Do this today : back up your financial data

Posted by Tad Johnson - Apr 30th, 2008 at 20:04

You have strong passwords on all your financial accounts. (Right?)

You have an emergency cash account that you could access in an emergency. (Right?)

You have car insurance and/or renter’s insurance. (Right?)

But, do you have copies of your important financial data? Sure you can access everything online, but it’s a whole lot easier to consolidate everything in one place. Take ten minutes out of your day tomorrow and do this:

  • Make scans of all the cards in your wallet (front and back). Store it as a .pdf or .jpg somewhere secure (like in your gmail account).
  • Write down all your important contacts & account numbers for your banking/investment accounts. Store it securely online.
  • Get $100 from the ATM and hide it somewhere in your house (hey, you never know).

With these three simple steps, you’re preparing for the worst possible situation. Hopefully, you’ll never have to access your “backups” but if you ever do, you’ll thank yourself big time.

Save 17 cents per gallon

Posted by Tad Johnson - Apr 15th, 2008 at 22:04

You may have detected a theme as of late : gasoline is getting really expensive. On these pages, I’ve offered a silver lining to the escalating costs as well as some ideas to keep the costs down. Here’s another that fits into the latter category.

Get a credit card that offers at least a 5% rebate on gasoline purchases.

These come in a few shapes & sizes. Some are co-branded by a particular oil company (I carry a BP Visa card) while others are more generic (all the majors offer some flavor of gas rebate cards). Since gas is in many ways a fixed, recurring expense (assuming your driving patterns don’t vary too wildly) it makes sense to take advantage of these rebate offers. At $3.50/gallon, a 5% rebate is like saving 17 cents per gallon. Not bad!

As with any credit card rewards program, be sure that you don’t carry a balance month to month. These cards generally charge a higher interest rate to support their rebate offers, so a few months with a balance could easily wipe out a year’s worth of rebates.

http://www.rewardscards.com/gas-rebate-cards-ranked.asp

Gas Rebate Cards ranked via kwout

Leverage in a Global Economy

Posted by T.W. Hanson - Apr 2nd, 2008 at 20:04

 earth

The New York Times devoted an entire section of today’s paper to living in a leveraged world.  The potential problems of this reality are small compared to global climate change, but they are much larger than the current U.S. housing crisis.

This is a must read for vicenarians interested in how money, markets and the global economy functions.

Leveraged Planet

A Market Bubble Collapses: The Slow Motion Train Wreck Version

Posted by T.W. Hanson - Mar 16th, 2008 at 20:03

train wreck

Vicenarians don’t have much practical experience with the troughs in the business cycle. There was the savings and loan crisis in the late 80s and early 90s, but many of us were learning how to read during those years. The Internet/.com bubble collapse of 2000 is our primary frame of reference for distressful economic times. This crisis is appears very different. Although characteristics like increased unemployment seem to reappear each cycle, there are rarely perfect parallels from one downturn to another. One of the macro differences is the speed. The rate at which this credit markets are contracting is much slower than the rapid implosion of the Internet companies in 2000.

Unlike in 2000, today’s irrationally overvalued assets are homes and properties.  Prices for these assets are sticky.  Most are unique and take weeks, months or years to sell.  One result of this is that the securities tied to the value of these properties have fallen at a similarly and painfully slow pace.  Write downs of assets on bank balance sheets haven’t occurred all at one but have been stretched from quarter to quarter to quarter.  This is forecast by some to continue for quarters to come.

bubbleDuring the Internet bubble, company values were wiped out overnight.  Equity values disappeared, companies shut down, people and families felt pain and the economy took a hit.  However, it was over in a relatively short period of time.

The industry this is hitting the hardest is slowing down the bleeding even more.  The financial institutions provide and source the capital for all other industries.  Each day they are operating in a weakened state, other businesses and individuals aren’t getting the financings or financing terms that a fully functioning free market would provide.

When will the market recover and economic expansion resume?  When the financial sector reaches a catharsis resulting from both the final write down and the replenishment of tangible assets on their balance sheets.  Don’t hold your breath.

Suing Your Own Client?

Posted by T.W. Hanson - Feb 27th, 2008 at 20:02

lawsuit

Wachovia has filed suit against Providence Equity Partners, one if its clients. It is arguing that by Providence improving the terms of a leveraged buyout of Clear Channel Communications it no longer has an obligation to provide a portion of the financing. They are well within the legal rights to do this and may win. However, what is their motivation?

The terms of the deal improved. Providence’s renegotiation of the buyout makes the financing more palpable to lenders like Wachovia. This is analogous to stopping at a Waffle House, arguing that the bill is to high and refusing to pay after they lower the tab.

This is a PR nightmare for any future Wachovia financings with private equity firms. Providence is large, and this will not go unnoticed by other PE shops.

Appetite for risk at Wachovia has clearly contracted since they orginally agreed to the Clear Channel buyout financing. The big question is what has made them bring in their horns: a greater level of intelligence than at the original time of signing, fear or big trouble in the banking sector.

Powered by WordPress with GimpStyle Theme design by Horacio Bella.
Entries and comments feeds. Valid XHTML and CSS.