Blessed by the Potato

Well, January 2009 is right around the corner, and now it’s time to start thinking about packing money away in your shiny new TFSA to grow tax-free. What are some of the TFSA options out there?

High Interest Savings: I like the TFSA for a number of reasons, but the fact that it’s so flexible, allowing money to go out and come back without losing contribution room or incurring taxes is probably number one. Because of the flexibility of the account, it’s very well suited to serve as my emergency/medium-term savings fund, which calls out for a high interest savings account. Note, however, that you can’t recontribute until the year after your withdrawl, so don’t plan on using it as a revolving door high interest savings account.

Other Fixed Income: Bonds and GICs are taxed in a fairly harsh way (as are high interest savings accounts). But, they should form at least a small part of one’s portfolio, so the ideal place for them is within a TFSA. However, I haven’t seen any GIC TFSAs advertised yet.

Stocks, index funds: I don’t plan on having any stocks or index funds in my TFSA in the first year, but with $5000 contribution per year, I also don’t plan on having $10k in fixed income/emergency funds by year 2, so next year I will probably switch to having some equities in there. Most likely I’ll throw my index funds in, not necessarily because of tax preference, but for tax simplification: it’s just a lot harder to deal with calculating tax due on a mutual fund than it is for a stock. Note however that US dividend-paying stocks would benefit more from being sheltered. It will also depend on fees, as self-directed RRSPs (for holding US stocks, for instance) generally have annual fees whereas mutual fund RRSPs don’t, and it will probably be the same for the TFSA.

I’d like to go into more detail on the various offerings, but firstly most of the banks haven’t released the details yet, and secondly, that’s been covered by virtually every PF blog out there, so you can easily find it and I’d be wasting my time.

For those who don’t know, the TFSA is the new tax free savings account, just about the only good thing given to Canadians by the Canada’s New Government (and I suspect, only so they can find tax leakage in it and take it away later). You put money you’ve already paid tax on into your TFSA, where it can grow tax-free, and can be taken out tax-free. It’s quite flexible, and in many ways superior to an RRSP (where you put pre-tax money in, it grows tax free, and then you pay tax on the withdrawl). For many people, especially those in lower incomes (low enough that you expect to be in the same or higher tax bracket at retirement as when you’re contributing), it may not make sense to contribute to an RRSP (and indeed, I do not have one yet), and the TFSA might be your first choice of savings vehicle.

When I first “made up my mind” to buy a Prius (in quotation marks because I obviously don’t have a Prius in my driveway now, so my mind couldn’t have been that made up), it was because my car had been stolen and even though it was recovered it wasn’t pleasant to drive anymore — I was constantly reminded of the violation. It was also because it was 10 years old and starting to act its age. In 2006, it incurred over $4000 in repairs, and I really doubted it was worth that much in the first place. In 2007, another $1000 in repairs, plus an estimate for $700 in repairs that I decided to defer (good choice so far — both those parts are still going strong). 2008 however has been fantastic. Repairs so far haven’t broken $200 (not counting scheduled maintenance), and I was starting to think that my car was getting through it’s mid-life crisis and I might be one of those Honda owners who gets 15 or 20 years out of their car. I was getting so hopeful I even took the down payment I had saved up and put it in the market.

Unfortunately today I took my car in to the tire shop for a routine rotation + alignment, and they said they “weren’t going to waste [my] money with an alignment — your lower ball joints are loose and it’s going to be $550-$600 to repair”. Now I’ve known for a little while that some suspension work was coming for my car. In the summer it’s fine, but it makes a heck of a squeak going over all the potholes in the alleyway once the temperature dips below zero, so I suspect that once they start looking closer at the ball joints they’ll find double that amount of repairs to do.

Oh well, if it’s not repairs on an old car, it’s payments on a new car, and I can at least console myself with the fact that if the depression does hit, I can always park the car and not pay for repairs, but if I were to get another one I’d have to pay the loan off no matter how much I avoided driving.

It looks like a lot of people these days are choosing to keep their cars longer. It doesn’t look like the amount people drive has changed all that much, but new car sales are way, way down, leading to the Detroit 3 to look for handouts/bailouts. It’s amazing how much they’ve shot themselves in the feet over the years with cheap credit and leases. As Derek DeCloet points out in a recent Globe article:

“The Detroit Three spent years training their customers not to buy vehicles without a subsidy – usually in the form of 2-per-cent or zero-per-cent loans. They also taught them not to bother saving for one, because no down payment was required. (Your columnist, when buying a Pontiac Vibe five years ago, was practically admonished by the salesman for putting $2,000 toward the purchase. Didn’t I have a better use for the money, he wanted to know?)”

So with the days of a zero-down lease/financing over with, it’s going to take time for new car sales to come back because people are going to need a few years to start saving up for those down payments again. On top of that, the Detroit 3 have been existing in this perverse parallel economic universe for some time now: their quality has been coming up, but mostly when measured by short-term surveys, “initial quality”, etc. The perception that their quality, especially the long-term reliability, is still low, and so for the most part they compete based on price. However, they don’t have the advantage in terms of margin AFAIK: their labour costs are higher, their “legacy” costs are higher, and for GM in particular, they have a lot of duplication selling the same crap in a ton of very slightly different trims under different badges. That’s a bad position to be in, and I’m actually amazed it lasted for as long as it did. Now with people suddenly interested in keeping their cars longer, and needing more predictability in costs (they can’t tap their HELOC for a costly surprise repair) long-term quality is going to play even more of a factor.

This is again a spot where they have perhaps shot themselves in the foot when it comes to their hybrid programs. The Honda system is simple: the belt-and-cone CVT may be fragile (we’ll need some time to see if that’s really the case), but the hybrid implementation is very simple, and will actually work on engine power alone even if the motor/battery dies (though the engine is perhaps more likely to die than the motor — and given that we’re talking about a Honda engine, that’s not likely). The Toyota/Ford system has been poo-pooed all over for requiring the battery to work to run, but beyond that it’s actually a pretty elegant transmission system that should be quite durable. The only issue I’ve heard with it is that it might not have sufficient cooling, which might be one reason why you’re not supposed to tow with a Prius (note that you can tow with a HiHi or FEH). The system GM developed, it’s “two mode transmission” is like two GM transmissions frankensteined together, with four clutches throughout (I am lead to believe that the clutch is a common point of failure in GM transmissions). It’s a system designed primarily for large trucks (the Tahoe hybrid and Escalade hybrid), which indicates that clearly GM was hoping to continue marketing large trucks based on <5 years of ownership even in a future where a hybrid system was deemed necessary. At the same time, GM and Ford stopped making minivans, so if/when those soccer moms who “need” 3rd row seating want something that sucks a little less fuel, they’ll go to the competition for a minivan.

I’m pretty sure that just because of how many people are employed by the automakers and their sub-industries that they’ll get a bailout from governments — the American government if not ours — but I hope that they actually manage to change into companies that can compete in a world of high gas prices and tight credit. I hope it’s not just going to be used to supply their burn rate for another 6 months or a year when they’ll be back in the same position. I also hope that Toyota and Honda — who are equally foreign automakers in Canada and who also employ a lot of Canadians — don’t get completely screwed by the bailouts.

Wow, in this day and age I would have thought people had figured out the whole mailing list thing. Apparently not, as evidenced by an absolute fiasco by the EMC 2009 organizers.

What’s EMC 2009? I haven’t the faintest bloody idea. They mysteriously sent out a notice to a bunch of scientists (myself included) that they had added us to their mailing list. They sent the notice twice: the first time encoded in Greek. They never said who they were, where they had harvested our email addresses from, or what the mailing list they had just signed us up for was all about. I’ve never heard of them, and I have no idea what they’re selling.

People who make mailing lists should know better in this day and age.

I immediately shit-canned them, and unsubscribed. The webpage was broken, with no information at all, and it was a secure site with its own non-standard security certificate. Firefox threw a hissy fit about the security risks. I let it do its thing “this time only” to unsubscribe, but I could totally see how someone who was less net savvy would be faced with the message:

“Page load error: lists.ntua.gr uses an invalid security certificate.
The certificate is not trusted because the issuer certificate is not trusted.”

and not know how to unsubscribe. Plus we’re sometimes told not to click on those links in spam messages because all it does is confirm that the address is live, which just invites more spam. So then, en mass, the people who were unwillingly signed up for this mailing list started to send messages to the list saying “unsubscribe” “get me off this” “how do I get off this?”, etc. That, of course, did not help matters, and by now people who get signed up for mailing lists should know better. Word is that the traffic of furious unsubscribe messages reached 50 per day, clogging the mailboxes of scientists all over the world, and finally the list admin who started this mess had to step in and shut down the mailing list. She sent a really snarky email too, even to people like me who had unsubscribed already (I unsubscribed, why am I getting more crap from you morons!) lambasting the sheep for sending stupid messages to the list that clearly were unproductive and not getting them unsubscribed. I don’t know why she’s getting all uppity: yes, the lusers were being moronic, but that’s what end users do, even scientists (especially old scientists). She’s the one that caused all the pain to begin with via the completely unsolicited mailing list. It’s like those telemarketers who call and then act all put out and snotty when you actually answer the phone, and you’re just like “hey bitch, you phoned me!”

So, Irene Karanasiou, for you, here are the rules:

Well, I own some TD, and it’s way down this week, and it’s probably going to get worse today. They’ve decided to have a share issue to top up their capital levels, which is not news that I wanted to hear. I honestly thought that they would be the one bank to side-step this mess and make it through with out a dilutive share offering… especially since they made a preferred offering early on in this mess.

D’oh.

Well, we went to see the Twilight movie today, and I just recently finished the books, so I thought I’d do a small review of both at the same time. Consider this whole post to be full of spoilers.

The Movie: The movie was quite faithful to the books. They added some parts to make the plot a little more logical (basically, the other vampires don’t suddenly show up out of nowhere, they have about 40 seconds of screen time before they meet Bella). However, because so much of the book took place inside Bella’s head, there’s a lot of narration, which is a little uncomfortable at times. Narration aside though, the movie is pretty light on exposition. There were a few points where I had to wonder if someone who hadn’t read the books could follow what was going on (for example, they cut right into the middle of a conversation between Bella and Edward, with Bella saying “so do you have to be dying to become a vampire?”). It’s not a hugely complicated plot, so I’m sure they could, and moreover, the books have sold so many copies that I don’t think that’s a particularly large audience anyway.

They did a really good job of casting the main players, and moreover, the director got some really good performances out of these young actors. They were believable as kids without being terribly annoying to watch or bratty. Bella was almost exactly as I pictured her, and Charlie, Edward & Alice were also great (I loved her pitching style). Emmet, Rosalie, and Jasper weren’t as I pictured them though: Emmet is supposed to be supernaturally huge, and he’s not even American football player big; Rosalie is supposed to be this drop-dead gorgeous bombshell, but she just blended into the scenery next to Bella and Alice. Jasper though wasn’t even close to how I pictured him: he was a soldier before being changed, so I expected him to be older, with neater hair, and above all else, to be battle scarred. About the only thing he had right was the pained half-wild look in his eye. Esme could be cast by a robot (or equivalently, Keanu Reeves) for all the screen time she gets in the books and movie, so I suppose she was fine.

While the performances of the actors were enjoyable to watch, some other aspects of the movie kept distracting me. The cinematography was very music-video-ish. They kept cutting to slightly different angles, or extreme closeups, or randomly throwing in shots of the grass or the trees or rapidly sped up cloud movements. There were a few spots where they played games with the focal depth that were quite neat — like when Mike is asking Bella out and he’s just a blur while we’re focused on Edward in the background — but other times I found the camera work to just be distracting. Some of the effects also seemed quite low-budget at times. I wasn’t terribly impressed with the vampire-in-the-sunlight sparkle, and Wayfare actually laughed out loud in the theatre when Carlisle first showed up: his white skin make-up looked borrowed from my Halloween supplies, it was just cheap and cheesy looking. Those quick cuts also made me think the movie was done on a low budget, as did Edward climbing the trees straight up without touching them. He’s strong and fast, so I of course expected him to either swing or jump from branch to branch, or to really dig his hands into the bark to claw his way up. I didn’t expect him to just float up while waving his hands in the general direction of the tree: it seemed like they just didn’t have the budget to do the branch-to-branch wire work, or to do the FX on the tree bark…

All that aside, there was really only one part from the book that I missed, and that was the time Bella got to spend in the hotel with Alice and Jasper. In the movie it’s just: arrive at hotel. Make call. Go to trap. In the book they spend tense days in the hotel while Bella agonizes over Alice’s predictions and whether to call her mom or not. It seemed to work in terms of moving the plot along, but left out a big part of James’ tracking suspense. I noticed the absence of Carlisle’s backstory, and about how Edward fears for Bella’s soul — it weakened slightly the part where Edward decided to suck the venom out rather than let the change take her, but not by much. In fact, there’s no mention of religion at all in the movie, nor of the vampires’ pasts (save a three-second mention of Edward being turned in 1918 after nearly dying of Spanish flu).

The books: The books are pure girl porn. They are heavy on Bella’s thoughts, and have a lot of great day-to-day inane chitchat in them. Stephanie Meyer is good at writing the dialog, so it works, but you definitely need to be warned about that before going in. It’s primarily a love story, with the whole suspenseful vampire thriller thing just sort of tacked on to the end and a few bits in the middle. I quite liked the first book, which suckered me into reading the rest.

The rest… meh. The second and third ones practically held a little powerpoint presentation in the first chapter outlining the plot and the twists we could expect, and we just had to wait for Bella to catch up to the rest of the world. It was extremely painful to read, because from about the halfway point on I was basically screaming in my head at her to just figure it out already and move on to the second half of the plot because there’s a lot of book left! Of course, I kept expecting a second plot line to develop just based on the thickness of the books, but one never does. So it’s safe to say that they’re slow. Again, the day-to-day dialogue along the way is pretty good, but I found it harder to identify with the characters and their choices in the later books since I was yelling at them so much. This is compounded by the dark depression Bella throws herself into for most of the second book, which makes it less enjoyable to read. It was a pretty good portrayal of a depressed teen, but that’s something I can do without reading too much on, especially since it’s all over this guy that left her that she only knew for like 6 months (yeah, they went through a lot, and he’s Edward and perfect… but she’s a kid, she should heal faster than that).

The fourth book redeems itself a bit in the plot depth department, but just gets kind of weird, so I’d have to say read the first one, and just leave it there.