Are We Seeing A Dead Cat Bounce or a Bottom?
Dead cat bounce is a term used to describe a market that experiences a dramatic decline in stock prices, then a moderate-to-sharp rise in stock prices before resuming its downward trend.
It is my guess is we’re seeing is a “dead cat bounce.” Speculators and those that think a bailout will be passed have jumped in the market to reap some quick gains. Others may be jumping in trying to cover their short positions. Only time will tell if my guess is right - I have a feeling that it is.
What do you think? Have we hit the bottom, or are we seeing a “dead cat boune.”?
Congress Votes Down Bailout Bill - Interesting Ties…
Not much to say here. The video does a good job of making my point.
The Question Comes up Again - Should Poor Leadership Be Rewarded
In the Monday edition of the New York Time’s, a consulting firm estimated the ousted CEO of Fannie Mae, Daniel Mudd, stands to collect about $9.3 million in severance pay. Addressing this article, Barack Obama senta letter to Treasury Secretary Henry Paulson and Federal Housing Finance Agency Director James Lockhart stating:
“Under no circumstances should the executives of these institutions earn a windfall at a time when the U.S. Treasury has taken unprecedented steps to rescue these companies with taxpayer resources,”
“It would be a gross violation of the public trust to fail to use this authority now, while American taxpayers and American homeowners, already struggling in a weak economy, are being asked to accept an historic intervention to rescue these institutions,”
While I may not agree with some of Barack Obama’s on a few issues, I completely agree with him on this one. The takeover of Fannie Mae and Freddie Mac was necessary to prevent a larger econmic problem for the United States. In the end, the takeover could end up costing US tax payers billions of dollars. Under no circumstances should we be rewarding CEOs for failure.
What do you think? Should Daniel Mudd receive a large severance package for his work at Fannie Mae?
A Large Majority Of People Don’t Care How Much Fuel Costs
Over the past few months, I have paralleled the increasing cost of fuel with tips on how you can reduce the amount you spend on fuel. In addition, I have begun riding my bike to work when the weather allows to save myself money and reduce my carbon footprint.
If you follow the news, I’m sure that you’ve heard about the rise in sales of locking gas caps as people try to fend off fuel thieves. Perhaps you’ve heard friends and family venting about the cost of fuel. Heck, maybe you’ve even received one of those email forwards that calls for everyone to boycott the large oil companies by not buying fuel for a day.
I’ve heard it and seen it all, too.
However, it is my contention that a large majority of people don’t care how much fuel costs. They just like to complain.
On the days I do drive to work, I drive about eight miles per hour slower than I normally would. This puts my speed right around 62 miles per hour. Reducing my speed has improved my car’s gas mileage by about nine miles per gallon. The reduction in speed has also made it apparent how fast everyone else is going. Not to mention how many people drive alone in big SUVs.
Parking lots are also a great place to witness how little people care about the cost of fuel. My wife and I were leaving the grocery store the other day, and as we got to our car we noticed a car idling in the parking lot. Someone was sitting inside, talking on a cell phone. People don’t care.
If people cared about the cost of fuel, they would do something about it. Instead, they do as they always have done.
Perhaps the area I live in is different from what people in other parts of the country are doing. How about it? Has the rising price of gas caused a difference in the driving habits of people in your area?
Will The Tax Rebates Work? Some Say No!
Many Americans, including myself, feel that the stimulus checks being sent out by the US Government won’t work. A recent CNNMoney.com poll in which 1,000 people were polled, states that 82% of Americans think the rebates won’t work. Almost half the people said they would use the check to pay off bills, and another 22% said they would put the money in the bank.
Personally, I’m going to use my check to start at Roth IRA. How about you, what is your stimulus check earmarked for?
2 Reasons Why A Gas Tax Holiday Doesn’t Make Sense
By now you’ve probably heard of the gas tax holiday proposed by Hillary Clinton and supported by John McCain. The aim of the proposal is to suspend the government imposed 18.4-cents-a-gallon gas tax from May 26 (Memorial Day) to September 1 (Labor Day). Unlike Clinton and McCain, Barack Obama says suspending the tax is a bad idea.
While I would like to pay less for gas, I agree with Barack Obama on this issue. Here’s why:
1. Gas tax revenue helps fund the Highway Trust Fund. This fund helps finance bridge and road repairs. Without money to correct aging infrastructure, our roads and bridges could become unsafe. In addition, the people who perform the repair work could lose their jobs because there isn’t funding to keep them employed.
Decreased tax revenue could lead the government to borrow in order to finance bridge and road repairs.
2. Gas prices could be artificially inflated when people have access to cheaper gas. This is a simple economics 101 situation. Lower prices create demand and more demand drives up prices.
I found a nice gas tax holiday calculator over at JabberWonk.com. I plugged my numbers into it to see how much I might save if the gas tax holiday is approved.
Since I’ve started riding my bike to work, the miles I drive a week probably aren’t 100. However, if I were to drive to work every day, these numbers would be pretty close. Even with these higher estimates, my total savings for the 15 weeks covered by the gas tax holiday would be $9.20. In the end, I would rather deal with spending $9.20 than the issues I outlined above.
What about you? Do you think a gas tax holiday would ease the financial burden that some consumers are feeling?
Beer Prices On The Rise
I like beer!
Though I may be drinking a bit less in the coming months. I stopped at the beer store this afternoon and found that the price of most 6 packs has increased about $1. Other micro brews - in larger bottles - have also increased in price.
This all comes on the heels of ethanol production. The price paid for both corn and wheat has increased. Thus, more farmers have switched their crops over to either corn or wheat. I can’t say I blame them since the cost of fuel has increased and is now cutting into their profits.
In the meantime, production of hops is down and the cost to acquire it has gone up. This is putting a squeeze on all brewers - even the larger ones.
Perhaps it’s time to acquire a taste for cheaper beer. Lets hope that grape growers don’t uproot their vines to grow corn or wheat.
-
-
About
Just Squeaking By is a blog about my personal finances and my quest to get them in order. Read more about Just Squeaking By
-
-
Blogroll