Blessed by the Potato

A friend from work has decided to buy a car, and since it’s a big purchase and one I haven’t ever made all on my own before, I decided to shoot her a little interview to see what’s going through her mind as she makes the decision:

So, here it is in mid-January 2009 and you are, if I’m up-to-date, at the point where you’re certain you’re going to get a car, and a new one at that, but are still deciding on the make/model, etc.

What made you decide you wanted a car?

It was kind of spontaneous: my parents just said we should go car shopping while I was back in Ottawa. I never thought about it before that. Plus now I can afford it, once I looked at it from the point of view of getting a car I realized I do have the savings to afford one; I’m graduating soon, too, so it should get easier to afford even if it’s a little painful in the short-term. Also, surprise!, I already bought a Matrix! I haven’t picked it up yet, but it’s ordered and done.

Why now? You have, after all, gotten along through most of your PhD without one, why not put it off a few more months until you’re done?

The car will move with me; I can afford it now, and am near the end. I could get more (leather interior, etc) if I waited until I had a “real job”, but I don’t really need that stuff anyway.

What are you looking for in a car? Is it looks, feel, features, price?

Something to take me places with air conditioning. Something comfortable and safe.

What cars have you looked at so far? What was it that struck you most about each model (whether good or bad)?

— Yaris: noisy, unsafe feeling, small… it felt like a toy. It would be find as a second car in the city, but I wouldn’t want it as my only car

— Fit: liked it a lot better, lots of storage, but it was still pretty small.

— Civic: Looking for a hatchback, and the Civic didn’t have one. Other than that liked the civic with 4-doors (hated the 2-door).

— Matrix: Was a hatchback, was larger and felt safer. I liked the feel of it, it felt comfortable to drive, I could picture myself in the car.

At one point, you were considering a mid-sized car such as the Toyota Matrix. At that point I put forth the argument (backed by several spreadsheets) that once you were up to that point, a Prius would make a lot of sense from a financial as well as ecological, larger-backseat, and pure awesomeness standpoint (not only can you sneak up on people, you can also power your house in an ice storm). However, you have not been swayed by my logic yet. Why is that? What concerns linger?

The up-front cost was higher, and I just didn’t have the extra money now. Buying a car is a gamble, and your analysis was looking at gas prices staying the same or going up, what if they go down? Plus I don’t plan on keeping my car for 10 years, so who knows what might happen to the resale value (I know you say that right now the hybrid premium can be passed on in resale, but who knows?). Also I’m not 100% convinced about the long-term reliability. I know you told me about how long it’s supposed to last and the current failure rate and all, but who knows, maybe after 8 years that suddenly takes a dive?
Your spreadsheets didn’t convince me.

:P To quote Jonathan Chevreau, did you read them?

So how long do you plan on keeping your car?

I don’t make long-term plans, I have no idea. Less than 10 years.

If you don’t want to commit to a car for a long-term, why not lease?

I don’t like the idea of having to keep the car to their terms, stick to mileage limits. I can do whatever the hell I want with it.

I know you’ve talked to a few people about this decision, what sorts of advice have you been getting? Anything worth passing on?

–He did try to sell me the extended warranty, it was helpful to know that you can wait until the end of the 3-year factory warranty before you really have to make that decision.
–The recommendation to check out the APA was helpful (just dropping their name helped even though I didn’t sign up).
–Advice about the repair costs of different brands from word-of-mouth helped me see that some of the American cars were not great bargains.
–Some maintenance tips from the guys.
–Financing vs. leasing issues were cleared up by some friends.

Aside from word-of-mouth, what resources have you found helpful?

Magazines; lemonaide at the library; websites for car reviews and feedback.

How are you planning on driving it? (That is, will it be for a daily commute in heavy traffic, or weekend jaunties on the highways and backroads, a combination? Do you have an estimate of how many kilometers per year you’ll rack up? (For reference, I drive just about 20 Mm/year, which is about the national average)

Occasionally on weekends, driving to Toronto and Guelph. No idea if I’ll commute to work when I graduate, but it’s a possibility.

Ok, so I see how not really knowing your driving profile would make filling out my hybrid spreadsheets hard :)

How are you planning on paying for it?

Purchase financing through the dealer (Toyota had promotional interest rates below what I could find at the banks). Large downpayment from my savings.

How are you planning on negotiating? Have you considered a pre-negotiating service such as the APA (apa.ca)?

Negotiated by myself with the dealer. Did mention the APA even though I hadn’t done it, that helped bring it down. They had a $500 gas card promotion, which I had them apply to the car right away rather than risk misplacing the gas card. I walked away, telling them I was going to check out another dealer, and I really talked up the Honda Fit while I was negotiating for the Matrix. I came back a few days later after thinking about it; he did offer more when I said I was going to look at the Fit.

Have you got any insurance quotes yet? How did they vary by model and company?

Yes, I called around myself. The best rate was through my alumni association. I called every bank I’m associated with and did an internet search. It helped that I had a history of being an occasional driver on my parents’ car for years.

Do you have any advice to pass on?

Test drive. Get on the highway to see what it’s like with the big trucks blowing by you.

Ok, congrats on the car!

I’ve started reading a blog with a horrendous eye-puking colour scheme called Bronte Capital, by John Hempton. Why do I subject myself to 4.5″ of column lost in a 12″ sea of green? (actually, these days I just read the RSS feed in Thunderbird) Because he writes about a lot of interesting (to me) macro-economic issues, in particular bank failures. To paraphrase a number of his posts, the banking crisis was started with some bad bets, some opaque financial instruments, and a poor sense of risk management and risk correlation (the odds of improbable losses all occurring together). But this was a fixable problem. What has happened is the bad bets, the subprime loans etc., have spiraled out into a crisis of confidence in the banking sector. Nobody knows who is and isn’t solvent, and lending between banks dried up. As runs on banks happen, governments are forced to step in with bailouts before the house of cards comes crashing down even further.

So it was a recent post of his that made a point that stuck in my mind: “[In many cases,] the processes are as important as the outcome. Indeed, they are more important. Markets work because we have a legal process.” When it’s not clear whether or not a bank is actually insolvent, yet the government decides to step in, unasked, and nationalize it on a Sunday afternoon, wiping out the bondholders (as well as the equity holders, where that risk is more explicit), and then next week acts completely differently for the next bank, it makes things very unclear. The markets (both stock and debt) can price in risks and defaults and bad loans, but the random acts of government are chaos. If investors can’t even begin to guess at how much something might be worth and whether the government will wipe them out, they’ll stay away.

Indeed, it was this exact problem that really raised my ire when Harper and Flaherty decided to make a 180 degree turn, breaking their election promise to tax income trusts. If it’s necessary, then you’ve got to hammer the market with data showing that’s the case. A phone book sized report full of evidence should have landed on the desk of every trust investor in the country explaining why it was absolutely critical to flip-flop and tax trusts, and explaining the process of that decision, and how it was absolutely justified, and followed a process of due consideration and laying the groundwork for people to anticipate any further moves so that investors never feel blindsided. Now the clowns in blue are at it again, trying to speed up the auto bailout. As though the bailouts and mortgage buy-backs weren’t ad-hoc enough, it’s very strange and troubling to read that the government is the one lighting a fire under the auto companies to take government money. WTF?

So far Canada’s banks seem to have avoided the worst mis-steps of the rest of the world. Indeed, I own some shares of them, so I’m hopeful things will pull through all right. But it’s time for someone at the government to sit down and draft some rules — hopefully ones that will never be needed — guiding a potential nationalization so that we don’t follow in the footsteps of the US. Heck, draft some rules for bailouts, nationalizations, and infrastructure boosts for other sectors as well so that people can know what to expect.

…and just as I was writing this up, along comes an article that says the Canadian government is taking steps to change the rules to allow it to own shares in banks. I find this a little troubling, actually. First off, Flaherty has shown no foresight in anything he’s ever done, which makes me worry that Canadian banks are closer to needing a handout than they’ve previously let on. Indeed, they all just did a fairly expensive round of fund-raising, ostensibly to boost capital levels well above the minimums to give investors some peace of mind, but now I’m starting to wonder if desperate times are nigh. Also, no mention is made of due process or deciding when or how the government will take a stake, which was the biggest point John Hempton had to make. I am invested in the Canadian banks, with rather huge paper losses, but I’m hanging in on the hopes that they will avoid the worst of this banking “thing”, and my investment will turn around. I’ve had some heartburn over the last year, and had to re-check the dividend yields a few times to stay the course, but now I’m having serious thoughts about bailing. After all, I have been far too optimistic all along. I was wrong about other banks: this time last year I was looking at Citi (I didn’t buy), and I figured that they got ahead of the credit troubles by raising cash early, even though the initial stock sale at $25 seemed like a steep discount at the time. Now they’re floundering. I was wrong about the extent of the troubles (and pessimism about said troubles) for the Canadian banks: I’m down 35% on those, and that was after waiting until I felt most of the bad news was “priced in” to buy…

I don’t know what’s changed behind the scenes, but it looks like my domain host is no longer handling the URL forwarding for my site properly. It used to be that it would forward the holypotato.com part to [MY_IP]/blog which would allow you to add on the location of any particular post [ /?p=XXX ] to create a link for any particular page. It was a little annoying (couldn’t just cut and paste from the address bar), but it worked at least. Now though, things are all screwy and that’s not working. More importantly, my hidden/administrative subdomains [ xxx.holypotato.com ] that I used to direct me to certain parts of the site for admin stuff or my own personal file bank home-away-from-home are also taking me to the main page, which is bad. So far that’s annoying but not critical — reading, commenting, and as you can see, authoring are all still working fine. The RSS feeds (which oddly enough do use the same URL structure as trying to link to a specific page) appear to still work.

I’m working on seeing what I can do — bear with me, especially if the site goes dead for a little while while I fiddle.

Update: Ok, I know what’s changed behind the scenes. Domain Direct, part of TuCows, who used to be, way way back in the day in league with Rogers (or took over a registrar that was), where I bought the holypotato.com domain from originally, has been shut down and its operations taken over by Hover, another part of TuCows with substantially inferior service. Everyone on the support forums is complaining that the redirection to individual pages isn’t working. Just logging in to the support forums took 20 minutes. So it doesn’t look like there’s going to be an easy fix for this from them, which means it’s probably time to go host shopping again.

Update Jan 23/09: At first Hover tried to pass this off by saying that “page-level redirection” was a premium service that not many people wanted, and consolidating the Domain Direct and other registrars meant cutting some fat… but after a number of people complained about it, it appears to be mostly fixed (I’m still having an issue with the favicon, but I can live with that).

I have a soft spot in my heart for post-apocalyptic science fiction, and City of Ember fits the bill. It’s a suitable-for-children adventure story, set in a city built beneath the ground to shelter the remnants of humanity from an unnamed horror on the surface. Whether it was nuclear war or some other catastrophe, the builders expected that after a certain amount of time — 200 years — the surface should be safe to return to, and included instructions for escaping the city in a box handed down from mayor to mayor over the years. Unfortunately, an untimely death broke the chain along the way, and the knowledge was lost. Centuries and generations pass beneath the ground, and things are starting to fall apart in Ember. The great generator that keeps the beacon of light and hope in the darkness running is breaking down, more and more knowledge is lost, spare parts have run out, and everything has just been reused and repaired too many times. The city is old and tired and falling apart and is little more than patches on top of patches.

So far the premise sounds like Fallout: the movie, which would be awesome. In this case the adventure is all about uncovering the builders’ hidden instructions for leaving the city, and the kids’ struggle against the city elders, and less about adapting to the super mutant filled wastes outside.

The movie is surprisingly good, especially the visual effects of the underground city. I thought the cobblestone roads didn’t seem quite worn down enough, but otherwise it looked great. Everyone seemed to give a good performance, even the child actors. I did have to scratch my head towards the end when the older children inexplicably grabbed the 3-year-old to come on their incredibly dangerous, illegal adventure with them, but oh, well. It was good, and so I have a lot of trouble understanding why I haven’t heard anything about this movie. Where was the advertising saturation? I don’t even recall seeing it in the movie listings back in October (when IMDB says it was released).

Well, I’ve got the Xbox all hooked up to the TV now, and Tversity running on my PC. I had no end of trouble trying to make it work at my parents’ house (I was in Toronto when I picked up the Xbox 360), with the Xbox connected via a wire to the router, and the computer with Tversity running over the wireless. But back at home with both the Xbox and the PC on a wired connection everything was up and running smoothly right away. I can stream files from my computer to the xbox, and they look great. If I had a high-def TV they’d probably look even better. I am having a minor problem with a few codecs, but since it’s only for one or two files I’m going to try forcing transcoding later to see how that works, and if that fails I’ll have to reinstall the codecs. One other minor annoyance is that there are a lot of default folders in the Tversity view on the Xbox, only one of which actually has content. It would be nice if I could get the Xbox to default to that one folder to start with.

Other than that though it’s working fantastic as a media streamer, well worth the money for that capability I think. I’m also gaming a little bit on it — I haven’t really enjoyed Lego Indiana Jones that came with it, but I got Gears of War 2 previously played from Rogers Video for $20, and I’m enjoying the use of cover in that shooter. My one-month trial to Xbox Live is just about over and I haven’t gamed multiplayer at all, so I suppose I’ll have to give that a shot soon. It seems like a really expensive system to game on: the Xbox Live subscription is $5/month normally (though Amazon has the 13-month card on for $52+tx right now); it’s another $60 for a second controller or guitar controller (and $200 for Rock Band), and even the “cheap” Xbox Live arcade games (like Castle Crashers) are $20.