There are at least two trends in economic thinking, those who advocate government intervention in markets and those who promote a hands off, laissez-faire approach.
This video is an interview with Jim Rogers, who is a famous commodities trader. This interview is a good example of modern interventionist vs. lassie fare thinking. Check it out to see the kinds of arguments both sides bring to bare on the issue of economic crisis. – Hint: Rogers is a proponent of laissez-faire policies.
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Hi All,
Its a slow labor day weekend for us DINKs. So, today I summoned up some effort and marched out into DC’s muggy heat to make some extra money. I ended up selling about 15 dvds and a computer game for 30 bucks at a local record store.
Thirty dollars is not a lot, but its nice to have less junk cluttering up the house. Also it only took a half hour and I got a bit of exercise in the bargain.
Best,
James
This from the FDIC…
On August 29, 2008, Integrity Bank, of Alpharetta, GA was closed by the Georgia Department of Banking and Finance and the Federal Deposit Insurance Corporation (FDIC) was named Receiver. No advance notice is given to the public when a financial institution is closed.
Click here for the skinny.
Hi All,
If you’ve got any money in peer to peer money lending outfits like prosper.com, you’ll definitely want to check out the latest piece from the MotleyFool.
Among other points, the article outlines the companies deteriorating loan situation,
“And far too many of those loans are going sour — fast. Fully 18.5% of all dollars loaned on Prosper between its inception and the end of June 2008 have gone delinquent. Some individual months look substantially worse: More than 35% of the dollars loaned in February 2007 are in some stage of evaporating.“
The article is here.
Click here for our sordid history with prosper.
Best,
James
“I am fundamentally an optimist. Whether that comes from nature or nurture, I cannot say. Part of being optimistic is keeping one’s head pointed towards the sun, one’s feet moving forward. There were many dark moments when my faith in humanity was sorely tested, but I would not and could not give myself up to despair“.
– Nelson Mandela
Hi All,
This posting is to clear up a common misconception about Individual Retirement Accounts (IRAs).
IRA’s are not investments, instead they are accounts. Essentially they are containers that can help you avoid income taxes on your investments until you begin to take your money out at retirement. In your IRA you can buy pretty much anything you want; stocks, CDs, bonds, etc.
How to they work? Well, you essentially open up an IRA in the same way you would open up a checking account. Then you make a deposit into the IRA – not more than $5,000 in 2008. After your deposit clears, usually less than three days, you can invest in anything in the institution managing your IRA can offer you.
The great thing about IRAs is they allow tax deferred profits. That means you can avoid taxation on any capital gains – That is, if you buy and sell a stock or a mutual fund, you don’t have to pay taxes on the profits.
Best,
James
To rely on Social Security or not, that is the question….
While news these days is all about the political conventions in Denver, Social Security will eventually come up as a political issue that needs to be handled.
I came to thinking about this subject again when I did a couple of scenarios on a retirement calculator, about how much money James and I would need. In the inputs section, it asked whether or not to include Social Security as a given.
Whether you are for or against Social Security, if you know much about the system it isn’t hard to come to agreement that the current system is broken.
See, Social Security doesn’t work with the benefit of compound interest as private retirement annuity plans have. This means that the money you pay into the system never grows. What you put in today goes into the pockets of Social Security recipients of today.
What does this mean for those who are say forty-five and below? Basically because of demographic change there will be fewer people paying into the system by the time we hit the golden age. This means that there will be more deductions than contributions.
If you can do the math, this means that soon there will be a deficit and the system will run out of money. People might think of Social Security as a given, but the system nearly went entirely broke in the early 1980s. The government was within months of hitting zero on Social Security funds when Congress managed to sort it out and tweak the system to keep it running.
You might ask – where does the surplus money from today’s contributions go? That would be the national debt that grows endlessly these days. Some politicians have fought for Social Security funds to be kept in a no touch pot, but this isn’t how the system currently works.
I’m certain our readers have many different opinions about Social Security in general.
Readers: Do you plan to count on Social Security funds for your retirement?
I look forward to hearing what other people’s feedback is.
Cheers,
Miel
When fraud hits, it is normally a bit surprising. I’ve just been hit with fraud, but it seems that I’ve gotten off rather lucky this time.
A third party fraud alert company called James, since his number is listed as my primary contact point, and left an automated message that said fraud was suspected on my debit card. James let me know and I gave the number a call.
I was of course a bit suspicious of calling, but was on guard for them asking for any information. They only asked me for my phone number as confirmation, and never mentioned the name of the bank. As I logged onto my ING account, while we were speaking, it was quite clear that they had correctly identified fraudulent activities.
There were three consecutive charges for $205.30 at a Wal-Mart in Naples, Florida.
Considering that I’m currently in Afghanistan, have never been to Naples, Florida, and don’t shop at Wal-Mart – there was no question about whether it was fraud.
I’m still a bit confused how someone manages to walk into Wal-Mart and make a purchase on a debit card that I have in my wallet here. I’d understand if it were an online purchase, but you’d think something would give with the physical card. It’s still a mystery to me as to how they got my numbers and what I can do to prevent this from happening in the future.
I’m also thinking to myself, “Now if you want to commit fraud, does it make sense to buy three purchases for the same amount right in a row? And, more importantly, don’t you have higher sites than something cheap at Wal-Mart?”
Back in college a friend had her credit card stolen from the campus library and someone was stupid enough to head straight to the store that they worked for, Fred Meyer, and try to buy a camcorder. It didn’t help that it was a guy purchasing the item on a card with a female name. He was recognized by a co-worker and denied the purchase. Then he went immediately to the nearest Fred Meyer and tried to make the same purchase again. Busted!
I’m very lucky that the fraud alert company noticed it though. Living in Afghanistan, I only use my debit card maybe once or twice a month. Thus, I rarely check it either. I would have noticed eventually, as there is very little spending going on here, but it feels better to have sorted it out early.
Now I’ve filled out some paperwork and hopefully everything will be sorted out quickly.
As you can imagine, being in Afghanistan without a way to access cash doesn’t feel so fabulous. Hopefully it will be here in the next several weeks, but I may have to start eating on credit at our place and eating out less!
Fraud alert systems aren’t always right, but they do a good job of picking up on abnormalities. A couple of years back James & went shopping, as he was in need of some goods like shoes, sweaters, and a haircut. After spending a whopping $250 in one day he got a call about abnormal activity on his card. Since I regularly purchase large items for work purposes my credit card only notices when I’ve suddenly disappeared in Dubai with no charges.
Glad they noticed the fraud before I did! Keep your wallet safe!
Best,
Miel
Hi All,
This from Bloomberg this morning:
Zimbabwe is in its 10th year of economic recession and has the world’s highest inflation rate, 11.2 million percent, following a land-redistribution campaign begun by Mugabe in 2000. The program… slashed agricultural output and led to shortages of basic commodities. An estimated third of the population of 12 million has fled — the bulk of them to South Africa. (here).
I’ve ceased to become disgusted with economic situation in Zimbabwe, now I’m just impressed that any one country could have that much inflation.
Best,
James
Hello All,
If you’re looking for a break from the usual personal finance blog fare of checking accounts, mortgages and stock market investing, swing on over to the Zillow Blog and check out their listing of crazy and unique houses. They’ve got pictures of places shaped like guitars, shoes, etc…
Click here for pics.
Best,
James
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