Friday, October 31, 2008

Tracking November's Grocery Spending

I just finished renovating our monthly budget, and under Groceries I have $400 per month (covers both M and I). I am going to hazard a guess and say that this is a nice blend of wishful thinking and total denial.

Since New Year's resolutions are right around the corner, I figured I might as well find out. So for the month of November I'm going to save all grocery/bodega/food co-op receipts and see what the final tally is. I figure that we should be able to eat in on $100 a week, so one of the interesting things about going through the receipts will be finding out what the budget breakers are. If I was a betting budgeter I'd place money on it being my obsessive purchase of blocks of cheese...

Thursday, October 30, 2008

New York State's Budget Gap

New York Governor David Patterson was in Washington this week testifying before Congress regarding New York State's projected 3.5 year budget deficit of $47 billion dollars. Egads.

New York State has long paid more in federal taxes than it gets back in aid from the Feds. While I agree in principle that the wealthier states should shoulder more of the financial burden than, say, Alabama, it is also ironic that it's the blue states who pick up the tab and are then held hostage by the red states' conservative politics. If pro-American is pro-rata, then Palin is on the wrong side of the fence. But I digress, which is understandable given that Tuesday is right around the corner. Thank god.

Back to my home state's woes. In 2007 New York state sent the Federal government a nice big fat check for $86.9 billion. What we got back from the federal government in return was a lowly rank of 40th in the nation in federal funding per taxes received. Of course, New York State would do well to take note that New York City paid $11 billion more in state taxes than it got back in state aid, essentially making all of upstate New York our welfare ward. Again, in principle I support the idea of the big guy supporting the little guy, but New Yorkers (the five borough kind) are constantly held hostage by New Yorker's (the rest of the state kind), so my enthusiasm for fairness is tempered every time things like congestion pricing get shot down. Like Western New York even has a rush hour (don't mind me, I can say things like that since I grew up in Buffalo).

All of which is to say, we have good reason to be freaked the frack out. Twenty percent of New York State's revenues come from Wall Street. Ditto for the city. And even the Wall Street Journal doubts Bloomberg is right for the self coronation job.

So when Patterson says he doesn't want to raise taxes, it's because New Yorkers already pay more in state taxes than all other states except one (that would be New Jersey, believe it or not). It's not the taxes, it's the inane New York State Legislature's spending spree that goes unchecked year in year out. If they manage to come back after the election and actually suck it up and cut spending, it would be a miracle of near biblical proportions.

Is there a way out? New York Magazine recently did a cover article on David Patterson that looks for some answers. None of which come easy.

Fiscal irresponsibility from all levels of government and capitalism have put us at risk. So I would like to take a moment to point out the most obvious, something that someone with piggybank blues knows all too well. Your budget-making abilities suck donkey derrier.

Tuesday, October 28, 2008

Credit Card Crunch

The NY Times article, As Economy Slows, Lenders Begin to Curb Credit Cards brings the credit crisis from Wall Street to, you know, your street. If you want a pretty decent primer on how to protect yourself, check out the San Diego Union-Tribune piece here.

Either I have sucker written in halogen across my forehead, or my credit must be pretty good because the past few weeks I've seen an uptick in credit card offers stuffing my mailbox. That isn't exactly the norm right now, and the Times article lays out some basic ways that we'll start to feel the squeeze.

First, the why:

Lenders wrote off an estimated $21 billion in bad credit card loans in the first half of 2008 as more borrowers defaulted on their payments. With companies laying off tens of thousands of workers, the industry stands to lose at least another $55 billion over the next year and a half, analysts say. Currently, the total losses amount to 5.5 percent of credit card debt outstanding, and could surpass the 7.9 percent level reached after the technology bubble burst in 2001.

After years of profiting off of us losing our shirts, lenders are now taking enormous losses. And make no mistake about it, even creditworthy consumers are going to feel the pinch, just like creditworthy mortgage seekers are having a hard time right now. If the financial and banking industry is broke enough to get bailout after bailout, then rest assured they're broke enough to extend any kind of credit to the likes of you and me. And that includes the plastic kind.

The how:

Big lenders — like American Express, Bank of America, Citigroup and even the retailer Target — have begun tightening standards for applicants and are culling their portfolios of the riskiest customers. Capital One, another big issuer, for example, has aggressively shut down inactive accounts and reduced customer credit lines by 4.5 percent in the second quarter from the previous period, according to regulatory filings.

Lenders are shunning consumers already in debt and cutting credit limits for existing cardholders, especially those who live in areas ravaged by the housing crisis or who work in troubled industries. In some cases, lenders are even reining in credit lines after monitoring cardholders who shop at the same stores as other risky borrowers or who have mortgages from certain companies.

While such changes protect lenders, some can come back to haunt consumers. The result can be a lower credit score, which forces a borrower to pay higher interest rates and makes it harder to obtain loans. A reduced line of credit can also make it harder for consumers to manage their budgets, because lenders have 30 days to notify their customers, and they often wait to do so after taking action.

Some other notes from the article:

* Even Amex is pushing some creditor's interest rates up 2 to 3 percentage points.

* Rewards shmwards. That "free" flat screen went from a Sony to an Insignia.

* Anticipating the regulation that's headed their way, credit card companies are pulling back on zero percent credit card offers to everyone under the sun, eliminating teaser rates, and chopping up the length of time a zero percent rate is good for.

* Our mailbox will get 13 fewer pieces of junk mail a year. See above.

All of which may inspire a how-dare-they-! kind of response. Aside from the fact they scrod the pooch when they were making bank off of crazy credit limits, high fees, and trap doors for the average Joe and Jane, they now have some pretty legitimate reasons why they're doing this. The credit crisis is trickling down.

To summarize from the article:

* The credit card market is shrinking. It's not like people are exactly banging on the door to get even more credit cards and the debt that goes along with it.

* Credit card companies' profit margins are shrinking. Credit card companies have their own financing-- credit card bonds. Companies live and die on borrowing money, and the credit card companies are no exception. I touched upon this in an earlier post Why We Need the Bailout. So when investors stop investing in the tools that companies use to make money flow, like credit card bonds, companies lose flexibility to take risk (on the likes of you and me, for example, and our comfy interest rate).

* I don't know about you, but I curbed my spending like there's a bread line in my near future. That means less money for the credit card companies.

* Before, credit card companies could make up for a loss in profits by jacking up the fees. This isn't exactly the political climate to be attempting such shenanigans.

And that, folks, is why shite trickling down just never feels good when you're at the bottom.

Wednesday, October 22, 2008

Lewis Cho Sample Sale

Despite the fact that the economy has the moody blues, the season of holiday parties and other frivolity requiring a high alcohol tolerance and fashionable studs is fast approaching.

For the fashionistas on a strict budget, Lewis Cho is having a wharehouse sale with everything $50 or less. A wardrobe update with up to 80% off sounds pretty good right about now!

Sale is Tuesday, Oct 28th, Wednesday, Oct 29th and Thursday, Oct 30th from 11am - 8pm at:

Lewis Cho
225 W. 36th Street, Suite 701, between 7th & 8th Aves.

Support your favorite indie fashion designers!

Friday, October 17, 2008

Buy American

Warren Buffet's NY Times Op-Ed, Buy American. I Am. has a short two word per two sentence title. His advice, on his authority.

I couldn't possibly say it better, so I encourage you to click and read.

A preview:

A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful.

Friday, October 10, 2008

Finding Bottom

While the markets continue to walk the plank, I've been trying hard to think of ways not to completely lose my mind. I like to repeat the mantra, It's all about the number of shares, not the dollar amount, the number of shares... Does it work? Uh, not really.

After the Dow cracked 8000 yesterday, I decided to buy in. Because after all, you buy low, right? Honestly, the best thing to do with your money right now is to buy stock. But that is much easier said than done.

The problem with buying low these days is that you never know how low it can go. To make matters worse, to find the bottom of the market is much easier after the fact. Frankly, anyone who tells you they know when this market is hitting bottom has his/her pants on fire they're such a liar, liar. Nobody predicted this. While Buffet warned of the dangers ahead, I don't think that even he thought it would unravel quite like this.

About a month ago I bought some stock that was near its 52 week low. The market at the time, as you may recall, was going apoplectic and I thought I was buying a good company at a bargain. Boy was I wrong. Because oil fell on its ass, the S&P fell on its ass, and today when I logged in to my Scottrade account I found out I too had fallen on my ass-- I lost 60% of my money on that stock in less than four weeks. So what did I do? I bought more. But not of that company. I was so spooked by that loss, even though I know it'll be okay in the end, that I bought an ETF of the S&P 500. If that's alphabet soup, I did a post a while back on index funds and ETFs here.

To be honest, I was torn. I've been casting sidelong glances at blue chip companies like GE. This afternoon it was at $18 and change, smashing its 52 week low. It's now up to $21 and change as I type this. I could lose my lunch trying to pick the moment to strike. And then you have sparkly American companies like Apple and Google offering steep discounts. The risk is that you could find out later that this nice big blue chip is on the brink of bankruptcy, or that the floor of the Dow Jones Industrial Average just collapsed and took everybody with it.

I work for a man who made his money as a successful investor. Today he shook his head and said, "The problem is, all the rumors so far have turned out to be true." So I steered clear of GE, even though I was tempted, and conservatively bought SPY. If you have some spare change lying around and you don't mind looking at it for at least five years, I'd suggest you buy an ETF with a wide net of diversity tracking an index you understand (in other words, the S&P 500 versus Brazilian small caps). Because it's not about finding the absolute bottom, it's about buying into the market at a much lower price than it will be five to ten years from now. Stocks haven't been this cheap since 1985! And because companies are dropping oops-we-lost-billions-of-dollars kind of surprises on us left and right, I'd really really encourage the average investor to stick with index funds/ETFs through a ROTH IRA. Also, don't go all in. For example, if you have $4,000 to invest, you could invest $1,000 a week for a month to spread your price risk.

In the meantime, prepare for a rough ride. And remember, as long as a company doesn't go belly up, they can't take away how many shares you have. While that's been of little emotional comfort to me, it does keep my panic in check.

Wednesday, October 1, 2008

Why We Need the Bailout

The past month has been dramatic, and certainly the past few days are no exception. With a whirlwind of controversy over the failed bailout plan, there seems to me to be some misplaced rage. Thomas Friedman's Op-Ed, Rescue the Rescue, hits the nail on the head.

Count me in to tar and feather the brokers, who James Cramer lays blame to in a recent New York Magazine article:

The unraveling started with brokers searching for new income streams after the post-dot-com collapse of equities. With the Federal Reserve taking interest rates down to 1 percent to jump-start the economy after 9/11, these firms’ clients were desperate for bonds that could give them a higher return than risk-free Treasury bonds. With low short-term rates available to tease borrowers, as well as what seemed to be endless home-price appreciation and a glut of global cash seeking a home, the brokers decided to package all sorts of arcane mortgages into bonds and sell them to institutions and hedge funds around the world. The whole scheme rested on the underlying value of those homes, which would never decline again—right?

Count me also as first in line to spit on the shiny shoes of every top one percenter tax bracketeer whose greed got us in this mess to begin with, and surely aren't worried about how they're going to pay for their Metrocard this month--bailout or no bailout.

And yes, as I've railed about before, it's we the little people who got snookered and we the little people who are now footing the bill. So the rage is real, but to be against the bailout is directing the anger to a place more akin to shooting yourself in the foot, when you were aiming for Richard Fuld.

Look, when people are talking about a credit freeze that involves a $700 billion bailout, rest assured they're not talking about someone taking away one of your credit cards. While that is a real trickle down outcome of this mess, nobody is trying to spend $700 billion to help out your sorry ass. No, this is a business credit freeze. And while many people are like I give a flying duck, the fact of the matter is you should. Because our economy runs on credit- it literally fuels the engine that we all benefit from.

For example, a few friends of mine are designers. As small business owners, they do things like make clothes from scratch and other things beyond my meager talents. So they design something and send it off to a factory, the factory bills them (ie credit) and they have X amount of days to pay. Then they sell their clothes to stores, and in turn bill the stores who have X amount of days to pay (ie credit). If somewhere along the line someone can no longer afford to extend X amount of days to pay, it is a chain reaction, and as we all know, you can't pay unless you got paid. It would simply not be possible to be a fashion designer, small potatoes or big kahuna, and pay everything up front.

Another example-- take restaurants, a dime a dozen in NYC and our motherlode of small businesses. When a restaurant or bar buys liquor from a distributer they have an approved credit line. Liquor is expensive, especially in large volumes, so they get, say, 30 days to make money off it and then they're able to pay their bill. For a restaurant to pay up front for liquor, for restaurant supplies, for all food deliveries, etc., it would cripple the business and they would go under. Not because they were poorly run, necessarily, but because you need credit to take risk, to make a profit, to get paid. If the liquor distributer suddenly loses its own ability to buy on credit, whether because credit is frozen or the interest rates are raised too high, the subsequent effect on restaurants in the city would be none too pretty.

And on a larger scale- you think H&M or Old Navy pay everything up front before they've had somewhat of a chance to sell to us, make a little money and pay back what they've borrowed? You think Sony delivers a flat screen TV to Best Buy already having paid in full what it cost to make and ship those thousands of flat screens? Obviously not, and now we get into commercial paper. Commercial paper is basically a money market security issued by the big boys to cover short term debt, such as inventory. It's only really available to highly rated businesses, and presumably safe so the yield is low for people who buy it. You have to buy a lot of it to be able to buy it, so usually money market funds buy it, not people like you and me. With a low interest rate, it allows big business to do what it does on a daily basis, just like a factory billing my friends for their order on 100 dresses allows them to do what they do.

And that's why we need the bailout. Because some very bad decisions by some very wealthy people are clogging the entire capitalist system, of which we're all a part of no matter how left you lean. Unless you lean so left you're Thoreau, and you paid for your pond in full, in which case you're good to go. For the rest of us, we can only hope for a plan that addresses the needs of taxpayers with transparency, accountability, and the ability to recoup the loan. Perhaps most importantly, the bailout is only the first step in repairing what broke in the first place (and yes, that's a loooong list). Because prevention is a whole other issue, and if there is any kind of silver lining it's that our government just might have the motivation now to finally hold Wall Street accountable with honest regulation.

Thursday, September 18, 2008

What Just Happened? (and do I care?)

Talk about high drama on Wall Street. I don't even know where to begin. Normally when large established companies start to tank, they are gobbled up by healthier companies. They don't just fail.

The Economist's Nightmare on Wall Street has a pretty succinct recap.

EVEN by the standards of the worst financial crisis for at least a generation, the events of Sunday September 14th and the day before were extraordinary. The weekend began with hopes that a deal could be struck, with or without government backing, to save Lehman Brothers, America’s fourth-largest investment bank. Early Monday morning Lehman filed for Chapter 11 bankruptcy protection. It has more than $613 billion of debt.

Other vulnerable financial giants scrambled to sell themselves or raise enough capital to stave off a similar fate. Merrill Lynch, the third-biggest investment bank, sold itself to Bank of America (BofA), an erstwhile Lehman suitor, in a $50 billion all-stock deal. American International Group (AIG) brought forward a potentially life-saving overhaul and went cap-in-hand to the Federal Reserve. But its shares also slumped on Monday.

Then, of course, the Fed bailed out AIG with an $85 Billion Loan Rescue.

I have read thousands of words this past week that relate to derivatives and credit default swaps, and I regret to inform you I still don't know what they are. Although the Globe and Mail did a decent job that my brain understood for a few seconds what was what, as does the NYT's The F.A.Q.’s of Lehman and A.I.G..

So what's a person, a little person with piggybank blues, supposed to do? I'm not talking about desk jockeys on Wall Street (that's more like Fort Knox blues...), I'm talking about grad students, people who work for non-profits, freelancers, baby white collars, artists, the just-trying-to-get-by-ers: people who may or may not have even heard of AIG before Monday and couldn't tell a CDS from an MP3, but certainly understand that this is ass-backwards socialism and a free-marketeer f*ck up.

Well, first things first, check the IRA!

Morningstar has a nifty little list in Lehman, AIG, Merrill: Which Funds Are Most Affected?. Fidelity pops up a few times. Most of my Roth is with T. Rowe Price, so I called them. The lady was nice. My list was Lehman, AIG, and Merrill and she had the foresight to add Washington Mutual. So-called Lifecycle or Retirement Funds, a mutual fund that is a basket of funds whose allocation and risk are tied the year you want to retire (so my Roth is in a fund called Retirement 2040), probably have a little of one of those troubled companies. In my case a couple funds own less than 1% of AIG and WaMu. And here's where diversification actually works. Even if two of my funds own less than 1% of those sickly companies, that's two out of, say ten, mutual funds in the Retirement 2040 fund. Morningstar also has an article on Funds Exposed to Other Dangerous Financials. A few posts ago I said I was selling a fund and buying stock instead, well the fund was Oakmark Select and they're cited in the article as owning 3.47% of Morgan Stanley. So I say, call the toll free number of all your mutual funds and ask them just how much you own of Lehman, Merrill, AIG, and whatever major US company happens to be on the brink of failure that day. They've already heard the question a million times, and they'll be more than happy to tell you the answer. Some, such as TIAA-CREF's open letter to shareholders simply tell you what's what on their website.

Another thing people are worried about are the "safe assets", like money market funds. Lots of money market funds buy things like the debt of a nice big cozy company called AIG. A money market fund is no savings account, even though people use it for a similar purpose- to safely stash some cash. A money market fund is a fund with shares, ideally trying to stay above a dollar per share. If money market funds dipped below a buck a share, then it's time for the little guys like us to worry. Buy stuff on eBay? Your money might be sitting in PayPal's money market fund. Have an online brokerage account? Your extra cash might be sitting in a money market fund. Or maybe you actually do have a significant chunk of change in a money market fund because they historically perform better than savings accounts and are supposedly "just as safe". They're probably fine, but I'd still move something like an emergency fund from a money market to a savings account if that's what I had. And two friends of mine just sold their apartment and need to stash a fair amount of money for an indeterminate amount of time, but not long term. For large account holders I would check out Your Cash: How Safe Is Safe? for a better handle on your options.

So that's all. Call your mutual fund companies, know what your risk exposure is and sleep easy. And hope you don't have to retire in 2009. Other than that, I'm going back to trying to figure out just what's really on sale in the stock market to buy, and what's just a financial flotilla of garbage.

Sunday, September 14, 2008

When the $h*t Hits the Fan

You know it's bad when Greenspan says the economy is in a once-in-a-century crisis, because that time frame includes, um, the Great Depression for chrissakes!

I re-subscribed to the WSJ recently, and I've been online perusing the comment sections of the lead articles. Ninety percent of what's said I can't even repeat, but I have to say I learn more from the commenters than I do from the articles. Cursing aside, the workers on the Street are freaking out and doing so with great articulation and conviction. And after a little while I started to wonder, should I be freaking out too? Does it matter to me if an investment bank or two goes under? Right now, no, I'm getting ready to call it a night with the A/C, a propped pillow, and a nice book of fiction. In the morning there will be more news and I can figure out if the sky is falling on me, as well as on Lehman, Merrill, AIG, etc.

One interesting note on the WSJ article comments- many want to do unspeakable things to Bush, Greenspan, Paulson, and the Republican party in general. I can't quite figure out why, a lot of industry-speak and jargon thrown around. But there was also a lot of talk about the repeal of the Glass-Steagall Act, signed by none other than President Clinton. The act separated investment banking from commercial banking, and many say its repeal led to subprime mortgage stupidity. Along with Bush, Greenspan, Paulson, and the Republican party in general. PBS has a nice timeline of the Glass-Steagall act here, for those interested.

Back in the morning with, I'm sure, news so bad it makes you wish for a breadline. That Greenspan, he's such a joker.

Tuesday, September 9, 2008

Library Fodder: The Man Booker Prize Shortlist

They just announced the six finalists for the Man Booker Prize, that literary prize for novelists from the Commonwealth of Nations and the Republic of Ireland. Talk about the sun never setting.

Anyways, if you're itching to put a hold on a book at your local library and need some book ideas, check out the list:

Aravind Adiga The White Tiger
Sebastian Barry The Secret Scripture
Amitav Ghosh Sea of Poppies
Linda Grant The Clothes on Their Backs
Philip Hensher The Northern Clemency
Steve Toltz A Fraction of the Whole

You might notice the absence of Joseph O'Neill's Netherland and Salmon Rushdie's The Enchantress of Florence, so like all prizes, this shortlist won't be short on debate.

Saturday, September 6, 2008

A Middle Finger to the American Savers

First, I would like to congratulate myself on two posts in two days. After a year of blogging, I realized that even my virtual free association on economic matters needs to take some time off every now and then. I sense that the blogging vacation is officially over, so back to work I go.

Business Week's article, Why American Savers Have Drawn the Short Straw tells us what we already know; sucks to be us. And by us I mean the savers, today's white unicorn.

Presumably right about now it's the savers who should be rewarded. We lived within our means and ignored the white noise of those big bad institutions who were trying to get us snookered into their own profit making scheme. We paid down/off credit card debt instead of punting it to the moon. We put a little away for retirement, for a rainy day, for a future purchase to be paid in full. And now when everything comes tumbling down, we should be basking in our glory, the proud but silent collective I told you so!

Fat chance.

Even with a current account deficit that, starved of domestic savings, requires $2 billion a day in foreign financing, economic policymakers are fixated on propping up credit and giving the participants in the housing bubble second chances. In order to do so, they are stripping the hides off of net savers.

Since August of last year, the Federal Reserve has slashed interest rates from 5.25% to 2.00%—wielding a blunt instrument that was swung enough to bend the yield curve in favor of suffering banks. You know, the institutions that screwed up but were too big and important to be deprived of an inalienable right to cheap deposits that they can loan out at several points higher.

My ING savings accounts are certainly not keeping up with inflation. I've tapered off what I save to the bare bones because things like groceries and gas are taking a noticeably bigger bite out of my monthly budget. And my Roth IRA is losing money as fast as I'm putting it in. So when I read this morning's WSJ headline announcing that the Federal government is taking over Fannie and Freddie, I'm having an apoplectic seizure in front of my laptop. Sure, I'm a just little guy (or gal, as it would be), my piddling savings isn't propping up nearly half of the outstanding mortgages in this country (like Fannie and Freddie, in case you were wondering why they get the bailout). But seriously. Moral Hazard anyone?

Moral Hazard is a term economists like to banter about; it basically means that if you don't hold companies in check, they think they can do whatever the heck they want. And they do. And the bailout of Fannie and Freddie, and previously Bear Stearns, pretty much fits the bill of creating a moral hazard. Joseph Stiglitz did an outstanding job of breaking down Fannie and Freddie's moral hazard in a recent article for the Financial Times.

Defenders of the bail-out argue that these institutions are too big to be allowed to fail. If that is the case, the government had a responsibility to regulate them so that they would not fail. No insurance company would provide fire insurance without demanding adequate sprinklers; none would leave it to “self-regulation”. But that is what we have done with the financial system.

Even if they are too big to fail, they are not too big to be reorganised. In effect, the administration is indeed proposing a form of financial reorganisation, but one that does not meet the basic tenets of what should constitute such a publicly sponsored scheme.

First, it should be fully transparent, with taxpayers knowing the risks they have assumed and how much has been given to the shareholders and bondholders being bailed out.

Second, there should be full accountability. Those who are responsible for the mistakes – management, shareholders and bondholders – should all bear the consequences. Taxpayers should not be asked to pony up a penny while shareholders are being protected.

Finally, taxpayers should be com­pensated for the risks they face. The greater the risks, the greater the compensation.

All of these principles were violated in the Bear Stearns bail-out...

But the proposed bail-out of Fannie Mae and Freddie Mac makes that of Bear Stearns look like a model of good governance. It sets an example for other countries of what not to do. The same administration that failed to regulate, then seemed enthusiastic about the Bear Stearns bail-out, is now asking the American people to write a blank cheque. They say: “Trust us.” Yes, we can trust the administration – to give the taxpayers another raw deal.

So, I would like my bailout, please. I would like the consumer savings account to have its own interest rate, and I would like it to be at least 1% higher than the rate of inflation. I'm sure this would cause all sorts of problems for Fannie and Freddie, and I'm sure that it is a suggestion only an economic neophyte could make. But think of it this way. Maybe American savers can bail out America, instead of China doing it for us. If only you'd stop giving us the middle finger.

Friday, September 5, 2008

B of A $75 offer

I've been a lazy poster lately. Here, I'll make it up to you and hand over seventy five bucks...

Bank of America, with its newly ubiquitous ATM storefronts, enticed me to open up an online checking account. The offer of $75 is good for new online banking customers. I just opened up their online checking account, with no account minimums or fees. I did deposit $25, you need to deposit the twenty five bucks within thirty days to get the $75 bonus (deposited within 90 days). I figure I'll close it after a few months and take my money and run. Probably to ING, my long neglected piggy bank.

A 200% return on my money, now there's something unheard of in, oh, say, ten years...

Wednesday, August 20, 2008

What to do, What to do...

So I've clearly been on vacation for this whole summer. Maybe not a physical vacation, but certainly a mental vacation. And now that September looms and I'm coming back to earth, I realize that my finances are in disarray. Mental disarray, that is.

While I was away, the price of gas went down. Considering we drove 3,000 miles in our trusty Chevy Prizm (ie Toyota Corolla), it was a welcome reprieve from the oil madness. And while our economy is floating about as well at the Titanic, there's positive and negative sides to the drama, never mind the economic debate about are we or aren't we in a recession. So while all this was going on, what did I do? I ate Maine lobster. And lots of it.

Thank god for autopilot. Every month our checking account is drained for our Roth IRAs and our ING accounts (travel, Christmas, gym membership, car, emergency fund). It's not a lot of money, really, but over the course of a year it adds up to a softer cushion than a crash landing. And so not much changed. Well, except for the drooping value of my IRA, and the fact the car fund and travel fund got drained.

So I realized when I got back that I like to have my head actively wrapped around my finances. Autopilot or not. And that part of all that sitting around dreaming up goals and ways to meet them is the planning part of financial planning. After looking at my Roth IRA mutual funds, I decided to sell off one of the losers (I know I'm not supposed to do that but whatever) and transferred it to my online brokerage account. Why? Because I'm convinced that the iPhone will propel Apple farther than the S&P average.

However, I'm sure there's an actual, like, method to picking stocks that involves math and other values of sound judgment. So over the next few days I'll dig up some dusty econ book and figure out just how a person looks at a stock and assesses whether it is a good buy or not. And since I'm feeling like a delinquent poster, I'll post my trials and tribulations as an amateur stock picker here.

I'm excited about my project, but a little worried. While I can appreciate the crack-like epidemic that is sweeping iPhoners, it is, after all, my retirement we're talking about here.

Saturday, July 19, 2008

Concisely Painful Economic Forecast

I'm sure it'll be blogged to death, but the NY Times' Uncomfortable Answers to Questions on the Economy is really, really good. And not in its positive outlook, but in its format. Simple questions, concise yet broad answers. What the average person really wants to know about what the hell is going on out there, but was afraid to ask.

Is This a Recession? Who knew some private institution was the semantic god of the big "R" word, no wonder economists are arguing over are we or aren't we ad nauseum. So the Economic Bureau of Economic Research says no, most others say yes. The article breaks down why.

How Bad is Housing? The article is fantastic when it talks about housing. They break it down, and the gravitational free fall isn't over yet. Economists expect another 10-15% drop in housing prices, and there's currently enough homes on the market to satisfy 2+ years of demand, without ever having to build another. I'm no real estate guru, but that sucks tailpipe.

When Will Banks Revive? $300 billion in write offs with an expected ceiling of $1 trillion. Those numbers are so off the charts they mean nothing to me. Other than someone made a $h*tload of money f@ck*ng up. Again, the article does a short and sweet breakdown, but you read stuff like that and you just want to go out and kick some banker butt.

Is My Job Safe? It aint over 'til the fat lady sings, and she's not even warming up yet. We're workers in an economic Jenga, and pile that on with wallet busting gas prices, 5% overall inflation, lower wages-- it's a bleak picture. That said, "only" a few hundred thousand more workers will lose their jobs. “In every dimension, people are worse off than they were,” said Mr. Roubini, the New York University economist. In a market of millions, cross your fingers and hope your job has nothing to do with the housing market.

Are Consumers Done? and the last question, an American favorite, Who's to Blame? This is the part that's horrifying. Consumer spending counts for nearly 70% of all economic activity. Are ya kidding me?? My take is, you can't have your cake and eat it too. I don't care where you got your MBA from. You can't feed the American consumer indigestible food, watch them puke it up, and blame them for the mess. Look, obviously as a PF blogger I have my issues with those who spend beyond their means. But get real. The blame goes high and low, and pretty much nobody is unscathed. And that's the part of the article most painful. Yes, we all did this to ourselves, but we sure had some help along the way.

Thursday, July 17, 2008

What I'm Not Cutting

Inspired by a CNN/Money article Where Americans Will (and Won't) Cut Back, I decided to take a look at what's on my chopping block.

Consumer confidence is in the gutter, inflation is on the rise and the economy is struggling. But even as consumers cut back on spending, there are some things they refuse to give up.

Nine out of 10 Americans said they are cutting back expenses or discretionary spending at least somewhat because of the current economic conditions; according to a recent study from market research firm GfK Roper Consulting.

And moi? Well, I guess since I'm in the upper coast of Maine, vacation is one category that's not getting cut. But to be fair, M and I save a little every month to be able to go away once a year or so. But flying to dollar depressed countries (ie anywhere in Europe) is going to be put off for a while.

Eating out also isn't on the chopping block, though like eating through the pantry it's one of those theoretical eliminations that never seem to become reality. The reality is that I eat out for less money. No more spontaneous meals at Al di La, it's more like the local taqueria.

Some things are on the chopping block. Driving for the hell of it. Buying new clothes. Buying gadgets. Buying lots of books (though I still buy some, I'm not blowing $100 at the Strand- I'm setting one book limits which for the first time I actually adhere to). And saving.

Yes, saving more money is on the chopping block. Even though I would love to save even more pennies than I already do, and pretty much every year I try to increase it a little, this year I wasn't able to increase it as much as I would have liked to.

And what I'm not doing? I'm not one of the 50% of Americans buying a new HD/flat screen TV within the next year. Other things the article sited as things Americans are loathe to cut right now are cable/satellite TV subscriptions, vacationing and travel. It's alright, I never thought I'd see the day Americans would be conscious of fuel efficiency. Then again, I was just a kid during the last energy crisis.

Monday, July 14, 2008

The Oh $h*t Fund

Sometimes things happen that make me think thank god I have a savings account, that if I didn't have a cushion, no matter how small it may seem, the most insignificant fall could have ended up breaking a bone. Instead, I just got a good internet workout with my ING account.

Saturday morning M and I left Brooklyn for a three week vacation (!!). I won't bore you with the details, but essentially a large purchase for M's work went on our credit card right before the card's monthly statement ended. This meant that the check reimbursement from work would not come until a few weeks after the payment was due. While we were away on vacation. On top of that, my freelance check would also come in-- you guessed it-- while we were on vacation. I guess the old me would have paid some smidgen over the minimum payment on the credit card, canceled the automatic IRA investment that happens on the 15th of every month, and just gone into a rationalized debt for the sake of a few weeks of summer vacation.

Okay, maybe this doesn't count as an emergency. But sometimes calling something an Emergency Fund is a little more alarming in name than what life throws at us. So I transferred some money from our aptly labeled ING Vacation Fund and Emergency Fund into our respective accounts and will enjoy vacation free from the stress of what is going on in our bank accounts. When we get back and deposit our checks I'll just transfer the money back into the ING accounts. Because you never know when the next oh $h*t moment will happen.

And that's just one way I avoided 7 Surefire Ways to Stay Poor

Tuesday, July 1, 2008

Back From The Hiatus with Endless Random Thoughts

Wow, it's been a while since I've really posted. Thanks for all the kind words, things worked out in the end. M's great uncle got sick and things took a rapid and surprising turn for the worse. He passed away, but it was for the better if such things could even be possible. I guess modern medicine makes it possible, with the opportunity to live longer there's always a question of quality of life. On a selfish level I may wish the old guy was still here so I could kick his ass in cards, but honestly he was more than ready, and openly said so. I lived a good life, quote unquote. I hope that when the day comes for me I can say the same.

Then I went home to Buffalo for a while to visit my family, and I had a talk with my mom about her impending death, which she seems to bring up repeatedly despite being in fine health and a hair above a youthful sixty years old. I also moved my sister into a new apartment, and her money woes frankly just make my head hurt.

Being away from the city and my day to day life these past few weeks made me think a lot about money. I know I obsessively save, not in large amounts but with a certain consistency, and I read a lot of bloggers' paths to the long road to retirement as well. But from the struggle to get M's great uncle proper medical care, to my mom's sincere freak out over the gyrations of the stock market and her own retirement right around the corner, financial planning is no joke. There is a very real end of the road, and a reason why we do these things to begin with; live below our means, save, plan for retirement.

Sure, I'd love to have a Prius. I can even rationalize that to have a short car loan will boost my credit score. And driving around for a thousand miles before I fill the gas tank sure sounds like more fun than pouring money into my Roth IRA that keeps on sinking like the damn Titanic, but this choice is a privilege. How so?

Take my childhood, for example. Working class family below the poverty line before Reagan bumped it up. Not consumers, by any stretch of the imagination, there simply was no money. Also, not savers, no 401k, etc. Fast forward into my adulthood, when my mom finally gets a retirement plan from work, into which she diligently saves. But there's a lot of lost time that can't be made up, so I know that when she's watching the Dow she is really really worried, and I'm worried for her.

And me? I'm a consumer. I save, sure, but it comes from the money allocated for my consumerist ways (aka disposable income), and I could always save more, no matter what I say on this blog. That's the difference. Nowadays we are a nation of consumers, and we have thousands of dollars of credit line(s) to keep up the habit. So that privilege I was talking about before? The privilege is not in the decision to save, it's in the decision to spend.

In the end- nobody's perfect, I know I'm not exactly giving up my material goods for a higher cause any time too soon. But there has to be some middle ground, and if I never laid out what it took to retire like a normal person, then I might have never found that middle ground. Because I will always lust after things like a Prius...

Tuesday, June 17, 2008

Credit Card Myths

I've been dealing with some family stuff for a bit and I'm out of town, so this post will be short 'n sweet.

In the meantime, in my brief foray back into financial news I stumbled upon this, 9 Big Credit Card Myths-- among them, minimum credit card purchase. Good luck raising holy hell trying to get that bodega to comply.

Saturday, May 31, 2008

Mapquesting Cheap Gas

Well, you might as well add Mapquest Gas Prices to your to-do list the next time you budget your commute or your summer road trip plans.

Type in a zip code, etc. and a map will pop up with local gas stations and their gas prices. While it doesn't alleviate the sticker shock, it's not such a bad idea to penny pinch at the pump whenever you can.

Speaking of which, I applied for a BP Visa card and got one. Actually two, since M and I share the car. It's 10% cash back for the first 60 days, which will cover our summer travel, and then 5% thereafter. Unfortunately, at non-BP stations it's only 2%, but anything to get me close/under $4 per gallon. Of course, there's a million BP stations near me, and none in Maine or Cape Cod...

Other gas station price sites (not quite as intuitive to navigate, IMO):

Friday, May 30, 2008

Summer in the City

Summer in the city is hot, humid, and humming. It's the time of street fairs, block parties, and FREE live entertainment. I love this time of the year. Time to mark up my calender!

Central Park Summerstage:

Mavis Staples (and Stephanie McKay) kick off the season Friday, June 13th at 7PM. I saw her at BAM and saw firsthand that this woman can still take you there.

Other highlights- indie band of the moment, Vampire Weekend (June 14th), Taj Mahal (July 27th), Junot Diaz (July 27th), Richard Price- Lush Life is high on my reading list- (July 31st), and many more.

The Summerstage benefit concerts are obviously not free, but you can still sit outside and hear great music. I'll definitely be there for the Thievery Corporation (live) with Seu Jorge featuring Special Guests Bebel Gilberto & Federico Aubele Turntables on the Hudson (June 12th)- yes, Bebel Gilberto! Also lined up are shows with Sonny Rollins (August 6th) and The National, Yeasayer, Plants and Animals (August 4th).

Celebrate Brooklyn at the Prospect Park Bandshell:

Isaac Hayes (Shaft!) kicks off the season Thursday, June 12th. Man, I can't wait for that show!

Some highlights- Cold War Kids (June 27th), Beth Orton (July 12th), Deerhoof (July 18th), The Philip Glass Ensemble (July 25th), Mark Morris Dance Group (July 31st),and Lila Downs (August 8th).

The above schedules might be the most famous of the free concerts in the parks, but the schedule for the CityParks Concerts is just sick. The Jungle Brothers (August 5th) and BT Express (August 12th) in Red Hook, Whodini (July 10th) in Bed Stuy'sVon King Park, KRS One (July 24th) in the Lower East Side's East River Park, Slick Rick(August 13th) in Harlem's Jackie Robinson Park, The Delfonics (July 29th) in Queensbridge Park, and Frankie Morales (July 22nd) in South Bronx's St. Mary's Park. Many more, just check out the schedule.

McCarren Park Pool has free Pool Parties and movies, just scroll through their full schedule to see what's going on. Desperately Seeking Susan July 22nd and MGMT on July 27th caught my eye.

Shakespeare in the Park brings you Hamlet and Hair. Sweet.

Bryant Park Summer Film Festival- Mondays, opening night June 16th, Dr. No.

The Village Voice's Siren Music Festival July 19th, noon-9PM. Broken Social Scene and a gazillion other bands, essentially just rocking out right off the Coney Island boardwalk.

DUMBO's Movies with a View schedule isn't up, but watching flicks at the foot of the Brooklyn Bridge with Manhattan as a backdrop (and eventually Olafur Eliasson's waterfalls), there could be worse ways. Check back here for a schedule, first film is July 10th.

South Street Seaport:

Wire, those punk legends who still inspire, opens the season tonight.

Madison Square Park Music

BAM's R&B Festival at Metrotech

Harlem Meer Performance Festival

River to River Festival- schedule not up yet

Broadway in Bryant Park

Pier 54 River Rocks

Charlie Parker Jazz Festival- schedule not up yet

Seaside Summer Concert Series- new schedule not up yet

Martin Luther King Jr. Concert Series- new schedule not up yet

Good Morning America Concert Series in Bryant Park:

Nothing like seeing Usher (May 30th) at 7 o'clock in the freakin' morning.

But wait, there's more! NBC's Today Show has the Toyota Concert Series at Rockefeller Center. Rihanna (June 20th) and Coldplay (June 27th), and yes, at 7 AM.

The more civilized stuff:

NY Philharmonic Concerts in the Parks

The Metropolitan Opera in the Parks

That's just the tip of the iceberg (I didn't even touch art, except for the waterfall mention), and I'm exhausted. Remember, it's early in the season so new shows are added frequently. Click on all the above links for updates and full schedules, and bookmark FreeNYC for even more events and reminders. And seriously, you need to mark things in a calendar. And if you're not from the city? Come visit!

Wednesday, May 28, 2008

The Multi-Class Squeeze Economy

Last week M bought some groceries and came back flabbergasted at the prices. And last night we ordered some take out from a taqueria, and on the walk over we passed an empty Blue Ribbon and Stone Park and the cheap Mexican joint was packed. You know it's bad when the fancier places are unusually empty, and the cheap eats places are hopping. Welcome to the universal economic squeeze.

CNN Money has an interesting take on it in Making a good living, but still feeling strapped.

Hoyt of argues that every income strata is feeling it. The wealthy are hurting from the roiling stock market, the middle class from falling home prices and working folks from rising prices.

Food prices, for instance, climbed 5.1% over the past 12 months and April's 0.9% rise was the largest in 18 years, according to the Consumer Price Index. Gas, meanwhile, hit its highest recorded price of $3.937 on Monday, up nearly 21% from a year ago and 9.7% over the past month, according to AAA.

That's right, last month's food prices spike was the highest in eighteen years. Egads.

The interesting thing about the economy is the point of departure between consumer perception and the perception of the economists. Consumers are pretty much freaking out (one man in the article points out that he didn't mind penny pinching to send his kids to college, but not to buy eggs), while the economists are mucking about the statistical wash of price indexes and the increase or decrease of important numbers. Basically, I don't think we're walking around thinking are we or are we not in a recession. Sure, I know the debatable criteria for real economic recession, but I also know that my place in the economic food chain is in a steep recession. And I'm not the only one.

Suddenly, people who aren't used to looking at certain bills are getting shocked from their eye sockets to their pockets. I mean, I looked at my bill from the Associated supermarket, but not like I do now. I'm running around the apartment turning off random lights. And I think that I finally might just put a dent on that lifelong project of eating down the pantry.

What does this mean for the larger economy? I don't know, but for now I think the war of perception is being won by us, the consumer.

Tuesday, May 27, 2008

Carnival of Money Stories Edition #61

Two posts in one day. This is what happens when I wake up at a decent hour.

So PiggyBankBlues is proud to take another stab at the Carnival of Money Stories. For those not in the know, a Carnival is basically roundup up financial bloggers doing what they do best; blogging about money. It's a good way to catch up on new bloggers and some great posts. Enjoy!


Not the Jet Set lists lessons learned from 2008 Emergencies and Expenditures: YTD.

My Dollar Plan has some helpful budgeting tips in Create Your Own Dollar Plan: Step 4.


Saving to Invest urges us in these dark times to Embrace Fear for Financial Freedom.

Financial Zip really breaks down just how to Use Investor's Business Daily as a wealth of info for investors.

The Dividend Guy has a useful chart in A Review of My Yearly Dividend Income for all you dividend investors out there.

Amateur Asset Allocator has a funny and smart post, Dear Washington: My Retirement Plan Wish List.

It covers more than just investing for retirement, but Greener Pastures has an excellent post on Four Things You Need for Retirement.

Net Worth

Free Money Finance takes stock of My Finances 10 Years Ago and Today, and we could learn a thing or two.

Five Cent Nickel also takes the 10 year plunge, and shares with us what happens when Stepping Back in Time: Our Life 10 Years Ago.

Speaking of net worth, it's not always so cut and dry a calculation. My Money Adventure tries to get a handle on how to figure out My New Net Worth


Blueprint for Financial Prosperity has a great post on How to Cut College Costs by 13% - 25%. Too bad it's a little late for me, I could've used the savings...

Chief Family Officer has some money saving advice in Review: Ebates. Check it out before the next time you shop online.

The Happy Rock does all the legwork for you tool chest shoppers in Frugal Tool Chest Tip #2: The Dynamics of Finding the Item You Want Cheaper.

Speaking of tool chests, Monroe on a Budget tells us Why You Want to Fix That Leaky Pipe, it will cost you less money sooner rather than later.

Student Loans (or not...)

This Wasn't in the Plan breaks down just why Studen Loans Aren't Always the Enemy.

Frugal Babe tells us the Best Financial Decisions I made in College, and how she managed to graduate debt free (!!).

Credit Cards

living the cheap life has A Reminder About Cash Back Credit Cards- they just might be a wise thing to have in your wallet.


Debt Diet has good reason to rejoice I'm Out of the Will!

Money and Fitness Blog is trying to cover all the bases by Switching Roles with your Spouse When Paying the Bills.

Funny about Money has a wise post that pointedly asks Are We Movin' on up? Or Not?

Are You Going To Be This Way the Rest of the Time I Know You? tells us why she went the route of a A Frugal Girl's Decidedly Not Frugal Wedding.


Out of Debt Again has an amazing story on How I Got In and Out of Debt the First Time.

I've Paid Twice For This Already has a thoughtful post on how Life Is Meant to be Lived, a little perspective while trying to manage finances and debt at the same time.

And for a little bit of lightness in a heavy category, The DebtFree Playbook Blog has a funny post How Not to Clear Your Debt.


My $mall C€nts brings us a first hand report on Consumerism in France and America (Part Three).

Harvesting Dollars has a story in Kroger Gift Card Program Resolved that reminds us to be careful purchasing those gift cards.

And last but not least, categorical crossover The Baglady has some fine pointers (and analogies) on Mastering the Game of Money.

A big thank you to all the participants!

Radio New York and KEXP

I'm a little slow on the uptick, because it made news last February, but this morning I discovered Radio New York's and KEXP's Radio Liberation. Hipsters, and those who listen to the same music anyways, rejoice. 91.5 FM weekday mornings.

I just woke up, fiddled with the dial, realized I didn't have the radio plugged in right (that would help), so I pulled out one plug and some funky song came on. Then I listened to Clap Your Hands followed by Talking Heads and was beside myself with aural joy. And I hadn't even gotten out of bed yet.

Now, I'm no big fan of on-the-dial radio stations in NYC. Besides public radio and major label hip hop (both of which I like, but not exclusively), it's shocking that a city with such a vibrant music scene has such arid air waves. Sure, WFMU and WBGO are great, good luck getting reception.

So what is Radio New York 91.5 FM? It's an NYC government radio station. They do things like cover NYC high school sports and Brazilian music shows. KEXP 90.3 FM is a member supported radio station based in Seattle that I've streamlined for years, as do millions of other listeners. They also sponsor a lot of NYC shows. So joined forces with Radio New York 91.5 FM to air several programs.

Weekday programming info from Radio New York's website:

Wake Up, airing 6AM to 9AM, is a three-hour morning drive show featuring an eclectic mix of music, hosted by Kevin Cole of KEXP.

John in the Morning airs 9AM to noon as a simulcast of the long running KEXP variety mix show hosted by John Richards.

MoGlo, broadcasting from 12AM to 1AM, is a nightly modern global show with a music mix from the streets of New York and around the world, hosted by premier DJs, including Darek Mazzone of KEXP.

So turn your morning dial to 91.5 FM and enjoy. And for those not in NYC, and those who want music 24/7, just head on over to KEXP's site and streamline or podcast their music. And best of all, it's free!

Friday, May 23, 2008

Library Fodder- 1001 Books

I'm sort of at an impasse on my reading list. The list hasn't disappeared, but sometimes my interest has waned. Like my Netflix queue, my public library wait list can get a little stale. So the great NY Times review Volumes to go Before You Die came just in the nick of time.

It's not the book, 1001 Books You Must Read Before You Die, so much as The List.

The book is British. Of course. The British love literary lists and the fights they provoke, so much so that they divide candidates for the Man Booker Prize into shortlist books and longlist books. In this instance Peter Boxall, who teaches English at Sussex University, asked 105 critics, editors and academics — mostly obscure — to submit lists of great novels, from which he assembled his supposedly mandatory reading list of one thousand and one. Quintessence, the British publishers, later decided that “books” worked better than “novels” in the title.

Even without Milton or Shakespeare, Professor Boxall has come up with a lot of books. Assume, for the sake of argument, that a reasonably well-educated person will have read a third of them. (My own score, tallied after I made this estimate, was 303.) That leaves 698 titles. An ambitious reader might finish off one a month without disrupting a personal reading program already in place. That means he or she would cross the finish line in the year 2063. At that point, upon reaching the last page of title No. 1,001, “Never Let Me Go” by Kazuo Ishiguro, death might come as a relief.

I haven't done a tally yet, though I suspect I'm more of a quarter to a third of the list through already (I've read Ian McEwan, but not eight of his novels). No matter, that leaves a good 700+ books to sift through and plug into the Brooklyn Public Library search page. I don't put much stake in the authority of these literary lists, but I do love finding new authors through them.

Thursday, May 22, 2008

Happy 125th Birthday Brooklyn Bridge!

Happy Birthday to you, happy birthday to you, happy birthday Brooklyn Briii-idge, happy birthday to you!

You're the apple of my eye, here's to 125 more years.

Check out this weekend's free events celebrating the Brooklyn Bridge's bday here. If you've got roof access, there's fireworks all weekend.

The Brooklyn Bridge by the numbers:

Length of river span: 1595.5 feet
Total length of bridge: 5989 feet
Width of bridge floor: 85 feet
Suspension cables: four, each 15.75 inches in diameter and 3578.5 feet long, containing 5434 wires each, for a total length of 3515 miles of wire per cable
Foundation depth below high water, Brooklyn: 44 feet 6 inches
Foundation depth below high water, Manhattan: 78 feet 6 inches
Tower height above high water: 276 feet 6 inches
Roadway height above high water: 119 feet (at towers)
Total weight, not including masonry: 14,680 tons

Wednesday, May 21, 2008

No Free Checked Baggage on AA

As if the quotient for irritation with air travel isn't already at an all time high, American Airlines has announced that it will charge $15 for the first checked bag. The charge applies to all discount coach tickets, and is exempt for full fare coach, business class, international flights, and premium frequent fliers. More info on American Airline's site here.

United Airlines is already looking into doing the same, Continental declined comment, and Delta, Northwest and Southwest have no immediate plans to follow suit. We'll see how long that lasts...

As a legitimate carry-on only traveler, I have visions of UFC style fights breaking out in the aisles over that precious overhead bin space for those donkeys who brought on four bags.

Tuesday, May 20, 2008

Budget Hero

Marketplace has a very cool "game"- Budget Hero, where you get to play with widgets and control the US government's budget. Yeah, and I thought doing my own budget was difficult enough...

The deal is you choose three "badges", which are widgets that represent certain issues. So I played twice, and sadly I busted the US budget both times, by the year 2033. The first time I chose Competitive Advantage, Green, and Energy Independence. Depressed I busted the budget and labeled Debt Maintainer (I quote; "You made no impact on the 2008 debt level, maintaining it at 37.7% of GDP in 2018, 8.4 trillion"), I switched out Energy Independence (why who doesn't love giving the Saudis money) for Efficient Government. And I still got the same result.

The fascinating part is the breakdown. If you slide the curser around the buildings, the cost of each item breaks down, ie interest on debt 422 billion. Clicking on the taxes brought up a lot of very large numbers, Repeal the Bush tax cuts +2,725 billion, then you click on that box and it tells you that this 2.725 trillion buck windfall is over 10 years, and it has blurbs on the pros and cons of doing so, and the impact. Anyways, I just sucked a good hour of my life on this game, so enjoy.

Monday, May 19, 2008

Our Piggybank's Inferiority Complex

CNNMoney's Why You Just Can't Seem to Save Enough hits us where it hurts- our piggybank's ego.

Your mortgage is prime. Your credit-card balance is reasonable. You've set aside some money for retirement. Feeling like you've done all you should? Didn't think so.

All signs point to an economic slowdown, and there's a real risk that it will be a nasty one. Jobs look shaky, food and gas prices are up, and the credit you thought would be there in an emergency could get a lot more expensive.

Even if you've been better than the average American about saving, you probably wish that you had a bigger cash cushion right now. And if you're at all like me, you've been looking around your house lately and wondering, "Why didn't I put the money I spent on that in the bank?"

Yes, therein hides the problem.

The article asks the question of just how much of what we purchase is in reaction to our friends and neighbors. I don't think I'm really prone to the keeping-up-with-the-Joneses affliction, but then again. If a friend said they ate at so and so restaurant, and it's maybe over $20 per person, I just might want to try it. But this is how it's skewed, because what you see is not the whole picture. Who knows if this person ate at home all week to go eat out at a moderately priced restaurant. Who knows if the person who drives the Lexus is eyeballs deep in debt. It's the trap of the ostentatious. While we associate objects with class, what you see is not always what you get.

New Yorkers are at face value less ostentatious than others. Unlike those in most of the rest of the country, our cars pretty much suck. Even the nice ones. Parking on the street will do damage to even the nicest bumpers. We are somewhat limited to how much we flash because we ride the same subway cars as those who like to mug. There are no McMansions, and what limited square footage we do have doesn't really fit a helluva lot of things. And yet...

The average cost of a New Yorker's stroller is over $500. We are real estate obsessed and have the economic cartography of all five boroughs memorized, so we can pretty much guess how you roll by where your front door is. And in a city with more metrosexuals than homosexuals, we are top shelf label whores on the down low. And speaking of top shelf, we don't order well drinks. In other words, we're still consumer kings and queens.

And I would hazard to guess that we're not the only ones. Unfortunately, the urge to spend is a constant reminder that keeping up with the neighbors is a losing battle. And then there's the oddballs like case in point (me!), who are the only one amongst their legions of friends who do not have cable, and fully fund their Roth IRA instead. Sexy it aint, but talk to me when I'm sixty five. Just don't ask me how much I spent on clothes last week...

Saturday, May 17, 2008

Taxing Gas

The NY Times article, In New York, Debating a Flat Tax on Gasoline was a bit of an eye opener. Gas in the city is always crazy expensive, and now I know why- there are eight taxes per gallon. The biggest shocker is the 75 cents (!!) per gallon that goes to the Metropolitan Transit Authority (MTA).

Each gallon of gas sold in New York actually includes eight different taxes. In addition to the city’s 4 percent sales tax, and the transportation authority surcharge, there is a federal excise tax of 18.4 cents. The state also collects an 8-cent excise tax, an 8-cent sales tax and a petroleum business tax of 16.4 cents a gallon.

In addition, drivers pay a “spill tax” of 0.3 cents a gallon for environmental preservation and a petroleum testing fee of 0.05 cents.

Higher gas tax in a city with spider web like public transportation definitely has drivers drive less. For example, the 8.6 percent one year increase in city tax receipts this past winter pale in comparison to the actual 31 percent increase in gas prices over the same period.

At the center of the debate is a flat tax versus the current rate of percentage. While drivers may welcome a flat tax, there is no reason why a city that is the single largest polluter on the Eastern Seaboard should encourage policy that encourages more driving. And this is coming from a car owner (granted, whose car now remains parked forever). Also, the flat tax makes little economic sense.

“You’re kidding yourself if you think that an industry that makes as much as it can will pass along the savings to the public,” Michael F. Conners II, the comptroller in Albany County, which abandoned its flat-fee tax after six months. “The oil companies say they would never take this tax away, but it’s absorbed into the price.”

Mr. Conners said that his county would have lost $4.6 million in taxes had it kept its cap in place for a full year. That would have amounted to 3.4 percent of the county’s total receipts from all sales, property and other taxes. “This was not help for the driving public,” he added, “but a transfer gift to the oil industry.”

Tuesday, May 13, 2008

Steven Alan Sample Sale

More fashion, but this time mobbed with frantic fashionistas. Ah, the joy of shopping in New York for that deep discount.

Steven Alan Sample Sale
This Thursday through Sunday
87 Franklin St. near Church St. (212-219-3305)
5/15 and 5/16 (8:30–8)
5/17 (noon–7)
5/18 (noon–5)

Lews Cho, Jean D'arc, and of course my favorite men's shirt. Tons of cool threads on sale, and if you don't believe me, just check out the line to get in.

note: the sale is at the Steven Alan showroom, 87 Franklin, one block east from his store.

Monday, May 12, 2008

Sticker Shock

I just put some gas in the tank-- $3.90/gallon! Egads. I don't drive in the city, so I don't fill the tank frequently; I just happened to kill some time while moving alternate side parking this morning. So I'm pumping gas and staring in panic at the numbers by the dollar sign flipping in rapid succession, and my eyes drift down to a receptacle for BP/Amoco gas card applications. 10% rebate first 60 days, 5% thereafter. Is it time to apply for another card?

This summer M and I will be driving to the northern reaches of Maine for a couple weeks, then down to Cape Cod for a week, and back to NYC. Plus there's a round trip NYC-Boston trip, maybe a jaunt down the Jersey Shore- it's a busy summer for our little car. With absolutely killer prices prices at the pump, I think I'll look into credit reward cards that are good for road trips. I'll post my findings, and any suggestions in the meantime would be great.

Thursday, May 8, 2008

Your Walk Score

I was reading a Marketwatch article, 15-minute tip: Walk more for a better score, about how the walkability of where you live influences your physical and financial health, and found the cool site Walk Score.

The benefits for your physical health are obvious, but how does walking improve your financial health? Well, for one thing, have you seen gas prices lately? But most pointedly, a walk score can inform where you live- adding value to certain neighborhoods and making others less attractive. It certainly is true in cities with enough public transportation that most don't own cars; when choosing a neighborhood to live in you want to know how many services are within walking distance. Walkability can also help you sell your home, decide on where to work, etc.

So head on over to Walk Score to see how your current/prospective neighborhood stacks up. You type in your address, and a google map calculates your score based on the walkability of certain services. My address is an 86 (out of 100), almost a walker's paradise (a score of 90-100), but not quite. I feel like mine is pretty damn close to walker's paradise, the farthest thing is a public park (0.69 mi) and if you knew my avenue on a Friday night you would think there were a little too many services. I checked my old address in the East Village, which is a 100.

It's a fun site, I wish it was around when I was single and searching for affordable apartments in crappy neighborhoods. It definitely would have been part of my research and would have saved me numerous subway rides out to the hinterlands.

Wednesday, May 7, 2008

Basic Finance for Artists

I got an email yesterday from the Lower Manhattan Cultural Council with information on a free six week workshop on basic finance for artists. I can't find anything on their website, but here's the pertinent info taken directly from the email:

BFA: Basic Finance for Artists

Designed especially for artists, Basic Finance for Artists is a concentrated, six-week series of workshops that will help develop financial awareness and balance through practical training in money management.

Workshop Topics will include:

* Budgeting
* Accounting & Tax
* Debt Management
* Investment & Market Basics
* Buying vs. Renting
* Long-term Planning


LMCC is looking for a diverse range of artists who are committed to and will benefit from hands-on training in an open learning environment. The workshop series is free, but space is limited and registration is required.
Dates & Times

Tuesdays, 4-7 PM
June 3 – July 15, 2008

Lower Manhattan Cultural Council
125 Maiden Lane, 2nd Floor
New York, NY 10038

If you have questions about this workshop series, please feel free to call or write.

Natasha Chuk
212-219-9401 ext. 117

LMCC is fantastic, and I urge any NYC artists to check them out.

Tuesday, May 6, 2008

Brooklyn Botanic Garden Plant Sale

Roof decks, stoops, window boxes, fire escapes, the ledge of a kitchen window, the occasional backyard- this is gardening New York City style and 'tis the season. If digging the dirt is your thing, head on over to Brooklyn Botanic Garden's 2008 Plant Sale (and for those who don't live in NYC, almost all botanical gardens host plant sales, so check out your local one for some great deals).

Yes, it's crowded, but it's worth it. They have a lot of plants, and of course there's the wealth of info; from the silver haired ladies in the gardening club who are volunteering their time to tell you that the wind on a roof deck will kill that gorgeous plant in your hands, to the greenhouse reps who are there to give you more information on the dozen varieties of hot pepper plants. Trust me, those volunteers have saved my plants, from our basil plants that wilted the whole summer (too much direct light, they need partial shade) to our tomato plants that never really grew un-rotten tomatoes (put them indoors at night until the temperature stops dropping). Of course, if all you need is a plant in the bathroom and advice on how not to kill it (yet again), it's still a pretty fun experience. There are lots of free events throughout the day, and they take cash, credit cards, and checks.

So grab a little red wagon on your way in, and head on over to the green thumb extravaganza, maybe even check out Murakami next door. Not only is the plant sale cheaper than Home Depot, it's a helluva lot prettier.

Today, Tuesday May 6th 4:30-8pm
Members Only (membership may be purchased at door- a good idea for serious gardeners)

Wednesday May 7th 9am-7pm
Thursday May 8th 9am-Noon

General Admission

Adults $8
Students (with ID) & Seniors $4

2/3 Eastern Pkwy
Q, B Prospect Park

Friday, May 2, 2008

Lewis Cho Sample Sale

Feeling like some new duds just in time for roof deck parties and a spring fling? Head on over to my favorite NYC designers, Lewis Cho, for spring dresses, tops and skirts 50-80% off retail.

Lewis Cho
May 6 & 7 (this Tuesday & Wednesday)

12:00-8:00 PM

225 W. 36th St, #702
between 7th and 8th Ave


Thursday, May 1, 2008

April Net Worth

Well, I'm back to thirty thousand. $30,589 to be exact, an increase of 3.88%. It's so dinky, yet I feel so warm and fuzzy. I love being in the black...

I know I should have other goals, like a good pf blogger, but right now I'm just trying to gather enough together to max out my Roth IRA every month. It's seriously putting a dent into my cheeseburger budget, but I guess it's important to be able to even afford a cheeseburger when I'm seventy. Of course, when I'm seventy I'll probably be banned from eating cheeseburgers because, well, I ate too many for sixty nine years.

But back to the relevant stuff. M and I do save every month in our ING savings accounts, so I guess those count as goals.

$100 christmas fund (gifts and travel)
$100 car fund (for surprise repairs and a "new" used car in 5+ yrs)
$100 gym fund (annual gym membership for both of us)
$100 vacation fund (tax returns pad this fund, we go away a lot...)
$200 emergency fund
=$600/month in ING

It might seem like a lot, but remember it's a joint account, so really my share is only $300. Better to pay a savings account that much rather than Amex.

At least once a year four of those funds get drained (not the emergency fund, if life is kind), which is why my net worth spiked in December and then took a tumble. But I kind of figured out what things really killed my credit card every year, and just decided to save for them instead. So far it's worked out. Plus, now that those infamous stimulous checks are on their way, my savings account has a small something to look forward to.

Wednesday, April 30, 2008

How Much Do You Make?

A recent NY Times article, Not-So-Personal Finance looks at the question of should one talk about money publicly. In particular, paycheck size.

For people old enough to remember phone booths, a blunt reference to salary in a social setting still represents the height of bad manners. But for many young professionals, the don’t-ask-don’t-tell etiquette of previous generations seems like a relic.

I guess I'm of the phone booth relic for nine to fivers, but in the restaurant industry it's fair game. I have no problem asking how much someone (I know, even casually) makes in tips at another joint, and within the same restaurant there usually is a fair amount of transparency between, say, the floor and the bar. Especially if the floor is tipping out the bar. But if you earn a paycheck paycheck? No way am I asking you how much you make. Not unless you're one of my best friends. But that's just me, I wouldn't be offended if someone asked me how much I made, I'm just not really going to go around asking people that question. I guess because I think that they themselves don't do that.

There are definitely benefits to sharing salary information with friends in the same industry. Also, I think that women have a tendency to inadvertently sell themselves short because they don't talk about money as much as men. But that is a totally uneducated assessment (however I would like to point out that I am very skilled at the uneducated assessment, so it's not without merit). And honestly, I am all for people talking more about money in general with each other.

Apparently, if you're under 35 you already know how much all your friends make. And those extra two years of me sometimes wishes I was under 35, so guess what. I make $2300 a month (a mix of before tax and after tax, don't ask), but that's mostly freelance work so it can easily change.

And if I asked you how much you made, would you cringe or tell all?

Monday, April 28, 2008

iTunes Free Single of the Week

iTunes' free single of the week is Melody Gardot's Worrisome Heart, a smoky jazz title track from Verve's reissue of her debut album in 2006. It's a nice song for this overcast day, so head on over to the iTunes store for the free download. And then quickly exit the program before you, like me, start snatching up random songs from bands like Journey (listen, Lovin', Touchin', Squeezin' is a good song!)... and Busta Rhymes' new single... and, oh never mind.

Friday, April 25, 2008

New York's Finest

One of the great things about having people visit you in the city is that you get to show off all your favorite things to do. Not necessarily the big things, like shoot up to the top of the Empire State building, but the little stuff. Like watching the sunset from Fairway's outdoor cafe in Brooklyn.

Fairway is a large supermarket. Like 33,000 sq. ft. large. For a city that like to grocery shop in corner store bodegas, that's one hulking store. For those readers who don't live here, it's also a New York institution with a store originally in the Upper West Side and Harlem, and the fact that one moved to Brooklyn was a huge deal that had people shaking with excitement over the prospect of fresh fruits and vegetables (we must have the worst produce in all of the US) and legendary store prepared food. Okay, we New Yorkers love the hyperbole of our institutions, but it really was a big deal. The Brooklyn store sits right on the waterfront in Red Hook, in a restored five story brick building from 1869 that was originally a coffee warehouse.

We got some picking's like Italian olives and Fairway's killer guacamole with chips, and each picked up some dinner. Basically an outdoor picnic. Then we headed out the back to the cafe and watched the sun slink down behind Jersey, and watched the New York harbor just slide by. Kayaks(!), tug boats, the Staten Island Ferry, and of course a fantastic view of the Statue of Liberty. We even saw the FDNY pull up to the dock right at the foot of the cafe, get off the boat in full gear, go inside to grocery shop, then get back on the boat and float off into the harbor.

Everybody has their favorite spot to watch a sunset, and I have to admit this is one of mine. It's waterfront dining at its finest, and without killing your budget.

Wednesday, April 23, 2008

Bananas Going Bananas

Yesterday I was at the Park Slope Food Co-Op and I noticed a sign above the boxes of bananas. After a long haul of 69 cents per lb., organic bananas are expected to hit $1 per lb., with no price ceiling in sight. There goes the one and only fruit I actually enjoy eating. If cheeseburgers had the caloric and nutritional equivalent of asparagus, I'd be golden. But alas, I'm mourning the price of bananas.

I tried to google my way to knowledge about the banana situation, but I couldn't find much. I recently wrote about the world food crisis, but just this past week The Economist put out an excellent article, The New Face of Hunger.

“World agriculture has entered a new, unsustainable and politically risky period,” says Joachim von Braun, the head of the International Food Policy Research Institute (IFPRI) in Washington, DC. To prove it, food riots have erupted in countries all along the equator. In Haiti, protesters chanting “We're hungry” forced the prime minister to resign; 24 people were killed in riots in Cameroon; Egypt's president ordered the army to start baking bread; the Philippines made hoarding rice punishable by life imprisonment. “It's an explosive situation and threatens political stability,” worries Jean-Louis Billon, president of Côte d'Ivoire's chamber of commerce.

Some of the shift has certainly been an issue of supply. In the case of my beloved bananas, there was a devastating flood in Peru where the Co-Op purchases its supply from. But it is also largely an issue of demand. Countries like China and India increase their consumption of grain and meat as they become wealthier. In the meantime, biofuel production is pegged to Western governments' targeted goals, shrinking usable farmland (for food) in the process. Farming is not limber, and it is notoriously slow to respond to market forces. There are large swaths of unused land in Russia and Brazil, for example, that will take at least a decade before they are farmable. If that's a word. Farming, it seems, is experiencing some serious global growing pains.

But the food scare of 2008, severe as it is, is only a symptom of a broader problem. The surge in food prices has ended 30 years in which food was cheap, farming was subsidised in rich countries and international food markets were wildly distorted. Eventually, no doubt, farmers will respond to higher prices by growing more and a new equilibrium will be established. If all goes well, food will be affordable again without the subsidies, dumping and distortions of the earlier period. But at the moment, agriculture has been caught in limbo. The era of cheap food is over. The transition to a new equilibrium is proving costlier, more prolonged and much more painful than anyone had expected.

“We are the canary in the mine,” says Josette Sheeran, the head of the UN's World Food Programme, the largest distributor of food aid. Usually, a food crisis is clear and localised. The harvest fails, often because of war or strife, and the burden in the affected region falls heavily on the poorest. This crisis is different. It is occurring in many countries simultaneously, the first time that has happened since the early 1970s. And it is affecting people not usually hit by famines. “For the middle classes,” says Ms Sheeran, “it means cutting out medical care. For those on $2 a day, it means cutting out meat and taking the children out of school. For those on $1 a day, it means cutting out meat and vegetables and eating only cereals. And for those on 50 cents a day, it means total disaster.” The poorest are selling their animals, tools, the tin roof over their heads—making recovery, when it comes, much harder.

I encourage you to check out the article. It's a little long (it is The Economist after all), but I learned a lot about how agriculture plays out on the world stage.