Facebook friend defaulted? You are a bad credit risk

Source: Facebook Wants to Redline Your Friends List – StumbleUpon

It is a stunning example of a bad idea. Facebook patented a tool to track people’s credit risk based partly on their friends defaulting on loans. Isn’t this crazy?

The article talks about historical risk and the risk that banks try to judge based on present credit models. Everyone wants to be repaid, but how often those models are just simply wrong. I have worked for rich people and rich people often don’t pay their bills. Where are the companies that fault them?

For example, one rich person I knew didn’t pay anyone who worked for her. Yet she had a stack of credit cards. Where is the model that protects the bank from that? On the other hand I have known poor people who paid everything they could to predatory companies like short-term title loans or so on, and they were marked down as bad credit risks?

Isn’t it crazy that being sick and being laid off of a job are the biggest risks to someone having a good credit score? You might as well re-title a credit score as someones “lucky index” about how lucky they have been to avoid sickness and job layoffs.

Yes I can hear the people now with good credit saying “Well it was hard work and character that got my credit score. I paid my bills, and I am a good member of society.” Great, I’m glad for you, really I am. However not everyone is in your position. For the vast majority of people who are not genetically lucky, or have steady work, this credit system is anything but fair.

My way of responding to the credit system is to buy as little as possible. I try to support small businesses when possible, and to find the most economical companies with the best support. Very difficult to do, but possible. As a society we have to demand with our money respect from those we do business with. It is our right and our choice what we support.

Airbnb and the sharing economy

Sustainability and enjoyment are at least as important as economic benefits for participating in the sharing economy.

Source: Enjoyment motivates people to participate in the sharing economy — ScienceDaily

I stayed at an airbnb and it was fantastic. For the cost of staying one night in a traditional hotel, I enjoyed two nights in a more private and better location. It was a good feeling knowing that I was not at the mercy of some nameless corporation, but my stay actually was helping the average Joe.

I had concerns of course staying at an airbnb place but I had a friend who stayed at one and said she had a great time. So with the savings and the positive recommendation I bravely went forward. Now I would do it again. What is even more amazing is that Tesla announced they are working with airbnb to bring charges to those locations. What a wise and great marketing way to show that people can really do whatever they want, and their Tesla experience will be different and wonderful.

It would be nice to continue to move the money towards the average person with these kind of sharing things. I do think it has to be carefully done. I like that airbnb has insurance for its network providers. I like that there is some sort of quality guarantee. I like the fact that it is a recommendation and profile based system where you can have a relationship with good providers. I don’t like things like Uber which put all of the risk on the end person. No single person can bear the cost of a bad customer, or an unfortunate circumstance out of their control. So it needs to be reasonable for it to be successful.