Friday, October 31, 2008
If you want to see the entire debate class or see an abridged version you can simply do a search at YouTube.com for them.
Here's a full version that has good sound quality and an interview. Be patient, the full song follows the CNN interview
That's what happens when a country "prints" or creates too much money. It loses value. The official name for that process is inflation. What's the alternative to paper? Gold. It's been the "hedge" against inflation ever since paper money was first created by governments.
For rest of Terry Savage - Chicago Sun Times article click here.
Tuesday, October 28, 2008
Here's the CBS Marketwatch article.
Saturday, October 25, 2008
This video is spot on for medium density Afghan traffic. If you were to actually reach the center of Kabul or Jalalabad the traffic would be much more chaotic. This video depicts a section of road heading away from Kabul (Afghan capital) towards Jalalabad. You'd actually have to drive about another 2:45 to 3:15 hours to reach Jalalabad. The route would include some drastic changes in elevation and driving alongside the edge of a few mountains.
I'm planning on going back to the middle east for a tour and have been searching YouTube for some good videos to jog my memory.
Finally, here's some good representation of high-density traffic conditions for Aghanistan
Here's what it looks like driving through the mountains between Kabul and Jalalabad. When I first started driving this route there were no guard rails.
Friday, October 24, 2008
- Lipstick sales go up during economic downturns: True
- Beer sales go up during economic downturns: False
- Hemlines go up during economic booms: False
Here's the full article.
Search buzzword(s): lipstick economy; lipstick sales up in bad economy; lipstick sales and the stock market
Wednesday, October 22, 2008
Only in San Francisco: Fastest Time at Nike's Women's Marathon not Awarded First Place (No, This is Not a Case of Drug Test Failure)
Tuesday, October 21, 2008
71 Ways to Survive the Downturn in the Market (Atlanta Journal Constitution Cites Three Bloggers as Sources for Article)
- Protecting your investments
- Preparing for job loss
- Single parents
- Saving money at home
- Reducing credit card debt
- Little ideas that make a big difference
- Quick ways to get cash
- Cheap (but romantic) dates
Here's the Atlanta Journal Constitution article. Here's one of my prior articles that provides greater depth on frugal dating ideas.
Monday, October 20, 2008
I like Dow Chemical (DOW) because it has a huge dividend, 6.9% and it's raw input costs has to be coming down substantially with the huge drop in oil costs. It's payout ratio is a little high at 62%, but I think that might come down with the lower input costs.
I'm buying 3M (MMM) because it has a nice dividend, 3.5% and is still growing, albeit slowly in this economy. Since 2007 much of it's earnings gains have come through currency exchange rates. Nonetheless it's a nice blue chip. Also, it has a high return on equity (ROE) of 32.83%... among other things.
I'm buying Exxon Mobil (XOM) sort of as a hedge against Dow Chemical. But, I still love the company. It has a measly Debt to Equity of 0.077. It has a decent dividend of 2.3% and has more than 10% of its stock value in cash on hand. It is has been buying stock back vice plowing its cash on hand into more oilfield rights. Smart move, at least recently while oil prices have been in bubble territory.
Finally, i'm not starting an automatic investment plan in Johnson & Johnson (JNJ) because their agent, Computershare, charges $1 per month for the JNJ automatic investment plan. Instead, i'm manually doing purchases via my online account. Doing purchases like this in JNJ allows you to bypass the $1 fee.
My other periodic investments going forward will likely be the international (EFA) exchanged traded fund, government bonds and precious metals.
Sunday, October 19, 2008
(1.) The average sale price of a house here is $21, 250!
(2.) The region's unsold house inventory has shrunk 16.43% from last September to an 11 month inventory.
(3.) A little more than one-third of sales in this Metro area come from foreclosed properties.
What city is it? DETROIT.
I infer that unsold houses will start to sell when either an area has a good job base or the houses are just plain dirt cheap. Here's the article talking about Detroit real estate.
Saturday, October 18, 2008
Yahoo! We Just Signed a Lease-Purchase Agreement on One of Our Rental Properties That Didn't Generate Income Since Feb 2008
The house was built in 1999. I bought the house from my sister and brother-in-law in 2005 and immediately had a tenant under contract the same day I closed on it. The tenant lived in the house for just over three years. When we came in behind our prior tenant we discovered alot of work that was required to get the property marketable again. We spent about $13k to get it up to standards and waited about 5 weeks before we had a signed lease-purchase contract.
News of the signed lease-purchase contract comes a few weeks after my wife was hired into a federal civil service job. Whenever our household does a military move, we always take a hit in our income because my wife inevitably has to quit working to relocate to where my new assignment is.
Our household has actually gone:
(1.) Since May 15, 2008 with a 33% reduction in household income due to wife's relocation without continued employment
(2.) Since February 1, 2008 with a 7.2% reduction in household income since one investment property was without tenant
(3.) Since April 1, 2008 with a net 10.4% reduction in household income due to diverting of income to rehab our empty investment property.
In total, we were operating with about a 51% reduction in our household income. I cut my TSP (401K) contributions down from about $1290 per month down to $61 per month to help offset the income reduction. We also cut out our contributions to our ROTH IRAs for 2007 and 2008.
This week we were finally able to restart my TSP contributions. Initially, i'm setting it at $621 per month and will ratchet it up over time as our household establishes an emergency fund.
Friday, October 17, 2008
Click here to read a related article that also details fuel saving tips.
Thursday, October 16, 2008
Credit Albert Einstein with discovering this rule. Albert Einstein called compound interest the most powerful force in the universe and characterized it as the greatest mathematical discovery of all time.
Wednesday, October 15, 2008
Link Love (Fiscal Zen, Distilled Rose, Bullish Bankers Posts, My Good Cents, No Spend Zone, The Passive Dad, Everyday Finance & Dual Income No Kids)
Fiscal Zen: Free MIT online courses. I've known about this for a while, but have not made the time to take any classes.
Distilled Rose: Growing Basil at home. My wife and I grow basil, parsley, thyme, green onion, cilantro, mint and lettuce on our apartment balcony.
Bullish Bankers: Posting on Johnson & Johnson (JNJ) stock. This is one of my favorite DRIPs. I recently restarted my monthly allotments for 3M (MMM), Exxon Mobil (XOM) and Dow Chemical (DOW). I periodically add to my JNJ position about 3 or so times a year.
My Good Cents: Thrifty Rental Car Sweepstakes through 30 Oct.
No Spend Zone: Article about the cost of Christmas tree shopping plus great video of ornamental house lighting.
The Passive Dad: Great article about renting out your garage. Most applicable for large city dwellers.
Everyday Finance: Considering setting up a home solar system? I was planning on writing about this, but Everyday Finance beat me to it. Check out the article.
Dual Income No Kids: Great article about the next bubble... I recently posted about the Energy Infrastructure bubble. This is a long range bubble that is just starting to grow. Of more immediate concern is the credit card bubble.
Tuesday, October 14, 2008
Banks are Citigroup Inc., Wells Fargo & Co., JPMorgan Chase & Co., Bank of America Corp., Goldman Sachs Group Inc., Morgan Stanley, State Street Corp., and Bank of New York Mellon Corp., said the people. One of the people also said Merrill Lynch & Co. will receive an investment."
Source: By Robert Schmidt and Peter Cook of Bloomberg
Monday, October 13, 2008
What are SIPC levels? The SEC defines coverage limits at $500k total, to include up to $100k in cash holdings. Here's the SEC guidance.
Sunday, October 12, 2008
(1.) Welfare / Food Stamp Representative (State Civil Service)
(2.) IRS Customer Service Representative (Federal Civil Service)
(3.) Unemployment Office Representative (State Civil Service)
(4.) Medical Industry Jobs
(5.) Military. Around 25% of young adults qualify for military service.
(6.) ChaCha. Telecommute job available from comfort of own home (~ $3 to $9 hr)
The Chicago Tribune advances the idea of seeking temporary employment with retailers who may be plussing up staff for the holidays, companies that service retailers and a couple others. Once you land the job, do your best and you may get hired on full time if not already hired full time.
"Retailers: They are often the go-to employer during the holidays. J.C. Penney Co., for example, will begin adding holiday staff at its stores about mid-October, and hiring will continue throughout the season, executives said.
Delivery services: Firms such as UPS hire thousands of temporary workers to handle the holiday rush.
Movie theaters: They typically increase staffing to prepare for the release of holiday blockbusters.
Inventory services firms: Companies that help retailers manage their stock during the busy season.
Possible upside: Do a good job, and you may be hired on as a permanent part- or full-time employee. Because turnover is higher in hourly positions, employers want to keep seasonal workers who have demonstrated a strong work ethic."
The rest of this Tribune article can be found here.
"Due to extreme fluctuating market conditions for 2008, as well as current market conditions, gold and silver demand is unprecedented and the demand for platinum is unusually high."
Moming Zhou of CBS Marketwatch states: "The Mint added that it's halting the sales of several gold and platinum coins while putting a few other coins under allocation sales. The move, announced on late Monday, follows as a halt on sales of two other coins in September and August."
You can read the full CBS Marketwatch article here. I guess i'm a little late to the coin buying party. Recently, my concerns over the potential dilution of our currency have been growing and I only recently bought into the Gold (GLD) and Silver (SLV) ETFs. I also started looking at Monex.com and am considering opening up an account with them or simply buying Platinum, Gold and Silver coins locally.
Saturday, October 11, 2008
Friday, October 10, 2008
Here's a partial article from the WSJ:
"The U.S. is weighing two dramatic steps to repair ailing financial markets: guaranteeing billions of dollars in bank debt and temporarily insuring all U.S. bank deposits.
If the two moves come to fruition they would mark the government's most extensive intervention yet in the financial system, as officials ponder increasingly far-reaching measures to stem the sprawling crisis.
The top economic officials of the Group of Seven leading industrial nations will meet starting Friday in Washington where they intend to discuss a proposal from the U.K. government to bolster bank lending. Problems in the credit market have led to ..."
Here's a link to the article. Unfortunately, you'll need a WSJ online account to access the full article.
The popularity of this line of thinking is evident today in our consumer credit nation. It's ok if you use credit responsibly, paying off the balance in full each month. However, a number of Americans fail to do this. I never saw Whimpy pay for a burger so I must assume he racked up some monster debt.
I spent a few minutes searching for indebtedness figures and found this March 2008 Yahoo article. It claims that the average household has between $11k and $12k in credit card debt. It also elaborates on other impacts of debt to include:
Peace of mind
It's a good read.
Thursday, October 09, 2008
Here's a good article from Prashant Gopal of Business Week discussing the budgetary shortfalls of California, Florida, New York, Arizona, Nevada, Alabama, Rhode Island, Georgia, New Jersey and Maryland. Click here for article.
An important assertion made in the video is that the bailout is only a temporary shot of grease to aid in the revival of bank lending. The bailout will be temporary if real estate prices continue to fall. If prices continue to fall, the toxic real estate debt, held by banks, will only depreciate further forcing banks to build offsetting cash reserves and freezing up consumer lending even further.
Wednesday, October 08, 2008
Eric Janszen tells CNBC that the rebuilding of our entire energy infrastructure will be our Nation's next bubble. University of Chicago Economics Professor, Steven Davis is also shown on the video clip taking issue with the idea.
You can view Mr Janszen's website at Itulip.com
Here's the CNBC video clip:
Tuesday, October 07, 2008
Three Retirement Topics: Baby Boomers Delay Retirement; How My Household is Doing in Planning for Retirement; My General Advice
Kelly Greene notes that the average retirement age in the U.S. is 63. She cites that "less than one-quarter of workers age 55 and older - just 23% - have savings and investments totalling $250,000 or more... About 60% have less than $100,000."
Also noted in the article:
"According to research from T. Rowe Price... A 62 year-old with a $100,000 salary and a $500,000 nest egg will see his annual retirement income from investments and Social Security rise by 6% for every additional year he remains in the work force."
Here's the full Wall Street Journal article.
My opinion on what people should do to prepare for retirement:
(1.) Don't forget to account for the long term effects of inflation on your retirement income. Using a two to five percent after inflation return is far more realistic than using a flat 11 or 12 percent annual return.
(2.) Don't be optimistic. Plan for and prepare for the worst. Doing so, will better enable you to emerge successful, no matter what life throws at you.
(3.) Don't believe that your company or government pension is all you'll need. Many citizens are finding that their companies are either headed towards bankruptcy or already declared bankruptcy. In these cases, their pension benefits have either been drastically cut or completely vanished, especially if they had no pension but held company stock.
(4.) Don't expect to enjoy Social Security, Medicare and Medicaid benefits like those we know of today.
This weekend I ran the numbers to determine what it would take for my wife and I to retire and determined that we could both retire when I reach 49 yrs of age. I used the MSN Retirement Calculator. I assumed that:
(1.) We would be able to turn our $392k net worth into $2 million in the next 15 years through aggressive saving and conservative investments.
(2.) In addition to a projected net worth of $2 million, I would collect at least $64k per year from my military pension (in today's dollar).
(3.) Our investment portfolio would earn a 2% return after factoring in inflation.
(4.) We would live to around 93 years of age.
(5.) No social security benefits would be available.
Using these assumptions, we would have enough assets to draw about $80k per year (in today's dollars) if the Department of Defense continued to honor my pension and provided my dependent(s) and I medical benefits. Also, we would have a $850k buffer left over when we die. If the Department of Defense / U.S. Government became insolvent, we would subsist on $2 million dollars, living on half as much income ($40k per year).
Monday, October 06, 2008
"The Fixer," Chicago Sun Times Most Popular Consumer Column: Addressing Consumer Alerts, Rip Offs, Etc.
Stephanie Zimmermann receives approximately 8,000 consumer letters a year seeking help in fixing any of a myriad of consumer issues. In her last three columns Stephanie addresses:
(1.) Merchants forcing customers to spend a minimum amount to qualify for a credit card transaction. Stephanie states:
"If you encounter a merchant setting a minimum or maximum purchase amount or imposing a surcharge, you can report them to the credit companies, which will intervene through the merchant's bank. For MasterCard, you can fill out a merchant violation form at www.mastercard.com/us/personal/en/contactus/merchantviolations.html. For Visa, call the number on the back of your card to file a report."
Here's the full article.
(2.) Knowing a store's return policy. Cites cases where consumers should be well aware of return policies when buying Christmas presents or other gifts well in advance of when they'll be opened. Here's the full article.
(3.) When free credit reports aren't free. Article states that the correct site to get a free credit report from is http://www.annualcreditreport.com/. Other sites, if used, may impose hidden charges. Here's the full article.
Here's a YouTube video clip of Stephanie's column, "The Fixer," talking about IRS Scams
As of early October, you can also view 13 of Stephanie's video clips here.
Sunday, October 05, 2008
Here's the latest full article.
Saturday, October 04, 2008
(1.) Military Enlisted with Pregnant Girlfriend: D Rating; $1k Loan; 28% Interest; 4 days left
(2.) Military Officer: D Rating; $5k Loan; 17.65% Interest; listing closed early
(3.) Postal Service Employee: A Rating; $7,500 Loan; 14.3% Interest; 5 days left
(4.) Doctor: AA Rating; $6,800 Loan; 12.5% Interest; 4 days left
(5.) Analyst: B Rating; $3,600 Loan; 16.05% Interest; 1 day left
(6.) Accountant/CPA: $9,990 Loan; 14.3% Interest; 1 day left
I'll likely get more bidding competition. But hey, this is me blogging about my finances, including Prosper bidding. I'll likely only bid on these if I can get > 10% after fees. Also, i'll only end up bidding on one or two of these.
Friday, October 03, 2008
Save and Conquer - Retirees in Trouble: S&C discusses recent New York Times and Wall Street Journal articles about our aging work force and their level of unpreparedness for retirement.
Financial Rounds - Economic Meltdown Cartoon: The Unkown Professor posts a funny comic that pertains to grad students and professors and how they are affected by the economic meltdown.
Dual Income No Kids - Bailout Pork: Excellent article breaking down "egregious" provisions and "pork" in the bail out bill past by the Senate.
My Frugal Freedom - Shipping Container House: Interesting posting about using shipping containers (CONEX boxes) for the construction of a house.
Military Money Might - What is the Best Way to Fight a Bear (Market): Hank writes a good article about his recommended investment strategy for those fighting a bear market. I like his article. However, I would add that in a bear market, you want to scale into your investments. Invest portions of your money on each 7% dip in the market, scaling in as the market goes down. If the market goes down 25%, you have about 3 opportunity points to buy in.
Debt Free Living Guru - When no Money Comes in: Sharman gives some concise advice to those in a money crunch.
Thursday, October 02, 2008
Some of the other pork in the bill:
$6 million for kid wooden arrows in Oregon
$192 million for production of Rum in Puerto Rico
Here's an article on the topic. Articles really haven't yet caught up yet to updating the price tag.
Wait!! If you act now, we'll even throw in a years supply of "ShamWow."
Wednesday, October 01, 2008
Here's my rebuttal to a letter posted in the Bellingham Herald (WA) on Sep 30, 2008. Original letter in mixed case, my rebuttal is in all caps:
"Taxing the rich will be bad for everyone"
I have been reading how so many resent people resent the "rich" and how they must be taxed more and more to help the less fortunate.
YES ME TOO.
If the "rich" money goes to taxes, it is taken out of the local economy.
THE MARGINAL BENEFIT OF A RICH PERSON GETTING MORE MONEY DEGRADES WITH EVERY ADDITIONAL DOLLAR. A RICH PERSON IS KNOWN TO BE RICH BECAUSE THEY HAVE MONEY IN THE BANK VICE IN CIRCULATION. PEOPLE KNOWN FOR SPENDING A LOT IN THE LOCAL ECONOMY WITHOUT FIRST HAVING MUCH MORE MONEY IN THE BANK ARE NOT KNOWN AS RICH BUT FOOLISH.
There will be nothing to spend in the community. This would eliminate the large charitable donations to all the unfunded community projects.
THE COMMUNITY PROJECTS ARE UNFUNDED BECAUSE FEDERAL AND STATE TAX RECEIPTS ARE NOT LARGE ENOUGH FOR NON-ESSENTIAL PROGRAMS IN ADDITION TO SUPPORTING EXISTING ENTITLEMENT PROGRAMS. IF THE LOWER INCOME LEVELS ARE TAXED LESS, THE MARGINAL BENEFITS OF EXTRA MONEY IN THEIR POCKETS ARE FAR HIGHER THAN THOSE EXPERIENCED BY THE RICH.
What about the local businesses that would no longer be patronized because there would not be "rich" people spending their money locally?
YOU MEAN GUCCI, FERRARI, ETC? OK, I CAN LIVE WITH THAT. PEOPLE OF LESSER MEANS WILL STILL BURN THROUGH THE EXTRA CASH IN THEIR POCKET (AT FAR GREATER NET RATES) AND HAVE LESS REASON TO RELY ON GOVT ENTITLEMENT PROGRAMS.
IF THE RICH ARE SUFFICIENTLY UPSET WITH HIGHER TAXES, THEY CAN ALWAYS WORK HARDER AND EMPLOY MORE OF THE UNDER EMPLOYED, POOR AND MIDDLE CLASS TO DRIVE UP THEIR NET PROFITS
They would not be buying new homes.
OK, I CAN LIVE WITH THAT. I SUSPECT IT'S BETTER TO HAVE MORE SUFFICIENTLY EMPOWERED MIDDLE CLASS BUYING 50 OR MORE HOMES FOR EVERY ONE RICH CAT HOME.
... vehicles, farm equipment, expanding businesses, booking vacation trips, investing with local brokers, etc. It would not be long before most businesses would no longer exist to hire local people, stores would be nearly empty, demands on the food banks would increase, lower-income people would have even less than they have now.
WHAT YOU SAY IS GARBAGE. ABOUT THE ONLY NEGATIVE OF SIGNIFICANCE IS THAT THERE WOULD BE FEWER ECONOMIES OF SCALE. MORE LITTLE BUSINESSES WILL BE EMPOWERED TO PROSPER AS COMPARED TO SMALLER NUMBERS OF LARGE BUSINESSES. THESE LITTLE BUSINESSES HAVE HIGHER COSTS ASSOCIATED WITH THEM. HIGHER COSTS ARE DUE TO COSTS OF CAPITAL (INTEREST RATE PAID) AND LESSER ABILITY TO DISTRIBUTE THEIR "FIXED COSTS" LIKE THE BIG BUSINESS. THESE HIGHER COSTS WILL BE PAST ON TO SHOPPERS IN THE FORM OF HIGHER PRICES. PAYING HIGHER PRICES IS A SMALL CONSEQUENCE WE MAY EXPERIENCE BY PULLING UP THE LOWER AND MIDDLE CLASSES BY THE BOOT STRAPS.
Think seriously about what you ask for - you may get nothing instead of a chance to have things continue to get better. Take care of your community and it will take care of you. Taxes only go into a big, black hole where only a very small percentage ever comes back to the community.
I DO NOT INTEND TO TALK ABOUT THE GALAXY OR BLACK HOLES. NO REBUTTAL NECESSARY.