Scenario 1:  Assume the economy picks up steam, oil rises from $85 to $120 which quickly begins to take the steam out of any recovery and plunges us back into recession.

Scenario 2: Assume the economy remains stagnant, oil rises from $85 to $110 because of the Fed’s $2 trillion dollar inflationary pumping into the economy.

Scenario 3: Assume the economy dips back into recession, oil rises from $85 to $115 because the US will incur more deficit spending and the US dollar loses value against other currencies thus raising the price of oil.

Scenario 4: Assume Greece defaults and sends cascading domino shocks across Europe, oil rises from $85 to $100 because Opec cuts production in their October 2010 meeting.

There are more scenarios but you get the picture and I find very little scenarios in which oil will drop but ironically the biggest scenario that will drop oil is the mass adaptation of electric vehicles like the Nissan Leaf or Chevy Volt and the push toward natural gas for power generation.

I’ve positioned myself with natural gas ETFs and energy ETF plays because its the only thing that makes sense in this current economic climate.  I hope my bets pay off!

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Unfortunately, while I would normally take the extra cash and invest it in the market, I can’t do that because this market is way overheated and long overdue for a big dip down.    So I can’t pay off my mortgage and I can’t invest in the market so the cash mounts and earns a paltry rate.   What a world!

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I actually have the cash to pay off the balance but why do that when it’s at a very low interest rate and there’s no rush?     Next move up trading student loans for mortgage debt

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I have a few months to make a decision but things are shaping up just right.

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When I left my employer in January, I was down a significant amount in my portfolio.   To illustrate, I’ve got two diagrams showing the situation:

(click for larger image)

So while I didn’t recover 100%, it was close enough to Dow 10k to cash out.   In order for me to recover 100%, the Dow would need to climb up another 15% here and I just don’t see it happening.  As it stands, I’ve actually only lost my employer match which was free to begin with so I consider myself broken even and in 100% cash at this point for this account/money.

While many people have visions of Dow 14,000 now, I am highly skeptical that it will happen.   At some point over the next few weeks, a major correction is more likely than another 1k climb but anything can happen and I’m still seeing a great deal of volatility in the options market.

Gold is out of control, the US Dollar is on the brink, unemployment is high, and the S&P has a whopping P/E of 135+ and it’s like the dot com boom/crash all over again.

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First, the savings isn’t all that great when you factor a few things in such as:

1. In order to save money, you have to buy groceries in bulk.  Once you do this you have effectively committed your lunch menu for the whole week.  For example, if I buy a pound of roast beef for sandwiches then I’m having roast beef sandwiches all week long.   If I buy turkey then I’m eating turkey.  These foods are perishable and if I don’t eat them by the end of the week they go in the trash.  I know someone will point out that I can freeze food but that leads me to problem number two.

2. The whole purpose of eating is nutrition, deliciousness, variety and freshness but eating frozen food bought in bulk defeats the purpose of many of these ideals and its counter-productive.

3. The food at my company’s cafeteria isn’t all that expensive thanks to the price deflation of just about everything these days.  Lunch is a reasonable $4 to $6 depending on what I buy and it is cooked fresh daily and it keeps the cooks and clerks employed as well as the dish washer people.

So instead of taking sandwiches to work, I’ll stop by the cafeteria and get a fresh one made and buy some hot fresh soup to go with my sandwich.  I may opt to take my own soft drink since the vending machines sell drinks for $1 and those don’t tend to spoil for a long while anyway.

This brings me back almost full circle to this post challenging Trent over at The Simple Dollar about the effectiveness of cooking meals at home in the infamous $0.99 Double Cheeseburger math.   Ironically, I was concerned about inflation back then before the big crash and I’m starting to get concerned about inflation again now that the Fed has pumped trillions into the system.

If anyone out there has any ideas I’m open to hear them but I hope they’re not “buy 10 cases of Ramen noodles” at $0.99 then heat them at office.

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What I did like was the fact that Chase will now offer the ability to track expenses much like Quicken does on a desktop level.  Seriously, I think I know why Microsoft dumped MS Money and why Quicken bought Mint because as more and more banks offer online tools to track and manage money there really isn’t any point to buying or using Quicken.

What I don’t like or can’t determine yet is whether the other “options” in Blueprint are of any value or if its just another way of scamming people.   There is an option to split up purchases and pay some expenses in full each month while letting other expenses accrue interest.   The example used on the site shows how you can pay for food and gas on your Chase card and pay that portion off in full at the end of the billing cycle but if you purchased an LCD for $1000 then you can pay only interest on that purchase.   On the surface, it sounds like a good deal because interest isn’t accruing on all purchases, just certain items but I’m not sure about the details or caveats.  What happens if you’re late on a payment?  Can gas & fuel purchases still be paid in full interest free?

Ultimately, I won’t use much of  “Blueprint” because I pay off ALL of my expenses every month so I have no need to split my bill.  I also prefer to use my Amex card anyway since they’ve been itemizing and categorizing my expenses for years now. Of course, the real issue is the interest rate on the card and not the ability to split bills.   I would have been happier if Chase were to offer low interest on large purchases vs. having the ability to split the bill.

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I recently signed up for Google Voice and discovered that I could get free SMS texting and free caller id, free voicemail and a few other features free.   One of the great features of Google Voice is that I can reroute calls from my google voice number to any phone number.    So I started thinking…..

From 8 to 5 I’m usually in the office Monday thru Friday, why can’t I give out people my google voice phone number and simply re-route it to the office phone during this time?   After hours, I’m usually home so why not re-route my google voice number to my home from 6 pm to 9 pm and on weekends as well?

During other times I am either engaged in some activity and don’t want to be interrupted (e.g. at the movies or gym or park or driving).  Do I really need a cell phone for only a few hours out of the day?    Big Telecomms should be very afraid of Google, I know Apple is terrified of Google and that’s why they dumped Google Voice App from the  iTunes store but I think its much more ominous  for Big Telco than anyone thinks because they can’t compete with FREE!

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I am now, almost weekly, getting credit card balance transfer offers for either 0% or 0.99% APR on balance transfers but with some huge caveats.  First, the balance transfer fee is 4% almost across the board so if I did a 25k balance transfer I’d be hit with a $900 fee JUST for transferring.   That’s bad enough but the bank can also renig on the deal whenever they want so who’s going to pay a $900 fee on the premise that the APR for the balance transfer might now skyrocket the very next day?  The new credit card rules prevent changes to fixed interest rate cards not variable so it’s a no-brainer not to go down this road.

Secondly, I know many people that have stopped using credit cards altogether because of the high interest rates.  Many people have been rate jacked, including 700+ FICO consumers of which I recently posted and received a few comments on here.

Third, I think banks have lost a great deal of the “trust” factor and it’s not coming back anytime soon.  I have little intention of ever borrowing arbitrage money again from credit cards.  Like any sensible person, I’ve moved on to student loans locked in at 5% APR with a max cap of 9% and that’s really the new safe arbitrage and way to borrow money.

And the revolt has begun….

www.youtube.com/watch?v=jGC1mCS4OVo

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The biggest question is whether I should return to a healthier lifestyle.  One of the most dramatic changes I made was cutting back from ultra lean ground beef (the 94/6 kind) to a higher fat 73/27 kind.   I have to admit, the fattier meat tastes so much tastier and less expensive but so much cheaper.   I think the price difference is $3.99/lb for ultra lean to $1.72/lb for fattier beef.

I saw a news report on a woman talking about not being able to justify $0.88 for bell peppers because a double cheeseburger at Wendy’s was $0.99.  “Which would you buy?” she asked the interviewer, a double cheeseburger for your family or two bell peppers?   With over 300k of income, I never wondered about that until I was unemployed and uncertain about the future.   Despite currently working, I’m still uncertain about the future and on the one hand, if I don’t support the lean meat producer they may go under yet on the other hand if I do support them I may find myself unprepared for the next round of layoffs.   What to do?

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