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Archive for the ‘Finance’ Category

I predict that the price of a barrel of oil will dip as low and $29 by Q2 of 2009 (currently sitting between $38 and $45).  Not only are supplies fairly high right now but everything we read tell us that demand is going lower and lower.  The recession causing us to use less oil but also the annoyance of paying $147 a barrel last summer is making us conscious of our consumption.

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What economic crisis?

How can it be in such times of frugality that pro athletes are still being paid millions of dollars to ‘play’ a sport?  Last week the New York Yankees signed CC Sabathia to a seven-year, $161 million deal, the largest and richest contract ever given to a pitcher.  Is this a flipping joke?

How can this be justified?  I get the whole ‘economics and revenue sharing’ component of pro sports contracts…but this is an insult.  It is insulting to those of us who actually work for a living.  It is even more insulting to those who wish to work for a living but who are unemployed.  There is nothing you can say to make me believe that a baseball player is worth that kind of money.  If your argument is that he brings in 200 million dollars to the profit pie than I’ll say that the pie needs to shrink.  Be it ticket prices and licensing fees or television revenue and advertising rates.  The whole thing stinks and needs to be amended.

Our descendants are going to look back at us and have a real chuckle…the same way we laugh at cavemen.

I love this guy.

I love this guy.

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Sawdust and glue.

I read many different blogs on personal finance throughout the run of a week and many of them focus on where to invest money to get the greatest return.  As this economic collapse continues to unfold there is only one sure fire way to see your money grow; and that is by investing in a saving account.  There are still a few high interest savings accounts out there that provide a return of 3-4%.  In Canada your savings are insured by the Canada Deposit Insurance Corporation up to a maximum of $100,000.

I read an interesting article explaining why so many people now find themselves on the brink of bankruptcy.  For the purpose of this discussion let’s use the example of a big screen TV at a cost of $2,000.  In the eighties people would actually see this TV and begin accumulating savings in hopes of one day being able to purchase this item.  Once their savings got to $2,000 they would enter the store and pay for the TV in cash.  In the nineties people were getting less cautious with their money and would enter this same store and purchase this TV on the credit card knowing that they would be able to pay off their card at the end of the month when they got paid.  Then in 2000 it seems that people got credit crazy and bought consumer goods at a reckless pace with no regard for how they would eventually pay for this same TV, a buy now pay later approach.  With this we saw an explosion in the ‘no payments for 24 months’ type of deal.  This took it to an even higher level.  Not only can you have this TV today but you do not even need to put it on a credit card today.  Obviously this type of promotion appeals most to those who cannot afford the TV in the first place, the poor and uneducated.

As a result of these trends many of the large furniture and appliance chains ended up becoming credit unions first and retail outlets second.  The quality of the furniture diminished to a point where sawdust and glue became the norm.  This didn’t matter to most people because they were not using their own money to purchase this junk and therefore didn’t hold it to the same standards that they would have if they were feeling immediate pain or had saved up for the purchase in advance.  In reality they were using their own money and much more of it than if they had saved in advance and paid in cash.  Instead many people ended up paying a huge premium for crap, quality continued to diminish and people got poorer and poorer.

hold-the-payments

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