Thursday, December 18, 2008

New Credit Card Rules--It's About Time!

I found this article today titled U.S. credit card rule changes approved by regulator. In a nutshell, it means that credit card issuers can't screw the consumer--or at least they'll have to find new and different ways to do so. Credit cards can't raise their interest rates except under certain circumstances such as a payment being 30 days or more late, require a grace period of 21 days, ban universal defaults where credit card companies jack up your rates because you paid a utility bill or gym membership late, and prohibit double-cycle billing.

These are long overdue in my opinion, and I'm glad to see such actions being taken. I've never carried any credit card debt, always paid my bills on time, and such so none of it really effects me. I'm not in favor of it because it'll save me money--I'm in favor of it because it's the FAIR and RIGHT thing to do--something credit card issuers should have been doing for years.

One quote in the article, a criticism of the new rules, goes, "Scott Talbott, chief of government affairs for the Financial Services Roundtable, said the rules will likely result in less credit as banks won't be as able to charge higher interest rates to riskier borrowers."

Let me be the first to call bullsh*t! First, consider the source--chief of government affairs for the Financial Services Roundtable? I'm not even entirely sure what that is, but it sounds like someone who's a hired gun of the credit card lobbiests who has a vested interest in ripping off consumers.

More importantly, however, banks CAN charge higher interest rates to riskier borrowers. What it DOES mean, however, is that banks can't give out artificially low rates then jack them up unexpectedly later. It means they have to be honest with their rates up front instead of the deceptive methods they used to get people to sign up at low rates then jack it up later. Borrowers who DO pay their bills late can still be hit with even higher rates.

In the short term, banks very well may reduce credit to consumers, but they're already doing that because of their own economic problems. I wouldn't go blaming these new rules for that. And honestly, if someone is already maxed out and can't afford their credit card bills already--why the hell would you give them MORE credit in the first place?! Hello?!

Scott Talbott continues by saying, "You need to be able to reprice for that risk, otherwise banks will grant less credit. You will have those who manage credit properly subsidizing those who don't."

Did you catch that? He said it himself--banks will reprice for that risk, otherwise banks will grant less credit. They have an option, and one of them is to NOT grant less credit. As someone who manages credit properly, I'm more than happy to do my part to subsidize those who don't. =)

These changes, undoubtably, will decrease the profits of credit card companies. They made a heck of a lot of money off their unfair practices, and during economic times like these, a lot of these credit card companies are having a tought time of it. Default rates are going up, and they need cash more than ever before. But I just don't feel sorry for them. From a credit card issuer's point of view, this is absolutely the worst possible time to have these new rules enforced. But they should have done it themselves years ago. NOW is always excellent time to stop screwing consumers. =)

Saturday, December 06, 2008

I Call Bottom!

It's official--there are some people suggesting that gas prices might go as low as one buck per gallon. Now, I'm not disagreeing that it could happen, but if I were a betting man, I'd bet that prices are more likely to hit $3/gallon before they hit $1/gallon. But with all my google sleuthing, I could find no recent news articles predicting that gasoline could hit $3/gallon, or even $2/gallon for that matter.

I'll tell you why--it's the same reason people were predicting oil prices would hit $200/barrel earlier this year--most people have a very short term view of the world. Gas prices have been going up for a week, then they will "obviously" continue to go up, and if gas prices have been going down for a week, then they will "obviously" continue to go down. Take the last two data points, draw a straight line from the first one to the second one, then continue that line out perfectly straight, and that's where gas prices will land next week.

But global events and decisions are already setting the base in place for another oil spike. Demand will continue to increase, but projects are being canceled. Investments in the Canadian oil fields that were supposed to usher in a source of dependable, albeit more expensive oil, are being put on hold or canceled outright. Investments in alternative energy which had been profitable with oil at $100/barrel, or even $80/barrel, are now losing money and additional investments are being scaled back or canceled. And now, apparently, our brief spike with high oil prices is fading in the distant memory--SUV's are back!

Let's do the math. Increased energy consumption + decreased energy investments = high oil prices. Just something to look forward to next year. I wouldn't dare predict when oil prices will spike again, but the fact that it will is about as certain as the sun rising tomorrow.

And since I'm already talking about oil prices, I'd like to say that car commercials that brag about their cars getting 25 mpg (more-or-less, depending on the car being promoted) are stupid. My 1990 Ford Taurus could do better than that--and that car was nearly 20 years old! To say that I'm underwhelmed is a major understatement. It's no wonder Detroit is doing so badly. The cars today get worse mileage than they did 20 years ago! I'm not sure that's something I'd want to brag about.....

Monday, September 29, 2008

Fools! They're all fools! =)

To continue my post about the $700 billion bailout, I find some of the stuff I read about it fascinating. The vote for the bailout failed today, and my stocks tanked. Grand total, my stocks lost precisely $1,976.29 of their value today. That's okay--I really don't mind! =) They'll go back up, eventually. In the meantime, I can keep buying stocks at low, low prices.

But the part that fascinates me is what I read in the media. It seems to me that a lot of people genuinely believe the bailout will actually cost taxpayers $700 billion dollars. It's a huge misrepresentation, and largely unfair. Wall Street doesn't deserve to be bailed out, yadda, yadda, yadda. I've read that many congressmen who actually want the bailout to pass voted against it or abstained from voting because elections are just a few weeks away and it would "look bad." And heck, if Obama and McCain can actually agree that the bailout is a good thing, you gotta think there might actually be something to it. What do we elect politicans for if it's not to make the tough choices? Alas, many of them are more interested in getting reelected than doing the right thing. I can't say I agree with everything Bush has done, but at least he does what he thinks is right. Gotta give him credit for that.

The biggest irony I find, however, is that it's actually possible that the bailout would make money in the end. We aren't just giving away $700 billion with no strings attached. We, the taxpayers, would be buying very real assests with real values, possibly for a fraction of their true value. (I'll pause here to let you finish laughing.) But seriously.... there's absolutely no reason that the US government can't get back every cent that's loaned for this bailout, plus interest and expenses, and maybe even a little extra. But that number is just so darned large, it frightens a lot of people. I don't think the media does a very good job of explaining that a $700 billion payout doesn't mean it'll actually cost taxpayers $700 billion in the end. I wonder how much stock holders lost today with the bailout failure? I suspect it might be greater than $700 billion, although I haven't found any hard numbers to back that up.

But that's okay--I'll keep buying stocks as I can, and smile that stocks will stay so much cheaper that much longer. =)

In other news, what I really wanted to talk about, was the strike at Boeing. I think it's utterly, irresponsibly stupid. A couple of years back when the machinists went on strike, I felt Boeing was being stupid and idiotic. This time, I think it's the machinists that are shooting themselves in the foot.

When they first voted to strike this time, I read that 80% of the union members voted against the contract, but 87% voted to strike! Which means that there are at least 7% of the people there who actually supported the contract but wanted to strike anyhow? That's screwed up. My gut feeling is that there are a lot of hard feelings, and many of those who voted to strike just wanted to strike out of spite. Not all, perhaps not even most, but a sizeable number. That's a stupid reason to go on strike.

And the main sticking point for them? Job security! Are these people out of their minds? There's no such thing as job security. When Boeing starts to develop the 797 and they need to decide where to assemble the plane, what do you think is going to happen? "Well, we could assemble it in Everett, but they like to strike all the time which causes problems. Perhaps assembling it in some other location where they're less likely to strike would be prudent?"

Shooting themselves in the foot. Boeing must stay competitive, and if that means outsourcing some of their chores, that's what they need to do. And it's not necessarily a bad thing either. If developing countries such as China have a financial interest to buy from Boeing--such as manufacturing some parts in China--they can sell more planes and have more business in Washington.

And while many people in this country are facing foreclosures, loss of jobs, and so forth, the machinists feel now is the best time to walk off the job?

Good luck with that. I think the machinists will cry uncle before Boeing does this time around.

But there is a serious morale problem with regards to the machinists. I'm not sure there's any simple or easy solution for it, but I do think they're shooting themselves in the foot with this strike. And if the worst should happen, and your job does get offshored to some other country, find a new one. I've been laid off twice now. It's not the end of the world. If you're good at your job, there will be another one available.

Thursday, September 25, 2008


It's official--Washington Mutual is done. During its more than one hundred years in business, it survived two world wars, the Great Depression, and countless scandals over the years. It's not the end of the world, but it does sadden me. I read that the final straw came because depositors had taken out about $15 billion fearing that the bank would fail. Granted, it probably would have failed anyhow, but a bank run? How stupid do you have to be? It's FDIC insured. Unless you're stupid enough to keep more than $100,000 in your account ($200,000 for joint accounts). If you keep that kind of cash laying around in a bank account, you deserve to lose it anyhow. Do people not realize this?

I feel like I'm somewhat ahead of the tread. Bank failure didn't become the "in thing" until IndyMac went under. My bank, NetBank, failed last year. So ha! Been there, done that, and when my bank failed, I didn't even find out until about a month after the fact! But it wasn't a big deal, all things considered, and I wouldn't have changed anything even if I knew the bank was failing. The assets were sold to ING Direct, and I find it a perfectly acceptable place to do business with now.

As for the Mother Of All Bailouts (MOAB), the $700 billion that's being thrown around, I find that incredible sum to comprehend. But all-in-all, I find myself not especially concerned about it either. Keep in mind, that number is likely far higher than the final cost to taxpayers would be. It's to be used to buy up a bunch of lousy mortages, but those mortages aren't worthless. They are still assests with real value. Not as much as banks originally thought they were, but there is still some value there.

I also find it heartening when I hear reports about US Sam taking equity stakes in some of these institutions--it's the least we deserve for bailing them out!--and even perhaps taxing certain financial transactions on Wall Street to ultimately cover the cost of the bailout. I don't mind using taxpayer money to bailout Wall Street--as long as Wall Street ultimately pays for the bailout in the end. I'll be considerably more upset if I felt taxpayers wouldn't get most of that $700 billion back in the end. I'm optimisitic, though. And I'm pleased that they want to restrict those golden parachutes so the folks who got us into this mess can't walk away with millions in severance. It's appauling how so many CEOs can drive a company into the ground and get paid millions while doing it.

I'm not even terribly concerned about the "moral hazard" of bailing out Wall Street--the theory that if we bail them out, they won't learn their lesson and take stupid risks in the future thinking if things get too bad, the government will just bail them out again. Bailing out Wall Street doesn't mean they won't suffer. Oh, they have. Stockholders have gotten all but wiped out. The most wreckless companies have blown up completely or been bought out for pennies. Capitalism at work, and it is good. They're feeling the pain of their mistakes. A bailout isn't going to change that.

Remember last year when it seemed like wealthy mid-east folks were investing billions in some of those faultering banks? Terrible, wasn't it? Even the Crystler Building--and what's more American than the Crystler Building?--was bought by foreign investors. In hindsight, I'm rather happy to see them blow billions of dollars on our failed institutions. Better them than us, right? ;o)

I find the fear permeating the market exciting. Stocks as a whole are cheaper than I've ever seen them before, and I'm more optimistic about the stock market than I've ever been. Apparently, my view is quite rare--I read recently that more people expect the stock market to be lower one year from now than has ever been recorded in my lifetime. Oh, if only I had more money to invest..... Unlike Wall Street, however, I'm not willing to take on debt to buy more assests. Stocks very well could continue going lower, and those margin calls could be a problem if they did. I suspect in the next few years, though, I'll make a killing with my investments. If stocks stay low or (even better!) continue to fall, I'll be scrimping and saving every cent I can to buy more.

As long as I'm a net acquirer of stocks, I'm thrilled with stock prices going down. You hear about inflation going up, but then everyone is depressed that the price of stocks is going down. Hello?! Why does everyone want to pay more for stocks? *shaking head* Why aren't stocks considered when they figure out inflation rates? I spend more on stocks than I do any other single item. Even managed to max out my IRA contributes this year. Sweet! =) (On a sad note, however, the stock I wanted to buy with it went up over 20% in the time it took for the check to work it's way through the mail and get deposited into my account. Argh! I still bought the stock, but I wasn't happy to pay 20% more for it just because the check took a few days to make its way into my account.)

Exciting times, indeed! Take advantage of it!

Friday, September 19, 2008

Down With Google!

For years, I used to use Yahoo as my search engine of choice. Then one day, I tried Google, and was amazed at how much better the search results were. I never went back.

Nowadays, I generally use Google out of habit. Yahoo and other search engines have since improved their searches considerably and I can't say I find any one better than another. I usually get more-or-less the same results no matter what I use. (Except Cuil, which returned absolutely terrible results, when I tried playing around with it.)

Today I read that Google's search dominance has continued to increase, serving up 63% of all searches on the Internet. I wouldn't call that a monopoly, per se, but as a consumer, I'd rather have at least two "biggies" battling it out for searches. Nothing good can come from one major winner. Looks what happened to Internet Explorer as soon as Microsoft won the browser wars. It was dead in the water for years until Firefox came along and blew IE6 out of the water. Tabbed windows, standards compliant, and wonderfully useful toolbars. IE7 improved things dramtically, but I still prefer Firefox. And now a beta version for IE8 is already available. See what a little compition can do? We'd all probably still be stuck with IE6 if it wasn't for Firefox's success.

(Speaking of IE8--if anyone is trying it and discovers any problems with Atlas Quest while using it, let me know. I haven't downloaded it or tried it out as of yet, so there could certainly be "upgrade issues" I don't know about.)

I still like Google search results, though, but I find myself more and more concerned about their enormous clout. So, starting today, I've decided to ditch Google as my search engine of choice. No, starting today, I'm going to use Live Search.

Why Live? Well, my opinion of Yahoo has gone down for one thing. I still hate their cluttered search page. And the fact they're trying to partner up with Google is a huge issue with me. After all, I want to reduce Google's dominance--not increase it which is what the partnership with Yahoo will do. And Microsoft, who runs the search engine, is the third most commonly used one. It does not hurt that I own some stock in Microsoft either, though my little pittance was hardly a major deciding factor on that score. ;o) Anyhow, my trust in Yahoo's management was shot after they didn't take Microsoft's offer to buy up the whole company. Are they IDIOTS?! Apparnently so. (I'm a bit leery about Microsoft making the offer in the first place, but I'm not entirely convinced it would have been a bad thing had they bought Yahoo either. Yahoo not taking it, though--that's just criminal in my book.)

I never really used Live before, and when I checked it out this afternoon, I was actually pleasantly surprised. I pretty picture of Machu Pichu showed up, like a pretty background compared to the stark white of Google. And when I moved my cursor around the page, little boxes would highlight on the image with information to links about the site, the photo, and one of them even included a link to "airline ticket deals." WAY COOL! It's like a virtual box on Atlas Quest! Not that I'm particuarly find of virtuals, but I love how the links are "hidden" in the photo like letterboxes in the wild.

I'm not sure how often the image changes. I've tried a couple of refreshes and it still comes up Machu Pichu. But gosh, I really like it from a visual standpoint. =)

I'll still keep the Google ads on the tutorial pages for lack of a better source for them. I really wish Microsoft would come up with a program such as Google's AdSense program. Even if they give out ALL of the money made from the ads, Microsoft could still come out ahead just by making itself more relevant. But they never asked my opinion. I'm just a lowly webmaster and shareholder. =)

But in any case, I'm no longer going to use Google as my primary search engine. Long live Live! =)

Friday, August 22, 2008

Zero is Still Zero

If you watch the news, you won't be surprised to learn that Fannie Mae and Freddie Mac (and am I the only person who thinks those names are incredibly stupid?) have been having trouble lately. Today I read that Moody's cut the preferred share ratings on the two companies.

The section that caught my attention, however, read: Many analysts expect the government will have to exercise new abilities to recapitalize the companies, effectively nationalizing them. Those worries yanked their stock closer to zero this week from more than $65 a year ago.

The reason I found this amusing was the comparison of a stock at zero to that of a stock at $65 a year ago, like the fact that it was $65 a year ago is important. Would you rather have bought a stock for $65/share or $1/share and watch it go to zero?

It's a trick question--it doesn't matter. If the stock goes to zero, you've lost 100% of your investment. It doesn't matter at what price you bought in at--you lose 100% either way. Zero is the one stock price that your results will be exactly the same regardless of your buy-in price. It doesn't matter if you bought in at $100,000/share or 1 cent/share--you still lose 100% regardless if the stock price goes to zero.

The fact that the author of this article compares zero to $65 makes me think that the author of the article does not realize this point. It's not like someone who invested a year ago is hurting more than someone who bought in yesterday--they're both losing 100% of their investment. (Or at least heading in that direction--it's still not official as of yet.)

Thursday, August 07, 2008

The Olympics!

I'm not really an Olympics kind of person. I can't say I really understand the enthusiasm people have for the event, who wins or loses, yadda, yadda, yadda. It's a big yawn to me. Does anyone even remember how many medals were won in Athens anymore? Does anyone even care anymore?

A bunch of people I don't know, competing against a bunch of other people I don't know. Whoopee. *twirling finger in air*

This year might be interesting for political reasons, though. I'd hate to be running things on the ground in China. Talk about a migraine. *shaking head* It's kind of surprising to me that China would even want to host the Olympics. What do they have to gain? They spent billions of dollars to host the Olympics, for what? Publicity? That's the kind of publicity I'd think they'd rather do without. I've actually heard more smog reports Beijing since it was announced they got the 2008 Olympics than I ever heard before they had it. It gives opponents to China a very visible place to make protests that they'd otherwise never have. If everything goes well, I'm sure the Chinese government will breath a huge sigh of relief, but they won't be any further ahead than before. And oh so many things could go wrong.... So many things that could embarrass them and stain their reputation for decades to come.

I was actually rather pleased when I first learned the Olympics would go to Beijing. I'm convinced that the more integrated they become with the rest of the world, the more pressured they'll be to become open and honest. I'm not naive enough to think they'll become a democracy overnight because of it, but can the Chinese government stop hundreds of thousands of visitors from talking about Tiananmen Square massacre? The truth will leak free, and the more their citizens travel beyond the China Machine and see the rest of the world, the more they'll see the problems in their own society. The Olympics, however, is bringing the rest of the world to China which essentially accomplishes the same thing. Those folks who can't travel outside of China or political or monetary reasons can now rub elbows with those who do on an unprecidented scale.

It's a huge risk that China is taking, which is why I'm so surprised they're taking it.

Four years from now, when the Olympics are being held in London, I may not know who won what events, or how many gold medals the various countries brought home. But I suspect I'll remember the polictical background for decades to come, and I hope China becomes a better place for it.

Now cute girls in tight outfits on ice skates--that's fun to watch. I still won't remember who won, but at least it's fun to watch. ;o)

Saturday, August 02, 2008

The Best Time of My Life....

'Tis the witching hour at the moment. I rarely stay up late enough to properly enjoy the witching hour, but it's a time of night I always find soothing for some reason. Streets are quiet and deserted. Shadows abound, however, and there's always something in the shadows. Mice, cats.... something....

I first remember learning the term witching hour while reading The BFG (Big Friendly Giant, for those of you not in the know) by Roald Dahl in the fifth grade, perhaps my favorite book in my entire elementary school career.

The witching hour is now upon me, as I continue tweaking a few ribbon colors on Atlas Quest. I had the television on, and at this late hour, all the channels tend to play commercials. Hour long, paid advertisements. It's shocking to me that anyone would actually watch such long commercials, though I have watched parts on occasion to laugh at the ludicrous claims they make. Using their "proven" techniques, I could become rich in real estate, the stock market, or by starting my own business. With their patented veggie cutter, I'll be a five-star chef in mere minutes. They can cure baldness, help you look like a supermodel, and give me six-pack abs in just three minutes per day.

It's really kind of funny to me, and I'm astounded that anyone would ever believe such hyped up claims. Do these people not realize it's just a commercial with hyped up claims?

I was pleasantly surprised to learn tonight, the special ad was a collection of music from the 70s and 80s. I remember adjectives such as "timeless" and "amazing" being thrown around with abandoned. The thing is, I generally like music from the 70s and 80s, and of course, they played clips from all sorts of them. I was actually enjoying the commercial!

My one complaint, though, was that they kept talking too much and not playing enough music. Alas, I guess we can't have everything. *shrug*

Which brings me to.... what is the best time of your life? Because one of their so-called testimonials. I know it's fake. Competely and totally faked. You know how I know this? Because the woman said the music brings her back to the best time of her life.... in high school! Raise of hands here--anyone think that high school was really the best time of their life?

I can't say I had a bad high school career. It was probably typical for the most part. I went to school, and.... heck, I don't even remember what I did for fun back then. Probably played Tetris too much.

High school has too many constraints to be considered the best time of one's life. Curfews, lack of money, lack of transportation..... For a month or two, I deliberately avoided one particular person in fear they might try to beat me up if they ever got me alone. (I will confess, however, that I brought this situation on myself when I deliberately whacked him in the shin while playing field hockey in PE--a fate he justly deserved. But I was careful to avoid him outside of class after that!)

All-in-all, though, high school was probably the worst time of my life. Isn't that kind of normal, though? To doubt what you'll do in the future, worry about college, peer pressures. To be stuck without money or transportation. Bleh.

No, it wasn't until college when I started to have a heck of a lot more fun. That was when I first started traveling. I rafted rivers, rock climbed up steep cliffs, backpacked up tall mountains, and saw a number of very cute naked girls relaxing in hot springs. Let me tell you--that never happened in high school! (Not my high school, at least!)

I can't really say that college was the best time of my life, though. I was still learning who I was. Turns out, I didn't really get into rock climbing. Hanging on the side of a cliff all afternoon got kind of boring after the initial thrill wore off. Backpacking suited my speed more, however, allowing me to cover more ground and see more places. Rafting and canoeing were also wonderfully fun, but I was too cheap to actually buy my own gear so was always dependent on others for those particular adventures. I don't get to hot springs much anymore, but I did do a bit of solo skinny dipping while thru-hiking the Florida Trail. =)

No, the best time of my life started when I was laid off from my job at Intel. I had saved tens of thousands of dollars and suddenly found myself with enormous quantities of time. All my life I'd either had school, work, or both. For the first time in my life, I found myself with neither--AND with money to spend. That was when I started the best time of my life, traveling through Central America and thru-hiking the Appalachian Trail being highlights.

Of course, most people probably don't get that particular luxury, so I could image that for a lot of people, college could be the best time of their life. High school, though? I just don't believe that. Even when I worked at Intel, I still considered that time better than my time in high school.

Stupid fake testimonials..... Was it really so hard to get some legitimate testimonials?

Wednesday, July 30, 2008

Tired of business as usual?

There was just a commercial on television for Dino Rossi, the Republican running for governor in the fine state of Washington. And in it, he says that he'll bring "change" to the government.

Does anyone really believe this? I can't count the number of times I've heard politicians promise to bring change, and it's probably the lamest empty promise a candidate can say. First, they don't say what kind of changes they're promising. Secondly, they aren't dictators so the changes they can implement are limited.

And while I'm at it, I hate those commercials when politicians say they're for education, for health care, for small business, for [fill in the blank]. Really? Is that the best they can do to distinguish themselves from their opponents? And does anyone really believe that such opponents would actually be against such things?

It would be so wonderful if politicians actually explained what they would try to change, and perhaps why they feel such changes are important. I just want to vote against them whenever I see their commercials that are full of empty promises.

But the part that annoys me the most--I have to assume that there actually are a large number of people who DO believe all these empty promises. After all, why would they spend millions of dollars on them if they didn't work?

In this case, I'm complaining about Rossi's ads, but Christine Gregiore, the incumbent governor hasn't done any better.

Her ads tend to focus on how well Washington state is doing, despite all the troubles in the rest of the country, seeming to imply that she's single-handedly for everything that has gone right in the last four years. Yeah, sure. And there's a bridge in Brooklyn I'd like to sell....

I'd rather know what sorts of changes she'd like to focus her efforts on if she were to be reelected. Now that's the type of information one can make a quality decision with.

Friday, July 11, 2008

I Hate Oil

Anyone that reads this blog knows I don't worry too much about oil prices--that's not the part I hate. My hate is directed to the obsession people have about it. I have the 11:00 news on right now, and they reported that gas prices went down one cent per gallon overnight in the Seattle area.

Really? Is that news? I have a hard time believing that there's a large number of people who were breathlessly waiting to find out how much gas prices dropped over the course of a single night. Even when oil isn't news, it still makes the news. Enough is enough.

I vote that the news media should not be allowed to report the change in oil prices more than once per week. Perhaps Monday at high noon, because everyone hates Monday already, so reporting the gas prices shouldn't make the day any worse. =)

In other news..... I've been losing a boatload of money in the stock market lately, but I can't help but be thrilled at how low some of those stock prices have gone. Buy! Buy! Buy! I can't remember a time when I've felt that stocks as a whole have been trading at such desirable levels, and I'm sending my government rebate check to my IRA! Woo-who! Now I just need to decide.... which stock to buy? So many choices.... So little money to buy with. *sigh*

Tuesday, June 17, 2008

It doesn't get any worse than this!

I was reading an article today, and it contained the following quote: "This nation's economy is inextricably linked to the viability of its air transportation system. If the airlines continue to spiral downward, so will the economy."

Does anyone really believe that? Airlines alone have the power to bring down the economy? I don't think so. Oh, yes, jobs will be lost, consumers will have to pay more for tickets and get less in return, and much of the economy is tied to airplanes, but if a few of the largest airlines went belly-up, it's not the end of the world. Other airlines will step in to fill in the gaps, and the industry will get back on its feet again.

Some of the air traffic will move to more cost-efficient means of transportation--trains, boats, or trucks. Passengers will be more likely to drive to their destinations, or perhaps go by bus or train.

The death of an airline or two may cause some hardships, but it's hardly going to topple the economy. Now the housing problems and credit crunch..... Those are serious issues that can severely hurt the economy.

Monday, June 16, 2008

Raise the Gas Tax!

I've said it before, and I'll say it again. I'm a big proponent of increasing the tax on gas, which probably puts me in a very small minority, but hear me out. I just heard a political commercial on the radio slamming the gas tax, but as with most political commercials, it plays on people's fears and ignorance of basic economics. I so very much wish our schools would better educate our youth on how economics really works.

First, consider this: taxpayers are paying to subsidize alternative forms of energy. You're paying to buy other people's bio-fuels. You're paying so others can use solar energy, or wind energy, and all sorts of ideas. Do you know why? It's because that's the only way they can compete against "cheap oil."

Now if we increased the tax on oil, prices would go up, and we'd no longer have to subsidize alternative energy sources. Sure, you might have to pay a bit more on oil, but at least you could stop paying subsidizes for other people's benefit.

But you know, I'm not really convinced it would drive prices up all that much. Oil is a commodity, and the issues of supply and demand are very much alive. If you suddenly add a dollar per gallon tax, it'll likely hurt in the short term, but in the long term, there's still a bunch of oil that oil companies want to sell--that they need to sell--so how do they do that? By lowering the prices they sell the oil for in the first place until--all else being equal--prices fall back down to where they would have gone without the tax.

There's been talk about taxing oil company's "windfall profits," but isn't that just a backward way of letting the oil companies collect the tax for the federal government anyhow? Instead of just saying, "Hey, let's let the feds tax us one buck per gallon," we'd rather say, "Hey, let's have the oil companies charge us an extra buck per gallon, then make the oil companies give the money to the feds."

Cut out the middle man--just tax the consumer directly instead of these indirect taxes that frankly stink of anti-capitalism. You start taking money from oil companies, legally acquired, just because it's the popular thing to do, they may not be inclined to open up more oil fields or pump the fields they have very hard, then where will that leave you?

Though honestly, I don't think it's the oil companies necessarily that are responsible for the surprising surge in oil prices recently. A lot of the recent rise, I believe, is part of a commodities bubble. Everyone's running around saying "this time, it's different." Yeah, I heard that during the dot com boom and the real estate boom as well. There's a bridge in Brooklyn I'd like to sell you.... Now there are some very good reasons why commodity prices have been rising, and in the long run, I do believe prices are going to rise and continue to rise, but the recent spike in oil prices I do not think is sustainable. I think a lot of speculators are driving up prices, and a lot of them will end up losing a lot of money when prices go down again.

And the folks who I think are making the most profit from high oil prices are the people who actually own the physical commodities at their source--not the oil companies that just drill the oil, not the companies that refine the oil, and not the retailers who sell you the oil. It's the folks who own the land the oil comes from, such as our good buddies in the Middle East.

Frankly, I'd rather a have a one dollar tax by our federal government than sending the buck to the mid-east and who knows what happens with it then. If oil prices are going to be artificially high, I'd prefer the money going to the feds than to oil companies or mid-east terrorists, but that's just me. *shrug*

If I were a benevolent dictator, I'd start increasing gas taxes immediately. I probably wouldn't bump it up to a dollar per gallon overnight--that would cause unnecessary pain, but a one-cent increase every month for 100 months would get the same results in a more gradual, easier-to-deal with manner. High gas prices would help increase research into more efficient vehicles and alternative fuels without having to subsidize them, reduce our reliance on foreign oil, take money out of the hands of oil companies and mid-east dictators, and perhaps help to better fund roads, education, health care, and more.

If you love America, you should support a gas tax! =)

I'd even go so far as require minimum gas prices such as $3/gallon, that will increase over time. No matter how low the price of oil goes, require people to pay at least a certain amount for gas to insure those alternative sources of fuel and improved fuel-efficient cars continue being researched and developed. For a lot of companies researching how to make fuel-efficient vehicles or developing alternative sources of energy, they could get hosed if prices fall too much or too quickly, and minimum price supports can help insure they'll still be in business for years to come.

And.... late breaking news.... French fries are NOT, I repeat, are NOT made in France. *shaking head* Trust no one.

Tuesday, June 10, 2008

Stupid Tech Stuff

I haven't ranted or raved on this blog so far this year, and I'll tell you why--most of the year, I've been too far removed from the Internet to spent the scarce time I had complaining about it. =)

I pondered a lot of stupid things in this world on my hike. When I first heard about Microsoft bidding for Yahoo, and Yahoo's shares actually rising above the price Microsoft offered, I thought Yahoo shareholders were absolutely stupid. If I owned Yahoo shares, I'd have sold in a heartbeat. Oh, sure, maybe they could extract a couple extra bucks per share out of Microsoft, but it was a risky bet with limited upside and a long way for that stock to fall if the merger didn't happen. IDIOTS! I'm not really convinced Yahoo was worth as much as they offered, but maybe. I'm generally leery about big mergers since more often than not, they don't tend to work out well.

But why Yahoo deluded themselves into holding out for a better offer? Why would Microsoft bid against itself? It's not like other companies were tripping over themselves to spend more than $40 billion bucks for the company. And even if the merger never happened, I thought it was still a brilliant opportunity to throw the folks running Yahoo into chaos. Shareholder revolts, possibility leading to the company's top executives being shown to the door. Spending their efforts fighting off shareholders and Microsoft rather than developing a better business. Perhaps make Yahoo employees feel a bit insecure in their jobs and jump ship.

No matter what, I felt Microsoft would probably come out ahead. And I spent hours wondering what was happening with that proposal, since most of the time I didn't have access to up-to-date information. It was a fascinating story to me (not to mention that I do own shares in Microsoft, so there is some of my own money on the line as well!)

Those poor idiots that actually bought shares above the price Microsoft was asking--IDIOTS! If I weren't hiking, I'd probably have been inclined to short the stock. The best Yahoo could hope for was a merger, and even then anyone buying at those prices was going to come out a loser.

And what about all those people at Bear Stearns who put all their retirement savings into their company stock? Did they learn NOTHING from Enron? It's bad enough to lose your job, which will happen to a great deal of folks at Bear Stearns if it hasn't already, but to lose your entire retirement savings as well? When I worked at Intel, I did have the option to put my 401(k) into an Intel stock fund, but I wouldn't touch that one with a ten foot pole. Actually, I might have put some of my savings into it if I thought the stock was undervalued, but I felt it was trading at wildly insane prices and was a terrible investment, but I know a lot of co-workers who had a great deal of money invested in Intel. In fact, if you'd like to see how Intel's stock did since that time, check out this link. It shows a ten-year history of the stock. I worked at Intel from September 1999 until December of 2001. That large anomaly you see in 2000? Yeah, I was there for that, and listened to many of my co-workers talk about plunging their 401(k) into
Intel stock.

Now I'm not an expert on stock market analysis, but here's the thing--you don't have to be to know that those stock prices were utterly INSANE. I hoped the insanity would last long enough for some of my stock options to vest and still be in the money, but that turned out not to be the case. On the plus side, however, I never had to figure out how to account for stock options on my taxes. =) (On another note, I did lose plenty of money in the stock market during the dot-com bust, but Intel has lost 2/3rds of its value in the last eight years. My losses, however, didn't come anywhere near that level, and are up significantly since hitting hit bottom.)

Bear Stearns doesn't really have to do with tech, but the employees who put their life savings into that stock and the whole Yahoo refusing to be bought--I spent many an hour on the trail amazed at such stupidity. It's not rocket science. If you have a 401(k), don't be stupid. Don't invest it in your company's stock, because when your company hits hard times, you'll likely end up unemployed or with a severe pay cut AND have your savings wiped out all in one shot. And--I don't know who was stupid enough to pay more for Yahoo shares than Microsoft was offering, but that brings stupidity to a whole new level. So little chance of making money, such an enormous chance of losing a boat load. *shaking head*

Okay.... on to today. What absurdities do I see today? Well, I passed a newspaper rack this afternoon, and on the front page in big type was the pressing news of the day: The iPhone--cheaper and faster!

Really? Is that really newsworthy? Electronics always become cheaper and faster. That's not interesting or revolutionary. I'm rather disappointed in Apple that that's their main bragging rights for the new iPhone--cheaper and faster. Hey, guess what? If you wait for another year, I'll bet it's even cheaper and faster than this year's model. Yawn. Wake me up when there's something new to report.

Actually, I'm most disappointed because the picture of the new iPhone--it looks just like the old iPhone as far as my untrained eye can see. I can't tell the difference. When I first saw a commercial for the iPhone, I was impressed. I had no interest in buying one, but I knew a really cool gadget when I saw it. It was slick, exciting, and new. I expected the "new" iPhone to be just as slick, exciting, and new. Nope, this was more of an evolutionary change than a revolutionary one. I'm so used to Apple being revolutionary, I'm kind of disappointed they only settled for evolutionary this year. I have little doubt the new phones will be huge sellers--and why not, at $200, you can get one for less than half the price they were introduced at a year ago--but I just don't see the wow factor this time around. Cheaper and faster is not front page news.