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Monthly Archives: January 2009

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Monday News Round Up

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Hi All,

Its first full week of 2009, so we’re getting down to businesses.

Here is the best of recent news that fit to print.

The Obama stimulus plan is looking like a whopper. The NY Times is reporting that it includes up to $300 billion in tax cuts, changed tax rules regarding depreciation, tax credits for job creation and direct rebate payments to individuals. It looks comprehensive, but will almost certainly run up the federal deficit.

Don’t Mess With Taxes has a nice little posting on the practice of “Grossing Up”. Grossing up is when companies add enough money to their workers checks to cover any added tax on bonuses. Look for more fatcats to avoid taxation with this.

The Environmental Protection Agency is proposing adding the power to tax livestock to its rulemaking authority. They are thinking of adding a tax of up to $175 per cow and $20 per pig. Farmers with more than 50 animals would be required to obtain a permit. The farm bureau says it would add 8 cents to each gallon of milk. Good luck with that.

Charles Rangel is looking more corrupt every day. He hit up failed insurance giant AIG for $10 million, and then approved a big time tax loophole so AIG could write off a ton of foreign income. The full story is at the TaxProf blog.

The economic picture is looking more optimistic. Construction spending wasn’t as bad as expected, and Walgreen’s sales were up 10%. That said, the feds should watch out because the Chinese are starting to say they don’t want our debt.

Best,

James

Investment Options

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Options are a wonderful thing to have. In this economy though, it is always a bit hard to judge what your best options are.

Now that I’m employed we can free up the extra savings of mine and add this to our entrepreneurial funds that we’d been putting away for some time. This gives us about $35,000 of spare cash to work with at the moment.

Our initial objective with these funds was to buy property in Portland. While we are still interested in pursuing this option, we are also taking a step back to make sure that we are weighing the alternatives for their merits as well.

At the moment there is a fabulous one bedroom plus in NW Portland still on the market that I fell in love with back in November. We love it but realize that working the numbers everything would have to land in our favor to make it break even. This would include a low interest rate, reduction in price, and rent at just above average.

We could go for something less expensive to ensure that we were cash flow positive, but we might not have a place that we would potentially want to live in at some point. I also have a less favorable opinion of studios for their value since they turn over quickly and have limited appreciation.

We could also wait and continue to save, as the market doesn’t look like it is rebounding any time soon. Then we could buy what we want and be cash flow positive. But we’ve also been saving for awhile and would like to make things happen.

We could also take the less complicated route of just buying secure bonds and getting a $200 monthly cash throw off without the hassle and risk of real estate.

So many choices. We are glad to have options.

Readers: As always we’d love to hear your two cents on which option we should pursue.

Miel

Understanding the Global Financial Crisis

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Hi All, 

Well, its been a few weeks since the economy started to melt down.  This has given academics enough time to begin to analyze the situation. This video is from a symposium at the University of California at Davis.  Its got three experts from economics, history and government affairs. All of them give their analysis of the economic crisis.  

The video is a bit long, but the quality of the commentary is better than most of the junk the media puts out.  If you’ve got some extra time you might want to put the video on in the background.  

Chrysler’s Shameful Bailout Thank You

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Do you remember last months detroit bailout? Well, someone at the Chrysler company came up with the hairbrained idea to “thank” America for the Whitehouse approved bridge loan. Check the PR picture below. The best thing about this shameful episode is someone posted the picture to Chrysler’s official blog. You should definitely check out the comments before Chrysler gets a clue and yanks the post.

DINKs Update – Miel lands her Dream Job!

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Happy New Year!

Us DINKs are looking forward to a prosperous and fulfilling 2009.

We were particularly excited to start out the New Year on the right foot with a job offer issued and signed on the eve of 2009. Miel landed a position that is perfect for her with an international development organization doing regional program management. She will be based in DC with plenty of travel to Africa.

She also got offered exactly what she had been hoping for in terms of salary. This was 8% on top of the previous 8% she had received from her last job that fell through. This is an effective 15% increase on her base from October. While we don’t have the luxuries of danger pay and so forth, we do have the opportunity to enjoy time together and still have the travel component that Miel enjoys so much.

James is getting ready to take his next set of comprehensive exams, so you’ll be hearing more posts from Miel in the coming weeks while James goes into hibernation.

In terms of next steps, this means we’ve taken a look at our finances and where we want to go from here. We decided that our next move will be to proceed with purchasing a place in Portland in the next several months. After this we will work on maxing out the last of Miel’s 401(k) that wasn’t topped off due to her job situation. After we’ve achieved those goals we’ll reassess how things are looking for us.

Looking forward to all that 2009 will bring and wishing all our readers a joyous New Year.

Best,

Miel&James

Chinese May Execute Milk Company CEOs

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Hi All,

I don’t know if you remember this, but a while back there was a big scandal with tainted milk coming out of china. Something like 4 children died and over 50,000 got sick because the Chinese milk had melamine in it. It was hugely costly for business as Cadbury and Lipton had to recall a bunch of their Asian products (1).

Well, looks like the Chinese government is going to give the former milk company CEOs the death penalty (1). Thats not messing around.

Sometimes I think the US justice system is too lenient on white collar criminals. It’s a joke that guys like Bernie Madoff aren’t eligible for the death penalty. If one harms as many people as Madoff did, under any reasonable system one would be a prime candidate for the maximum penalty.

Best,

James

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