I don’t make any money on this; and I rarely promote products. But this is a great deal, and I just bought one.
You can get an Antec Earthwatts 380W power supply for $5 (after rebate) with free shipping. The 80plus power supplies will generally reduce your computer’s power consumption by 20-25%.
Newegg is selling it for $35 with free shipping.
Here is the $30 mail in rebate, which expires today.
For the intelligent readers of this blog, this entry is just a rant. I heard a segment on the radio tonight about “Should you Refinance”, and I was pretty appalled at the advice given. The expert on the radio said, “If you are already well into your loan, one drawback is that you’ll reset the clock for 30 years with your new loan…”
Ok, well its true that you generally get 30 more years to repay. But since when is that a drawback? His statement reflects the underlying principle of how Americans view loans – and it is very troubling.
Refinancing shouldn’t be about getting a lower monthly payment unless you simply can’t afford your current loan (should be rare). Refinancing should be about saving money because you are paying less in interest each year and paying more against your principal instead. It’s pretty simple.
Are we so stupid that we think we have to put the dollar amount that is on the payment slip each month? Yeah, I guess we are – welcome to the land of the ‘interest only’ ’30 year loan’.
You know you’re a geek when you decide to upgrade your Linksys Router from it’s standard OS to a linux kernel. But, I just did that- and my router now runs DD-WRT.
The instructions to upgrade my WRT54Gv5.0 worked like a champ!
Given that it’s only been up for a few hours, it’s too early to tell if it is any better. The administration console is definitely more advanced and a bit better for me, so I do like that. Also, there is this setting to supposedly increase the power for the router’s signal. I’m hoping that will increase connectivity range; but so far, the tests are inconclusive.
Definitely cool, however.
News from the small world department:
I met a guy today that I had interviewed some time back. I didn’t remember him; but he remembered me (indicating that it’s clearly more stressful to be interviewed than to do an interview!). Anyway, turns out I had given him my interview question. He liked it so much he had asked it when doing interviews later. Nice! I guess it’s not a bad question 🙂
I recently discovered Prosper – a “peer to peer” lending system. I instantly loved the idea – that you could connect lenders and borrowers via the web with low overhead and create a new market. I spent a lot of time researching it, and came to the brink of lending my own money on Prosper. Unfortunately, I’ve discovered that it doesn’t actually work.
The Basics
The basic idea is that Prosper offers 3yr, unsecured loans to individuals. If you sign up as a borrower, your credit report is drawn, you create a listing on the site for why you need the loan, and lenders bid on your loan. Potential lenders also sign up on the site, browse through would-be borrowers, ask questions, review credit history, and lend to those loans that appear to be good investments. Prosper provides great analytics about expected ROI for different types of borrowers. Prosper makes this data available, you can even use it offline to crunch your own numbers. Overall, the site is very well designed, has a great set of features, and even community groups to help users work together.
For the potential lender, you’ll get paid back monthly, Prosper takes a 0.5-1.5% fee, and you can earn interest competitive with unsecured lending rates from banks. For lower-risk loans, this is currently 10-12% annually. Of course, if borrowers default or don’t pay, it will get sent off to collections, and you’ll be out of the money. Prosper recommends diversification to avoid risk, which means instead of lending $500 to 1 person, you loan $50 to 10 people. If one defaults, you’re only out 10% of your cash.
Overall, its a cool idea! But does it work?
The Data
It’s hard to determine conclusively if the system works. But after analyzing it, I believe it does not. Unfortunately, Prosper tends to generate significantly larger default rates than you’d expect – even among borrowers with supposedly AA credit ratings. I used Prosper’s own performance search tools to conclude this. There aren’t any matured loans to measure on Prosper (since Prosper is less than 3 yrs old). So instead I measured loans originated between June’05 and Jan’07. Among AA borrowers, the average default rate was 3.35%. This is extremely high; Prosper’s “lending tips” video that they use to introduce lenders to the system says, “based on historical loan performance data for similar credit, AA borrowers have a less than 1% annualized rate of default.” (The video shows “0.2%”, while the audio says, “less than 1.0%”). Either way, even if that is true, it’s far away from what Prosper lenders are seeing today.
For further proof, I checked the Prosper discussion groups. It took a bit of searching, but alas I did find a thread titled, “Are oldtimers still actively bidding and lending?” Here, several long-time users confess that they have stopped using Prosper for exactly the reason mentioned above – excessive default rates. The responses were almost all negative, with conclusions such as, “The only way I would ever make another bid [to loan money] is if I knew the borrower personally” and “I’m discouraged about how many people seem to have had no intention of ever repaying”.
Lastly, LendingStats is a great 3rd party website for visualizing lending data on Prosper. It’s clear that some long term borrowers are making very low returns (1%!), that the delinquency rate in several states (such as Texas) exceeds the average rate of return, and if you consider the largest 10 lenders, none has an ROI greater than 7.86%, with the worst having a -18% ROI.
It is also clear that loans are more likely to default in the later period of the loan; this makes sense – as a borrower who could afford a loan in 2006 could have faced significant changes in life to make it hard to afford the loan 2-3 years later. One Prosper user writes, “the problem is that the late payments and defaults seem to be accelerating over time. It almost seems exponential.”
Other Problems
There are a few other issues with Prosper as well. One old timer wrote that Prosper is just too time consuming. This is personal choice, of course, but one which I share. Research and work is the key to all good investing. Research on Prosper, despite Prosper’s awesome web site and tools, is time consuming. Advanced users use automated programs to decide which loans to bid on. This seems like a good approach, but again, requires lots of research and time to figure out what the right “model” is for investing.
Collections is also a problem. As you’d expect, collections is done via a collection agency, hired by Prosper. The incentives for collecting unpaid debt seem out of place here. Because the lender for a single $5000 loan may be 100 small-time investors with only $50 at stake each, who is really making sure that collections is dealt with optimally? No single individual has enough at stake to really audit the process.
Finally, I think human nature is the biggest problem with Prosper. Understanding whether a borrower is responsible for a loan is a tricky thing to do. Now try to do that without ever meeting the person, and with the anonymity of only having their “alias”. It’s no wonder that a borrower feels less obligation to pay Internet debt than traditional debt. And you can bet that the defaulters always have ‘real world’ debt in addition to their Prosper debt.
Conclusion
I hadn’t planned to invest more than toy-money in Prosper. But I’m glad I kept researching instead of just diving in. It looks to me like Prosper will return your money at best (after 3yrs), and lose a little money at worst. It’s too bad, because it’s really a neat idea; except that it doesn’t actually work!
As this blog has garnered more users over time, there have been a couple of comment threads which have degraded a bit. Recently one was brought to my attention where a sole proprietor from one small company wrote some comments which were not well received by others. He used his real name, which is somewhat uncommon – let’s call him “SmallGuy”. Readers then replied back saying that SmallGuy was bad unreliable and a rip off.
Unfortunately for SmallGuy, this blog is more popular than his company’s web page. Google picked up the whole conversation, and a search for “SmallGuy” now brings up belshe.com above SmallGuy’s website, including “SmallGuy sucks” right in the snippet!
Obviously, SmallGuy is not too happy about this; customers searching for references on him don’t see very good stuff. And all of this is because he posted a comment using his real name on my blog, and he probably didn’t think enough about the possible long term effects of this comment before he wrote it.
Unfortunately, SmallGuy’s name is pretty unique. If it weren’t so unique, Google wouldn’t show belshe.com as a top result for his name. Everyone should remember that data that goes up on the net goes up forever. You can’t take it back once you press ‘post’ – ever. Even if I deleted the comment, its still out there in untold numbers of RSS caches, archives.org, and other places.
Those of us with unique names need to be doubly careful. On one hand, our uncommon surnames lead to better prominence on the net for those searching for us. On the other, if you say anything bad, it’s permanent and undeniable. If your name is Smith, you don’t have to worry!
As for SmallGuy’s dilemma, I offered that if he can get the poster of the negative comment to send me an email to change the comment, I will do so. That is, if he can solve his own customer issues, then he can mostly fix this.
In addition to the new Windows Stay At Home Servers Marketing, Microsoft Server 2008 is also launching it’s humorous marketing campaign. I like the part about drinking a “blue screen”!
Seems Microsoft is getting a little softer.
UAC, the impetus behind the famous Mac commercials, and the biggest frustration in Vista does have some reasoning behind it. One is that Microsoft wanted to allow non-techies to be able to use their computers without having admin rights. This is generally good. Techies that complain about UAC aren’t complaining just because of an extra step in getting a job done. They’re complaining because UAC is so annoyingly stupid:
– If you right-click on an item on the start menu and select “Run as Administrator”. It then prompts, “Cancel/Continue?”. It’s like when you asked your Mom for a glass of water and she replies, “I can’t hear you”, and you then had to reply, “May I have a glass of water, please?”
– Similarly, typing “regedit” at the command line forces the prompt. I specifically typed 7 characters and pressed return, does another mouse click really help?
Of course, the Microsoft engineers aren’t dumb, they did this on purpose; and the reason is usually misunderstood by those writing about UAC. Notice that when you are prompted for the privilege elevation, the entire screen dims, and the only window usable is the security prompt? Jesper, like many others, writes that UAC has nothing to do with malware. But this is not true! The elevation prompt screen is in a locked-down UI state; non-privileged programs are denied access to the UI at this time. This prevents a virus from moving your mouse to administrative programs or from typing “regedit” at your administrative prompts. It also prevents a trojan from displaying a dialog that *looks* like the UAC screen and getting you to type your password into it. This is why ItsVista noted that they couldn’t issue a print screen command on the elevation prompt. The malware countermeasures of UAC are much better described in this article from Microsoft.
Contributing to the confusion about UAC is that Microsoft employees have watered down the feature by implying that it’s not a security feature; Mark Russinovich writes,
“Because elevations and ILs don’t define a security boundary, potential avenues of attack , regardless of ease or scope, are not security bugs.”
I suspect this is lawyer talk; I don’t really understand it. To claim that all this good work isn’t security either means that you know there is a big hole in it (possible), or that a lawyer said not to describe it as a security feature so you don’t get sued. Jim Allchin likewise had some watered down comments about UAC here. Both claim that the only ‘secure’ way to prompt is to use Ctrl-Alt-Del. They are probably right. Windows has the fundamental security flaw that it allows one process to see the keystrokes and mouse events destined for another. This design flaw (also a flaw in many other windowing systems), is ultimately the reason we have UAC today.
Peer To Patent looks interesting (read the overview) – it facilitates getting public review of software patents.
Peer To Patent is a cool concept. Definitely positive. I wonder if there is enough incentive to reviewers to actually get substantial review? What if a few gracious companies offered cash to anyone that debunks a potential patent?
I’ve alternated between using each of these products over the last few years. Usually, it’s incredible how BOTH have the exact same offerings at the exact same price. This year, it’s a little harder to find their best price.
I’m not a big believer that either of these software packages can save you money. You still need to do your own research, understand your income, and experiment with filing methods to determine which path best optimizes your situation. But both do provide lots of tips for helping you discover the potential pitfalls and windfalls. Honestly, I see very little difference in functionality between these products.
The H&R Block web site offers the “Federal + State” package for $39.95. I haven’t seen a better price or any coupons.
The Intuit web site offers “Deluxe Federal + State” package for $44.95. However, you can buy this same software from Costco for $35.99. Further, this week Costco is offering a $15 coupon for it, so the price is effectively only $20.99.
Intuit is also promoting their online product; but it appears to be far more costly – $29.99 for federal and an additional $29.99 for state; e-filing is included for free. $60 and you get to put all your personal information on someone else’s web site! Hope they don’t get hacked! (If you were a hacker, it might be a gold-mine to try to hack, eh?)
Anyone find any better deals?
This year I’m using TurboTax; $20.99.