Blessed by the Potato

I got the windows on the Prius tinted last weekend at Auto-Links. I ended up choosing them because they had a lot of good reviews over at redflagdeals, including a group buy discount from that group (which is still good if you’re considering tinting your car), and their prices were roughly $100-150 less than what the dealership wanted for tinting. John and Cody seem to run a quality shop, taking care to wash the windows really well before applying the computer-cut tint. In fact, there was a minor problem with one of the tint sheets and John threw it right out, no hesitation on doing the job right.

I have to admit that my heart leaped into my chest when I heard the “pop-pop-pop-pop” of the retaining clips releasing the door panel (they need to open the door panel to get the film to the bottom of the glass), but of course they’re pros, and it all went back together nicely (no door rattles either, which was my big worry since it’s a problem I’ve managed to avoid thus-far on the Prius).

I ended up up-selling myself into the ceramic tint: I really don’t care about the electronic non-interference perk, but I did want to stay with a fairly light tint since I do so much night driving, while getting better heat rejection. One of the big reasons for getting the windows tinted in the first place was to reduce heat build-up, and the ceramic was not that much more for a fairly large increase in heat rejection. The film came in a “30%” and “40%” optical transmission, though apparently the ceramic is actually lighter than the rating. It is indeed a fairly subtle tint, this isn’t a black-out gangsta limo tint:

I got 30% on the back, and 40% on the front, and there is zero issue with night-time driving, with the possible exception of some light from headlights behind me appearing to streak out along the defogger lines of the rear window (I hope to update later with a picture of that effect). I’m hoping that will settle down as the film cures and adheres better to the window, but either way it’s not a big issue. In fact, I probably could have gone darker on the back (I had in my head going in that I wanted something in the ~20-25% range), but unfortunately the one downside to Auto-Links & ceramic tint is that there aren’t a lot of choices along the tint spectrum, with nothing available between 15% and 30%. One final perk I should mention is that these guys take Monday and Tuesdays off so they can work the weekend, which was great because Sundays are a good day to have this sort of thing done!

I just finished reading Michael Lewis’ The Big Short this weekend. It was a pretty quick read, and fairly informative on just what sort of shenanigans were going on in the CDO market of repackaged subprime loans. Even though I’ve been reading about these for something like two years now, I learned more scary facts about them. The book comes off as a really long newspaper article (albeit a rather good one), quoting the people who were there, and retelling the story of the guys who figured out early on what was going on, but there isn’t a central narrative (aside from subprime itself). Not too many of them seemed to grasp (or care about) the societal clusterfuck that would be unleashed if they were right until it was nearly upon them — they were just trying to make a buck on a mispricing of risk.

He has a few very interesting anecdotes about the generation of these financial instruments and the people behind it all, and it does contain a good explanation of what exactly a CDO is if you still haven’t picked that up.

I found it amazing that the raters (Moody’s, S&P) were so complicit in all of this. He makes a good point that our system is not set up to incentivize the “cops”: raters and regulators are paid far, far less well than the traders they’re trying to monitor. As a result, generally the “dumb” finance guys end up in those positions, and they get walked all over by the smart money (indeed, the big bucks in finance draw away some bright minds from physics, math, engineering, and even medicine who might do more societal good in those positions, rather than coming up with complicated computer models of how to redistribute capital). Some of these characters in the book who had figured out that these groups of subprime mortgages were doomed to fail asked the rating agency people to do a better job of rating the paper, since it obviously wasn’t AAA. Of course, they were doing that because they wanted the ratings lowered so they could make money on their shorts, and not out of some altruistic motive, but still. They pointed out things like how high default rates were in a period of rising house prices, and asked what their models said would happen to all this stuff if housing went down, even modestly — the ratings guys said they didn’t test negative numbers when rating the bonds.

I was also surprised to hear of just how dodgy some of these CDOs were created. I knew that they took a pile of mortgages, say 1000 of them, and grouped them together, and then created tranches, or levels. Each level suffers defaults in a certain order: the lowest level takes the hits of defaults first, and if just ~8% of losses occur in the underlying mortgages, that level is wiped out, and it gets some low rating from the agencies (BBB-). The top level has a fair bit of protection, some high number of losses must occur before they’re wiped out, so that stuff gets rated AAA. Then what I found out is that first off, the characteristics of the whole group of loans was only ever described on average: so a group of 1000 loans to borrowers with a credit score of 610 was rated the same as one to 500 borrows with a credit score of 510 and 500 with a credit score of 710, yet the second pool was much more likely to suffer huge losses that would wipe out the bottom few rungs of the bond ladder since any small economic setback would lead someone with a score of 510 to default. Secondly, there was so much demand for these asset-backed securities that the firms started creating synthetic CDOs: they’d take all the lower-level paper (rated BBB) that they couldn’t sell because it was too risky for people to buy, then create a new tower of paper and tranche it out, and again the top level would get an AAA rating, even though it was entirely composed of the low-rated dreck they couldn’t sell individually. The theory was that not all the bad paper would go bad at once, so the top level would have protections similar to the group of 1000 mortgages. Except since this was all the paper that went to nothing with ~8% losses on the underlying pools of mortgages, anything that affected all those mortgages at once, even if just a little, would make this whole tower worthless… the risk models were in no way reflecting the reality of the situation. Then on top of that, when they started running out of mortgages to reshuffle, they made CDOs out of the credit default swaps these shorts were buying, just synthesizing securities out of whole cloth.

There was one anecdote in particular that really blew my mind though: The tale of Option One, which was creating subprime loans that were so bad, people were defaulting in the first month. I had some idea of how bad the subprime lending was in the US. I know that it’s better in Canada, but I’ve always held that it was merely a matter of degree and not of kind, and that as our market got away from fundamentals, a correction would be needed. For a brief instant when I was reading about how bad some of this stuff was, I started to wonder if the “it’s different up here” crowd might actually be right… then I remembered that in Toronto and Vancouver, you can’t buy a house/condo today and expect to make a profit renting it out in the long term (i.e., when rates return to something resembling normal).

I thought it was quite enjoyable. Wayfare managed to put her tongue on exactly what it was about this version — it’s not just that it’s a Tim Burton re-imagining of Alice in Wonderland/Through the Looking Glass, it’s that it’s a new version with at least the skeletal outline of a plot. Many of the previous versions (and, I’m lead to believe, the books themselves though I haven’t read them) consist simply of one dream-like sequence after another, with no overall connecting threads. That’s supposedly on purpose, since it’s supposed to be dream-like, but it’s not as rewarding for the audience to consume as a movie.

Aside from that, I thought that some of the CG was a over-done (the Hatter’s eyes), but otherwise enjoyed it all. I loved it when the Cheshire Cat started kneading the hat, that was so perfectly cat-like, and Anne Hathaway was full of awesome as the White Queen. In fact, she may be the source of all awesomeness within Wonderland.

We saw the movie in 2D, and at no point did I say to myself “You know, I really wish I had paid more for this so I could wear funny glasses and see that part appear to jump out at me and then leave with a headache.”

Ellen Roseman had an article recently about a fellow with a visual impairment that ordered some speakers from their online store on sale, only to find out that the sale price was an “error”. Even though the speakers hadn’t shipped yet, they wouldn’t cancel the order, and told him that he had to return them in store in person, or ship them back at his expense. Then, when he called to complain about how difficult that would be for him, they told him to respond in writing.

Using her gift, Ellen helped get this particular issue resolved, and Future Shop has “noted a change to procedure for the call centre that would have escalated Mr. Klupsas’ case to a senior member of our escalations team, in order to determine a solution for the return based on accommodating his disability.”

This is entirely unsatisfactory in my eyes. How did it ever become policy that as a result of their pricing error, the customer has to ship the item back at their expense? Making an exception for people with disabilities in the call centre response tree is not getting to the root of the problem.

John Hempton said it best: “In many cases, the processes are as important as the outcome. Indeed, they are more important.” These processes need to be set up to encourage their employees and their organization to behave in ways that produce desirable outcomes. This sort of policy encourages pricing errors as a sales technique: slash prices, get people to buy the item, ship the item, then say “Whoops, that was a mistake” and force people to either return the item at their expense, or pay the full price. How many people do you need to trick into paying full price this way to make up for the shipping costs (and complaints line staff time) for the orders that do get shipped back?

Indeed, price errors appear endemic at Future Shop. From what I’ve observed I’d say that about 99.99% of their price changes execute properly — which sounds decent until you realize that that still leaves them with several major screwups per year. At what point does it go from a series of unfortunate errors to a strategy? Loblaws does even more prices changes per week than FS, yet has fewer pricing errors — and when they do screw up, they follow the scanning code of practice, so you still get your deal (or if the price error works against you, up to $10 off your misscanned item). In fact, Future Shop is a member of the voluntary organization that implemented the scanning code of practice, but doesn’t seem to feel the need to uphold their principle to “Visibly demonstrate retailer commitment to price accuracy” when it comes to their online store.

How automated is their online store, anyway? Is there a person who checks each order, akin to a cashier, before the confirmation email goes out? If not, why not? It’s not like the online prices are that much better than in-store, so the overhead should be there to hire that sort of person; it shouldn’t be very expensive, and it may pay them back in catching SNAFUs like this before they get out of hand. I mean, their entire online system isn’t automatic — there are all the phone reps, and someone has to be packaging and shipping in the warehouse, it can’t all be robotic yet (and if it is, I want to see it).

So, what policies can we set up that will demonstrate FS has a commitment to customer service, and not in being that sleazy guy who tries to change the price after the checkout is done, yet at the same time protects them from potentially having to sell two hundred Xboxes at a loss? What rules will align everyone’s interest? After all, the focus is on these sorts of structural problems after the financial meltdown.

Well, first off, you want to remove any way for them to profit from purposefully making price errors. So, remove the need for the customer to return the item at their expense. Since shipping is not instantaneous, refusing to sign should be enough (and again, I don’t know why Mr. Klupsas’ case was allowed to get as far as it did, regardless of his disability). And since shipping is not instantaneous, and your order confirmation is not (or shouldn’t be) instantaneous, there should only be so much opportunity for FS (or any online retailer) to renege on the deal. Someone over there should check the order before the confirmation is issued, and at that point, they’re locked in (if not, is it really a confirmation?). If a mistake is noticed, then the policy should be similar to the SCoP for bricks-and-mortar stores, but modified to fit FS’s big-ticket merchandise: you get the item at the mistaken price (assuming the price is lower than it should have been) or at cost, whichever is higher. Determining cost will have to be on the honour system, but the idea is to find that balance where FS doesn’t go bankrupt because they have fat fingers on the price change keypad, yet where they also don’t make money from screwing customers with bait-and-switch price errors.

Well, the move is just about done. It took forever and was a huge pain in the ass. “One more move, and then we’re dying in that house.” Wayfare told me. I have to agree.

We hired professional movers for the big move to Toronto — no way was I going to try driving a big truck myself in the winter, or take 10 trips in a cargo van. To help our last move go smoothly we hired professionals as well, and we weren’t very satisfied: while they did get us fully moved in just a few hours and saved our backs a lot of agony, a lot of our stuff ended up scratched or dirty, and they didn’t bring the promised protective blankets, etc. So we tried looking around online for reviews before picking our movers for this round.

To my surprise, it was kind of hard to find any reviews at all for most moving companies. We ended up going with Campbell Bros, which were rated highly by the BBB. We were a little nervous at first since our contact at the company didn’t seem to understand email — we’d get one-line responses that didn’t address all our questions, and one of the quotes he gave us specified a delivery window of about 2 weeks when we were expecting a same-day move. However in person everyone was great — they not only brought the quilts to protect our furniture, they also had roll-out carpets to protect the floors that we worked so hard to get clean! They were done each half of the move in under two hours (it took me and 3 friends almost 3 hours to move just two rooms to my new London apartment). They were also really good at their jobs. It took them no time at all to realize Wayfare’s enormous desk wasn’t going to fit through the door to her office, and had the top off the desk and the door off the hinges in minutes, and then all back together again lickety-split. I think that alone would have taken the better part of the day if we were trying to move ourselves.

Moving the utilities went fairly smoothly this time around — Bell didn’t cut our phone service off a month early or anything. We did have some issues setting up the gas at the new house since apparently the old tenant wasn’t paying his bills, and Enbridge couldn’t figure out whether the gas was on or off (and it was somehow a different process to activate my account if it was off), so I had to have my mom physically go to the house before we moved in to see if there was a lock on the gas meter. Also, Rogers was offering a $30 credit if you set up your move yourself via their website. Their self-move website, naturally, didn’t work. Specifically, it told me that I needed at least 5 business days notice for my move, which I was trying to set up 12 calendar days ahead of time. So I had to call them, and they wouldn’t give me the $30 credit for trying to do it myself (though I’m going to call back again as soon as I have some time to sit down and breathe — blogging time doesn’t count).

With all the stress, all the packing, all the unpacking, plus getting used to a new place (and rewiring the phones, caulking the washroom, and all the other things we seem to do at every new place we move to) I can’t wait to never move again.

PS: To whoever rents the house after us: Congratulations, you’ve just won a free desk you can never take out of the office!