DB Update again... Except it ain't DB.

Just when I thought DB and I reached a truce, his partner decided to play censor.

Previously I've explained an incident where a comment about DB's writing style was censored by partner, and how DB is fond of claiming that MLM is a racket and ought to be treated like one by applying the RICO act on them.

So I took a look at the RICO act, at the actual text, mind you, NOT the wikipedia summary. It defined rackteering activity as a LOT of things, but none of them really applies to what MLM does.

So I posted the observation over, hoping for an honest discussion on the limitations of RICO act and its applicability on MLM. as DB claimed that other countries should adopt similar legislation to RICO.

The observation was DELETED by partner, with a comment about it's unsolicited, misinterpreted, and untrue.

Unsolicited is fine, but hardly irrelevant, as it was DB that kept mentioning RICO act  (3 times in past 5 blog posts).

Misinterpeted... Okay, except the partner claimed I misinterpreted WIKIPEDIA. I did NOT! I interpreted teh ACTUAL TEXT of the law, NOT Wikipedia! (I even included to link to the text)

Untrue, that people have inintiated "private prosecution" of Amway under RICO act... Okay... Google... yep, some former Amway reps sued Amway under RICO act, which is one of the provisions... private lawsuits. However, the case has NOT concluded, and Amway is prepared to settle the case back in April 2011, but the judge didn't like the settlement and told them to work it out some more.

That wasn't a conviction or even an admission or guilt.

Thus, the partner's behavior is extremely troubling. To be blunt, this person is censoring any comments that can be remotely construed as counter to their viewpoint, that they cannot debate or ridicule. if they think they can ridicule it, then they will publish it and ridicule it. If they can't, they'll delete it and claim "they don't allow untruths to be posted for the free-thinkers".

Clearly, there's a limit to their free-thinking.

Now let's go onto RICO, and MLM.

The lawsuit, which can be found here, claimed that Amway's business is fundamentally fraudulent, thus any attempt in mailing stuff out to members and communication over the Internet to promote such business model would constitute mail and wire fraud, which ARE two activities listed under racketeering activities under the RICO act.

As you can see, this gets messy very quickly, but then, lawyers are known to stretch the truth somewhat. :)

To make RICO law applicable to Amway, you must prove that wire fraud and mail fraud took place

You then have to prove that the magazine subscriptions are indeed, fraudulent, or contain material that are fraudulent, thus, constituting mail fraud.

You then have to prove that the internet communications are indeed, fraudulent, or contain material that are fraudulent thus constituting wire fraud.

If you can prove TWO of those acts are fraudulent, then you can have a RICO case, as two acts within 10 years constitutes racketeering.

You see the problem? What's in the Amway magazine? Have you read one? It's basically a bunch of self-help tips, profiles on 'successful' IBOs, announcement of new products, new markets, and other developments. In other words, a cheerleading magazine designed to make Amway look good. But is it fraudulent?

Or is Amway's website fraudulent? Because if it is, then it's wire fraud.

See the problem? How do you exactly prove that the magazine is fraudulent or promotes fraud? How about proving that the website is fraudulent or promotes fraud?

Hmmm...

Baloney Detection Kit used on pseudo-MLM scams

The Baloney Detection Kit by Michael Shermer I highlighted earlier can be applied to other types of baloney as well, not just pseudo-science. Here's its application go pseudo-MLM or pseudo-economics (i.e. financial fraud and claims).

http://hubpages.com/hub/How-to-apply-the-Baloney-Test-as-test-of-legitimacy-to-any-MLM-Opportunity

Related articles

• 5 Differences Between a Legitimate MLM and a Pseudo-MLM Scam (richdadobservations.blogspot.com)
• PowerBalance Admits Their Wristbands Are a Scam [Snake Oil] (gizmodo.com)

Confirmation Bias: the hole you dig for yourself

Confirmation bias is a universal problem, and has been observed as far back as classical Greek periods. Basically, it is a tendency of the mind to seek evidence to reinforce existing thinking... Or in other words: digging a hole for yourself.

http://hubpages.com/hub/Confirmation-Bias-What-is-it-How-it-affects-You-and-How-to-Deal-With-It?done

Related articles

• Is Reasoning Built for Winning Arguments, Rather Than Finding Truth? | The Intersection (blogs.discovermagazine.com)
• Brain Genetics of Taking Advice, or Not (brain4biz.wordpress.com)
• Confirmation Bias & The Availability Error (kestalusrealm.wordpress.com)

Hey, we're on the SAME SIDE!

Image via WikipediaRecently, I seem to have gone into some sort of a "debate" on the merits of Amway with a guy called David Brear on another blog called CorporateFraudWatch.blogspot.com


The comments started calmly enough... I was thanked for bringing attention to the scam known as TVI Express. However, here Mr. Brear calls TVI Express "Amway Copy Cat". 


So I posted a few comments thanking them. 


Then David Brear goes on claiming I am some sort of expert, then ascribe some sort of a conspiracy group behind TVI Express. Quote: "Kasey Chang is undoubtedly a world authority on 'business opportunity' fraud in general, and the 'TVI Express' racket in particular"


So I posted what I have on the "mastermind" behind TVI Express, Tarun Trikha. 


David Brear, however, is completely fixated on Amway, as he immediately starts pointing out how Tarun Trikha seem to be using Amway cult tactics. 


I pointed out that TVI Express is far more of a scam than Amway ever could be. Amway at least HAVE some products, while TVI Express have no products AT ALL. Thus, Amway *could* be operated legally and ethically if one chooses to do so. 


Then the blog owner, Shyam pointed out that an Indian court had recently ruled that Amway India violated the Indian version of the anti-pyramid laws. 


So I replied that I am not familiar with Indian law, and one should be concentrating on the true scams such as TVI Express, instead of something that *may* still yet operate legitimately, such as Amway. 


That comment was not well received by Mr. David Brear. Apparently, my failure to join him in the wholesale condemnation of Amway (and probably the entire MLM industry) had made me his enemy, as his tone turned downright hostile. In not so many words, he called me an Amway apologist, claimed that I was trying to defend Amway cult and all that. 


So I repeated my comment, that compared to TVI Express, Amway is quite benign. I even pointed him to Robert L. Fitzpatrick's "False Profits" blog. That's a real anti-pyramid crusader. 


That's not enough to appease David Brear though. He claims I was being condescending, that I assumed they don't know about Mr. Fitzpatrick, then goes into some conspiracy about how the US government condones MLM to scam people around the world. Then he links up religious right to the MLM industry. 


Frankly, I have NO position on Amway. It has been operating legally in the US (and elsewhere) for DECADES. What Amway does in INDIA, frankly, is none of my business. I have not studied Amway in any way, shape, or form, except peripherally as part of studying up on TVI Express, and how TVI Express scam CANNOT be multi-level marketing. As Amway basically defined what is legal MLM in the US, I know it "somewhat", nowhere well enough to defend against Mr. Brear's tirade that essentially said "you're either with us (i.e. against Amway) or against us."


So why can't Mr. Brear see that we're on the SAME SIDE, AGAINST FRAUD AND ABUSE? What's with the "you're with us or against us" attitude? 


What Mr. Brear have... is a reading comprehension problem. 


I wrote that Amway *can* be operated ethically, by selling stuff, and ignore the cultish ways like buying all those training packages and recruiting people. (You can recruit a few who are good marketers / sellers) and I meant that. 


However, it appears that Mr. Brear didn't read that. What he actually read was "Amway IS ethical", which is clearly NOT what I wrote. I am well aware of some of the accusations regarding Amway "cult" and related companies,like Quixtar, as one cannot help to read some when searching for MLM abuse examples. Confession: I *have* been recruited for Quixtar and I refused. They are horribly annoying. 


Thus, please drop that "you're with me or against me" attitude. It makes you sound like a fanatic. 

Related articles

• Amway, Fortune High-Tech, and Pyramid Schemes (lordsetar.wordpress.com)
• Amway settles suit, to replace $20M in gift cards (seattletimes.nwsource.com)

Helium -- where junk content is valued and real content is rejected for "lack of quality"

Image via CrunchBaseFollowing is my personal experience on Helium  ( http://www.helium.com/ ) Your experience can and will vary.


A long while back (several years ago) I joined a variety of places where you supposedly write things to make money (sort of freelancing). At the time, I thought Helium was interesting as it has a mutual rating community. Multiple people write articles about a single topic, then you are randomly asked to rate the articles (which is better of the two given).

So I wrote a few.

Then I realized the raters are all bigots.

They don't actually rate the articles based on quality. They just rate that they "like".

I wrote an article on "abandoneware". Legally, there is no such thing. Morally there is no such thing either. There is no such thing as "squatter's rights" to intellectual property. The #1 article claims "unsupported software" is considered "abandoneware". Others actually claimed a moral right to abandoneware as long as no harm can be proven. As predicted, my article ended at the bottom of the heap, even though I believe it is the most technically accurate of the 6 articles on that topic. That was in 2007.

So I abandoned the place.

In 2010, I was busted a scam called TVI Express, and I found a lot of writers were singing praises about TVI Express on Helium. So I gathered up all the facts I got, put in proper citations to actual news articles, and explained it's a scam, by citing all the inconsistencies, all the lies the distributors told, compared the structures to all the laws, and so on, and declared it a scam.  (I'll reproduce the article below)

The article was rejected for "LOW QUALITY" that does not meet Helium's standards.

WTF?!


At least the #1 article is a "scam busting" one from Shawn Cornett of ExpertMLMReview. #2 and others are singing praises of TVI Express, and that's just bull****.

So there you go: I think Helium is a community of bigots, based on my experience. Its raters are not rating for quality. Of course, I may be bigoted as well. That's why this is a RANT. 

Mannatech and their fanatical following

Image via WikipediaI have no idea whether their products do any good (and in my own opinion, they do not) but that's not relevant. I've been getting into a bit of discussion with a Mr. David Maddern, who, thus far, has demonstrated a willingness to defend Mannatech, even when all evidence is against him. Instead, he finds some other excuses to continue the defenses.

By my count, Mr. Maddern had won ZERO rounds in our two months of verbal sparring. He had barely edged a tie in 2 rounds, but lost 12 rounds. So that's a complete disaster.

The discussion can be found at http://behindmlm.com/companies/mannatech/sugarmums-com-au-whos-behind-the-business/

Here's a tally of each conversation, and sort of a "tally". I am KC, and he's DM

DM: Makes wild claims of 46% commission payout and such

KC: Calls for proof

DM: Throws out Mannatech website as "proof", names MTEX stock symbol

KC: Finds stock symbol completely unimpressive, massive losses

DM: Starts blabbing about "Mannatech is NOT sugar pill", cites some unproven explanation about cell science

DM: Claims Mannatech is losing money because it's donating vitamins for third world nutritional relief

KC: Calls DM's explanation "pseudo-science", explains "dip" in stock price occured LONG before nutritional relief announcement

DM: Replies with "you don't understand us / our science", blabs more about glyconutrients

Stock and general info round goes to KC, DM abandons the field

Cultural Baggage and Entrepreneurship... continued

AdroitAlien and I have a little discussion on Cultural Baggage and Entrepreneurship... This is his reply where we were discussion on China, labor, and more. He wrote:

If you were talking about cheap labor in general, how exactly is that exploiting? More to the point, who are we to decide if their labor standards are unfit? And if they are unfit, who is to blame? Do you see my point here? Even if we replace the "child labor" with "cheap labor", my previous point would still be valid. Supply and demand works in favor of demand. If there is a surplus of demand, people will find a way to fill(Supply) it. If there is a surplus of supply, demand falls(Unless they are commodities). It is the US that is the main source of these products. We are the demand.

Well, the point was not about "cheap labor", but rather exploitation of cheap labor is not really entrepreneurship. Any one in business knows "buy low sell high". It doesn't take an entrepreneur to see that. Real entrepreneur creates new products, exploits new market niches, creates new service, and so on.

I don't believe the GDP and annual growth is fiction and I don't expect anyone with the ability to critically think to believe that. I've been following Nielsen for a while now and I am constantly reminded of Asia's growth.

http://blog.nielsen.com/nielsenwire/consumer/chinas-next-frontier-its-rising-cities/

They do market research with measurable data to back it up. I have no affiliation with them.

China's GDP is widely believed be fiction. Just search "China real GDP" and you'll find plenty of economists doubting the numbers released by China. One economist is quoted as saying that the published figures on how much freight is moved doesn't correlate with the GDP figures. Local governments are know to inflate their figures to make themselves look good. China's GDP is a POLITICAL figure, not an economical one, so its reliability is low. The fact that China's Consumer Price Index has jumped to over 5% just in 2010 should tell you their GDP is actually due to INFLATION instead of actual growth.

As far as their banks controlling inflation, how is that different from the Federal Reserve's tactics of printing money[digitally]? Our system isn't even audited(yet). Congressman Ron Paul is pushing for an audit as we speak.

China's Central Bank has FORCEABLY ALIGNED thei Yuan (RenMinBi) to the dollar, refusing to budge even a few pennies. It is only late in 2010 that they allowed a TINY rise in exchange rate, and that was huge news. However, it did not prevent their CPI from taking a sharp rise, and real estate market going into a bubble. They are trying to manage the bubble, hoping it doesn't go KABOOM.

The approach is one of indirect control, vs. one of direct control. VERY different.

If Foxconn is a Taiwanese company, isn't that still Asian? A contractor often times outsource work. This is nothing new. They're still working for Apple. And when you say cheap labor, you're saying it like it's a bad thing. Very strange coming from a pro-business article. And this relates with my point on the prison industrial complex here in the US. Even if we conclude it to be a bad thing, we are doing the same. Why hire workers for $10 an hour when we can outsource the work to prisoners for 65 cents an hour?

The point actually is the "innovation" is NOT in China, but rather, in the US or elsewhere. Chinese companies are NOT known for their entrepreneurship and innovative spirit. China is known for being a copycat, producer of cheap clones, and for industries, a lot of industrial spies. It's not about whether the innovator is Asian or not.

Okay, I'll give you that. Sure, they have plants in the US and Mexico. Does that justify them kicking our butts in our own country? When nationalistic American say "Support America, buy American." Will, you raise your hand and make a point to support Toyota for having plants in America?

Then the point of "protect American jobs" goes away, doesn't it, if these "foreign" cars are actually built in the US? Boycotting them would be pointless. In fact, every new car sold in the US actually has a label that explains where the vehicle is assembled, and how much of the parts used were imported.

I'll humor you again. If the Japanese auto makers are getting "bailouts" for decades, who is to blame? The car makers for getting the bailouts or our governments for giving them? BTW, I don't consider loans "bailouts" no matter how low the interest rates are. A loan is a loan.

It wasn't blame. It was simply very different circumstances.  Besides, the "bailout" in the US is a loan. US paid a lot of money to become part owners of GM, and the money WILL be paid back when the shares are sold later. Chrysler's version is a little different, but basically they sold a big chunk of themselves to Fiat. 

So the difference between a business and a job is measured in time? If so how much?

The original quote is "if you have a business in which you spend most of your time, what you have is a job".

The point is that a business is supposed to generate PASSIVE income... that it makes money without your personal involvement. It's okay to be self-employed, but then, self-employed just means job, except you are your own boss. It's not really entrepreneurship.

I don't want to turn this into a east vs West or China vs the world thing. I know Japan, Taiwan, Korea, etc are all part of the eastern culture. I just don't buy into the hate. Recently, China has limit the amount of precious materials, like Lithium, for export and they've been getting bad press for it. I say, how is that different from what we did to Cuba? This is not a debate on Eastern business culture = bad, Wester = good. I am taking no sides. I am here to say, "The pot calling the kettle."

It's NOT hate. it's simply DIFFERENCE. You have to unlearn part of the upbringing about conformity and all that (that's in the original Hub article). It wasn't really about east vs. west economic war, but more of an IDEA or CULTURE conflict.

Btw, just to clarify a few things. Morally, I do not support the child labor in China or anywhere but I do understand it. Also, innovation goes well with efficiency. Whether or not we agree with it, China and other parts of the world have made electronic good cheaper for us, the consumers. They are an industrialization country right now. We can't expect them to innovate as well as Japan or the US.

And if they ever want to become a "first-world country" they need to actually innovate instead of copy. Japan did that. 

Related articles

• Instant view: China GDP growth speeds up, inflation eases (reuters.com)

RANT: China's real estate prices... WORSE than the US bubble!

Any one care to guess how much did our real estate prices spike during the "boom days" leading up to the sub-prime mess? Here is a graph from Wikipedia showing you the price spike:

The price index went from year 1998 or so, at just over 100, to 185 at 2005. That is roughly 80% increase. (see the original wikipedia article), in about 7 years. Right?

Guess how the real estate prices in China is doing?

(linked from http://www.businessinsider.com/the-state-of-chinas-real-estate-market-in-60-seconds-2010-3 )

This is from Feb 2007 to Feb 2010, a mere THREE years, 60% increase. Their real estate bubble is growing much faster than the rate of our bubble.

Will they CRASH EVEN HARDER THAN US?

Deliberate misinterpretation, ARGH!

Image via Wikipedia

Why do some people choose to interpret stuff their way, instead of the normally accepted definitions?

One job recently called for a "15-seater".

A 15-seater van, as most people are aware of, has 15 seats (including the driver's position). Last row has 4, then 3 rows of 3, then two up front, for a total of 15. That's TOTAL capacity of 15, thus, 15-seater.

The person who ordered it actually did ask me, upon seeing the invoice (on which I wrote "15-seater charter") how many people is that, I replied "that's including the driver, so 14 additional people".

On the day of the ship, she argued and basically forced the driver to take one additional people, claiming that 15-seater means 15-passengers. The driver refused, as that would mean a ticket for him if he was ever stopped by police, for "overloading", no seat belt, and other offenses. They had a big argument. You don't need to know the result, suffice to say it got escalated to me, and I was exasperated to hear such lack of reasoning, esp. when I *did* tell her that it means 14-seats for passengers, no more!

When we say "it's a sporty two-seater", it mean two people in the car, including the driver, right? We don't call it a one-seater.

So how can anyone then expect a 15-seater to seat 16? (15 passengers, plus driver)

There *are* exceptions in the charter business. For example, when you go ABOVE van, to minibuses and motorcoaches, then the seating capacity no longer includes the driver, mainly because the driver sits in a DIFFERENT area, nominally SEPARATE from the passenger cabin. For example, in one of my old minibuses, the driver is separated from the cabin by a small partition. Even though it's based on a heavy-duty E450 step/van body, there is no passenger seat next to him, unlike some models. So, seating capacity is 25 (5 rows of 4 seats, plus a final back row of 5). I call that a 25-seater, seats 25-passengers. I don't call it a 26-seater. In a different vehicle of the same class (different maker) there IS a passenger seat (and a passenger door, in fact), but there's still a separate cabin. Those are technically 24-seats (6 rows of 4-seats each) with an extra seat for the tour guide / escort. It is "sold" as a 24-seater, not a 25-seater. In fact, some remove the seat and put in storage bins.

In larger vehicles, such as motorcoaches and buses, driver is NOT counted in the 'seating capacity'. It's just convention. When driver is separated from the cabin, they are NOT counted in the seating capacity. When they are NOT, then they are counted.

But there are no partitions in a van. So a 15-seater van seats 15, including driver. Enough said.

(Later we found that that every person she squeezed onto the van means more money in her pocket, which is why she wants that extra person in there. I don't want to mention any names, but this person works for a non-profit, the charter was for an excursion by a bunch of elders, and she solicited me for kickback on this job. Yes, I said KICKBACKS.)

Well, guess what I ran into just this morning...

Image by Shira Golding via Flickr

I had just walked into Starbucks this morning, and had just ordered something. One guy parked his bicycle right outside, and walked in just as another guy opened the door. The guy who opened the door walked up to counter to order... while the guy with the bicycle walked up behind the stand with bags of coffee, and started to stuff bags of coffee down his jacket!

I turned to one of the barristas and whispered, "Hey, that guy is stuffing coffee down his jacket!" And keep in mind, this is right in front of two security cameras. The barrista looked up, and that guy is out the door, hopped on his bike, and gone.

Yep, it's a grab-n-run. The barristas took inventory of damage... Three or four bags gone. About what? $40 worth of coffee? Petit larceny, that is. And how much does he expect to sell them for? $5? Who would *dare* buy "Starbucks" coffee from a guy at a street corner?

And if it's for his own consumption, he'll soon run out of places he can pull this at.

What's the point? I wonder?

Guess what CA wanted to regulate about your car?

Image via Wikipedia

Guess what regulation California wants to pass regarding your car?

A regulation concerning PAINT.

That's right, a proposed legislation will regulate what kind of paint / color you can get in California.

WHY?!?! You ask.

Well, black or dark color car gets hotter in the sun, right? So if you require cars to have lighter colors, you'll use the AC less, and thus, improve mileage, and reduce global warming, right? It sounds like someone from the Sierra Club or Union of Concerned Scienetists would propose: it sounds good, but it's unscientific.

So is the color black doomed as a car paint choice? Not quite.

Now you're going to say, but that made sense to me! But wait!

The problem is... Most of the heat in the cabin came through the glass, not the skin of the car covered by paint. Just think about it. The glass area is right at the cabin, while the area with paint is over the area mostly UNrelated to the cabin.

So how much gas can this idea save? About 10 gallons per car PER YEAR, and this would add over $50 to cost of the car, by most estimates. Not to mention this will severely limit your car's paint choice (black is out, closest is a very dark brown).

It took a study from the National Renewable Energy Lab (NREL) to prove that this idea is a non-starter and that California Air Resources Board (CARB) should axe the idea, and CARB did.

Now CARB is back with another idea: requring glass that reflects a LOT MORE light than the current safety glass, which reflects a mere 6%. According to the proposal, the new windshield must reflect 30% of light (which matches current law of 70% light pass-thru). Side, rear, and sunroofs require even MORE reflectivity.

Please note that the regulations say REFLECT, not absorb. Which means tint is NOT acceptable.

In fact, the reflectivity requirement will jump to 45% by 2014, though in all honesty, it's for new cars only.

The problem is so far, only one company had came up with a new glass formulation that meets the 30% reflectivity... and it's EXPENSIVE, as it involves a nanolayer of silver between current safety glass, among other things. It does not affect visibility.

And what's more, the layer of silver blocks radio signals due to the Faraday effect (any one know what a Faraday cage is?) Thus, radar detectors and internal GPS receivers and anything else that receive radio signals inside the cabin will have problems (yes, even your cellphones, though that can be fixed by special antennas). Oh, and those toll transponders (Fastrak in Northern CA) that used to go inside your car... Now they have to go OUTSIDE.

As you can guess, this will severely affect the cost of a car, adding a few hundred, due to the exclusivity of this glass formula, and the added cost of the glass. In other words, CARB will grant monopoly to this glass maker, if this proposal passes. Yet the gain in energy savings is still debatable.

Not to mention this idea is pointless in the northern states. In the sunbelt, absolutely. But northern states? Nah.

Yet you know everybody follows CA when it comes to emission and energy stuff.

But there are HUGE implications when it comes to completely changing the formula of autoglass that is in use for the past several decades. I am sure it'll pass visibility and crashability, but what about replacement cost, widespread availability of such glass at places OTHER than the dealer, not to mention effects on interior electronics, effect on other drivers (increased reflectivity will affect other driver's visibility THROUGH your vehicle, say into the traffic beyond), and so on?

Then there are additional problems. If an owner is forced to replace these uber-glass with regular glass, maybe due to breakage, lack of parts, and so on, is the car still "legal"? Can it be registered next year like smog test? Will CA charge a "mitigation fee" to register out-of-state vehicles like it current does with cars that doesn't meet CA emissions? Do owners of such vehicles get refund for electronics that no longer work inside, or get a stipend to install conduit antennas to keep these electronics working?

While the intent is good, there are always unintended consequences. I am just not too certain if the consequences of this proposal has been fully realized yet.

Business based on tricking people

The only business that relies on tricking people is magicians. Anybody else, and we call them crooks, and put them in jail.

Except the guys who manage to toe a fine line between warning you not to be stupid, and make you fall for the scam any way.

Here's one example... In California, every corporation incorporated here have to file an annual "minutes" with $25 processing fee that basically updates the government on how your corporation is doing, and who are responsible. Here is one such form:



However, there are some "legal scammers" out there that want to do the same work, except charge you $75 more, for a total of $100. But you do all the work any way, since you get to fill out THEIR version of the form, all the same info. They just copy your info onto a real form, and pocket the extra $75 you sent in. Sounds like easy work, doesn't it? Here's such a form:



He's making money even if he got a response of just 1% (i.e. only 1 out of 100 fall for this "legal scam"). Yikes, too bad real businesses don't profit like that.