Nearing Bottom

As we approach August, the signs are pointing to a bottom or near-bottom for the market. Small upswings in oil are causing fears that are unprecedented. Banks are failing but the FDIC is stepping in and protecting individuals. Freddie and Fannie's debt is secured.

Now we just have to wait out this week's job and housing reports and we could see greener pastures in Septemeber.

Market stabilizing?

I don't want to sound too optimistic yet, but we are seeing oil heading toward more fundamentally stable prices at $125 a barrel. Many analysts are predicting a floor of $120 where it will hover for some time.

Definitely, while a lot is behind us, we are not out of the woods yet. Banks need another positive quarter. We need to see the housing market bottom out. Oil and dollar needs to stabilize. Then, we can finally call an end to this mini-recession.

Saving money making coffee

As I continue my journey to save money on everyday goods, I started digging around and found some starbucks beans that were unopened. I decided to make 10 cups of coffee and chill in the fridge. That should provide about 5 days worth of morning iced coffee.

The beans I originally bought for about $7 and they can probably make about 60-70 cups of coffee. Considering I had been paying $2.25 for a coffee from Dunkin Donuts, that's about $78.75 I wouldn't be spending, netting $71.75 in savings. However, the coffee machine and grinding equipment cost about $150.

So within two bags of coffee, I will have at the very least paid for all the equipment and beans and well on my way to savings.

Anyone else doing these little things to save money?

"Naked" Market Outlook

Don't be fooled by the last two days of positive momentum, nothing fundamentally has changed in the US economy to validate such positive behavior.

While certainly banks having given themselves some more breathing room and oil has been dropping like a paperweight, macroeconomic characteristics such as GDP growth, unemployment, and housing starts do not show any sudden changes.

More than likely, we are seeing a quick response to the government's new short selling rules, which no longer allow "naked" shorts on 19 financial stocks. Traders now have to prove they have arranged for these shorts before they can do so.

Many consider this rule to effectively prevent shorting of these 19 stocks, and certainly a good reason why the financial sector is suddenly doing so much better.

Here is a link to the list (See Appendix A): SEC Release
Comment: It's surprising how hard it was to actually find the full list.

Starting new rotation

Monday marked the first day of my new rotation. My last rotation was in Financial and Planning Analysis. This one is Reinsurance Security. This should be a totally new experience for me, and a far cry for the other FP&A roles I have tried.

Reinsurance Security is essentially counter-party risk analysis, analyzing the credit worthiness of various companies we do reinsurance business with. Today, I am already working on analyzing a small company that we will be providing approval/disapproval notices on.

As I get in this, I find it so interesting that government allows some of these corporations to exist. So many of these companies are pure shell companies, pretending to hold on to liabilities of another company, but being wholly owned by them.

Much of this is reminiscent of the sub-prime mess, and in a very real sense, many of the mortgage reinsurers went down for precisely this reason.

As with many things in my life, things seem to always fall on my plate when they are really hot. And this field right now is on fire, with the demand for good credit analysis at ridiculous levels.

This will certainly propel my career along, and at the same time, there's some trepidation that I may not learn all I can in this one-year rotation.

Be wary of credit card deals

Recently, I've been keeping a keen eye out for balance transfer deals that charge little to no fees for transfers. However, more often than not, I am seeing deals that offer very low APRs (0.99%) with 3% transaction fees.

While 3% transaction fees are normal, most credit card companies cap this fee to a certain amount. The cap can range from $50-$200. Make sure to read the fine print on each of these offers. Those transactions fees can mean the difference between making some easy interest money off of borrowed money or losing all that interest in the transaction fee.

Consider for example a $5,000 transfer. At 3%, the fee should be $150. With a cap of $50, the real transaction fee is 1%, while with a cap of $200, the real fee is still 3%.

Also, be careful of using balance transfer offers from credit cards you actively use. I made this mistake a while back. I charged about $50 to a credit card before I did a transfer of $8,500. Unfortunately for me, since I now carry a balance month to month, that $50 is accruing interest at 10% while the balance transfer has a 0% interest rate for the promotion period.

Obviously, dollar-wise, its not a lot, but the principle of the matter is very annoying.

Bank Deals

Recently, I've been shopping around for a new bank because my current one is closing its branch near my work. While looking, I checked my Bank of America account and noticed that they were offering two deals.

(1) They were offering me $75 to open an account, if I funded it with $25 because I hold a credit card but have no other accounts with them.

(2) They were offering me money to refer a friend, and if they signed up, both of us would get $25.

Both are easy ways to make some quick money. Check them out.

Notice: Bank of America is not providing me any consideration for this post. This is purely to provide information.

Networth Depression

Clicking on other personal finance sites recently, I'm finding myself both depressed and challenged by many of them.

While others are having similar issues forcing them to stray from their budgets here and there, many people are well on their way to a high positive networth.

Unlike them, I am still lugging around a negative networth, primarily due to my student loans and one year of job experience.

I am going to continue reading those sites, and see if I can gleam their secrets and apply them to myself.

Certainly my most important month to month finance goal is to stay on budget. For too long, I have lived on the philosophy that my salary will outpace my spending.

This is simply not true.