If it Walks like a Duck... Run the other Way

I don't pretend to be the smartest person in the room.

But I can define "credit default swap" and it's kissing cousin "credit derivative" in a single, one-syllable, word:

Bull.

When Wall Street gets cute, it's time to lock up your piggy bank and keep your hands in your pockets.

Why?  Because Wall Street and the "too big to fail" banks are practicing New Math.  You remember New Math???  Tom Lehrer, an MIT math professor, wrote/sang a satiric ditty about it. 

http://www.youtube.com/watch?v=8wHDn8LDks8

Mae West had her own take on New Math.  "One and one is two, and two and two is four, and five will get you ten if you know how to work it." (wink)

Honey, if they can't make it work for themselves -- may I say $2 billion loss? -- how are they gonna make it work for you?   They're not.  You are the least of their worries.

I find it interesting how many times the word "bet" has been used recently in the financial press describing the $2 billion loss.  Bet?  You bet on horses, you bet in a casino.  The truth is finally out.  Wall Street does not practice an exact science.  It bets.  And then it hedges its bets.  If you play blackjack, you know what that's about.  It's called "buying insurance."  Asking for a mulligan if the bet goes sour.  A do-over at someone else's expense.  Guess what?  You lose both times.  First in the original investment (bet) if your money is at stake, and secondly if you own stock in the insurance company that covered the bet.  

I don't think any of us want to keep our money under our mattresses, but it may be the safest place.  When Wall Street sings its siren song, stick your fingers in your ears and sing along with Tom.   

Penny Pincher

Life is a Trade-Off

Are you in sticker shock over prices at the gas pump?

You're not alone!

Remember the good old days when gas stations actually gave premiums with purchase?  And the price per gallon could be measured in cents not dollars?

In my budget gas and groceries are lumped together.  I have X dollars for what I call my "allowance" which must cover gas, groceries, incidentals, sundries, you name it.  When the price of gas goes UP, what remains for groceries etc goes DOWN.  Yet when I walk into the supermarket the cost of fuel has adversely affected the cost of groceries.  For example: a 12-pack of Diet Coke that was $3.99 two months ago is now $4.88.  Uh-huh.  So, I have less to spend for groceries, but groceries cost more so the cart is emptier when I get to the checkout.

It's obvious trade-offs are in order.

-- Make your own.  I've started making my own pizza -- at home, from scratch, including the crust -- and the first attempt was swoon-worthy.  I'll never go back to take-out or frozen again.  Cheap and cheerful pizza.   Recipe on request.

-- If a 6 pound bag of boneless, skinless chicken breasts is $19.99 and a 6 pound bag of boneless, skinless chicken thighs is $14.99, guess which one I'm buying now?

-- Salads are good for you!  And cheap and cheerful.  I have a salad every night before dinner... romaine, celery, radishes, green onion, green pepper, parsley, home grown basil fresh picked from my container garden, topped with grated parmesan, a squeeze of fresh lime, and a dash of extra virgin olive oil.

-- Baked potatoes.  I've made a baked potato a weekend dinner entree.   Toppings range from chili to chicken ala king to sausage gravy.   Or butter, pepper, green onions, parmesan cheese with a dollop of sour cream.

-- Brown bagging it to work.  I've taken my lunch to work for so long I can't remember when I didn't.

How has the rising cost of fuel affected YOUR wallet?  What trade-offs have YOU made?

Penny Pincher

Summertime and the living is ....???

It's already HOT where I am and the fans are back on... I'm grateful for the a/c in my office, and equally grateful I don't have to pay the office power bill.  I was thinking about having a tankless water heater installed -- 3 years of tepid/chilly showers are enough of an endurance test -- but in summer a tepid shower is a cooling off treat, so will put off that expense until fall.

Living for 3 months without power after a hurricane taught me a few lessons on keeping cool.

#1 - the illusion of cool is almost as good as cool itself

Cool colors help... I'm about to switch out bed linens to very cool appearing blue/green sheets... looking like a refreshing pond.

Pictures of COLD things... after the hurricane we taped pictures of COLD things all around the office.  Polar bears on ice floes, refrigerators, ice bergs.  You get the idea.

#2 - cheap and cheerful treats

Iced tea... I'm a year 'round iced tea drinker.  Fridge tea - 2 family sized tea bags in a 2 quart pitcher of water, stuck in the fridge to brew.   Don't need the sun for this.   Because I drink so much of it, I have a second quart bottle full of already brewed tea that I pour from.

Popsicles!  A couple of years ago I bought a simple popsicle maker for about $2.00.... a six-section mold with 6 reusable plastic sticks.  I use a single-serving sugar-free mix - one of those little packets made to flavor a 16 to 20 oz bottle of water - and pour it in my mold.  Okay, it's like sucking on a big flavored ice cube... but it's one way to beat the heat and the cost is minimal.

What are YOUR cheap and cheerful ways to beat the heat??

Penny Pincher