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Monday, January 07, 2008

The First Rule of Surviving A Recession

Dryfly suggested that tips on surviving recessions would be good. Well, the first rule I have is a good life rule that should be applied at all times. Always help anyone you can. What goes around, comes around.

Today I got a pretty quick payoff when applying this rule.

I have written about my Verizon troubles, and the last "fix" improved matters, but did not restore usability to the phone service. There has not been one day since the service was "fixed" that the phone did not go out. I emailed Verizon and explained to them that I was going to contact a Congressman and the public oversight board yesterday.

So today a young tech came out. I was nice to him, and explained matters once again. He brooded a while, and then he looked at it, and concluded the splice was bad. Well, that was what the last tech had said, but they didn't fix the splice. They fixed something else, but not that. Well it turns out that there was a good reason for not fixing it. There is a severe shortage of the splicing machines that they use.

The nice young tech said he would call around and try to find one, so that he could fix my line and I could actually use my phone once again. While he was trying to do that I hung around hopefully, and offered him coffee, etc. Then we got to chatting, and I discovered this poor guy had a Citi loan at an unbelievably horrible rate. My banking soul just shriveled - 28%? His finances didn't seem bad and his credit score was around 650. 28%? Good God!

He has credit cards, but he pays them off. However this loan at 28% is just costing him a bundle. He also has a savings account. I could not find any reason why he should be paying a penalty rate like that. He was not financially sophisticated, and he just recently got the good-paying job but he hadn't overspent before and wasn't carrying big debt. I believe some sharky LO just took advantage of him. I couldn't even figure out why his score was that low, so I asked him about inquiries, and he said there were a bunch of them from when he went to one place for a car loan. Well, that could be, because it seems to be one trick these bozos use. You don't want to know what some of these outfits do with car loans. It ought to be illegal.

So I decided that I might not be able to get Verizon to fix my phone, but I probably could get this guy on a better financial path. While he tried to find equipment so he could resplice, I tried to find a local bank that could get him out of the hole. I found a credit union that he qualifies for, which should be able to roll that thing over at a much better rate. His car loan rate was awful too.

Anyway, the upshot was that he got some other guy to come out, and they fixed it. I believe they really fixed it, because I darted back in the house after the splice was done and ran my little program that I wrote to ping and log the results, and it was much better. After the last fix, it was still really erratic, but this time it was very steady.

I am still shocked at the rates this guy was paying. He said he would follow through, and he should save a lot of money each month. This sort of stuff just makes my teeth hurt. There is no excuse for it. None. It's abuse. I bet anything that he got the loan through CitiFinancial, which is not, in my experience, a very ethical outfit. See, for example, this 2004 action by the Federal Reserve. Also see this 2006 essay about predatory lending and federal preemption in which Citigroup comes in for mention.

So to anyone else out there who is getting hit with this sort of nonsense: Set up a savings account and put some money in it. Pay your bills on time. Then find a community bank or a credit union. These places want your business. This kid didn't know anything about banking - he didn't even know what a community bank was, and he didn't know how interest was even calculated. But he knows enough to pay his bills on time, not let debt build up, and to set up a savings account, so all he needs is to find a loan officer with some type of ethics.

But as a result of all this, the techs and I had a nice long talk about what was going on inside Verizon, and now I know all the dirt on Verizon. I am sworn not to divulge it until it cannot be traced back to them, but it was exactly what I suspected.

So, is it time to short Verizon?
MoM i find hat giving people a hand is always worthwhile,recession or no.And the 28% rate does not surprise me,the LO made more $,and her/his manager probably got a bigger bonus...ethics are always personal and american corporations don't seem to care about their reputations any more.I am very pleased to hear that you now have phone service,and that you and the chief are a bit safer.
I wouldn't consider them a good investment, no. I don't short, so I can't advise you there.

But seriously, consider the liabilities inherent in such a policy.
This is my unofficial recession monitor. I am basing it on the number of people that scream at me in a given week. Based on that, I would say that people are starting to feel the pinch. I figure that by the time they are screaming at me on a daily basis, collections will be a growth industry and I can get to scream back.

Another FYI, since I run into people that are shocked by this; while they usually frown on a rep hanging up on a customer, most companies usually have a rule that lets you hang up on someone who is being abusive and won't stop screaming at you. Which is why I hung up on the woman yelling at me today ;) (especially since she'd already cancelled and was upset at the early termination fee. Maybe you need to do something on folks who don't bother to read contracts they sign. She's going to look real stupid taking us into small claims court when she signed a contract that said she'd pay for early termination.)
Way to go MOM - you banked some karma doing that.

And you are right - we won't get through the troubles alone.

Back in the 80s I was a foreman/plant engineer at a large rural ethanol plant... it was between the Reagan Recession and the farm crisis and jobs were impossible to find. I had responsibility for part of the process plus I supervised the people who ran it on a shift by shift basis.

One night on third shift (supervisors like myself all rotated) I had an operator completely blow his assignment. Caused a big headache for the next shift - I heard about it from our peers who replaced us - not happy.

Next night I'm doing the rounds and see this operator doing the same thing - I tell him he has stop, that its killing the next shift.

Well he blows his top & tries to choke me says its not his fault. I push him away and tell him to get the shop steward - we got an 'action' to discuss.

The plant manager, the shop steward, the employee and I all meet at the 'head office' to discuss. I told the story - the operator didn't lie, said he did it. The plant mgr said I could have him fired on the spot - his actions (attacking me) was over the line. Steward agreed - that one was a no brainer.

Now - everyone knew this guy was going through a hideous divorce - something that often happens when you spend YEARS on third shift. They were young - she was alone almost every night - not good. I was aware he was under huge pressure.

I cut the guy some slack, said I need his job done NOW, tonight or the plant goes down. We need him back on the line and busting ass, it won't happen again - let's all move on, it never happened.

Every operator in that plant knew the story within minutes... everybody pitched in (without my even saying a word). When the next shift came in the place was humming.

This was a hardcore Midwestern blue collar union town - for many months after that my money was no good at the local taps - people I didn't even know bought me beer... glasses would show up 'courtesy of that operator'.

I eventually moved & don't know if that guy's marriage worked or not. But I learned good deeds really do pay off in ways you can not imagine. It never hurts to do the right thing.

One last thing - I was 25 at the time. Months after it happened I had a grizzled old union worker come up and tell me privately that was the night I became a 'leader' and not just a 'boss'... the guys on that line would walk on hot coals for me the rest of the time I worked there.
Mama, I think that is always sound advise. Thanks for the reminder and for helping that young tech out. That is super!

dryfly, I enjoyed reading your account of so many years ago. It is good to try to understand people beyond the current situation that is playing out. You probably made a real difference in this persons life. Thanks for sharing this with us.
What a story, Dryfly. And great advice for us all. What particularly impresses me is that you were so young.
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