Steadfast Finances

Every now and again, you stumble across one of those rare comic strips that compresses years of utter stupidity into ingenious simplicity.  At the same time, you hope it grabs your funny bone and gives it a good shake.

I found one of those this week with good ol’ Dilbert.

Now that the creative thinking and mathematical assumptions of the “geeks bearing financial models” are becoming clear, I’m sure many folks are asking why the summation of 1 teaser rate mortgage, plus 1 mortgage that can’t be repaid, plus 1 mortgage that reeks of manure equals a great investment (e.g. mortgage backed security)?

It doesn’t!

Perhaps I’m razzing the credit rating agencies like Standard & Poors who put corporate profits over their integrity and business ethos too much.

Since I grew up on a ranch, maybe I have an unfair advantage in all of this mess.  I learned a long time ago that if find a big pile of crap, it doesn’t matter how many things you throw on top of it to cover it up… it’s still a big pile of crap.

Best Reads from the Personal Finance / Investing Blogosphere

Ask Mr. Credit Card:  2% Cash Back From Scwab and -2.7% Cash From Amex.  Anytime you can get free money from using a credit card, I’m all for it (assuming you never carry a balance).  Basically, you get a 2% cash back bonus for using your Charles Schwab VISA.  So if you spend $1000 per month, you will be getting back $20.  Nothing to write home about, but if you do this every 12 months, you’re talking about $240.  Every little bit adds up in a recession!

BluePrint For Financial Prosperity:  Winners of the 2008 Recession & Credit Crisis.  Jim makes a highly credible argument that most people often overlook in a down economy.  One that makes savvy investors like Warren Buffett, George Soros, and a few others lick their chops since assets they want to buy are now a discounted prices.  In times like these, it’s important to remember what legendary investor John Templeton used to say — crisis brings opportunity!

Tough Money Love:  The College Student Debt Machine: A National Disgrace.   Mr. TML always makes a great argument, and this one is really hits a nerve considering it’s one of my lifelong pet peeves.  It’s despicable that we’re a nation that promotes education to the max, and somehow permits higher education costs to outpace household income by three to one.

Get Rich Slowly:  Why a Millionaire Businessman Took a Beginner’s Class in Entrepreneurship.  I’m a big believer in staying humble, even though that I’m not very good at it sometimes, I still think humility and self reflection are necessities to lifelong success in whatever you do.  This was probably my favorite read of the week.

Wise Bread:  Five alternatives to 0% yield U.S. treasuries.  U.S. Treasuries were being bought up as fast as they could be issued this week, and actually had a slight negative yield due to the demand.  Think of the implications just for a second.  People are actually willing to pay the U.S. Government to hold onto their money instead of giving it to a bank.  We live in interesting times for sure, but I suspect we’re just setting up another bubble that’s about to pop.

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