Saturday, September 8, 2012

Cognitive Bias: Attribute Substitution

Daniel Kahneman
Daniel Kahneman (Photo credit: Wikipedia)
Technically speaking, attribute substitution is not a cognitive bias in itself, but is actually CAUSE of several such biases.

Your mind has two sides, an "intuitive system", where you can make snap judgments, and a "reflective system", where the pros and cons are carefully evaluated using computations, logic, and such. If you are presented with a complex problem, and you are required to give an answer quickly, you can be induced into using the intuitive system that knows the answer to something very SIMILAR, and gave the wrong answer. That's attribute substitution.

(Daniel Kahneman is considered to be the first to explore attribute substitution)

Here's a quick example. "A ball and a bat together cost $1.10. Bat cost $1 more than the ball. How much is the ball?" You have 3 seconds.

Time's up! What is your answer?

If you answered $0.10 (10 cents), you are wrong!

In this case, the mind need to answer the question, and there's 'no time' to do a full evaluation where you need to solve the algebraic equation with 2 unknowns with the reflective side. Instead, you know you can do 1.10 - 1 in a snap and your mind unconsciously did teh attribute substitution, and substituted $0.10, which came from the INTUITIVE side.

Those with a bit skepticism (i.e. reflective side) would have checked whether 0.1 is the right answer, and realized it's NOT.  The answer: x+y=1.1 and x-1=y. y turned out to be $0.05 (and x=$1.05).

So what does this have to do with a scam? Everything.

Friday, September 7, 2012

Zeek Defender website blocked from using Paypal, claims "conspiracy" against industry

English: Logo of PayPal. Español: Logotipo de ...
English: Logo of PayPal. Español: Logotipo de PayPal. Русский: Логотип системы PayPal. (Photo credit: Wikipedia)
Apparently some "fine" folks over in la-la land, who is attempt to raise funds to restart Zeek, the largest Ponzi scheme in terms of potential victims in the US, is no longer allowed to use Paypal donation.

Their announcement claims some sort of a "conspiracy", that eBay, who owns PayPal, is somehow against the entire penny auction industry.

However, there is a much simpler explanation: it's against PayPal rules all along. If you read the acceptable use policy, this is very clear:

Service Requiring Pre-ApprovalContact Information
Airlines and scheduled or non-scheduled charters/jets/air taxi operators; collecting donations as a charity or non-profit organization; dealing in jewels, precious metals and stones; acting as a money transmitter or selling stored value cards; selling stocks, bonds, securities, options, futures (forex) or an investment interest in any entity or property; or providing escrow services.Please send contact information, business website URL and a brief business summary to

That's right, only charities, and non-profit orgs can use the donate function. The "fine" folks who want your money is NEITHER.

In Wake of Zeek Ponzi, Feds warn: do not try to hide money that doesn't belong to you

Feds went after a couple, their lawyers, and their spouses in helping the couple who ran a Ponzi scheme in concealing 1 million dollar of jewelry, which should have been forfeited to the government and be a part of the restitution fund.

Not only is it intentional fraud, it is a conspiracy, as well as perjury in court (claiming there are no more property to be forfeited).

Thursday, September 6, 2012

Zeek Rewards Confirmation Bias: trust but not verify

A couple sharp readers have spotted that some of the diehard Zeek Rewards Ponzi defenders are not only raising money to "restart Zeek", but also spreading misinformation about everything in the case, including:

  • Burks' lawyer is bullsh__
  • SEC never went before a judge before shutting RVG down
  • SEC didn't present any evidence in front of a judge
The following is from this "restart Zeek" campaign's website. As not to give them any link juice I am not linking to the source, but if you Google a sentence you can find the original easily. 

First of all, this is bogus, because the two sentences don't fit. You think a judge would just listen to SEC, and rubber-stamp everything SEC says, without SEC presenting any proof, merely allegations? 

And second, don't you think Burks was in court with his lawyer when this went down? They'd LIKE you to think SEC was in court alone, but that ain't the truth!  See next section. 

Wednesday, September 5, 2012

Zeek Aftermath News Update

After death of Zeek, life continues...

Paul R. Burks, head of Zeek, may have ties to Louisiana Politics

And how did Nash Dunn, the reporter, happen onto this story of a lifetime

Somebody left their Zeek PR machine on zombie life-support. This was just released on 04-SEP-2012

Supposedly some fans of Bidify posted a video that says some rather famous fan of Zeek is going to jail as a part of criminal conspiracy. Phooey. That's pot calling the kettle black.

pot calling the kettle black
pot calling the kettle black (Photo credit: marktcorbin)

Tuesday, September 4, 2012

Part-time MLM vs. Full-time MLM

If you classify MLM by the potential income and market penetration, you end up with what I would call "part-time MLM", vs. "full-time MLM".

Part-time MLM is something you do as a side-job, convince a few people here and there, and earn some side money that may help you buy some things every once in a while. They typically deal with lower margin stuff commonly available, but with some unique twists. Think Amway, Solavei, ACN. It's not something you'd do full-time.

Full-time MLM, on the other hand, is something you can think about quitting your "day-job" over, if you really really want to take the plunge. Their products are usually luxuries, but high margin, like nutritional supplements, cosmetics, and so on. Think Herbalife, Xango, Nu Skin.

Almost all MLMs claim they are both... start part-time, work your way up, go full-time when you want to. However, reality indicates otherwise.

Monday, September 3, 2012

When Fearmongers Attack: Using fear as a propaganda weapon

Both fear and hope are powerful emotions, and in the hands of a manipulator, can have devastating results.

Scams usually prey on hope (and its relative, greed). Hope for a better life, more money, good mate, sympathy, etc.

And when the critics speak up, they were derided as "fearmongers", "negative people", and so on, by the scammers and their naive followers. This is very ironic, as scammers will use fear when it suits them.

In the aftermath of the $600 million ZeekRewards Ponzi scheme, some fearmongers have continued to play the victims for their own agenda. Take a look at the following example. In order NOT to give them any "link juice" I am NOT linking their website, but you can easily figure out by Googling some of the words.

Note that in the first paragraph, these folks alleged
"SEC mislead the judge in its claim" 
then in the next sentence, they wrote
"they (SEC) did this without even having to provide the judge proof"
So what did SEC mislead the judge with? Hmmm?

Sunday, September 2, 2012

BAD EXAMPLE: Ad hominem attack AND changing the subject

When a troll strikes, and attempt to derail a conversation, don't expect any logic, as the following example shows. These comments are posted on

Note the complete change of subject. When I answered his blah blah on how one is susceptible to propaganda, I asked doesn't that apply to himself. He changed the subject completely and tried to troll the subject of race. Throw in a couple more ad hominem attack with some pretense of logic, and it's rather humorous to read.