Caught this video over at mint.com – I’m starting to like them more and more. Not sure I trust them with all my financial information yet, but I have entered a few accounts in there, and I like what I see so far. Good information, well-designed site, and its free! Plus they have videos like the one below to teach people about finance, managing money, and government statistics (an oxymoron, really).
Free budget software – Mint.com
There are four ways in which you can spend money.
You can spend your own money on yourself. When you do that, why then you really watch out what you’re doing, and you try to get the most for your money.
Then you can spend your own money on somebody else. For example, I buy a birthday present for someone. Well, then I’m not so careful about the content of the present, but I’m very careful about the cost.
Then, I can spend somebody else’s money on myself. And if I spend somebody else’s money on myself, then I’m sure going to have a good lunch!
Finally, I can spend somebody else’s money on somebody else. And if I spend somebody else’s money on somebody else, I’m not concerned about how much it is, and I’m not concerned about what I get. And that’s government.
– Milton Friedman, libertarian,
in a 2004 interview
People often wonder why I don’t trust the government. My normal response is that I don’t know why anyone would. They have a record unblemished by success. This statement just confirms that. This is the main reason I have never started a Roth IRA – I know it’s a great deal (retirement money with tax-free appreciation!), but I don’t really believe the government is going to let it stay tax-free long enough for me to enjoy it, especially when they get desperate. I believe those times are coming soon.
Oh, and I came across the following very interesting quote, given what is currently going on in Washington:
I wonder what the good Senator would think now. I believe I already know.
This week I got a survey from the Republican National Committee about the Obama Agenda. Typical of the stuff they usually send out, it was full of fear, uncertainty and doubt, with leading questions like “Do you agree with Barack Obama’s budget plan that will lead to a $23.1 trillion deficit over the next ten years?” [Weren't we told that deficits don't matter just a few years ago?] and statements like “If you don’t like the direction that Obama and the Democrats are taking our country, then the single most important action you can take is to come forward and support the Republican National Committee today.”
Well, shoot, when you put it that way, let me get my checkbook. I mean, I do believe everything I read, and they do say in the letter that they stand for “conservative principles of low taxes, small government, personal responsibility, and a strong national defense.” I think some of those things are important too, contrary to the actions of the government for the last several decades, and…
Hey, wait a minute. Where were these “principles” when the Republicans were in power? I suppose the expansion of Medicare benefits was something that had to be done to stave off the Democratic threat, so people would vote for them? But they really *are* for limited government, when possible [e.g. NEVER]. And “Homeland Security” and expansion of the government into our privacy – personal responsibility aside, that was important for “national security”, right? And it was a purely defensive move to invade Iraq to secure the oil rights – after all, the best defense is a good offense, or vice versa – something like that…
Uhh… [Putting checkbook away.] All sarcasm aside, the Republican party has serious issues with the disenfranchised core of the party. Many of the “agenda” items that they ask about [criticize] in their “survey” [fundraiser] would have been the same if McCain had won. This is not to say that I’ve become a Democrat, or an Obama supporter. Frankly, I think his rapid turn toward socialism [complete with kudos from Comrade Chavez], his disregard for contract law and property rights in general, and his willingness to sacrifice moral justice for popularity is downright horrifying. But that’s a topic for another day.
The problem is, although each party demonizes the other, they basically push for the same goals – expansion of their own influence and authority to coddle their own special interests. I think the Republican Party specifically faces a real crisis of confidence from their conservative majority, the ones they let down when they tried to bring the radicals into the big tent. I imagine the Democratic Party will have the same problem, if not already, then soon. Once people see that the nationalization of GM against the “evil bondholders” really hurts them, since those evil bondholders were actually pension funds investing the people’s retirement money in what they considered an asset safer than stocks (since it was supposed to have seniority and be secured by the assets of the firm…) But I digress.
Until the Republican party has something to offer besides “the enemy of my friend is my enemy” politics, I’m not buying. Indirectly, I’m supporting both of the parties platforms, since if I don’t pay my taxes, they’ll throw me in jail. But willingly – no. I won’t support either. And the survey – not returned. Why should I waste my hard-earned money on a leaderless, reactionary, disingenious party?
Just finished reading this very interesting article in Rolling Stone (of all places). In it, the author links Goldman Sachs to many of the largest financial bubbles of the last 15 years, as well as the Great Depression. While the language is at times foul (it is Rolling Stone, after all), its a long and interesting read. It makes me wonder why none of this hits the mainstream business press? Why Rolling Stone? Not trying to be a conspiracy theorist or anything, but if even half of the allegations in this article are true (and there seems to be fairly good proof of at least half…), why is no one talking about this? Is our mainstream press really that blind, or beholden to those in power, that they can no longer be the “bastion of liberty and truth in society” that we always believed (or were led to believe by the movies) they used to be? Is it really all about politics and money? Truth, justice and liberty don’t matter anymore?
I’ve been following, with interest, the bonus flap over at AIG. Who isn’t? Perhaps, like you, I was outraged when I first heard the news that they had paid bonuses (large ones) after taking so much money from the government (read: taxpayers). Of course we were, that’s how the media and government wanted us to react. That’s how all the quotes and stories are slanted. At least, most of them.
Michael Lewis is one of my favorite writers, and has been ever since I read “Liar’s Poker” – his unique view of tradition, customs and business situations makes him an interesting counterpoint to many of the “business analysts” out there that have never actually had any experience in business. He has written a piece about the bonuses that I think is excellent – you can read it here. Another opinion article makes similar points here. Both of them lead me to wonder why we believe the over-reacting publicity hounds that we call politicians, most of whom are the same ones that were in office when this financial mess was created, have the ability and werewithal to fix it. Or even the intellect.
I’ve read all sorts of quotes from members of Congress telling banks, auto companies, and everyone else how they need to manage their respective businesses, and what they are doing wrong. Now they want the ability to seize financial companies, so they can control them. They seem to take their cues from whatever is popular at the moment. What credentials do they have to do this? Most of them have never worked in the business world (except for political consulting), and I suspect, if you took away their Congressional titles, most would not even qualify for a mid-level job at any of these places. Why should their opinion carry more weight than any of the rest of us? Because they control a bigger checkbook? Money (even money taxed from other people) gives them the “wisdom” of always knowing the best course of action? I don’t think so.
I also find it terribly ironic that the “excesses” that Congressmen are railing against in the business world “on the taxpayer’s dime”, so to speak, are ok for a Congressman. Do as I say, not as I do. For example, it’s ok for Congressmen to fly in a private jet on “fact finding missions” on the taxpayer’s dime, but heaven forbid a company that has taken taxpayer money do the same thing. What do Congressmen eat? Who pays for their entertainment? Why do we allow them to demand things of bailed out companies, when they can’t even balance the budget themselves? Not that I agree with the bailout of GM, but honestly, how is GM operating at a loss for years any different than a Congress that operates with a “fiscal deficit” for years? And yet, different standards apply to Congress? Why don’t they demand their own ranks take pay cuts, or make outrageous comments about themselves committing suicide if their budgets don’t balance or their policies waste money? Why the double standard?
And now that I’m ranting, how is the Congressionally produced, and now fully entrenched, ponzi-scheme known as Social Security any different from the Madoff ponzi scheme, except in size, besides the fact that Madoff’s investors had a choice? What was supposed to be a savings program has evolved into a “pay-as-you go” (ponzi) scheme which depends on an increasing birth rate. That brings up another point – why are our politicians so intent on copying Europe when it is obvious to anyone who wants to see that Europe’s socialist policies are leading it quickly to bankruptcy? Europe has universal health care, so we need to have it, even though everyone complains about the care you get under universal health care? Europe’s model has regulated them to a supporting role in the world economy, and now we want to copy them? Where is the wisdom in that?
Ok – sorry. I’m getting all worked up over this, and I’m straying off topic. The point I’m trying to make is one quoted often by my favorite financial newsletter editors at Stansberry: the government has a “record unblemished by success”. So why do we still listen to them? My friend recently posted about this on his blog, with a group that has high aspirations of making a difference – check it out here. But whatever you do, don’t make the mistake of believing the politicians know more than you do, so they must know what they are doing. Unfortunately, their actions don’t justify it.
Another year over, and I’m actually glad. With the real estate collapse (house still on the market, going on two years), stock market decline (S&P down 40+%), credit crisis, bank failures, presidential campaigns/politics, government bailouts (where in the world are we going to get 2 trillion to pay off the debt – I know, we’ll just print more money!), negative returns on treasuries, gas price roller-coasters, I can’t say that I’m sad to see this year finish. It wasn’t one of my best years, for all the reasons above and more. On to 2009 – may it be a better year than ‘08! Happy New Year to all!
This chart kind of says it all, doesn’t it?
There is a lot of stuff going on in the markets these days – hard to figure out. I actually read one of the most illuminating explanations for the credit crisis in an Investment Newsletter from Stansberry Research. In it, he described how the lynchpin of the whole credit crisis was the role played by AIG in insuring mortgages so banks could buy more than they should have. Once default rates started going up, AIG’s insurance was supposed to kick in, and their liabilities started increasing a lot, at which point they needed more cash, which brought about the bailout by the government (they seem to be doing that a lot these days.) Interesting read – it’s in the current month subscription of PSIA at Stansberry Research – good stuff.
A friend of mine also sent me this site, which I thought was hilarious. All the links work, and since I’m a big fan of comedy, plus I’m following recent events fairly closely, this was the perfect combination. It’s great.
So where do we go from here? That’s the $64,000 question isn’t it? It will be interesting to find out whether the government “bailout’ does what it’s supposed to do to restore credit to the markets. I wonder how many executives will want to make use of it, knowing it will cut their salaries significantly? I would imagine it will be a last resort for most of them. I also wonder if this will stimulate banks to start lending again, as desired, or if they will be overly conservative in fear of more write-downs, bank failures, and toxic assets.
With the presidential election around the corner, that’s also going to affect a lot of the current and future economic conditions. Will history prove accurate? Typically, when the economy has weakened leading up to an election, and unemployment has increased (both of which have happened this year), the incumbent party has always lost the election. Does that mean we’ll have a democratic president and republican Congress? Does anyone even care any more? As a personal side note, I’ve been fairly disappointed in the blatantly unconservative nature of the typically “conservative” Republicans, especially recently with the huge increases in government power, spending and reach, and the Democrats continue to lean towards the idea of large government as a nursemaid that provides a safety net for everyone, everywhere, which is, honestly speaking, impossible to finance. I believe there are a lot of disillusioned folks out there like me? Is there any real difference between the two parties anymore? Strange times we live in, for sure.
I ran into an interesting marketing scam yesterday. I was working on my computer when I got an IM from my brother-in-law, with a simple link: [hisname].yoimgz.com. He’s a pretty savvy computer user, and he and I have done several websites, so I figured he was doing a new website that he wanted me to look at or had discovered a new service, so I clicked on it. I got a page that said it was pictures for MSN Friends, and asked me to log into my MSN account to proceed. Didn’t think much of it, so I did, and then skipped through the next three pages of marketing come-ons. Unfortunately, that was it. No pictures from my brother-in-law, or website he was working on… nothing but ridiculous website marketing. I figured I must have done something wrong, so I tried it again, and got only one page of marketing, with nothing else. I went back to my IM client to ask him what the site was, and I had been disconnected from my MSN service. So I reconnected, but he wasn’t online, so I sent him an email. A few minutes later I was disconnected from MSN again, so I figured they must be having problems and logged out of MSN altogether.
Several hours later, I got an email from my brother-in-law saying that he had gotten a virus a week ago or so and that I shouldn’t follow the link (too late!) and probably ought to scan my computer, which I did immediately. Nothing. I also changed my password on MSN, just for good measure. Since I still had the history, I went back to the website to see if I could determine what they were trying to do (having a fear that they were phishing or trying to install keylogging, etc.) I found an interesting legal disclaimer (in gray text, below the normal screen parameters so it wouldn’t be noticable) on the site. Among other things, it claimed it was a perfectly legitimate “upcomming community” and that, among other things, by signing into your MSN account, you authorized them to “spread the word” about this upcoming site and that you would receive your share of the credit. It goes on further to state that, by “logging in”, you authorize them to:
“temporarily access your MSN account to do a combination of the following:
1. Send Instant Messages to your friends promoting this site.
2. Introduce new entertaining sites to your friends via Instant Messages.”
Unbelievable, no? They go on further to state that by hijacking your MSN account (of course they don’t use this language, but that is what they are doing), they are not agreeing to MSN’s terms of service and are not bound by them as you are, and that they are governed by the laws of Panama.
So, long story short, be careful of links in an IM, and a site called yoimgz.com. And if you received a text message from me with a link in it (before I changed my password), hopefully you didn’t click on it, and if you did, change your password and let your friends know about this. Maybe we can catch up to them…
Update – looks like another of my MSN friends has it, since I just got a text from his MSN account and he’s not online, this one with a link to a “realdealzz.com” website, with my MSN username at the first of it.
