Money and Financial Business

Mega mergers are almost always fuelled by three things: egos, conceit and a deep-seated need for power.So when a chief executive slaps down a premium of 50 per cent or more, shareholders can often find the rationale for pursuing an acquisition puzzling. When the premium reaches 70 per cent or more,...

Filed under: Bad news, Economic data, Housing

Overnight in London, Alan Greenspan made another stop on his book tour and was good enough to tell Reuters that the US housing market had much further to fall "All that I conclude is that the process of inventory adjustment has just started and we have a long way to go before residential housing and mortgage markets stabilize in the U.S." In other words, let the bank take your house and move to New Zealand.

Greenspan may not be helping the US economy, and he may want to keep a lower profile.

Housing stocks and financial services operations with exposure to US mortgages are already well aware of the dangers that the current housing downturn presents. Saying more about it may sell Mr. Greenspan's book, but it is hardly good for morale.

Of course, if the old man is right, and he often has been. a prolonged and deepening housing crisis would almost certainly drive consumer spending down sharply and damage industries from automotive to retail. This, in turn, would almost certainly cause a recession which could last for all of 2008.

If there is no one else to blame, we can always point a finger at Greenspan. His book sales should help him weather the recession.

Douglas A. McIntyre is a partner at 24/7 Wall St.

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"Bad people with evil intent"

Censorship is

The real Rudy

Fred Thompson vs. Roseanne

Republican Culture of Corruption: 2007 so far

The Lonely Candidate is the only candidate

Political Stock Exchange

Opium in New orleans

Who is Posada?

Bush Loyalty Quiz - 10 Questions to Test Your Allegiance to President Bush. What is your score? You can imagine mine

Fighting for freedom

"You are a burro, Mr Danger" by Hugo Chavez

Much more about the 2008 Election. Also, the 2004 election and other Political Posts Here

I'm not going to say much about the process this time. All that need be spoken about is the car.

But first...

I can understand why the sales guy wanted to stress the fact that the 750 would NOT be like the A8L. I'm sure he sees tons of people who are disappointed by the difference in feeling between the 750, the Mercedes S Class and the Audi A8. I notice that a lot of people don't really know what a BMW is supposed to be purchased for. So let me attempt to clue them in by saying that a BMW is meant to be DRIVEN! Yes, boys and girls, BMWs are for people who like to the thrill of driving. People who speed up in the twisties. People who drive fast and relish every bump in the road as an expression of their connectedness with the road.

These are the type of people BMWs are designed for. There is a reason that they call themselves the ultimate DRIVING machines. If you don't like the way the road feels, buy a Benz or an A8 or even, God forbid, a nouveau riche Lexus. BMW is not for you.

Now that I've said that...

I have to start by saying that it is a miracle of modern automotive engineering that a $90,000+ (2007 dollars) automobile can feel like a $30,000 auto (1999 dollars). I don't mean that disparagingly at all. It was a natural experience to get behind the wheel of the 750iL. Just as my 2000 Honda Accord allows me to feel the road (more than it should), the BMW really put me in touch with the driving experience and road feel (exactly as it should). It was a just a bigger vehicle to maneuver!

Let's get iDrive out of the way. It sucked ass -- totally. The A8L's controls were much more intuitive and easier to use. Whomever thought up iDrive should be executed like Buddhist monk in Myanmar. I can see some poor bastard dying in a horrible crash trying to change radio stations in any BMW with iDrive.

Anyway, the model I drove was snow white, with the most comfortable leather seats I've had the pleasure of sitting in in a while. Just a beautiful machine. While the car is big and heavy, it is not unwieldy. It sure looks like it could be, but the handling was superb. While taking it through some of the back roads of Montgomery County, MD, hitting some fairly tight turns at speeds that would turn my Honda into roadkill, the car was just taut and eminently controllable. Again, more modern engineering at work - traction and stability control are beautiful things. I loved how the sales guy kept pushing me to give it more power in the turns and soon that heart pounding fear starts pushing the adrenaline throughout your system. This car can make you feel like Superman, or at least Michael Schumacher. :)

Unfortunately, I did not leave the dealership with one. My Accord has years of life left in it, and I plan to drive it into the ground. But if Mercedes continues to mutilate the S Class as they have done, once my Accord keels over, BMW might well get my business.

Population 2006: 1.22 million
11/27/2006 Listing per population ratio 1:143

11/2006: 8,426
12/2006: 7,953

Population 2007:
01/01 Listing per population ratio 1:159
05/31 Listing per population ratio 1:131

01/01: 7,677
01/31: 7,673
02/28: 7,609
03/20: 7,802
04/30: 8,657
05/31: 9,251
06/30: 9,145
07/31: 9,575
08/31: 10,647
09/30: 11,196
10/31: 11,249

-ziprealty resale inventory includes SFR/Condo/MFR/Land Parcels

Filed under: Bad news, Law, Pfizer (PFE)

In an example of just how dicey it can be to do business in the developing world, Pfizer (NYSE: PFE) finds itself in a lawsuit brought by the government in Nigeria for $8.5 billion. The suit claims that the company "deceived patients and caused the death of 11 children in 1996 when it performed clinical trials for a new drug," according to Reuters. In 1996, the country was in the midst of a meningitis outbreak killed more than 12,000 children in six months.

Pfizer says it offered experimental drug Trovan because the government was pleading for help. Nigeria claims that Pfizer "failed to obtain all the required approvals for the test and did not get proper consent from the patients." And, later the FDA found that the drug could cause liver problems in some patients.

The suit brings up a difficult moral dilemma. Assuming that Pfizer felt that the drug was safe, offering it in an emergency would appear to be almost noble. But, if the trouble in Nigeria was used to get further test data on the drug, the company is due for more PR trouble than it has faced in a long time.

It would appear that, since Pfizer was likely to be able to have clinical trials outside Nigeria, that testing the drug there was of little use.

The incident may effect how much help US companies will want to give when poorer nations ask for it.

Douglas A. McIntyre is a partner at 24/7 Wall St.

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Need to be up to speed from the moment you rise? Sign up for FT Alphaville's 6.00 AM Cut.This morning briefing note is published right at the beginning of the European working day. Designed for busy readers on the move, our email service provides a quick and accessible digest of key financial news and analysis from the FT and other sources....

Here is a fascinating recount of some of the events at the Professional Risk Managers International Association meeting on 20 September. Unfortunately, I can't remember how I came across this. :(

From reading this, the first thing that comes to mind, for me, is "why doesn't Egan-Jones just start rating paper independently and let the market develop for their ratings on the basis of that competition?" Of course, I can see S&P and Moody's getting very litigious, based on the comments that came out of this. I could even see the SEC stepping in and trying to invalidate their work. And of course the issuers aren't going to come to Egan-Jones because they know they can go ratings shopping among Moody's, S&P and Fitch anyway. This whole situation stinks to high heaven.

The bits from Josh Rosner are well worth reading as well. Of course, these are meeting notes so they summarize what was said, but the thoughts are complete enough to see that things are seriously broken in the housing finance and securities ratings arenas.

A few days ago, I made a huff about how HSBC lowered the interest rate on its savings account, my savings account. I said I was going to move my money to Emigrant.

Now Emigrant has lowered its rate as well, from 5.05% to 4.75%.

Ay.

Stephanie & Greg Mulac will be doing a teleseminar on monday, Oct 01, 7pm EDT. They have invited Robert Puddy to join them in the call to discuss about membership site business. Robert will explain in step-by-step how a membership site can turn your online endeavors into a literal goldmine. This is a free call that you listen to find out how a membership site can change the way you make money

There are several kinds of freelance careers you can have. Some people choose to be writers, while others become graphic designers, data entry service providers, account & admin support and web designers. Increasing number of people are discovering the ease of landing virtual work and managing projects online. Project managers do not choose the best freelancer, as there is no way one can

Here’s a quick look at some of the posts from the MoneyBlogNetwork and beyond over the past week:

NCN continues his 33-day series. Day 22 is aboutemergency funds. Wow! $20,000 seems like a lot of money to just be sitting in a bank account earning interest.

MBH’s thoughts on Maxed Out - I wasn’t too fond of it.

J.D. talked about Freegans, which are basically freaks who go through other people’s trash in order to find food. - Disgusting! I think this borders on insanity.

Here’s an FMF guest post with strategies for saving money on travel.

Nickel talks about why he and his wife are switching to Bank of America’s money market account.

Flexo highlights some of the relief that college students will get from a new bill that was passed. - This is great and all but it fails to address why college is so freakin’ expensive to begin with!

Jim wants your thoughts on the United States’ deficit. - Yeah, it’s bad but I got to say that Clinton’s rosy outlook on the debt came prior to both the tech stock bubble and 9/11. Let’s face it, elected officials are HORRIBLE money managers!

Tricia mapped out her strategy for saving money on heating costs this winter. - Sometimes it’s nice living in area where the coldest temperatures during winter are in the 20s and 30s for lows and the 40s and 50s for highs. Though, I do miss winter.

BluntMoney likes the Scanalizer she won here on AllFinancialMatters. - That’s cool!

The Digerati Life takes a look at the causes and the consequences of the subprime mortgage snafu.

Lastly, here’s Meg’s top tips for accumulating easy wealth.

That’s it for this week. Enjoy!

By the way…

I would like your opinion. How many links would you like in each week’s roundup? I have a ton of blogs in my blog roll but not nearly enough time to link to all of them each week. I think roundups should stay at or around 10-15 links. Is that too many or too few?

In case you have not read part 1 of this article, please click here. Joining a team There are several companies that work on creating groups of freelance professionals of different specialties. They screen all the freelance applications and select the best out of them. Companies like www.aquent.com are reputed and have been in this business for many years and can be trusted. Initially, when

UBS is expected to announce Monday the departure of its investment bank head as it warns it will write down billions of dollars of fixed-income assets, making the Swiss banking group one of the year's biggest casualties of financial market turmoil. The bank is expected to say it has written down its fixed-income portfolio by more than SFr3bn ($2.6bn),...

Investor appetite for hedge funds which weathered this summer’s market storms will be tested by the announcement on Monday of up to £300m ($612m) of new money raising by two listed funds that specialise in investing in the sector. The London listed closed-end funds of hedge funds, run by Cazenove Capital Management and Dexion,...

The likely collapse of Barclays’ €67.5bn (£47bn) bid for ABN Amro this week will cost the British bank £80m in fees paid to advisers. But the biggest losers, if ABN does reject Barclays in favour of the Royal Bank of Scotland-led consortium's offer, will be the six investment banks advising on the deal,...

Filed under: Google (GOOG), Microsoft (MSFT)

In a move to counter Google (NASDAQ: GOOG), Microsoft (NASDAQ: MSFT) will move some of its key Office funtions online so that they can be worked on using multiple PCs.

Douglas A. McIntyre is a partner at 24/7 Wall St.

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The City of London is losing millions of pounds in profits as leading banks have failed to sell any loans in sophisticated asset-backed financial products amid the credit squeeze. Europe’s leading banks will lose £415m ($830m) in profits and £550m in revenue in the 2007 second half, with London the biggest casualty as investors refuse to buy the securities in the aftermath of the US subprime crisis,...

Merrill Lynch and Citigroup have each bought a 5% stake in India’s largest commodities exchange, valuing the bourse, one of the world’s fastest-growing, at up to $1.1bn. Financial Technologies India, the company that controls Multi Commodity Exchange of India, is also selling a 3% stake in MCX to Passport India Investment (Mauritius) and 2% to the GLG Financials Fund....

Another key shareholder in Mol, the Hungarian oil and gas company, have come out publicly in favour of the bid approach from OMV of Austria, adding to the pressure on Mol’s management to enter talks. Centaurus Capital, the UK-based hedge fund, on Sunday wrote to Mol’s chairman and vice-chairman, strongly criticising their tactics in trying to ward off a bid and urging them to “cease all attempts” to block a potential transaction with OMV....

Companies are spending billions of dollars on information technology every year but few boardrooms know the value of their hardware and software and the contribution they make to their businesses, a new study has found. The survey of 250 chief information officers and chief finance officers from companies in the US,...

Emap, the UK media group, will learn this week whether its auction has generated sufficient interest to proceed with the sale of its three divisions, after another bidder came forward for its radio assets this weekend. Phil Riley, former chief executive of Chrysalis Radio, is to put forward a private equity bid in time for this week’s first round deadline for offers,...

Madame X and Meg posted great commentary about the affect of disparate salaries in dating relationships article in the NY Times here and here. This caused me to think about the earning history of my husband and me.

In my relationship with my husband, we have flip flopped several times in who was the bread winner. When we first began dating, we were both students. I was impressed by his economic resources with his part-time research job and his upcoming (& lucrative) summer internship. Soon thereafter I graduated and began working in my first "real" job. That allowed me to be the breadwinner for about 3 years. In that time we got married. My husband then became the breadwinner again once he began working full-time.

Due to our career paths, we had a feeling that I would surpass my husband's income. He works for a non-profit. I work in a fairly lucrative industry. He gets really good benefits. I get sub-par benefits. Recently with my raise, I surpassed my husband's income.

Before this happened, I thought about how it would change the dynamics of our relationship. My husband is similar to the author of this post. He would rather spend the extra money to get more of his time while I am always looking for ways to save money. I wondered if my husband would be more willing to listen to my money saving schemes. I wondered if he would feel uncomfortable or threatened. Money is a form of power and I wondered if it would have an effect on how we relate to each other.

Well, aside from some light hearted teasing, the income change has not affected our relationship. My husband is not likely to spend of any more of his time machinating with me on how to increase our net worth through savings. Nor does he seem to feel insecure about my earnings. However, now when he tells me not to waste money on things like doing surveys or cutting coupons, I can tell him that I am focusing on both the offense and defense part of our net worth strategy

Instead of buying packets, I like to make my own taco seasoning because I can control the salt content and it's a lot cheaper since I have the ingredients on hand anyway for other recipes. I like to use the following recipe from Jonni McCoy of Miserly Moms.

Mexican Seasoning Mix
Makes approximately 15 tablespoons
(3 tablespoons is equivalent to one seasoning packet)

1/4 cup all-purpose flour (I like to use white whole wheat or whole wheat pastry flour)
2 T chili powder
1/4 cup onion powder
2 tsp garlic powder
4 tsp salt
4 tsp paprika
1/2 tsp cayenne pepper
2 tsp sugar
2 tsp cumin
2 tsp oregano

Put all of the ingredients in a blender. Cover and blend until powdery for 5 seconds or less (don't over blend). Use the "pulse" feature if your blender has one. Add more cayenne powder if you prefer it hotter. (I don't bother blending the ingredients - I find the mixture works perfectly well as is.)

Store in an airtight container for up to six months.

"Real estate is a local business, driven by local buyers and sellers, and best served by local professionals." - Gary Keller, Founder, Keller Williams Realty- February, 2000 How has the rising popularity of Web 2.0 sites changed the face of real estate ? Not a whole bunch. In fact, most of the information gleaned from the new wave of real estate technology sites is wholly incorrect. Just ask a San Diego homeowner, looking to refinance. The frustration in their voices are deafening when they pull up their home on Zillow.com and discover that the market value is far below the "Zestimate"- I know; I deal with it every day. Jon Dalton, a Phoenix Realtor, wrote about this very issue yesterday: Case in point … this morning someone asked about whether it’s the right time to buy real estate in Casa Grande, a city about one-third of the way between Phoenix...

The USAToday article: Your Portfolio: Saver's tired of playing it safe profiles 48 year old flight attendant Linda Kay Kempel who has accumulated $334,887 in savings and retirement accounts. That is...

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I may be speaking too soon, but with Japan up and Australia commodities companies performing well, Monday may be another move in the upward direction assuming follow through and no surprises in the US markets. Granted, Hong Kong markets were closed Monday and will be closed all week in China in observance of national holidays, but the US ADRs may well continue to roll upward.

Here are the performance measures for the Everydayfinance Portfolio from last week. Once again, the portfolio average blew away the indices at 5% vs. less than 1% for the S&P.


There were no large losers for the week and as has been the case lately, the Chinese equities continue to return double digits week over week. CROX has been on a roll of late as well. Based on the recent runup in Chinese equities, I unloaded some shares of BIDU and FMCN. For research and past commentary, feel free to peruse the rest of the EDF blog.

General Cable BGC -3%
Baidu (China) BIDU 2%
BluePhoenix Solutions (Israel) BPHX 1%
Crocs CROX 18%
CHL (China Telecom) CHL 13%
Vimpel-com (Russian Telecom) VIP -2%
Focus Media (China) FMCN 22%
Google GOOG 1%
USA Tech (Vending Mach. Credit C's) USAT 1%
Casinos - US and Macao WYNN 10%
Garmin (GPS) GRMN 10%
Suncor (Canada) SU -1%
K-Tron (Small cal pharma/food eq.) KTII -3%


PORTFOLIO AVG 5.3%
PORTFOLIO Median 1%
S&P ETF SPY 0.4%




.

It’s been a while since I’ve had a “Why I hate my industry” but here’s one that may become my #1, all-time “WIHMI” king. Let me recount the story for you all.

Recently, driving home from work on the 5 freeway in South Orange County I was passed by a large blue pick up truck, with big wheels, a lift kit, custom exhaust, etc., and as they blazed by me I noticed their personalized California license plate: “MAX FEES”. Seeing as one of the favorite refrains of “top producing” loan officers echoing around the bars of Orange County over the last few years has been the term “MAX FEES”; I’m going to guess that this person is in the mortgage industry. Even if they are not they are an embarrassment to any industry. To flaunt arrogance (or is it stupidity) with a personalized license plate that champions taking advantage of people borders on the absurd.

But, I’m going to bet that this person is in the industry; and if they are, they are a terrible human being. They have reached a level of depravity that is nearly unthinkable. To the owner of that truck - are you proud of the fact that you rip people off for a living? Are you so proud of your ability to lie and to pressure a family in to signing for a toxic loan while wiping out their home equity that you go and order a CUSTOM LICENSE PLATE COMMEMORATING YOUR ACHIEVEMENT? I mean, seriously - what is wrong upstairs? What made you think that getting a license plate that says MAX FEES on it was a good idea?

It’s not a mark of pride - it’s a mark of shame. It’s a scarlet letter - that license plate is the physical manifestation of the wrong that has been perpetrated on the American public by people in the mortgage industry. It is the definition of all that I hate in the mortgage industry. Whoever is driving around with that license plate, MAX FEES, can’t call themselves a professional; unless they consider themselves a professional rip-off artist. What a joke.

Seeing that car on the freeway made me furious that there is someone in the mortgage industry that can so brazenly show-off their thievery; it made me sick to my stomach.

If there is one reason why I started Blown Mortgage it is to diffuse the power of those who choose to use their position for harm instead of for benefit. MAX FEES if you are still working in the mortgage industry your time is coming; if you’re not good riddance - I hope karma kicks your ass.

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Tracking Santa Clara County, California

Population 2006: 1.77 million
1/02/2006 Listing per population ratio 1:708
8/17/2006 Listing per population ratio 1:335

01/2006: 2,838 (1,486)___01/2005: (1,862)
02/2006: 2,921 (1,776)___02/2005: (1,882)
03/2006: 3,353 (2,632)___03/2005: (2,823)
04/2006: 3,734 (2,424)___04/2005: (2,830)
05/2006: 4,259 (2,496)___05/2005: (2,838)
06/2006: 4,835 (2,763)___06/2005: (3,220)
07/2006: 5,200 (2,059)___07/2005: (2,764)
08/2006: 5,183 (2,252)___08/2005: (2,832)
09/2006: 5,412 (1,867)___09/2005: 3,500 (2,689)
10/2006: 5,039 (1,971)___10/2005: 3,750 (2,557)
11/2006: 4,402 (1,846)___11/2005: 3,403 (2,394)
12/2006: 3,431 (1,908)___12/2005: 2,638 (2,305)

Population 2007: 1.81 million
01/01/2007 Listing per population ratio 1:548
06/10/2007 Listing per population ratio 1:243

01/01: 3,229
01/31: 3,575 (1,606)___02/2006: 2,838 (1618)
02/28: 3,774 (1,654)___02/2006: 2,921 (1,776)
03/31: 4,498 (2,052)___03/2006: 3,353 (2,632)
04/30: 5,184 (2,009)___04/2006: 3,734 (2,424)
05/31: 5,866 (2,179)___05/2006: 4,259 (2,496)
06/30: 6,234 (2,163)___06/2006: 4,835 (2,763)
07/31: 6,426 (1,910)___07/2006: 5,200 (2,059)
08/31: 7,053 (1,908)___08/2006: 5,183 (2,252)
09/30: 7,436
10/31: 7,400

-courtesy of ziprealty.com and DataQuick News

The Canadian dollar - aka the “Loonie” has recently achieved parity with the US dollar for the first time in over 30 years. It’s getting a little tiring to keep providing all these anecdotal comparisons to the 70’s period of stagflation, but you can add this one to the pile. No offense to my Canadian friends, but this situation is Loonie.

And to make it worse, my favorite Canadian couple told me this story today:

Andy and Sharon visited the Washington coastline this past week and were short on greenbacks when they came across an historic lighthouse they wanted to visit. Apparently, the fee was $2.50 USD per person and they asked whether the cashier would accept Canadian dollars. Not only was the answer no, but the American cashier had no clue what the exchange rate was. Remember - Washington state is very close to Canada so it’s not like it is unreasonable to expect we might get a few Canadian tourists there. But no, it was just too confusing. One more thing, Andy and Sharon offered to pay $10 (CAD) in which case the lighthouse would have made a 100% profit over a couple paying with greenbacks. So how much did the lighthouse operator make from Andy and Sharon? Zero.

Okay - so it’s just a little story. But we need to start thinking a little more about our pompous attitudes in this country. If you’ve ever traveled abroad and in Canada or Mexico for that matter, it’s always been easy to pay for things in US dollars. In fact, you can visit many countries around the globe and slip them a buck and they are happy to take it. But when it comes to our merchants having enough sense to do it, it’s beneath us to even take the time to come up with a policy, even if we are located near to Canada.

It’s a bit funny actually. I can still remember feeling like I was ripped off as a kid when I got a Canadian coin as change. The dime looked like a dime, but it was not worth a dime. Same with the nickels, pennies and quarters. Too bad I didn’t hold onto those coins, they would actually be worth more today than my own currency.

Our currency is in trouble and the Fed’s actions are making it worse. But that is a complex topic being handled by complex people and I am but a simple person looking at small stories about lighthouse tours. Sorry, but I feel like I am in a Loonie Bin.

So, as promised, the website is back up and everything seems to be functional.  I got cash out of an atm and everything.  I’m still going to be watching my billpay stuff pretty closely.  I don’t need any late fees, but I don’t want to pay it again with a check or another account and have both go through.

If you missed my piece about Shutterfly (sfly) in the weekend edition of the Wall Street Journal, you can read it here on MarketWatch. The grabber, for me, was the percent of revenue derived from shipping costs, which themselves turn a profit. Shipping charges as a profit center? Who knew?

Promoting Work: Implications of Raising Social Security's Early Retirement Age

by John A. Turner WOB#12

Introduction

Preparing for retirement is becoming more challenging for today’s workers as traditional sources of income, such as Social Security and employer-sponsored pensions, are declining while life expectancy and health care costs are rising. One powerful antidote to income shortfalls in retirement is working longer. But many analysts believe that the availability of early Social Security benefits at age 62 induces many workers to leave the labor force at or near that time. In fact, over 50 percent of both men and women do claim Social Security at 62 and the average retirement age is 63 for men and 62 for women. Therefore, raising Social Security’s Early Eligibility Age (EEA) could encourage many to work longer.

This brief addresses the question of whether today’s workers would be able to work longer without undue hardship if the EEA were raised. Answering this question requires exploring trends in both the health of older workers and the nature of jobs. In examining these areas, the brief focuses in particular on economically vulnerable groups — women and minorities.

A quick assessment by my not quite up-to date entries in Quicken indicate a networth very close to $717.5k - excluding $5k in expense on the company credit card.

My currently projected year end n/w is $709.5k, anticipating a $10k tax expense before year end. In October I'll need to pre-test my tax returns to see what I'll actually owe. It should be interesting as Big Company tries to equalize local state tax obligations. Apparently they will help pay for accounting services to address this. I wonder how it will really work.

It's about $30k more than I had expected before our relocation to Chicago. I suspect the following items to have contributed:

1. delayed decorating expenditures - the sellers left their window treatments behind
2. delayed purchase of furniture - we bought less expensive family room furniture and have delayed purchasing anything new for our living room, master bedroom, kitchen and finished basement.
3. we have delayed wiring the house for ethernet, except for a connection to the kitchen.

We have made some additional expenses, unplanned for:

1. outside decorative lighting and outside electrical sockets - about $600.
2. extended natural gas for outside bbq / grill - included in basement estimates.
3. extensive basement waterproofing - we had foundation cracks filled - some were behind finished walls - expensive to fix. The waterproofing work seems to have held well - about $3000 (high estimate).
4. family visits and unexpected travel - about $1600.
5. swimming pool repair and larger than expected maintenance expenses - about $1600.
6. repair of our roof - about $3,600.

Another interesting tax obligation will be relocation reimbursement. Some of my reimbursements, such as association fees are taxable, but big company is supposed to gross up for those. Once again, I wonder how it really works.

I expect another $3000 - $4000 in expenses to refurnish my office and purchase bookshelves for our extensive collection. I anticipate my office becoming something of a family library. Only $1500 or so is included in our projected cash flow. We'll see how things work out by year end.

As to thoughts on end of year projections:

a. They don't included September interest payments.
b. They don't include projected interest payments.
c. They exclude any forcasted market performance.
d. They estimate an outstanding tax obligation.
e. They assume I'll manage to remain employed - my performance has been exemplory year to date, but my immediate leadership has changed, one wonders if they'll appreciate or feel threatened by what has happened.
f. They assume I won't break down and buy several flat screen TVs - something I'm dying to get, but feel too uncomfortable doing.

Until we either sell the old house or receive raises, our overall cash flow is about -$1500 per month. This is extremely distressing to me. The thought perhaps limits our interest in home improvements and certainly inhibits our planned investments. My wife's contract does provide for an automatic raise, which would cover this gap, however, we'd have to wait a year for it to effectuate. We certainly have the cash to weather the difference, however, I'm hoping my employers recognize a shred of my contribution and give me a reasonable raise - I am skeptical - I fear political obfuscation will lead to others successfully claiming credit for my accomplishments. If this happens, I will look elsewhere.

One thing to note, we were very successful in increasing our investments this year - mostly due to savings: maxing out our 401k contributions, plus a nice match from my wife's employer +$40k; extra cash invested +25k. About 12% return on investments (estimated), put us at over $516k in invested assets.

I still have to correctly enter our real estate transactions into quicken as well as my wife's 401k roll-over. I'm not sure there should be a significant difference, but we'll find out soon enough.

Regards, makingourway

Guest post from Greg, a regular contributor. Bio at bottom.

Your Source Feed, http://www.hustlermoneyblog.com/?feed=rss2, is now working fine. Carry on! We will let you know if anything bad happens in the future.

As a group, the stocks held this year have an average loss of 3.1% through the first three quarters of 2007. That compares to the S&P 500 being up 7.6% for the same time period, according to WSJ.com. For reasons stated previously, I am now factoring in dividends and returns of capital to shareholders in my results. I don’t believe the S&P 500 result reported on WSJ.com includes dividends.

Here’s how each of the holdings covered on Controlled Greed.com have performed so far this year.

BCE Inc. +48.1%

Fairfax Financial +23.6%

General Motors +21.9%

Nikko Cordial ADR +10.6%

Walter Industries/Mueller Water Products Class B +7.8%

Molson Coors Class B +7.7%

Liberty Media (Liberty Capital/Liberty Interactive) +7.3%

Deckers Outdoor +6.1%

3i Group +5.9%

CBS Class B +3.1%

DirecTV Group -2.6%

ArmorGroup International -11.3%

Comcast Class A Special -14.2%

Mueller Water Products Series A -16.4%

USA Mobility -18.8%

Media General Class A -24.1%

Foot Locker Inc. -26.6%

Aiful Corp. ADR -39.4%

Takefuji Corp. -47.1%

The stock picks averaged +9.95% at the end of the second quarter. To go from that to -3.1% means the last quarter was brutal. My last two stock picks -- Aiful and Foot Locker -- took no time at all to achieve double-digit declines after being purchased. Takefuji has seen the bottom fall out this year. And with Media General, USA Mobility and Mueller Water the hits just kept on coming.

Battered and bruised, I remain cautiously optimistic (taking the long-term view) and wait to see what the rest of the year has in store.

Two busy professionals seldom have time for a formal sit down dinner, occasionally, we, as a family, will go out for a special treat.
This week we chose the melting pot.
I have to say it wasn't bad. I liked it, but didn't quite fit into the gourmet experience I had while visiting New York so long ago.
Most importantly, i was quite suprised by the actual cost.
Four adults and two toddlers spent $130, however that was having no alcohol and full meals ONLY for two. In other words, four of us were able to eat somewhat sparingly for the price of two, however,the real price should have been $260 for 4. That's amazingly expensive for a strip mall restuarant, at least for fondue!!!
I did learn one important lesson.
Never take toddlers to a restuarant where they'll be waiving sharp long tined forks in their and everyone else's faces!
Between the boiling hot oil, bubbling broth and on table burners I couldn't rest a moment. Ruined my appetite. I love them so - I love my own eyes as well - nearly lost one between the bread and apple dippings.
My wife and I need to rething where to eat with the kids.
Suprising Beni Hana - heated table included - seems to work better - perhaps it's the flying shrimp!

Regards, makingourway

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Two checks came in within the last week in relation to our Chevrolet Malibu that we sold in August:

1. A check for $818 from the GM Protection Plan extended warranty. We purchased this extended warranty for about $1,400 new, before we knew that we could just get it when we needed it near the end of the regular warranty. As a side note, I also have an extended warranty on my Honda Ridgeline, but I get a full refund if I cancel as long as I never use it.
2. A check for $297.50 from the GAP insurance. When we bought the Malibu, we rolled in a wad of negative equity, so we paid $500 for GAP insurance. GAP insurance covers the balance between what the insurer pays and what you owe on the loan in the case of a total loss claim on the vehicle.

While I knew I could claim a refund when I canceled the extended warranty (the new owner couldn’t afford to buy it), I didn’t know I could get a refund on the GAP insurance. Luckily, when I went into the dealer to cancel the warranty, I happened to ask about a refund for the GAP, and sure enough I could get one. The second surprise came when I opened the mail today and saw a check for a good bit more than I was expecting.

This $1,115.50 plus the $10,500 from the sale of the Malibu will go towards Stacie’s next vehicle. More to come on this Tuesday.

Free Money! Get $250 or 25,000 rewards points from American Express Gold Card. (Anyone can apply)

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Tim Duy is looking for clear signals about the Fed's next move and having trouble finding them:

The Fed's Next Move, by Tim Duy: Although the last FOMC statement did not commit the Fed to a policy direction, market participants expect Bernanke & Co. to keep cutting right through the New Year. With the stage set for the FOMC to increasingly discount inflation concerns as the housing market worsens, it is difficult to argue against that expectation. Of course, a labor report stands between us and the next meeting - but will it be enough to draw attention away from housing?

The case for additional rate cuts appears to revolve on the direction of housing and inflation at this point. Regarding the former, return to the most recent FOMC statement:

Economic growth was moderate during the first half of the year, but the tightening of credit conditions has the potential to intensify the housing correction and to restrain economic growth more generally. Today's action is intended to help forestall some of the adverse effects on the broader economy that might otherwise arise from the disruptions in financial markets and to promote moderate growth over time.

Should we be concerned then about housing or financial conditions? What if housing continues to collapse in the months ahead despite loosening credit conditions? For now, I think it is best to assume that the Fed, or a majority of policymakers, is no longer confident it can disentangle housing from financial markets. Consequently, I expect that housing activity will play a significant role in the Fed's forecast.

And that view of the economy is dismal, to say the least. I won't go into the details of recent housing data, leaving that to others such as Jim Hamilton and Calculated Risk. The upshot is that the situation continues to deteriorate, and it is likely that we are only seeing the beginning of significant price declines. Moreover, Fed rate cuts are highly unlikely to offer any support to housing; at best, the Fed can soften the impact of a declining housing market. Bubbles cannot be recreated. Like all bubbles, this one was based on the expectation that housing prices always rise. With that delusion shredded, the speculators are in the wind.

Regarding inflation, the official numbers are cutting in the Fed’s direction. Friday's report on PCE is really cut and dry. Core-PCE posted three consecutive 0.1% gains, pulling the 3-month annualized rate to just 1.5% and the year-over-year rate to 1.8%. True, core-CPI is running at a 2.5% rate over the past 3 months, but, until we hear differently, the Fed prefers the PCE measure.

Housing down, inflation down. Given the Fed's recent behavior, case closed. More rate cuts are coming.

What could then forestall those rate cuts?

Presumably stronger than anticipated growth, but that presumes that the data between now and October 30/31 is read at face value and not pre-turmoil, and I think that is a big presumption. For example, the case for housing bleeding into the broader economy is based on a significant wealth effect that drives consumer spending into the ground. In contrast, look at the strong showing of the consumer in August, with real personal consumption expenditures up 0.6% for month. Even if consumption is flat in September, the quarterly gain will be 3.2% annualized. 3.2% is nothing to sneeze at.

But, as I said, this is pre-turmoil, so my expectation is that the Fed will discount the figure. Can the same be said for initial unemployment claims? Claims have trended downward since the 50bp rate cut, suggesting that the fears of a broad labor market deterioration that arose after the August read on nonfarm payrolls are overstated. That said, if the concern is the impact of the housing market, then that impact will only be felt in the future, and thus so will the employment impact. Thus, there is a risk that any rebound in September's employment report would be discounted; I suspect that it would take a strong report, over 150k gain, to offset the housing uncertainty.

You get the idea; if the Fed is focused on the housing-consumer-credit market story, the continuing downtrend in housing, and the uncertainty it creates in the forecast, appears sufficient by itself to justify additional rate cuts, especially with inflation sliding.

But is the inflation outlook really all that pretty? Aren't we supposed to be worried about future inflation, not past inflation? And what about those hawkish comments from bank presidents? From Bloomberg:

Poole followed other Fed bank presidents in suggesting that additional interest rate cuts aren't a foregone conclusion. Federal Reserve Bank of Atlanta President Dennis Lockhart said today he had an ''open mind.'' Earlier this week, Philadelphia Fed President Charles Plosser warned that the Fed's Sept. 18 rate cut risks accelerating inflation, and Dallas Fed President Richard Fisher said rates could be lowered or raised as needed.

I so want to pay attention, but my current temptation is to toss out hawkish commentary by bank presidents as essentially out of touch with the Board. This comment on these four is likely right on the money:

''They all have basically zeroed in on the financial market dimension of this rather than the housing spillover dimension,'' said Michael Feroli, a JPMorgan Chase & Co. economist in New York who used to work at the Fed. ''There definitely is a faction, and they are a minority, but they are not trivial.''

Maybe not trivial, but I have already been fooled once on this front, and, in any event, inflation warnings are simply nonsensical after a 50bp cut. Indeed, given the steepening of the yield curve, the fire sale on the Greenback, and the surge in commodity prices, clearly market participants are not giving much weight to such inflation babble.

And if you are worried about future inflation, you likely focus on just those things - oil, gold, Dollar, etc. The Fed, however, looks ready to downplay each and every one of these inflation indicators. On oil, from Fed Governor Frederic Mishkin's March 23 speech:

My view--that recent changes in inflation dynamics result primarily from better-anchored inflation expectations and not from structural change or simply the achievement of a persistent low rate of inflation--implies some very good news: Potentially inflationary shocks, like a sharp rise in energy prices, are less likely to spill over into expected and actual core inflation. Therefore, the Fed does not have to respond as aggressively as would be necessary if inflation expectations were unanchored, as they were during the Great Inflation era.

On exchange rates, from the same speech:

In contrast, unpublished empirical work by the staff at the Federal Reserve Board suggests that, once we take the rising share of imports into account, the influence of import prices on core inflation in the United States has not changed much in the context of reduced-form forecasting models.⁶ At the same time, the influence of exchange rate movements on import prices--the so-called pass-through effect--may have fallen substantially, at least according to some studies.⁷ If so, then the influence of exchange rate fluctuations on domestic inflation may now be less than it once was, when one controls for changes in the volume of our foreign trade.

Both of which imply that at least, Mishkin, and I suspect much of the Board, is significantly less worried about the Dollar, commodity prices, Chinese inflation, etc. than the inflation pessimists.

For my part, I am concerned that the Fed appears to have written off the dollar. My concern stems from rising international tensions - the Fed is dumping additional liquidity into the system at a time when most central banks are attempting to turn off the faucet. The Fed is implicitly, if not explicitly, relying on countries with fixed exchange rates to absorb that additional liquidity at the cost of inflation in those economies. Moreover, those economies with floating rates become the anti-Dollar bets, forcing the Euro area, Canada, the UK, etc, to be the deflationary counterweights to the inflationary US policy.

Is it a surprise that the ECB is under pressure to support the Euro with a rate cut? The only surprise is that there is not more chatter about an ECB intervention if only to erase the idea buying the Euro is a one way bet.

In my darker moments, I fear that the Fed is forcing their foreign counterparts down one of two paths - either central banks with appreciating currencies throw in the towel and match Fed rate cuts, thereby unleashing a fresh wave of global liquidity, or central banks with fixed exchange rate finally decide that they can no longer bear the inflationary cost of supporting the US current account deficit.

Adding to my concerns is that the Fed is overestimating the downside risk to the economy. Certainly, the past correlation between housing downturns and recessions is nothing to ignore. But too many indicators are not consistent with a recession for me to be embrace a dark outlook. Why are initial unemployment claims flat? Why does the consumer appear to have momentum in the 3Q07? Why are readings on manufacturing activity not solidly on the decline? Why did the inventory to sales ratio slide back to its lows? Why does the Baltic Dry Index continue to reach new highs? Why isn't faltering demand undercutting support for oil prices?

Bottom Line: The housing down / inflation down data flow gives the Fed room to continue cutting on the basis of forecast uncertainty. Presumably, strong data would undermine the case for additional cuts, leaving me wary of blow out ISM and employment reports. There is a risk that the Fed did intend the September move to be a "one and done" action, but unless they want to get into the habit of surprising financial markets, they need to make that clear - or the data need to be strong enough to do it for them.

Agree or disagree, Tim would appreciate your comments.

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Here are some of my favorite FiveCentNickel (subscribe) posts from a year ago this week:

» Save on Medical Care - Part I
» Saving Money: Focus on Big or Small Items?
» Save on Medical Care - Part II
» Save on Medical Care - Part III

And here’s what was going on two years ago:

» Buying a New Car, Part III
» Buying a New Car, Part IV (Epilogue)
» Accuracy of EPA Gas Mileage Estimates
» Buying a New Car: This Year or Next?

Finally, this is what was happening over at Raising4Boys (subscribe) last year:

» Overscheduled Parents
» Nintendo Wii - Another Hot Christmas Buy - Looks like this will be hot again this year.
» Birthday Party for a Nine Year Old

Check it out: HSBC Direct Online Savings - Earn 5.05% APY, FDIC insured.

Indy Mac is one of the market leaders in Alt-A Lending (stated income, low down payment, jumbo). I received an e-mail from IndyMac on Thursday: Indymac® is pleased to announce the return of our Alt A Jumbo product offering, now expanded with additional guideline flexibilities for your customers. Features: Loans to $2,000,000 Up to 95% LTV to $500,000 Full Doc, Stated Income, No Ratio and NINA documentation types1 Purchase, Rate and Term, and Cash Out Refinance Primary Residence, Second Homes and Investment Properties Borrower paid and lender insured MI options Wait, that's not all! Downey Savings is offering us a one year ARM, up to $1.5 million at 5.0%. They also allow us to refinance properties with no seasoning. This means that they will use the appraised value as recently as one day after the close of escrow. The crisis isn't over but we can see that the industry leaders...

Everything’s out the window. Tomorrow’s one game. Everything in the last two weeks is in the past and now we’ve got to focus on beating the Padres for a chance to go to the playoffs.
Matt Holliday of the Colorado Rockies, on tomorrow’s one game playoff against the Padres

Past Quotes Entirely Relevant to Investing

I was talking to a person recently on how one of his friends has created a successful business that generates five to six figures a year by selling toys/figures. He simply did it as a side project before since he had a lot of passion for it and surprisingly it has ballooned into a non stop business which he now does full time.

You hear this a lot I’m sure, but it really does start by doing something that you are passionate about because at the end of the day it can’t simply be about the money. It is too easy to lose motivation just basing it on money as well. You can easily start small like most people. It can definitely be great from a lifestyle point of view too as it doesn’t feel like work.

Ben Stein has Felix Salmon so upset that he has lost track of what month it is. I have to admit that I didn't actually read Stein's column, and still haven't, thereby avoiding a similar fate:

Ben Stein Watch: October 30, 2007, by Felix Salmon: I'm a uniter, not a divider. I'm a lover, not a fighter. I don't like to engage in the politics of personal destruction. But as Jonathan Landman might say, we have to stop Ben Stein from writing for the Times. Right now. And so, by popular demand, the first weekly Ben Stein Watch.

Stein uses his column this week to ask a question: "Is It Responsible to Shun Military Contractors?". Stein is a believer that investing isn't just about money:

I certainly believe in socially responsible investing for myself. I sold my tobacco shares long ago. (They have done fantastically well since then, but I don't regret my decision.)

Unfortunately, Stein doesn't tell us why he sold his tobacco shares. So we're going to just have to take a wild guess: maybe it's because cigarettes kill people?

Yet somehow Stein just can't comprehend why some socially responsible investors don't want to invest in arms manufacturers. "I don't understand this whole attitude," he writes. "Maybe someone can explain it to me."

Here, Ben, let me try, in words of one syllable:

Guns and bombs kill people.

Oh, damn, "people" is two syllables.

But let me rewind, to the very first sentence of Stein's column:

Henry Blodget should have started out as a writer.

I might point Stein to the second sentence of Blodget's wikipedia page:

Blodget received a Bachelor of Arts degree from Yale University and began his career as a freelance journalist and was a proofreader for Harper's Magazine.

Sigh....

Stein finishes up his column seemingly asking the SEC to regulate everything that absolutely anybody might conceivably invest in. He doesn't claim that this massive expansion of regulatory responsibilities would do any good, mind you; he just ends his column, cryptically enough, by saying that "the ladder of law should have no top and no bottom." It's a Bob Dylan lyric which Stein obviously loves, since this is the second time this year he's trundled it out.

So here's my idea. Since Stein clearly isn't being featured in the business section on the grounds of his economic expertise, he's obviously got this gig on the grounds of his celebrity status. Maybe the Times has no desire to replace Stein with someone (like DeLong, say) who actually knows what he's talking about - what they want is a writer who's vaguely familiar with economic concepts but who's also something of a household name. My suggestion: Bob Dylan.