My car insurance just got cheaper

I just got the renewal notice for my car insurance. It is over £50 less than last year.

Why?

The car is the same. The drivers are the same. I live in the same place. I have had the full no claims discount for years.

I wonder if it is anything to do with this -

"The biggest shake-up to the insurance industry for decades takes place on Saturday, when insurers will be banned from quoting policyholders a higher price to renew their home or motor insurance than they would offer a new customer.

After years of complaints that customers who regularly switched insurer were paying significantly lower premiums than those who renewed, the Financial Conduct Authority (FCA) has said they must be offered the same price."

In other words the insurance companies have been overcharging loyal customers [like me] and using the money to buy new customers.

You can read the full article here  https://www.theguardian.com/money/2021/dec/30/landmark-uk-insurance-shakeup-poised-to-benefit-loyal-customers

My insurers are Direct Line. 

 

Paying the workers more

When Ford introduced production lines in his car plant it had an immediate effect on output.

“Production time for a single vehicle fell from twelve hours to ninety-three minutes, with a new car rolling off the line every three minutes. 

 It was noisy and tedious for workers, but it was also surprisingly well paid: from 1914 Ford paid $5 for an eight-hour day, about double the industry’s going rate. Strange as it may seem, paying higher wages was yet another way of cutting costs and improving efficiency. In 1913, the year before the $5 wage was introduced, 71 percent of Ford’s new hires had left within five days. Paying higher wages reduced employee turnover, and hence the amount of time needed for training. 

 Ford claimed that “the payment of five dollars a day for an eight-hour day was one of the finest cost-cutting moves we ever made.” Average earnings in the United States in 1914 were $335, whereas a Ford employee working five-day weeks for fifty weeks would make $1,250.” 

Excerpt From: Tom Standage. “A Brief History of Motion: From the Wheel, to the Car, to What Comes Next”. Apple Books.

The London banker who broke the world

A fascinating Guardian newspaper article about the Eurobond market.

Link

Iron Mountain hideaway

From this article on the Iron Mountain storage facility.

'In the sixties and early seventies, Mesick said, people sometimes slept in the mine: it contained fallout shelters, built and maintained by Iron Mountain for executives from Exxon, Shell, and other big companies. 

One especially elaborate shelter, he said, had sixty-five hotel rooms, each with a private bath, and a large cafeteria with a commercial kitchen; in the mid-century-modern bedrooms, curtains obscured the concrete. According to Mesick, in the event of nuclear war, some executives, along with their families, would have been evacuated by helicopter from New York City. “They’d hired local folks to tend to them, to cook for them, to clean for them,” Mesick told me. “Their idea was to wait out the storm while the debris and radioactivity were going on overhead—then they were going to come out and sell oil to everyone who was left.” 

Every now and then, Mesick recalled, the executives would run a “live exercise”—essentially, they’d come and hang out for the weekend.'

It's good to know that the really important people would have been safe.

EU tyre labelling

In November 2012 the EU introduced new labelling for tyres.

The new standard gives motorists a way of comparing new tyres on their fuel efficiency, wet grip and noise.  Previously it had been hard for buyers to tell if one tyre was better than another. The aim of the new standard was to gives better consumer information and, in the longer term, provide manufacturers with  an incentive to produce better products.

Recently I went into my local  tyre retailer. There were twelve tyres displayed and only one had a visible label showing its EU ratings. The other eleven had a label showing the retailer's own rating system. I was told that it was different from the EU standard.

I am not going to speculate why the retailer failed to display the EU standard information for all their tyres, but I will not be going to them next time I need a new tyre.

I would also suggest that the legislation needs to be changed to make it an offence not to clearly display the EU standard ratings for all the tires that are being offered for sale.

Information system

"A CEO with hotel chain A found himself having to spend a night in a hotel from hotel chain B. Naturally, he was very curious as to what kind of information systems they had, and resolved to keep an open eye for any competitive use of IT. As he approached the reception for first time, the woman behind it smiled at him and said "Welcome back, Sir".

Flabbergasted, he said 'But...it is 12 years since I was here last! How could you know that I have stayed here before, what kind of advanced information systems do you have that can store and find the fact that I was here 12 years ago?'

'Well, it is really very simple', she said. 'When the doorman opened the door to your cab, he asked if this was your first stay with us. You answered no, and as you walked through the door, the doorman looked at me through the window and touched his nose. That told me that you should be welcomed back....'"

Peer to Peer lending in the UK

UK banks are offering very low interest rates to savers because the UK Government is giving them free money and they do not need to attract money from ordinary savers. Last year a UK bank was offering 2.5% on a one year bond. Currently it is offering 1.3%. Both rates are below inflation so anybody who has savings is seeing them shrink in real terms.

Given that many people with savings are past or potential Conservative supporters Cameron and Co. don't seem to be following a policy which will increase their votes. Savers appreciate what the Government is doing to them and look forward to repaying the Conservatives in the future.

Given this situation there is increased interest in Peer to Peer saving. ZOPA, Ratesetter and Funding Circle are the three main UK companies claiming to allow ordinary savers to lend to borrowers without involving a bank. They claim that their main advantage is that they pay higher rates of interest than the banks. Their disadvantage is that deposits with them are not guaranteed by the Government. That means you are risking up to 100% of your money for an extra 2-3% interest.

ZOPA used to look quite interesting [at least for a small punt]. When you gave ZOPA your money you could decide how much risk you were willing to take. The riskier borrowers paid an higher return. You take part in the lending decision. Now you cannot and ZOPA has become very dull. You just give them your money for 3 or 5 years and collect your interest. You have no chance to say who is lent your money and at what level of risk. ZOPA keeps all the decisions to themselves. That does not suit me at all. If I am taking a risk I want to decide how much risk. I want to be involved and interested.

They are also tediously bureaucratic. When I tried to open an account I got this response.

To continue creating your account, we simply need you to provide us with:

1    A utility bill OR bank statement.  This must be an original, not a copy, and less than 3 months old.

2    A copy of your passport OR photo driving licence.  This must be verified by a professional person, eg. an accountant, solicitor, nurse, teacher, officer of the Armed Services. This person cannot be a family member, live at your residence, or be retired. 
Please ask them to: Write 'I certify this is a true copy of the original shown to me today' on the back of your passport/driving licence.  
Print their name, profession, address and phone number of the company/practice/employer for whom they work, using an official stamp if available.
Sign and date it.

'We simply' ?  That sounds like a lot of trouble for a dull but risky investment and a couple of extra percentage points interest. I do not think I will bother. 

I have not tried Ratesetter but this article suggests it is pretty much the same deal. Both ZOPA and Ratesetter lend to Joe Public.

Funding Circle is different. They lend to small businesses. This is something the banks are neglecting but the Government is very keen on promoting. So much so that they have given Funding Circle £20 million to lend. Funding Circle is also much more fun and gives lenders the chance to decide which borrowers they want to lend to. Or, a lender can use a tool which splits your money up and lends it to a wide range of borrowers. TO start with I decided to use the tool and lend to 100 different borrowers.

Borrowers are graded from higher risk to lower risk and you can choose which ones you want to go with.

I have tried a small investment with Funding Circle. If it goes well I shall increase my investment.

Watch out for future reports on my adventures in business lending.

Disintermediation and Disaggregation

Some technical book publishers  are selling individual chapters of their books directly from their website. In doing this they are both disintermediating and disaggregating the normal book supply chain. The normal chain is as follows.



Disintermediation is the process of removing intermediaries from a supply chain. By selling their books directly to readers these publishers are cutting the bookseller out of the supply chain.

Disaggregation is the process of separating an aggregate body into its component parts. Books are usually sold as a bundle of chapters. In many cases this is what the customer wants. There would be little point in disaggregating a novel. However, customers may wish to buy just some chapters of a travel guide or a technical manual if they do not require the complete book.


Both disintermediation and disaggregation can disrupt existing business models. Book publishers have become accustomed to obliging customers to buy chapters they do not need to get the chapters they do need. In effect their business models required customers to pay for stuff they don't want to get the stuff they do want.  This is called the detritus model of retailing.

Music publishers are also in the business of bundling detritus with the ‘good stuff’ when they sell albums. Rarely are all the tunes in a album of equal quality or desirability. Apple et al are disaggregating when they allows customers to buy individual tunes, rather than obliging them to buy a complete album. They are not disintermediating because iTunes is simply an online version of a High Street retailer.

Incidentally, in their main book selling business Amazon are neither disintermediating nor disaggregating.  They are just substituting an online shop for a bricks and mortar one.  Perhaps they would like to disaggregate, but they cannot because they do not own the copyright in the books they sell.

When they started publishing themselves and allowing self publishing they started disintermediating the book publisher from the supply chain.

The music industry’s business model is threatened by the musicians who have set up web sites to sell individual tunes directly to customers. They are not only disaggregating the album, but disintermediating two complete stages from the normal music distribution change.




Copyright is the key weapon in the armoury of the detritus sellers. As long as publishers control the copyright in tunes or writings they have some say in the disintermediation and disaggregation decisions; though not a complete veto as Apple has demonstrated with iTunes.

RSS provides a more subtle example of disaggregation and disintermediation. Readers can use RSS feeds to choose which parts of newspapers they want to read. They can assemble their own 'newspaper' from multiple sources. They no longer need to buy the sports pages [detritus to me] to get the political and economic news. RSS readers also disintermediate the local newsagent from the news distribution chain when news can be read on screen instead of on paper.


Disintermediation can be taken further. If a writer chooses to be a self employed blogger instead of a salaried journalist the newspaper publisher can also be removed from the distribution chain.


Digitization has made disintermediation and disaggregation easier but both processes were possible before. Singles were sold as well as albums, and  Sir Arthur Conan Doyle sold some of his Sherlock Holmes stories in serial form.

How they produce tinned grapefruit

Grapefruit

Have you ever eaten tinned grapefruit segments?

Have you ever wondered how the produced those nice clean segments?  How they peeled each grapefruit, separated the segments and removed all the pith?

They must be using some clever machinery, right?

Last night a new TV programme called Food Unwrapped on the UK's Channel Four went to a grapefruit canning factory in Swaziland to see how they really do it?

When the grapefruit arrive at the factory they are steam blanched to soften their skins. Then they go to the peeling and segmenting process.

This turned out not to involve really ingenious machinery but 250 African ladies and their fingernails.
 

The grapefruit were now segmented but still had their pith. To removed that they soaked the segments in what was described as food grade [wtf?] hydrochloric acid. This did the job but left the segments contaminated with the acid.

To get rid of the acid they then washed the grapefruit in caustic soda, another powerful corrosive.

We were told the alkaline caustic soda neutralised the hydrochloric acid and left the segments safe to eat.

Should we believe that?  Well, if I lived  in a  country with a government that took food quality and safety seriously, and the interests of its citizens carried more weight than  the bribes of food industry lobbyists, I might.

Unfortunately, the UK is not such a country and so I do not.

I wonder if the same technique of  hydrochloric acid and caustic soda washes is used to produce other tinned fruit, such as orange segments.

Pro-biotic

The second half of the programme was on the pro-biotic industry.  Where do they get the bacteria they add to products to make them pro-biotic?  I don't think many people who saw the programme will be buying pro-biotic products in the future.

No, I don’t have a f&^%*~@# loyalty card

I have just returned from a trip to Tesco and, as usual, at the checkout, I was asked if I had a loyalty card. The first 1,000 times I was asked this question it was not so bad. Even the next 1,000 times were tolerable. Now, it’s a real pain in the arse. I am thinking of having a t-shirt made with the title of this post on the front.

I don’t have a loyalty card because I do not like the idea of Tesco tracking all my purchases and linking them in with my real name and address. I don’t like being asked if I have a loyalty card because I resent the suggestion that I am the kind of pathetic gripe farthing who would go through all the hassle of carrying and presenting a card just to save a few coppers.

Finally, I resent paying for loyalty cards through higher prices. I remember when supermarkets used to hand out Green Shield stamps. If you collected enough of these you could stick them in books and send the books off to get some pathetic gift. The supermarkets and Green Shield always insisted that they did not cost the shoppers anything. They were quite sure the entire process was paid for by higher turnover. I was never sure how that worked since all the supermarkets offered stamps. Where was the higher turnover coming from?

Then Tesco broke ranks. They stopped offering stamps and were able to cut their prices by about 10% [if I remember correctly]. Soon it was goodbye Green Shield at all the supermarkets. Now they tell us that loyalty cards do not cost us anything. That it is all paid for by higher turnover.

Of course you cannot say anything to the people at the checkout. It’s not their fault. It’s the Tesco suits who deserve wedgies.

So, my answer is to do as most of my shopping at ASDA. They do not do loyalty cards, and, guess what, they seem to be cheaper.

Why Yahoo wants to sell Delicious [its just business, they are not really fools or knaves]

There has been much wailing and gnashing of teeth after Yahoo announced that it is planning to sell the online bookmarking service Delicious.

The plan has not gone down well with the blogosphere and Yahoo have been called fools and/or knaves for wanting to divest Delicious.

Nobody has asked the following questions -

1.  Why did Yahoo buy Delicious?

2.  Why do they want to sell it now?

3.  Who might want to buy Delicious?

4.  Why do companies like Yahoo and Google offer free online bookmarking services, RSS aggregators and blogging platforms?

Let me venture some answers.

Why did Yahoo buy Delicious?

Yahoo bought Delicious to improve the performance of Yahoo Search. Algorithms are all well and good in selecting the pages to return in response to a search query, but they can be fine tuned by some human input. If you are running a search engine you would like to have an army of little elves to search the web and select the best links so you can feed their finds into your search engine. You could pay elves to do that, but they are expensive. A cheaper solution is to build or buy a bookmarking service and note what people are bookmarking.  Bingo, you have a free human powered search engine working for you in return for proving the searchers with a free bookmarking service.

Why do they want to sell it now?

Because they have stopped running their own search engine. Yahoo Search is now powered by Bing. There is no longer a business case for operating Delicious. Yahoo are not selling Delicious because they are stupid or evil. Its just business.

Who might want to buy Delicious?


Some big company who is very keen on search and does not have a bookmarking service [well, they do, but it is crap]. Can you guess who they are?

Why do companies offer free online bookmarking services, RSS aggregators and blogging platforms.

The business case for running RSS aggregators is the same as for bookmarking. If you run a service you can watch which feeds people subscribe to and which items they read.  You then feed their choices into your search engine. That is why Ask had Bloglines [and dumped it when they gave up search] and Google has Reader.

So, why does Google run Blogger?  Well, it is connected with search, but in a different way. Google runs Blogger so that people will create content and give Google Search users good stuff to find.  The more good stuff people find the more they use search.

That is why companies spend money running these free services. It is because they make money from search.

Bloggers can replace journalists, Not

The exposure of MP's expense claims has been a triumph for the Telegraph newspaper. The story is one of the most important that has appeared in recent years. It is also a clear demonstration that bloggers cannot replace journalists.

For a start, bloggers do not have the resources to handle such stories.  I understand that the Telegraph has twenty five journalists working full time on the story. There are two million PDF documents that have to be analysed and then double checked.

In addition, the journalists have been able to publish their stories because of the support of the newspapers legal team and the backing of the Telegraph's financial resources.  What blogger would have the nerve to publish some of the material that has been appearing in the Telegraph? Especially not with the libel laws we have in Britain.

Newsprint may be dying but we are still going to need professional journalists and news organisations. We just need to find some way of paying them.

I will not be sorry to see newsprint disappear. The technology had too many limitations.  Electronically delivered news and comment is much better. For example, electronic news can

- include video, audio and graphics. The NY Times has been particularly good at producing informative graphics.

- be sold worldwide at no extra cost.  For example, British e-news can be sold to our large expatriate community.

- can include links to other content. The BBC is very good at linking to their own past stories and external sources.

- can include unlimited large high quality pictures.  For example, see The Big Picture and The Frame.

- use archived material. No longer is yesterdays news just chip wrapping paper. It can be commercially exploited for years. It is often conveniently forgotten that while electronic news  has reduced some revenue streams, it has also eliminated some costs and created  new sources of reenue.

- eliminates paper, printing and delivery costs.

- provide much better management information. Editors can see what people are actually reading.

There are many other advantages. At the moment newsprint is more portable. As electronic paper improves even this advantage will disappear.


Though we need news organisations, we do not need as many as at present. Many newspapers have little social or political  value. Who would miss the Sun or the Mirror if they  disappeared? Many local newspapers have just been exploiting their local monopoly to overcharge for advertising. Who needs them?

The market will settle the question on newspaper survival.  Many will go under and most of those will not be missed. The ones that best adapt to the new technology, provide quality journalism and develop a viable business model will survive.

How to move your RSS subscriptions [feeds]

This post explains how to move your RSS feeds from Bloglines to Fastladder. The process is similar if you were moving from Bloglines to Google Reader, or between any online or offline RSS aggregators.

The process is very easy because all aggregators allow you to export or import your RSS feeds in a single file [called an OPML file].

Let us suppose that you are dissatisfied with Bloglines and want to move to Fastladder.

Step 1

Click on ‘Export Subscriptions’ in the bottom left hand corner of the Bloglines page.



Step 2

Save the OPML file containing a copy of all your feeds to your hard disk.



Step 3

Open an account at Fastladder.

Step 4

Start Fastladder and click on ‘Others’, and then ‘Settings’.



Step 5

Click on ‘Import’



Step 6

Click in the ‘Upload OPML’ box and the click on ‘Browse’. Browse to the OPML file you downloaded from Bloglines and select it.




You are finished. You have now moved a copy of all your RSS feeds to Fastladder. Your Bloglines account is still open and has all your feeds. You can go back to Bloglines at any time.

The Colonel Cathcarts

Colonel Cathcart is a character in Heller's novel Catch-22. The book is about an American bomber group in Italy during the Second World War. Cathcart is a group commander who wants to be a general. To his achieve his ambition is willing to do almost anything, including entirely ignoring the welfare of his own men and the military objectives of his own country.

He thinks of everything in terms of “feathers in his cap” or “black eyes”. A “feather in his cap” is anything that he does that he thinks will be looked on favorably by his superiors and might further his ambitions. A “black eye” is anything that he thinks might earn him criticism.

It doesn't matter to Colonel Cathcart whether what he is doing is right or wrong, just whether it produces a feather or a black eye. He doesn't care whether he does a good job. He doesn't care whether he is behaving in a moral fashion. He doesn't even care whether what he does is militarily correct. All he cares about is a feather or a black eye. He finds out what will look good and does it. It doesn't matter if it is the right thing to do. Anything that doesn't produce a feather can be neglected. Anything that might produce criticism or controversy, and therefore a black eye, must be avoided like the plague.

Colonel Cathcart is the ultimate wannabe. As such he is a personality stereotype. I'm sure you know some Colonel Cathcarts. I certainly do. I work with several of them. Such people are deadly to the welfare of their organisations. Unfortunately, in the less perceptive organisation, rather than being expelled, they are often promoted. In a business the market ultimately corrects such mistakes and forces the organization to expel its Colonel Cathcarts. In the public sector the market cannot exercise such checks and the Colonel Cathcarts can thrive.

Anglo-Saxon Model v Nordic Model

We're often told that the Anglo-Saxon model of social and economic development is superior to the welfare state model of the Nordic countries. Usually, the people telling us this are the minions of the few extremely rich men who control the British press. Social welfare programs make peoples lives too easy, they say. If you featherbed people they will not be motivated to work, and this will result in national economic decline. Look at the United States they exclaim. Look how prosperous they are with their dog eat dog society. We should have more of the same. Well, if I was a billionaire I might very well believe that we should have the same kind of society in the United Kingdom that they have in the United State. But I'm not, and therefore I look at these statements with a degree of skepticism.

Is the Anglo-Saxon model, followed primarily by the United States, the United Kingdom and the countries of the white Commonwealth, actually superior? This article in the Scientific American argues to the contrary. It points out that the Nordic countries have a higher average per capita income, a higher rate of R&D spending, a lower poverty rate and better budget surpluses than the Anglosphere countries. It does concede that the Nordic countries have slightly higher unemployment rate.

There are a number of other measures of performance that might lead one to be skeptical about the view that the Anglo-Saxon model is always better.

Germany, which has less than one third of the population of the United States, exports as much. Germany is far superior to the United States if we take exports as a measure of how well a country can compete in the world economy.

Let's look at another key economic measure, that of employee productivity. France has a higher rate of productivity per employee hour than the United States. That may in part be due to the better education of French employees, compared to those in the United States. Workers in the United States produce more in total, but that is because they work much longer hours than the French

The Finns came first in a recent survey of national educational systems. Several other Nordic countries also rated highly. Neither America nor the United Kingdom came in the first 10. The United States has a fine university system, but it schools are in a deplorable state. The ones in the United Kingdom are not much better.

There are other things that we could look at. One might be the rate at which a country imprisons its citizens. By this measure both the United States and United Kingdom must have truly appalling societies if they find it so necessary to imprison so many of their citizens.

How the little computer book got fat

Last night I was listening to a podcast by Joel Spolsky and he had a nice little story about how computer books [Excel Made Easy, etc.] came to be so fat.

Apparently, publishers found out that readers were buying such books mainly on their thickness. If somebody wanted to learn how to use Excel they had no way of knowing which book might be best, but were inclined to buy the thickest book in case it contained more useful stuff.

Publishers started to press authors to add extra chapters and lots of screen shots to books to fill them out. The result was an obesity problem amongst computer manuals. Instead of people being offered the slim, concise and cheap books they really needed, they finished up only being able to buy fat and expensive books that were full of padding.

Spolsky also said the computer book industry grew out of piracy. People illegally copied programs, and then needed manuals to know how to use them. It used to be that Microsoft and other software firms provided excellent guides to their programs. Then it all went online to reduce costs/increase profits [delete the one you think does not apply]; but online help is not as good as having a well written manual.

Why McDonald's Fries Taste So Good

"Their distinctive taste does not stem from the kind of potatoes that McDonald's buys, the technology that processes them, or the restaurant equipment that fries them: other chains use Russet Burbanks, buy their french fries from the same large processing companies, and have similar fryers in their restaurant kitchens. The taste of a french fry is largely determined by the cooking oil. For decades McDonald's cooked its french fries in a mixture of about seven percent cottonseed oil and 93 percent beef tallow. The mixture gave the fries their unique flavor -- and more saturated beef fat per ounce than a McDonald's hamburger.

In 1990, amid a barrage of criticism over the amount of cholesterol in its fries, McDonald's switched to pure vegetable oil. This presented the company with a challenge: how to make fries that subtly taste like beef without cooking them in beef tallow. A look at the ingredients in McDonald's french fries suggests how the problem was solved."

Inside Dell's manufacturing mecca

Inside Dell's texas plant. 2,350 PCs per hour and no guns allowed on site. Make sure you take a look at the slide show.