Monday, September 15, 2008

Wednesday, August 6, 2008

Counting

Visit the page (not through an RSS reader) and checkout my blog title...something's up.

Saturday, May 24, 2008

The Foreclosure Crisis

HouseI've been reading a lot about our nation's foreclosure crisis and it's an issue that has hit my area (NE Ohio) pretty hard. I am having a really hard time deciding who to blame. The list of suspects is long:




  1. Borrowers

  2. Real Estate Agents

  3. Brokers

  4. Lenders

  5. Banks

  6. Wall Street and Big Investors


I think that is a (roughly) accurate view of who relates to a mortgage.

Blame the borrowers

Being a person who owns a house and is fairly good with numbers, I find it easy to blame the "irresponsible borrowers."

Buying a house is a huge deal and there is a correspondingly huge amount of paperwork involved. Some of that paperwork describes in painful detail a payment schedule. I realize that one of the problems here is that people received exotic loans with varying payment schedules, but I'm talking about people who couldn't make the first payment. There are reports all the time about people falling behind from day one--not when their 5-year ARM shot up.

On the other hand, home buying is a complex and emotional process. This is why we have agents and lenders. These guys are supposed to help protect us from ourselves. But they don't.

So let's blame them.

Blame the agents

This is a tough one for me. We had a great experience with both homes we purchased and felt that our agents helped us through the process. At our first closing, it was our agent who uncovered a couple errors and ultimately netted us a couple hundred bucks back.

I can't say for sure if either agent would have stopped us from getting in over our head, though, I'd like to hope so.

OK, so the agents are off the hook--let's blame the brokers and lenders instead.

Blame the brokers and lenders

This is where I get really fired up and here's why: these guys have virtually no incentive to be responsible. A broker's job is to basically connect people who want money to people who have money--they facilitate and take commission from a transaction without risking any of their own money!

As I understand it, all a broker has to do is convince a bank to fund the loan. Since this is a free market, the broker can shop the loan package to multiple banks until someone bites. Over the last few years the standards of a "good loan" have erroded to the point where my dog is considering his own place--all driven by the insatiable demand for mortgages as investments.

NPR's This American Life has an incredible story about this part of the crisis and I highly recommend it.

Who is funding these loans? Banks.

Blame the banks

Monopoly ManSomehow in their 20-hour work weeks (closed national holidays, weekends, paydays, full moons and days that end in "y"), bankers managed to buy any and every loan. Despite no income, assets, or SSN, Pirate was approved for a sweet crib in the hills.

This is the last line of defense when it comes to investment quality. Banks had no business buying horrible exotic loans but their thirst for mortgages clouded their judgement and the money was good.

From hereon, mortgages were bundled together and sold as packaged securities. This had the nice property that they were easy to invest in but one nasty caviat: so much detail was obscured in aggregation that risk was very difficult to gauge. But hey, they're mortgages--those are like super safe investments, right?

This is where it stops with me. I don't blame Wall Street or the big investors. They thought they were buying good stuff with AAA ratings.

So, Blame everyone but Wall Street

OopsiesBorrowers need to be smarter. Education is key here. A simple, accurate monthly budget might have prevented a lot of this. Losing your home and destroying your credit is probably enough punishment so I'll let them off the hook for time served (20% of the blame). As much as I think a bailout of any kind is unfair to the rest of us, something needs to be done--but that's for another time.

Brokers and lenders take a hefty portion of the blame (30%) for selling people things they couldn't afford. These guys are the first line of defense but since they're part is over when the loan closes they have all too much motivation to look the other way, commit fraud, or just plain oversell us. As I see it, this level is also the biggest opportunity for fraud.

I place the remaining half of the blame with the banks. Just because everyone else is buying crummy loans doesn't make it right. It sounds like I'm talking about a child and maybe I am. These are the guys with the calculators, spreadsheets, forecast models, degrees, etc.--They're supposed to be the experts! I am really struggling to wrap my head around when bankers must have been thinking when they bought junk mortgages. Maybe the truck-loads of cash helped.

What Now?

That's a toughy. I don't think more paperwork is the answer--that's part of the problem. I think the process of buying a house should be overhauled and simplified. There's little reason for it to be so ridiculously complicated and the devil's in the details with this one--if you can't understand what a paper says, it could be screwing you big time.

Until then, I encourage buyers to run budgets with a close friend or higher a planner (and be realistic about the numbers) before looking at houses. Once you know what you can afford, don't look at anything higher and stick to conventional fixed-rate loans.

With respect to holding the industry accountable, it looks like the market is taking care of that for us (and bringing everyone down with it, unfortunately). I have no sympathy for the banking and mortgage industry but have resolved myself to the fact that our government will probably continue to bail them out, too, until this blows over.

Friday, May 23, 2008

Searching in Outlook

OutlookLove it or hate it, Outlook is the email solution for a lot of people. When it comes to work-related email, I'm one of those suckers.

Now that Google has spoiled us with archive-and-search-everything email, I've run into issues with my enormous work inbox. I have mimicked by gmail setup in Outlook with the aid of the fantastic search tool Lookout.

Lookout was acquired by MS a few years ago but was apparantly discarded. More on that from Joel Spolsky. The original author clearly explained how to obtain and configure Lookout for Outlook 2007.

If you're stuck with Outlook, consider this free tool to make searches quick and easy.

One final tip: if you are using Outlook 2007 and hate that annoying "Click here to enable lame instant search" nag bar, fear not. This is how to disable it:

 




  • Tools > Options > Other > Advanced Options

  • Uncheck "Show prompts to enable lame InstantSearch"


Disable Outlook Instant Search Nag Bar


 Happy searching!

Journalism At Its Best

I snapped this headline back in January and am just now getting around to posting it:

fed cuts rates to stop bloodbath


There is no doubt that times are tough and the credit market is a mess but a bloodbath? No. Newspaper man: you can't open with a headline like this and then not deliver. I can't follow your story with gross exaggerations like that.

In attempting to find the source I snapped that pic from, I discovered that I'm not the only one who picked up on this. As others have noted this seems to have originated as an MSNMoney article that still exists in some outlets. However, the original story has a new headline (but is still the top search result for the bloodbath line--go Google!).

Thursday, May 22, 2008

Look Out World!

Maya crawled for the first time tonight. Eek! More to come :)

Maya Grace

Best baby ever


Heads up: the best baby in the world has made an appearance over in the gallery.

Monday, May 19, 2008

Surf Quietly and Securely at Work

The internet is vital for my job. I search technical articles all the time and when my company's network filter blocks a site I am trying to get to, I get frustrated. I'm not abusing the network (usually), I'm just trying to do my job.

This is what I did to get around it.

I have a Linux box running at home (which happens to run this website). Here's how this works from a high level:

  1. Setup a server at home to accept SSH connections (like secure telnet)

  2. I setup a proxy on my home server to accept connections only from local addresses (not from the internet)

  3. I configure my laptop to connect to my home computer over SSH (a secure connection)

  4. I configure my laptop's browser to use a localhost proxy on some random, high port (like 31234)

  5. I bridge my laptop and my home network via an SSH tunnel so that connections to 127.0.0.1:31234 on my laptop are handled by my home server at 127.0.0.1:31234 (the proxy)


SSH Tunnel


That's a lot of information, I know. Each of these steps is pretty easy if handled one at a time. Here's how it's done. This was performed with a Gentoo-Linux machine at home acting as the server and proxy and a Windows XP machine at work acting as a client.

Setup a server at home to accept SSH connections

This is outside the scope of this doc. If you have a Linux machine, you probably have SSH running, too. In fact, I have never seen a Linux install without SSH setup out of the box.

Setup the network router at home to port-forward the SSH connections from the internet

Once you are able to connect to your Linux machine from inside your network, you will need to open up a port on your router/firewall so you can access it from outside your network. This is vendor specific so you're on your own there.



I setup a proxy on my home server to accept connections only from local addresses (not from the internet)

I used TinyProxy as my proxy software because it is lightweight and easy to configure. Since I'm running Gentoo, this is as easy as:

  • emerge -vat tinyproxy


The configuration file is pretty self explanatory so dig in and read the man pages. Don't forget to add it to the start up services with rc-update!

Configure browser to use local port for proxy

This part's a piece of cake so long as you keep the referencing straight. Since SSH will be bridging a "localhost" port on my laptop to a "localhost" port on my server, it's all just localhost. I do not configure the proxy with any server-specific addresses.

 Proxy


Configure SSH client's tunnel

Now that the server and client are configured, all we need to do is bridge them together. Inside Putty, create a tunnel like so:

Putty Configuration


Benefits, Issues and Alternatives

This works well but won't be a walk in the park to configure if you're new to networking or Linux--I skipped a lot of steps. There are also some speed issues as this is routing in/out of my home broadband connection which isn't very fast and in the cases of others, might be firewalled at the ISP level.

There are many other options out there including the use of an existing proxy or using simpler page retrieval techniques. For example, a friend did something similar by creating a webpage that would serve back whatever url you included in the query string.

Perhaps the easiest in-a-pinch technique is to VNC to the server and run a browser from there.

When evaluating alternatives, don't overlook the benefit of the SSH tunnel, though. This provided a secure connection over the web to my house and enabled me to move bits without punching new holes into my firewall at home or exposing my traffic to inspection at the office.

One final note: if you are looking to do something particularly nefarious or sensitive, this isn't by any means a solution you should consider. This solves a small set of simple problems. If you have more than casual needs for security or anonymity you better ask someone who knows what they're talking about.

Firefox 3.0 (RC1)

Heads up: Firefox 3.0 RC1 is out. If you are running the betas or anything from the 2.x branch, I recommend trying out Firefox 3.0. It's much, much improved. Aside from the polish that has been rubbed into the interface, the damn thing is fast.

Firefox Logo


I'm not one of those browser benchmarkers, this is just from casual use. Now that I've been on the 3.0 train for a while, using a 2.x build is a little painful--you don't notice the tiny delays between page loads until they are gone...and come back.

I don't care if it's just a visual rendering tweak or actually a performance improvement (a better network interface, a better memory manager, more aggressive caching, etc.)--it doesn't really matter because the fact is, I perceive it to be significantly faster.

Anyway, I think it's safe to go ahead and get the release candidate build. It'll upgrade you to the final copy when it eventually comes out in a few weeks.

Sunday, May 18, 2008

Pizza Structures

My wife and I were walking into Target today when we were overwhelmed with a foul odor in the cart area.

I'll try to describe the smell. If you birthed, raised, and slaughtered a dozen pigs in your basement, then for the first time cleaned that basement and fed the wash water to an elephant and waited for that elephant to eliminate and smelled his dung, you'd have some idea of what this odor was like.

I complained that I had planned to hit the restroom but didn't want to because of the "situation" and this is the dialog that followed:

My wife said, "go ahead, it might just be the Pizza Hut [express]."


My reply, "do you realize what you just said?"


"Yeah."


"'Yeah' indeed"


The most confusing part about this whole (true) story, is that we actually like pizza hut. This brings me to something else: pizza company names.

What's the deal with all the Pizza [structure] places around here? We recently brainstormed a list of possible names, which I cross-referenced to see which ones actually existed. This was actually a travel game where we took turns coming up with another place.


  1. Pizza Hut

  2. Pizza Cottage

  3. Pizza Inn

  4. Pizza House

  5. Pizza Hotel

  6. Pizza Motel

  7. Pizza Shack

  8. Pizza Wigwam

  9. Pizza Tee-pee

  10. Pizza Mansion

  11. Pizza Tree-house

  12. Pizza Tavern

  13. Pizza Silo

  14. Pizza Barn

  15. Pizza Bed-and-Breakfast

  16. Pizza Chair-Lunch-Dinner (thanks Mitch)

  17. Pizza Stand

  18. Pizza Van

  19. Pizza Condo

  20. Casa la Pizza

  21. Pizza Tower

  22. Pizza Castle

  23. Pizza Igloo

  24. Pizza Bunker

  25. Pizza Cave

  26. Pizza Cavern

  27. Pizza Church

  28. Pizza Palace

  29. Pizza Tent

  30. Pizza Cabin


Pizza StructuresFor those keeping score at home, that's a 53% hit rate. Considering some of the ridiculous names on there, I'd say that's not bad. Let's branch out a little, ok?

Tuesday, March 18, 2008

New Pics

Just wanted to let ya'll know that there are a lot of new pictures in the gallery!  62 if you want me to be specific :)

Tuesday, January 29, 2008

This Ad is Gold

If you're listening out there, Geico, I just saved you a bunch of money on your...marketing?

And You're Fired!

Monday, January 28, 2008

Airplane Ruminations

I've been flying a fair bit lately and that got me ruminating. If you know the answers to any of these, speak up.

  • Why do the window shades need to be open during take-off and landing? Does the pilot need to check his blind-spot or something?

  • Has any of this safety equipment ever actually been tested?

  • Has anyone ever survived a water landing? Will my seat cushion really float?





  • Can I use the oxygen mask during normal flight? That sounds relaxing.

  • A couple flights ago, my inbound plane was delayed because they had to stop unexpectedly for fuel. I asked how often that happens and the friendly rep told me that it's up to the pilots. Excuse me, but there are somethings I'd just assume leave up to the computer and calculating fuel requirements is one of them. Here's an idea: in bad weather, add extra fuel.

  • How fast do planes go when taking off? When landing? Answer: 150-180mph. It doesn't feel that fast, but I guess I've never driven a plane down the turnpike before.

  • How do planes make up time in the air? Do they fly faster? Lower?

  • Take a step back from the whole airline industry for a second and ask yourself, "how in the world did we get here?"





  • How can the women in 1E drink two Rum and Cokes ($7/each) but deny her daughter a sandwich because it's "too expensive."

  • Why is the women in 1E obnoxiously loud and somehow immune to the powers of my noise-cancelling headphones?

  • Why does everyone line up 15 minutes before anyone actually starts boarding? Can't we all just agree to wait sitting down?

  • How much does body weight affect gas mileage on the road or in the air?

  • How old is too old? Answer: the partially petrified couple in 3D/3E

  • How else was flying different back when you could smoke on an airplane?

Saturday, January 26, 2008

Is Your Refrigerator Running?

I have had a string of some pretty bad luck recently. One link in the chain was the sudden death of my refrigerator. We have only lived in our current home about six months so our home warranty was still in effect. Here's the initial timeline of events, starting on January 11:

Friday 3pm: Fred is dead (I call my fridge Fred). What was once ice is now the liquid formerly known as ice...and it's everywhere. I report the claim to the home warranty guys, AHS, as an emergency as I have no other form of refrigeration inside my house. We use the back patio as a makeshift freezer section and wait for the service people to call.

AHS Sucks


Friday 5pm: The service guys don't call, but Fred starts cooling again. Being naive optimists, we take this as a good sign and decide to wait until Monday to raise a ruckus.

Saturday 2pm: Fred is dead again. Water is everywhere. I curse myself for leaving the ice maker on. Sarah cries. I call AHShole again and am told my claim has been escalated and I should have a technician call me back within the hour. This guy, Jim, is incredibly nice. For a second there, I actually expect someone to call me back.


Saturday 3pm: Fred continues to drip what I can only guess is some sort of refrigerator embalming fluid. No one calls. I call AHShole back and am told that my claim is going through the system again and that I should hear back by 5pm. Seriously.

Saturday 6pm: No one called. I ask why no one called and the unhelpful answer is that "the contractor isn't picking up." Then it sounds like you need to call a different contractor. I am now told that I should use "outside authorization." She explains that I can call anyone I want for a diagnosis but AHShole needs to approve any repairs before they are performed. Luckily for me, since AHShole stalled all damn day, it's not 6pm on a Saturday and no one within 50 miles is picking up.

Saturday 8pm: After 90 minutes of calling every single name in the Google Maps search results and the Yellow Pages, I run out of people to call. I have left a half dozen messages and paged a handful of people. At 8:30, some company called Ruples calls me back and says that he can come out tomorrow afternoon...but not too early. We agree that 1pm is not too early and he warns me that his Sunday rate is pretty steep--$35. I hold in my laughter and tell him to come on out.

Sunday around 1pm: Ruples shows up--I realized it's a guy, not a company--in what might be an antique pickup truck. He immediately declares that Fred's relay is dead and this might be an easy fix. After running some 1970s style diagnostics, he gives me the bad news: Fred needs a new compressor. Fortunately, they're easy to come by and will only run my insurance company about $450. We are supposed to talk on Monday after he confirms part prices and gets authorization from AHShole.

 


Monday 3pm: I call Ruple to ask what's going on. He says that he needs the money for the parts up front and that he can spin by to pick it up and order the part on Tuesday. I ask if he's kidding, if he really expects me to prepay cash and just hope for the best. He wasn't kidding. I tell him to forget about it.

Monday 9pm: I call AHShole and ask that they send someone else since the guy I called didn't work out. They explain that since they'd already paid for a diagnosis they would not send anyone else out and Ruples is the only guy who can do the work. I tell them that I think he is trying to scam me and that I don't trust his diagnosis. Further, they didn't pay him, I did. Further still, I don't want reimbursement of my $35, I just want someone to come out and fix Fred.

Annette at AHShole explains that this is not going to happen and repeats her earlier statements. I repeat my earlier statements and we argue like this for 10 minutes or so. Finally, I say, "if you're not willing to accommodate my request or explain why it is unreasonable or how it will cost you any extra money, please connect me to a manager." I wait on hold for a few minutes. She comes back and agrees to send out Sears to take a look on Thursday. All of Fred's contents have long ago spoiled so I happily agree. An appointment is scheduled for 8-12, 3 days later.

Thursday 8:30am: The Sears technician calls ahead and predicts a 9am arrival. He's a nice guy and arrives on time. Ten minutes later Fred is back to his old self again. Apparently the compressor was fine--only the relay needed replaced. Thanks Sears! I ask the tech how much he would have charged me if I didn't have insurance (my copay is $55). He immediately answers, "$265."

I wish I had some orange juice in my mouth when he said that so I could spit it out all dramatically. Two-hundred-sixty-five-frickin-dollars for 10 minutes of work. Are you kidding me? He didn't even pretend this was due to parts. At that hourly rate, he must make over a bajillion dollars per year.

In conclusion:

  • Fred was dead for six days

  • No one in refrigeration or appliance repair works on weekends

  • ASH is no better than the oft-hated, stereotypical home warranty company

  • By calling in a second technician, I saved the insurance company a few hundred dollars (you're welcome, Annette)

  • I could have fixed the relay myself. I wouldn't even have needed my soldering iron.


So there you have it. If we have another appliance failure or two, this home warranty thing might actually pay off. Obviously, I don't recommend getting them--in our case, it came with the house.

Saturday, January 5, 2008

Pick a Number, Any Number

As most of you probably know, I like numbers. As an engineer, I don't really have a choice in the matter. This is probably one fundamental difference between engineering and math or science: we actually use numbers. My brother just graduated with a math degree and commented that he hasn't seen numbers in his upper level math courses for a while.

This should be a pretty simple post about a concept that I find pretty interesting: unique numbers. Specifically, universally unique identifiers or globally unique identifiers.

How about some context? Think about ID numbers that you are familiar with like your credit card number or social security number. It is important that these types of numbers be strictly unique. We can't have two people with the same SSN or credit card number--that'd be bad.

Now consider how these are assigned to you. At birth, you're given a social security number. But where do they get the number? In all honesty, I have no idea. I presume they are distributed to the state/county/hospital in blocks. That is, Licking Memorial Hospital might be assigned a block of numbers each month to use for new babies. These would be assigned by the federal government who would ensure that no one else used the numbers assigned to Licking Memorial. (note: since writing this Maya was born and I now know that these are not issued by the hospital.)

What if you don't have a central authority to distribute numbers? A lot of software applications depend on unique numbers to identify records for sales, employees, timecards, etc. If an application exists in one location this is as easy as counting (1, 2, 3, 4...). If the application resides in multiple sites, it gets a little trickier. One method is to associate the site with the number. e.g., site 1 numbers always start with 001 while site 2 numbers always start with 002 and so on. Sometimes this isn't an option. One case is where you have a bunch of sites but don't know how many or have any reasonable way to build such a fact into your number (think of the millions of computers on the net...). Ah, but some smart people have already provided a good solution to this problem. From Wikipedia:
The intent of UUIDs is to enable distributed systems to uniquely identify information without significant central coordination. Thus, anyone can create a UUID and use it to identify something with reasonable confidence that the identifier will never be unintentionally used by anyone for anything else.

What if we had the ability to generate a number that is pretty much guaranteed to be unique when tested against all other numbers in the whole world? How would you do that?! It could make for a good game...
"What number are you thinking of, Jerry?"

"You'll never guess. No, seriously, you are statistically not able to guess my number. Ever."

OK, some explanation is probably needed. What I'm talking about is called a universally unique identifier (UUID) or globally unique identifier (GUID). In spite of my terrible examples, these things are actually pretty useful, and actually really easy to create. A GUID (pronounced Gwid, rhymes with squid) is just a 128 bit string, generally represented in hexadecimal. Jigawha? Without getting into the ugly details of bits, binary, strings, hex, etc. I'll simplify a bit (har-har!) here. Think of a guid as a long row of letters (a-f) and numbers (0-9), 32 characters long. For example, these are GUIDs (the dashes are simply convention):

  • 15f197e0-546d-4074-bfb9-368fd2aae06a

  • d7a6a3e9-8e90-4422-9a86-6e84ba0d1575

  • 6662a8b9-22b3-47ba-89d6-08700b431fe0

  • 0a249bf8-9c03-4794-a327-66e9b9c90d37

  • 1908a5ad-5812-48ee-9fbf-4b1d357c7ff2


Not such a big deal, right? Not convinced that these are practically guaranteed to be random? Think about the lotto. The odds of winning a pick 5 mega millions lotto odds of winning the jackpot are 1 in 175,711,536. The odds of generating the same GUID twice are 1 in 2128. Now I realize that 2128 doesn't seem that big so let me try to illustrate (again, borrowing from Wikipedia here):

  • 1 in 2128

  • 1 in 340 undecillion (don't worry, undecillion is not on the quiz)

  • 1 in 3.4 × 1038

  • 1 in 340,000,000,000,000,000,000,000,000,000,000,000,000


How about that last one? Holy crap! In order to list all possibilities, you would have to generate a trillion GUIDs every nanosecond for ten billion years.

More Maya Pictures

Just a quick note: Sarah has uploaded a bunch of new pictures of everyone's favorite baby. And now for the most pathetic look you will ever see in your life:

Pathetic Maya


Happy Maya

Come Again, American Express?

I have been traveling a quite bit lately for work and at my office we don't use corporate cards. So to make finances a little easier, I started using a "business-only" card in October which would generally be used for only work-related expenses.

Amex Gold Card


I used an American Express Gold card for this because it had no pre-set spending limit (some business trips can get pricey) and it had excellent sign up rewards. The first two trips went well and I was happy with my new card. However, during a longer trip in December I ran into a snag. Here's how I explained the problem in a letter to American Express after the incident:
Customer Service,

I am writing to bring a recent incident to your attention. I signed up for an American Express Gold card with no preset spending limit in October. I had several business trips planned and had intended to use this business card for all of them.

The card worked fine for my first trip during the last week in November. I called customer service about this time to ask about the spending limit as I was planning to incur expenses in excess of $7000. These expenses were primarily conference fees (two charges of $2875) and other travel expenses. I was told that my card had no preset spending limit and these charges would all go through.

The first half of the trip went well. However, on December 5, SAP attempted to clear the second $2875 charge which was declined. I called customer service and asked why the charge had been declined. I was told that even though my account does not have a preset spending limit, it does in fact have a preset spending limit. I inquired further (I was very confused) and was told that my credit limit would increase as a steady payment history was established. I asked how this was different than any other credit card and the representative maintained that even though there is a threshold over which I cannot spend, I do not have a spending limit.

The representative offered to make a one-time exception and authorize the $2875 charge. I asked if all my subsequent travel expenses would then be declined because I would be over my "limit." She acknowledged that, yes, any further charges would be declined. I clearly stated that I did not want the large transaction approved since it would mean all subsequent transactions no matter how small would be declined. The representative noted my account and we disconnected.

I then contacted SAP to provide a different card for the $2875 charge only to be told that the transaction had since cleared on my Amex card! Hoping that my spending ability had been increased, I checked the website and found that my card was now maxed out and I was not authorized to make additional charges. When I attempted to call customer service to discuss this, I was told that because of a computer glitch or maintenance, no one would be able to help me for two hours and to try back later.

When I first received the card I was very impressed with your prompt and friendly customer service. However, the incident on December 5 caused a great deal of frustration and embarrassment. I don't understand how you can claim my card has no limit when it clearly does have a limit. I also do not understand why I was first told that charges in excess of $7000 would not be a problem when it is now clear to me that I have a limit around $5000.

Regards,
Michael Haren

Obviously by this point the trip was over and there really wasn't anything American Express could do, I just wanted some clarification on the whole limit/no-limit thing. It gets so much better with their response:
Dear Michael Haren:

Thank you for your e-mail.

Please accept my sincere apology towards the inconvenience this matter has caused you. Please be advised that your Card product is a charge Card product and does not have a credit limit or a preset spending limit.

However, our no pre-set spending limit does not provide unlimited credit to our Cardmembers. Purchases are approved based on a Cardmember's account history (including spending and payment history), credit record and personal resources.

However, I have forwarded your recent experience to the concerned department and have explained the entire situation. They may contact you if required. Additionally, please be advised that as of 01/02/08, the charges on your Card are getting approved. Please be assured that all future charges will be approved as long as your Card is in good standing.

I understand that my apology cannot compensate the loss you have gone through and this incident is regrettable you us.

Sincerely,

R. Nigam
Email Servicing Team
American Express Interactive Services

This left me thoroughly confused. When I spoke to the representative, she clearly indicated that my card had a fixed limit beyond which charges would not be approved. But now I have R. Nigam playing an interesting word game by dancing around the "limit", "pre-set spending limit", and "unlimited". I followed up for some clarification:
Mr. Nigam,

Thank you for your kind and thoughtful response. I'm afraid that I am still unclear as to the definitions involved here and am hopeful that you can clear up any misunderstanding.

As one of my coworker's noted, we were under the impression that "...does not have a credit limit..." and "...does not provide unlimited credit..." were opposites. I don't understand how I can have both no credit limit and at the same time have a credit limit. I did realized that when I was offered a card with no credit limit that there would be some sort of limit--there is only so much money in the world, after all--but I did not expect the limit to be so low and so inflexible. When I called after the transaction had been declined, I expected the agent to review my history and say something like, "no problem, we now see that this isn't fraud as you previously reported that you'd be making these charges. I'll increase your limit to $x to cover the rest of your trip."

Instead, we played the same game you and I are playing with the phrase "no pre-set spending limit".

I am planning a business trip next week to Georgia and would like to know what limits are in place on my account. If my account does not have a limit, at what dollar amount might I experience problems with my card?

Aha, I thought, this will force their hand on the issue and I will know once and for all what is going on. Apparantly I'm not as clever as I thought:
Please be advised that basis your inquiry, I contacted our Account Services Department on your behalf today, since this information can be passed on by this department only. However, due to the Cardmembers privacy and security concerns, they would like to speak with you directly. You may contact them at : 1-800-238-8091. 24 hours a day - 7 days a week.

I hope you find this information helpful and it was my pleasure to assist you.

Sincerely,

R. Nigam
Email Servicing Team
American Express Interactive Services

Well played, Mr. Nigam. Not to be outdone, I actually followed his advice. The woman I spoke with was incredibly friendly when she gave me the usual no pre-set spending limit bologna. I explained that I needed to know what my limit was because I was taking another trip soon and wanted to stay under it. She then helpfully told me that my limit is currently $7000. Not able to leave well-enough alone, however, she pleasantly added that if I use a significant amount of that any pay it back, next month my limit will be higher--since it's not pre-set. Good grief.

Here's what I've concluded from all this:

  • The "no pre-set spending limit" claim is apparently substantiated by increasing (or decreasing?) your limit each month

  • It's fairly tricky to get someone to tell you what your actual limit is

  • Amex customer service reps have been well trained on how to handle callers like me who are confused about this limit business

  • Amex customer service reps are unbelieveably nice. I have spoken to them on three separate occasions and have exchanged a few emails. In all cases I was blown away with how great their service was (except of course for dancing around this bizarre corporate policy)

  • It's all harder than it needs to be

  • This isn't much different than any other credit card


If you're still with me, there you have it. The scariest part of all this is that I'm starting to understand their side of it. Ridiculous.