Wednesday, February 15, 2017

One With $1 Million or a Million with $1?

http://www.businessinsider.com/check-cashing-stores-good-deal-upenn-professor-2017-2
"Banks want one customer with a million dollars. Check cashers like us want a million customers with one dollar," Coleman, the RiteCheck president, said in Servon's book.
Good article, a little longer than it needs to be. For those of us who can afford to park $10-20K in a bank in order to get "free" checking and a bunch of "free" services, as well as being able to accept the fact that the money from checks we cash isn't "available" until the check clears, the bank is a "no brainer", and people that use check cashing services seem "stupid".

Sort of like "Trump voters". If you are doing pretty well in BOistan, the big banks and institutions seem "safe, sane and secure". Increasingly, unless you are in the "upper 50% or so", that isn't your world.

Pretty much the same phenomenon explains why the elites were wrong on Brexit and on Trump ... the "smart money", the "big bets" were against -- the greater number of tiny bets were FOR. How many more people turned out in the well off counties of the nation (or at least appeared to turn out) really doesn't matter. It's like winning the football game time of possession by a full 15 min quarter, but losing by 1 point. You lose.

We all tend to assume that those that disagree with us are "stupid" -- they very rarely are. The actual difference in "raw general ability" between an 80 IQ and 160 IQ isn't worth much on the street. SURE, it is worth a TON inside the DC beltway, universities, law, mass media, corporate boardrooms or the operating room. Most 160 IQ PHDs are smart enough to realize they don't want to take on a street-wise 80 IQ thug in his element. Their 160 IQ general smarts are enough to avoid the encounter and that is all that is required.

Typically, the 160 IQ person has leveraged their advantage to know "everything about nothing" in their specific domain. They know how to do brain surgery really well, but they have no clue to do anything but call AAA if their car won't start. The 80 IQ guy is forced to do the reverse, he knows "nothing about everything" that matters in HIS domain.

We tend to be amazed at tricks a trained animal can do. Even the very smartest apes barely make 40 relative to a human IQ, and that is only in very limited and highly trained/specialized domains. The 40 IQ ape is more like the 160 IQ PHD. The ape is out of his domain and struggling to compete on a scale that he is not genetically predisposed to compete on. So too the 160 PHD -- humans were designed or evolved to be "hunter gatherers" -- the street is much more like the jungle than a courtroom, executive office or medical operating room. The 160 IQ PHD would lose to the ape in the apes environment as well without weapons -- so probably would the 80 street smart guy, but he would have a better chance.

"Genius" is often like being a virtuoso violinist -- take away the violin and your skill is worth very little. The Davos assumption is that we need just a few more 160 IQ virtuosos -- and to hell with the 80-100 IQ "proles".

Where are you placing your bets?

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