Tuesday, June 28, 2016

New Poll Says 71% of Americans Believe Economy Is Rigged

June 28, 2016
71% of Americans believe economy is 'rigged'

The poll asked a simple question: Which of the following comes closer to your opinion on the economic system in the U.S. People could select between three options:

1. The economic system is rigged in favor of certain groups 2. The economy system is fair to all Americans 3. Don't know

That is most certainly not a simple question. You've given me the option of saying it is rigged, that we live in a perfect utopia of fairness for everyone, or to claim ignorance. A simple question would be:

Do you believe the economy is rigged?

1. Yes
2. No

And even then it would be biased. Why am I asking about a rigged economy in the first place, unless somebody thinks it is?

Don't need a poll to know that life isn't always fair. I once saw several raccoons chase down a cat behind a neighbor's fence. Didn't see the end result but I could hear it. I will say this about the raccoons though. At least they didn't try to convince the cat that their subprime structured investment vehicles were of the highest quality! That's something I guess.

September 4, 2013
Survey says: Polls are biased

Pollsters took a stark look into the mirror Tuesday, seeking to explain how a new survey found that three quarters of Americans say most polls are "biased toward a particular point of view."

Can we actually trust a poll that says 75% can't trust polls? Perhaps another poll is needed to find out. I know just the person to do it.

Jimmy Kimmel's Lie Witness News

Will you be watching President Obama's planned 4th of July confederate flag burning with the last surviving members of the Tuskagee Airmen and the Wu-Tang Clan?

Hard to laugh, but harder not to! Hahaha!

Polls. And people wonder why Brexit was such a surprise?

Secondary Quote of the Day: "A Slow Moving Train"

Dammit! I wasted my quote of the day earlier today. It's gone. I'm now forced to rely on a backup.

June 28, 2016
CNBC: Don't get too happy about this stock rally

"It's going to be a slow moving train. It's calmed down for now — but it hasn't calmed down," said Ablin. "(The markets are) on heightened alert, but unfortunately it's moving at the pace of policy, not at the pace of the markets."

We don't hear many slow moving train analogies. Can someone clarify? I ask because it's calmed down for now, but yet it hasn't calmed down. Makes it hard to determine the actual speed of the train.

Does he mean that the train is actually moving slow? If so, that seems very safe. Rarely hear about slow moving train disasters.

Or does he mean slow motion video of a train? Those are almost always bad. They often involve a fast moving train meeting up with a slower moving vehicle attempting to cross the tracks in time.

We really need to know! Are the tracks safe? Can we cross them? And what's the deal with the heightened alert?

Don't worry. Nobody gets hurt in the video. It's apparently one of those slow moving trains I keep reading about. Whew!

Yeah, I know. I'm going to hell for teasing people like this, especially since I could no doubt be teased similarly. I have no defense. Simple things amuse me. And you know what they say, simple things amuse simple minds. So be it. I can live with that. Hahaha! :)

Who to Really Thank for Today's Stock Market Rally

I would never ask for myself, but I do think my fellow bearish bond anti-vigilantes deserve a round of applause. In the past week, the 30-year treasury yield has fallen from 2.50% to 2.27%. The yield held its ground today, in spite of the rising interest rate environment we find ourselves in, and in spite of the stock market rocketing higher. That's an amazing amount of spite and support for our fragile financial system. We're there for you. We've got your backs.

Not only will we continue to support future stock market valuations, but we also pledge to continue ruthlessly attacking the evil New York bank net interest margins on your behalf (as seen in the chart below), just as we ruthlessly attack the future returns of this country's many underfunded pension funds. It's all for you. Enjoy this era of permanent modern prosperity! Please don't let it go to waste!

Click to enlarge.

February 17, 2016
The Telegraph: Negative interest rates a 'dangerous experiment' for the world as monetary policy hits buffers

Commercial banks are at particular risk from negative rates, which have been described as a tax on the banking system.

Sub-zero rates reduce the profit made on interest, while increasing the cost of capital for borrowers. Japan's banking sector has seen its net interest margin (NIM) fall to 25-year lows as a result of the Bank of Japan's unprecedented monetary stimulus, according to data from Morgan Stanley.

Sometimes, in order to save a thing too big to fail, one must first nearly destroy a thing too big to fail.

Source Data:
St. Louis Fed: Net Interest Margin for Banks in New York

Costco vs. Sam's Club (South Seattle Edition)

June 28, 2016
Sam's Club is firing shots at Costco after the credit card swap disaster

On Saturday, Sam's Club announced that, until July 4, Costco Membership Cards could serve as free Sam's Club Cards — noting that Sam's Club accepts all major credit cards, unlike Costco. Typically, only members can shop at Sam's Club, with an annual membership costing at least $45 a year.

Simce we have memberships at both chains, I thought I'd offer a few personal comments about the Costco credit card debacle.

I think Sam's Club is the one desperately in trouble, at least in my area. Here's why.

1. The Sam's Club parking lot is never full. Their store is never full. Their checkout lanes are never full. As a customer, this is clearly a desirable situation. To an investor, not so much though.

2. The Costco parking lot is always packed. Their store is always packed. Their checkout lanes are always packed. As a customer, this is clearly not a desirable situation. To an investor, it is ideal.

3. Since Costco is always packed and Sam's Club never is, Costco can afford to offer us better deals. I think they do. When I see something priced at Costco, I don't try to second guess if it is a good deal. I generally know it is.

4. When I see something priced at Sam's Club, I do second guess it. Why? There is a particular bag of chips that Walmart also sold. It wasn't exactly the same size bag. Sam's Club's bag was slightly bigger. It has always bothered me that the cost per ounce was higher at Sam's Club, a place where I pay a membership fee. I therefore never trust a Sam's Club price to be fair, nor will I ever.

5. We spend more money at Costco than we do at Sam's Club even though Sam's Club is closer to us. That is not a good sign for Sam's Club over the long-term. It's the more pleasant store to shop in, because it isn't packed. You'd therefore think we'd buy more there. We shop there more often, for the convenience, but we actually buy less. Why? I can give you one reason. Since Sam's Club has fewer customers buying their bulk goods, I suspect their products don't turn over as fast. This leads to expiration date problems from time to time. If you are buying bulk goods, you need to see excellent expiration dates. We sometimes don't at Sam's Club.

6. I have never owned an American Express card and never will, perhaps somewhat out of stubbornness. I prefer a thin wallet. I use one and only one credit card. It's a Visa. I am so pleased that I will never need to take my checkbook to Costco again. Such a pain it has been. Yeah, first world problem. I know! More times than not, a supervisor needed to verify my check. So there I would wait, like a suspected terrorist needing a background check. The nightmare is finally over! Hurray! Thanks Costco!

7. Sam's Club took my Visa. Now Costco does too. Not good for Sam's Club. If I could choose only one store, it would be Costco. Sam's Club would get dropped in a heartbeat.

8. So why do we shop at Sam's Club? They had fantastic prices on some generic medicines, both for us and our pets. The key word being had. Makes me wonder if some weren't just incompetently mispriced. There are things they sell that Costco doesn't. We're particularly fond of Hershey's dark chocolate, for example. Since the store is mostly free of other customers and closer to our house, many of the refrigerated perishables are often bought there. The milk is especially good. Instead of buying a two gallon pack at Costco, we can buy a gallon of skim and a gallon of 2% at Sam's. And for whatever reason, I prefer the taste of Darigold. They used to sell bulk Cracker Jack. I love that stuff. Don't now though. Do we still buy enough there to justify the membership fee? I ask myself that every month. It's a close call, at best. Would not take much for us to drop the membership. Let's just put it that way. That's especially true since one of our dogs no longer gets her medication there. We'll see what happens at renewal time. They should not be optimistic.

9. We don't get too attached to our local Sam's Club, mainly because we wonder how long it will be there. They are losing the race with the nearby Costco, by a wide margin, and what could possibly change that? Costco's credit card debacle? Don't make me laugh. At least for me, I welcome the change. Big time. Does it seriously annoy many customers who are forced to make a change? I'm sure it does. Will anyone care five years from now? I could be wrong, but I doubt it. I really don't think my local Sam's Club knows how to cater to the needs of fast-moving disgruntled American Express card holders. It's a very laid back environment. Time moves slower in a Sam's Club. Everything is so leisurely. We'll see!

The Dumbest Financial Mistake That Jim Cramer Can Ever Remember Seeing

June 27, 2016
Cramer Remix: Brexit is the dumbest financial mistake I’ve ever seen

Please allow me to refresh his memory.

March 12, 2009
The Worst Moments Of Jim Cramer's Career

6. "The Winners of the New World".

On February 29th, 2000, Jim Cramer gave his "top 10 stocks" that are "going to make it in the New World".

This turned out to be a phenomenally bad list that would have incinerated the portfolio of any investor who was following along and buying. The ten stocks were:



Avoid everything but tech in 2000, he said. It is by process of elimination that he picked his top 10, he said.

Apologies to those who followed his advice, and then keep reliving those painful memories here. Shame on me. It seems that I've got winners of the new world permanently etched on my brain. Never seems to get old. At some point I just need to drop it though, and instead concentrate on the other nine worst moments of his career.

Bad Mark. Bad! Bad! ;)

Proof That We're Actually Living in a Very Humorous Computer Simulation

June 27, 2016
Diet Pepsi to reintroduce aspartame option

The new offering, sweetened with aspartame and Ace-K, will be called Diet Pepsi Classic Sweetener Blend and will be offered in 12-packs, 2-liter bottles and 20-ounce bottles.

Diet Pepsi Classic Sweetener Blend? Seriously? I remember a time, in the not-so-distant past, when I could simply say, "Pepsi, please."

Oh, how our computer programming gods must enjoy toying with us! Hahaha! :)

See Also:
10 Reasons Life May Be A Computer Simulation

Quote of the Day: "The Real Elephant in the Room"

June 26, 2016
The $100 Trillion Bond Market’s Got Bigger Concerns Than Brexit

“The real elephant in the room is not the U.K. vote or a Trump presidency. The real elephant in the room is we’ll have low and negative rates for a very long period of time.” - Steven Major, HSBC Holdings Plc’s Head of Fixed-Income Research

For what it is worth (not much), believer in the real interest rate elephant since 2000, and the nominal interest rate elephant since 2010. I'm basing this solely on the money I have personally invested, which generally implies true belief and not just idle chitchat.

Monday, June 27, 2016

Confessions of a Patient and Frugal Video Game Addict (Part 2)

In part one, you may recall that I said:

The funny part is that even as a patient and frugal gamer, I could feel the temptation. I'm starting to burnout on the game a bit. If I paid the $20, I could back away from the game. That's when it hit me. The worst possible time to spend $20 on a game is when you are starting to burnout! What an epiphany! Hahaha!

Full burnout achieved! Best $20 I never spent! That sure didn't take long! Hahaha!

Although I have 2,869 gold in reserve (enough gold to make many players salivate), and could easily coast for more than a month on it alone, I am quitting the game forever today. Game uninstalled. Poof.

The new update is out and there wasn't even a moment's rest. Four more expensive high end cars were added to drain our gold. Further, the weekly time trials were reset. This means that we have to compete in four separate time trials this week instead of just the normal one. This doesn't mean much to those who haven't played the game, of course, so let me just say that it is four times the work for the same reward. Further, I'll be traveling this coming week for 4th of July festivities. Can't think of a better time to quit. And then there's hiking season. It's here! It will be much better for my health than a mobile video game, and I won't be complaining one bit.

This is not a rant though. I enjoyed the game immensely. It's just a perfectly normal progression from great fun to burnout. That said, there is an amusing rant that I would like to share.

Real Racing 3 Wikia: No Compromise

GODDAMN IT WHAT THE HELL IS WRONG WITH YOU FIREMONKEYS????? Not even 1 Day to rest after the Le Mans event???? Are you kidding me?!?!?! I wanted to progress a bit in the career for pete's sake NOOOPPPE not happening. Oh look! 670 GC in my bank and GUESS WHAT? BAM! Ferrari FXXK. BAM! Lotus Exige S 360! BAM! Lotus 3-Eleven! BAM! Lotus Type 125. 4 cars, another 1000 Gold to be spent in the span of 1 month. Enjoy, lads! Hint: Firemonkeys are already feverishly working on the next half dozen GOLD COINS cars that will release right after these events finish.

- 4 hours ago by A Wikia contributor

I think I know who this is. It's Cartman from South Park! Hahaha!!

People like free stuff. No doubt about it. Not sure free stuff that makes one swear is worth it though, but hey, maybe that's just me!

As a side note, I'm never getting roped into a game that demands my continual attention again. You can take that to the bank. It eventually starts to feel like an obligation. Go figure.

I have other games ready to play. Looking forward to playing more Crash Dive (WW2 sub simulator) and Starbase Orion (space exploration and conquest), both of which can be played at a leisurely pace, with absolutely no time pressure. Life is good. :)

One last bit of advice for those who are just now starting to play Real Racing 3:

Do yourself a huge favor. Do not attempt to complete it. Do not feel compelled to compete in the weekly time trials. Do not complete every special event. Do not collect every car. Simply enjoy it as the good free racing game that it is. Otherwise, it will consume your free time and/or money with reckless abandon. I say this as a video game addict. It's hard enough for people who have played for years to keep up. You have little chance, and even if you do ultimately succeed before you burnout, this free game will extract a serious toll.