More Ways That Airlines Can Charge Passengers

American Airlines has just announced that it will begin charging passengers $15 to check in their baggage. I think a better system would be to charge by weight. You stand on the scale with all your baggage and pay a standard rate based on total weight and distance traveling.

According to Romesh Chander of Bellingham, WA, here are some ideas for
More ways that airlines can make money off passengers:

Toilet usage on the plane -- $5
Issung Ticket -- $5
Issuing Boarding Pass -- $5
Checking Boarding Pass at Gate -- $5

Piolts charge for flying plane -- $20
Copilot's charge for flying plane -- $15

Charge for leaving on time -- $5
Charge for arriving on time -- $5
Charge for arriving in correct city -- $5
Charge for arriving safely -- $5

Unscheduled stop -- $50

Bumpy ride -- $10
Lost luggage -- $10
Finding lost luggage -- $10

Clean plane -- $5

COMPLAINTS/questions (Any kind) -- $20

Fuel surcharge varies
Base ticket rate varies

Tip for Stewards $20% of final bill

Pension plan for executives $10% of final bill

Anybody got any other ideas?

US Economy Going South?

Note: The following post will depress you, unless your sense of humor is based on schadenfreude.

I've been maintaining my belief that we're going to see a pretty bad recession for over a year now. Until very recently, the newspapers were all cheerleadering the economy and how everything was just peachy. Even Ben Stein and other economists said everything's great last November.

CNN Money has started a new featured series called American Money, where everyday Americans recount the financial hardships they're facing in the current economic environment.

Nearly all of them focus on how the real estate meltdown has adversely affected them. A few of them bought a new home thinking that their old home would sell off fast. Unfortunately it didn't and they got burnt (and almost divorced) trying to manage two mortgages. One young man got a subprime loan that resets in a few years, and quite a number of people lost their jobs or found jobs that paid a lot less than what they were used to.

One family has a daughter who's ready for college but they've blown through their savings and can no longer afford to put her through college. Another mom has used up all her savings, 401k and even her kids college education 529 plan in her efforts to stay afloat.

One 62 year old had been in the mortgage business for 20 years has been reduced to working as a store clerk and part-time surfing instructor to get by. He's even managed to ruin his credit by co-signing a home loan for his son, who's in a similar situation. He's also managed to run up $35,000 in debt. I doubt he'll be able to pay it off on his minimum wage jobs and he seems to think the same way. He's decided he's going to just walk away from all his debts.

There are currently nearly a dozen stories of financial hardship with people using their credit cards, and maybe even payday loans just to pay the rent and put food on the table. I read it and really felt quite depressed. There was also a family that felt spending $250 a month on gas for the commute was breaking their budget.

In fact an underlying theme I caught here and there was that gas prices were too high and aggravating their misfortunes. If you don't have an extra $150 a month and its breaking your budget, that's really sad. You really need to cut back on all your expenses and/or move to a cheaper place.

Hopefully, the government will channel some of the $3 billion/week its spending on Iraq towards creating real employment in the US.

Can't Stop Global Warming!

From the Yahoo message boards for James River Coal Company (JRCC), which I had sold some naked puts on a few months ago, by some poster named Ross_Perot4President

I just farted a real loud wet one.....I just contributed to global warming....

Whoops, I just barbecued some ribs.....more global warming...

I just opened up a beer (i.e. a carbonated beverage), I just contributed to global warming.

I just let out a big friggin belch (methane gas -- holy @#$%, I just killed a tribe of pygmies tied to global warming)

I turned on the faucet to run water, the water treatment plant runs a generator which emits carbon fumes.....

I just turned on the lights which in turn comes from the electricity plants which spew carbon stuff

I just watched that Fat Bitch Rosie ODonnell on TV, her Fat mouth just spews greenhouse emmissions as well as rancid spew

I just watched Hillary Clinton on TV, the clothes she wears come from farm animals which intoxicate the atmosphere with methane gas and toxic emmissions, and her face comes from Satan's bunghole.

I guess its safe to say anything you do in American life spews some form of carbon dioxide. Maybe if we stop killing the rain forest and stop ugly people from breeding we can stop carbon from spewing onto the planetary surface

Until then, I will burp, fart, barbecue, run my water, heat my house, use electricity, and hate stupid liberals who think they know what's best for me -- they can shove it up their methane spewing asses.

Of course, if you're Al Gore, you might think you can solve the problem by taxing various businesses. Of course, Al Gore doesn't want to solve the issue, he only wants to profit from it.

American's Better Off Than Ever Before? Yeah Right!

Prof. Perry of economics at the school of Management, University of Michigan has an interesting blog on economics called Carpe Diem, which roughly translated means seize the day. In a recent post, he claims "that despite what many people think, our standard of living is higher now than ever before".

The evidence he cites is that we're spending less on food, clothing and shelter than in 1901, and we're spending less than citizens of "developing countries" like India or China.

We might have a better standard of living than someone in India, a country where nearly 30% of the population currently lives in poverty. Thats nearly 400 million people or MORE than the US's entire population!!!! How is that comparison relevant? Don't we measure up to the Canadians, British, French, Swiss, Australian, German or Japanese that we have to resort to comparing ourselves to countries that were either socialist or communist-dictatorships for the past several decades. (Incidentally, India has the only democratically elected communist-party in the world).

Also, I would be highly skeptical of anything the Federal Reserve publishes. Their assertion that the average person spends 18% of their income of housing sounds too small. I think the average person in the US spends about 25-30% on housing (although houses have become bigger and much more comfortable from 1901!).

And another factor to consider is that the average family had only 1 working member in 1901 - the male head of household.

Today you have most family with 2 income earners. So two people are now working, but they're not living twice as well.

That doesn't sound like an improvement to me.

However, I do agree on thing, we most undoubted have a better standard of living of anyone who lived in 1901, even maybe robber barons. But I don't think we're living better than ever before.

I think the late 1950s was when Americans were the richest. That was when we had a lot of manufacturing jobs and the government wasn't wasting money on fighting wars in remote places. And the dollar was backed by a precious metal, not just an empty promise.

Video: Cramer Frothing At The Mouth

Here's an interesting video of Jim Cramer imploring Ben Bernanke to stick his head out of the Fed window and see whats happening in the markets. Pretty amazing for a 52 year old man to get so worked up over a lousy rate hike. I think he might be losing it!






I wouldn't be surprized if he had an stroke on tv one of these days! Not sure what he was implying when he said that "they" called him off the air imploring him to do something. Were these people he's referring to bond managers or hedge fund managers? And what is he supposed to do? Call his buddies in the white house or the Fed office and convince them to cut rates? Or was this spectacle it?

Will the Fed cut rates to help the economy?

I think they will pretty soon, but that will weaken the dollar even further (and hopefully strenghten gold). But atleast all those people who couldn't afford to buy their homes without super-low rates and ultra-lax lending criteria and who are now faced with losing them will be able to continue the farce a little longer.

What do you guys think?

DOW 14,000 - All Time High

The broke the 14,000 level today. Despite Bear Stearns warning that their subprime mortgage hedge fund was worthless and Ben Bernanke stating that the subprime related losses would be in the range of $100 Billion the market was up! It just shrugged off the bad news and went on its merry way.

Interestingly, regarding Bear Stearns, Bloomberg reports "It was Bear Stearns, the biggest broker to hedge funds, that nine years ago declined to join 14 other investment banks in the bailout of Long-Term Capital Management LP. Then last week, as New York-based Bear Stearns pleaded for help to rescue two of its hedge funds teetering on the brink of collapse, many of the same firms refused to come to its aid". If you've never heard of Long Term Capital Management, I suggest you read the very interesting book,
When Genius Failed: The rise and fall of LTCM. It was basically a hedge fund started by some Nobel prize winners that ended up in smoke.

Going back to the stock market, when the market ignores terrible news and goes up, its usually a sign that the market is very bullish and will continue for a while. Consider that many companies are reporting bad earnings, and the stocks are not being punished.

Motorola (MOT) posted a $28 Million loss and the stock is up. Citizens Republic Bank (CRBC) announced its non-performing loans had quadrupled and it took a $20 Million write-off and its stock jumped up too!

Simply amazing.

At least the Dow Transports ($TRAN) is also hitting new highs along with the Dow Industrials ($INDU). If the TRANs had been lagging, the rally would be suspect.

We have a global credit bubble, a housing disaster in slow motion, a subprime mortgage fiasco, hopelessly underfunded government liabilities, an unsustainable trade deficit, negative U.S. savings rates, a collapsing dollar, oil depletion and creeping inflation, and yet the market is going higher!

Oh well, if you can't beat them, join them!

How To Become A Chick Magnet For Under $700

If you're one of those unlucky guys who doesn't have much luck with the ladies, your luck has now changed. You can now become a total babe magnet for less than $1000. All you need to do is buy an Iphone!

According to Cliff Mason of TheStreet.com, its the best $600 he's ever wasted.

As soon as she gets her hands on the thing, the cashier next to her catches sight of it and flashes me a look of what I can only describe as sheer ecstasy before asking if she, too, can take a look. When the two women on either side of me and the one in line behind me realized there was an iPhone owner in their midst, they reacted like I was one of the Beatles, circa 1964.

Maybe I'm embellishing a bit, but not much. It is true that within that five-minute period, more women tried to make more small talk with me than at any time in the last four or five years.

Further, he justifies its high price tag too.

People compare the price of the iPhone to the much lower price of a BlackBerry or a Treo and conclude that the $600 price tag is way too expensive. They're using the wrong comparison. We should be comparing the iPhone with plastic surgery. What's $600 compared to the $6,000 you might pay for a tummy tuck, or the $8,000 many will pay for a face-lift?

So if any of you are looking for a good excuse to buy an Iphone, this is probably the best one. You can read about it in his own words here.

Eight Random Facts About Adventures In Money Making

Super Saver over at My Wealth Builder has tagged me in a new blog project. This project calls for sharing 8 personal facts about myself, then tagging 8 other bloggers to do the same. Here are the rules , which were passed to me:

* Each player must post these rules first.

* Each player starts with eight random facts/habits about themselves.

* People who are tagged need to write on their own blog about their eight things and post these rules.

* At the end of your blog, you need to choose eight people to get tagged and list their names.

* Don’t forget to leave them a comment telling them they’re tagged, and to read your blog.

Eight Random Facts

1. I've lived on 3 different continents for significant amounts of time.

2. Even though I'm an engineer, I hate how gadgets have overtaken our lives. I resisted for years before getting a cellphone.

3. My watch costs more than my first car.

4. I'll probably drive my car until it has 200,000 miles on it. I stubbornly resisted all efforts by my wife to give it to her and get myself a new one.

5. I'm incapable of explaining to a barber(ok, a hair dresser) how I'd like my hair cut.

6. I think at some point in my life I'll move to either Australia or New Zealand and live there for a few years.

7. Thailand is my favorite place in the whole world to vacation.

8. I can't stand people who do stupid things because they're too lazy to do any research.

And finally I'm tagging 8 more bloggers (who hopefully haven't been tagged).

Moomin Valley
Live Learn Invest
Well Heeled: 20 Something Money
The Dividend Guy
The Wealth Junkie
DINKs Finance
The Corner Office
Lazy Man and Money

China Executes FDA Chief

In case you didn't hear, China executed its FDA chief today. The had http://moneyshaker.blogspot.com/2007/05/food-and-drug-chief-gets-death.html>sentenced him to death just over a month ago. And instead of waiting for 10 years to exhaust the appeals, they just killed him and put an end to the story.

In one fell swoop, China just reduced the average life expectancy for its FDA chiefs!


[source: http://www.newstarget.com/021930.html]

Shift Happens

Check out this YouTube video called "Shift Happens". Its a very interesting look at the exponential advancements society is making today.

How Trade Tariffs Hurt The Economy

Since I'm not smart enough to explain how trade tariffs work (or even spell tarrifs), I'll just shameless quote Christopher Hancock from The Penny Sleuth.

We believe trading partners are better off specializing in the good in which they are the low-opportunity cost producer. We believe restrictions on trade decrease the wealth of our country.

We believe tariffs benefit the select few at the expense of the entire economy and its citizens.

Think of it this way…simple example…China produces widgets for Wal-Mart at $20 a widget. American producers can’t do the job for less than $25. So American widget makers may lose their jobs. They plead to Washington, and Washington comes to the rescue. Congress slaps a $10 tariff (tax) on all Chinese imports. Wal-Mart now turns to the American widget producer.

But the retail giant must now pay $25 for each widget they stock. Consequently, they raise the shelf-price for widgets by 25%. Unfortunately, many American consumers simply can’t afford the price increase. Wal-Mart sales drop. The company is forced to cut costs. They lay off 10% of their work force.

The point: The number of jobs protected by import restrictions will be offset by jobs lost in other industries. And to top that, widgets are now more expensive for everyone in the American economy.

It gets better: In response, China decides to slap tariffs on American exports. Now American semiconductor makers can’t sell their products to Chinese computer makers. Sales drop. More jobs are lost.

And here’s where it gets worse: China cleverly cedes to America’s demands. The yuan appreciates 40%. Now every good we consume sporting the “made in China” labels gets noticeably more expensive. And just try buying something that’s not made in China.

Furthermore, China no longer has to keep the yuan from appreciating relative to the dollar. Meaning, China’s dollar demand drops. The fundamental need to buy U.S. Treasuries no longer exists. The dollar falls even further. Investors around the globe now requrire a higher rate of return to hold U.S. dollars. Interest rates rise. The economy slows…and so on…and so on.

There really isn't anything left for me to say (except buy foreign-currency denominated investments)!

How Capitalism Really Works

I was talking to another investor about the BlackStone IPO. He was planning on investing and wanted to know my opinion. My only opinion is that the ticker should have been BS instead of BX!

Why is that? Because its a fraud. The only reason Stephen Schwarzman is taking the company public is because the market is willing to pay much more than the company is worth. The company doesn't make any nor does it really provide any services. Here's an interesting story about what these private-equity firms really do.

The "New Capitalism" is not only more global than the older form, it is also more focused on finance. Imagine a man who makes his living digging ditches. He may hire himself out at a daily rate of, say, $25. The old capitalists would have paid no attention to him - he is just one of millions of small entrepreneurs getting by in life.

But today's financial hustlers will spot the opportunity. Let's take him public, they will say. We'll raise his daily rate to $30...pay him his $25...and the rest will be our "profit." We'll sell shares to the public at a P/E of 20...let's see, 20 x $5 x 250 days per year = $25,000. All of a sudden, the ditch digger has a capital value of $25,000. Then, they borrow $20,000 from a hedge fund...and pay it to themselves for structuring the deal. Now, the hustler has $20,000 in his pocket, the hedge fund has a high-yield bond worth $20,000; the shareholders have $25,000 worth of stock; and the poor man is still digging his ditches.

Then, an even more ambitious wheeler-dealer will come along and decide to "roll up" the whole industry - bringing the ditch diggers together into a multi-national consortium. Now they can all do cross-border transactions...including derivatives. And now ditch-digging is a major business, suitable for large investors...with more investment coverage and a higher P/E ratio. Soon all the world's banks, pension funds, insurance companies, and hedge funds have some of the ditch digging paper - debt or equity - and billions in fees and commissions have been squeezed out of
ditches by the financial industry.

That, patient reader, is the way (the world-over) that industries and assets are now being bought, sold, refinanced, leveraged, re-jigged and resold. In the old days, companies went to investors or to banks for capital and cultivated a relationship with them that was long and fruitful. Now, it's all wham-bam-thank-you-ma'am capitalism. Inquiring capitalists now only want to know one thing - how fast can we do this deal? How many points can we get out of it and how much leverage can we get? And whom can we dump it on, when we're done?

Taxes Suck! (And so does Aurora Loan Services)

I hate taxes. And I hate filing them

For one I feel the government doesn't know how to properly utilize the money it gets. Unlike Australia, where the budget is in a state of constant surplus, our illiterate politicians can't add and are always running a deficit. And as a result, they always begging for more money.

Another issue is with the reporting of taxes due. As the owner of several rental properties, I get to claim the interest on the mortgage payments and the taxes I pay. The mortgage companies send out a 1098 form every year. Unfortunely they do 3 things that piss me off.
1. They keep selling the mortgages to other companies.
This means I not only have to keep track of the payments(which I automate through online bill pay), but now I get several 1098s for the same property.
2. They don't print addresses on the 1098 statements.
This means I have no fricking clue which property the statement belongs to and I have to waste time matching up the statements with the properties based on 9 digit account numbers. (really irritating when you have 6 times as many statements as you do properties!)
3. They make stupid mistakes.
Occasionally, they'll forget to include the amount of taxes paid or insurance paid. If you overlook that, you're out that deduction. Yes, it looks like you made more money but thats a BAD thing at tax time!

If my Adjusted Gross Income[thats income after deductions) isnt' under the federal guidelines for the poverty level, I'm pretty upset. And now the wife had to go get a job which totally pushed us out of the poverty level! I told her if our tax bracket went too high, I'd quit my job in protest! (Of course, that didn't go down too well).

And whats up with the schedule D filling. The government wants me to file every single damn trade I placed??? Well ok, they don't trust us to accurately report it, whcih is fine since we don't trust the government to tell us the truth either. But why the hell can't the brokerage firms provide a simple spreadsheet of the transactions? (without charging for it?). Its all computer-based trading and they all have the records in their databases.

I actually found out that Interactive Brokers (the company with the worst interface and lousiest customer service, but cheapest commissions) actually provides a prepared schedule D!!! Thats awfully nice of them.

Especially since Datek, Ameritrade, TDAmeritrade charges 10 times the commission and won't provide it. Infact they got the 1099 wrong the first 3 times!

Anyway, I was up until 4:30 am doing my taxes. One of the mortgage companies fraudulently decided that my 5 year ARM was a 2 year ARM just because the date printed on the loan docs was wrong. The fact that they never offered a 2/1 ARM doesn't matter. Aurora Loans got to screw me and the truth can be damned! Anyway, my new rate is now 10.3% on the 1st loan, and 9.5% on the 2nd loan!

Aurora also wanted nearly $10,000 to refinance a $250,000 loan! I went to Countrywide instead but they need to see my 2006 tax returns to fund the loan. Hence the rush to get the paperwork all done so my CPA can file it.

Anyway, thats it for this friday's edition of The Weekly Rant!

Learning From The Frogs

Here's a riddle:

How many Frenchmen does it take to defend Paris ?

Don't know, its never been done!

Well, Bill Maher is in a more generous mood than I am. Check out his very accurate and very funny commentary on what our politicians could learn from the French.

Is the US Bankrupt?

According to the USA TODAY, dated 6/1/07,

The federal government recorded a $1.3 trillion loss last year - far more than the official $248 billion deficit - when corporate-style accounting standards are used, a USA TODAY analysis shows.

The loss reflects a continued deterioration in the finances of Social Security and government retirement programs for civil servants and military personnel. The loss - equal to $11,434 per household - is more than Americans paid in income taxes in 2006.

"We're on an unsustainable path and doing a great disservice to future generations," says Chris Chocola, a former Republican member of Congress from Indiana and corporate chief executive who is pushing for more accurate federal accounting.

Modern accounting requires that corporations, state governments and local governments count expenses immediately when a transaction occurs, even if the payment will be made later.

The federal government does not follow the rule, so promises for Social Security and Medicare don't show up when the government reports its financial condition.

Definitely sounds like the government is already bankrupt. Of course, it can always print more money, so it'll never really be bankrupt. The only disadvantage is that the US Dollar will fall in value against other currencies and against gold and other global commodities. Its already fallen signficantly against european currencies and also other currencies like the Indian Rupee and Australian Dollar. And the Canadian Loonie is the strongest its been in 30 years! Not a very comforting trend!

Food And Drug Chief Gets Death

China sentenced its ex-food and drug chief to death for accepting bribes.

Quite a harsh punishment for accepting $800,000 in bribes. Pity the US doesn't have laws like that. It would do wonders for the integrity of system. Here we've become conditioned to accept that politicians will lie and accept bribes and grant favors to people who grease their palms.

I'm against capital punishment because the cost of error is too high. However, in the case of politicians, I'm willing to make an exception. Corrupt politicians should be given the death penalty or reduced sentences for lesser crimes.

Some of the other possible sentences could be
1. Asset confiscation and a life as a social worker on a $24,000 salary. No other income or jobs permitted.
2. Public flogging
3. Exile to a deserted island.
4. Neutering

What do you guys think?

Why High Gas Prices Don't Matter

A lot of poeple have been complaining about the price of gas at the pump. In fact, Congress has enacted an anti-gouging law that provides upto 10 years in jail and upto $150 million in penalties.

But my contention is that high gas prices don't make any difference.

Gas isn't expensive
People are willing to pay $4 for a cup of $tarbucks coffee. That works out to about $1,250 per barrel. Compared to that, $65 for a barrel of light sweet crude sounds pretty cheap!

Besides this, compared to what 93% of the rest of the world pays at the pump, its still cheaper in the US.

High gas prices do not cause inflation
Some of you might think that since we use oil and gas in almost every aspect of our lives from commuting and transporting products to making plastics and profilatics that an increase in the price of oil would lead to inflation.

Well in theory thats true, but we're experiencing a much higher rate of inflation through the devaluation of the dollar and mindless government spending (through never-ending government expansion, ill-thought out entitlement programs and a very expensive war). The inflation caused by higher oil prices doesn't compare to this.

The higher oil prices don't affect our lifestyle
The only people who really feel the pinch at the pump are the people who drive SUVs and SAVs (Suburban Assalt Vehicles). Of course, if they couldn't afford the gas they wouldn't have bought them in the first place.

And if they really couldn't afford them to begin with, they should sell them and buy a Honda Fit, a Toyota Yaris or a Nissan Versa. They could also cut down on the number of miles they drive and walk a little bit too. (66% of US adults are overweight or obese).

Before you start complaining about poor people having to spend an extra $1,000/year because of higher gas prices, I know a lot of poor people who drive $25,000 cars. If they spent $15,000 on one of the cheaper cars mentioned about, the $10,000 they'd save would pay for nearly 100,000 miles worth of gas. Yet another reason to sell your car if you can't afford it.

Funny how some of these "poor" people I know can afford a $1,000 Plasma TV and $100/month for every single cable tv.

What about the really poor people?
There are probably a lot of poor people living below the poverty level for whom even a $200/year increase will break their budget. Sadly, these people have bigger problems. I can only suggest two things.
Buy a bicycle and read this article on how to live off $12,000 a year.

Gas prices are going to go even higher. Most of the oil's producers are at maximum capacity and the demand from India and China is growing exponentially. If you're feeling the pain now, imagine what it'll be like in a couple of years when oil is $100/barrel and you're paying $5.50 at the pump?

Paris Hilton Gets A Nude Sculpture

Shock scupltor Daniel Edwards just released a Paris Hilton Autopsy Sculpture. She's naked, wearing a prom-queen tiara, here legs spread open and has a cellphone in her hand. Her lovable doggie, tinkerbell is also featured. Its in pretty poor taste but he trys to put a positive spin on it by saying it'll deter teenage drinking. (yeah, just like trailer-trash barbie deters promiscuity)
Anway, you can check out the picture and decide for yourself.

Daniel Edwards is most famous for his god-awful nude Britney Spears giving birth sculpture.

Picked Up A George W. Dollar Coin

I stopped by the bank and picked up half a dozen new presidential $1 coins. Don't know why some people are selling them on ebay for more than they're worth but I guess someone's stupid enough to pay that. They're not all that impressive, except the "In God We Trust" part is along the rim of the coin, which I thought was pretty neat.

What I don't understand why the government is wasting money minting coins when we're moving more and more to a cashless electronic society.

What use is a new dollar coin? Most people don't like carrying around a pocket full of coins, which was why paper notes were invented in the first place. Notes are lighter, easier to carry and don't roll under heavy appliances when you drop them. Most vending machines don't even accept the old Sacagawea coins so I doubt they'll be modified for the new ones. And has anyone ever tried to tip a stripper with a dollar coin?