Get Rich Slick

Well it looks like nincompoop was re-confirmed to the Federal Reserve and that means that I need to use the nuclear option: Closing down all my big bank accounts!   I wanted to do it this week but I’ve been too busy to shuffle money around so it will need to wait till next week.    If you want to see some change in the financial system, I would encourage you to move your money to a credit union or a community local bank!

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This video link has been sent to me numerous times and it seems to be gaining traction.  To be honest, I’ve considered dumping all my big bank accounts and credit cards as this seems to be the only way to deal with the real problem of corrupt bankers, politicians, and the like.   The best way to suffocate a crook is to cut off the oxygen supply (money).

Watch the video and consider moving your money, this is one of my goals for 2010.

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I had lunch with a former co-worker college and he showed me his new iPhone.  I asked him why they were switching and he said that the company didn’t want to support Blackberry servers and pay licensing fees for it anymore.  Evidently, the iPhone can connect to the e-mail server without a blackberry server.  I’m not sure of the technical logistics of it but I was interested in what RIMM stock was doing so I decided to check it out.

From what I can tell, RIMM is on a struggle to get traction.  The economic meltdown seems to have taken a huge toll on Blackberry but I’m wondering if the change in business attitude is going to hurt RIMM in the long term.    Personally, I’m waiting for the rumored carrier-free Google Phone to come next month so I can buy it.   I’m tired of waiting for Apple to separate from AT&T so I can buy an iPhone and the company issued Blackberry I have has a pretty crappy browser so my choices are fairly limited.

I hope Google is serious about the Nexus cause I’m serious about buying.

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No posts until Tuesday, I’m taking the weekend off!

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Let the good times roll……I just got approved for a student loan for my MBA program and I couldn’t be more excited!  What should I do with the money?  Pay off mortgage?  Pay off the remaining car note?  Buy that new Big Screen TV?   The possibilities are endless!

Student loan money is the best arbitrage money these days as the loans are typically fixed at 6% or so and there isn’t a credit card company in the world that can compete with that since most are arbitrarily raising fees and APR on even their best customers!

I’m only borrowing 15k so it’s nothing to get truly excited about but still, 15k at 6% is a pretty sweet deal as the interest will be (hopefully) tax deductible.   I’ll also add that I’m expecting inflation to sky rocket over the course of this loan(s) over the next few years so the debt will likely be inflated away.

Right now is the perfect time to reposition your cash flows and my balance sheet just got a whole lot better!

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According to this post over at Mish Global Economic Analysis, the FDIC went bankrupt on Friday with the latest 3 bank failures.   Technically, the FDIC can tap the Treasury so they money flow will continue but that’s tax payer money not the premiums banks pay into the pool to insure deposits.

We’ve  almost come full circle as I warned people back in September 2006 that we may be facing an SPIC/FDIC Armageddon in the near future and the future is getting closer day by day.   Of course, FDIC chair will have some cover because back in March she issued this warning:

March 4 (Bloomberg) — Federal Deposit Insurance Corp. Chairman Sheila Bair said the fund it uses to protect customer deposits at U.S. banks could dry up amid a surge in bank failures, as she responded to an industry outcry against new fees approved by the agency.

“Without these assessments, the deposit insurance fund could become insolvent this year,” Bair wrote in a March 2 letter to the industry. U.S. community banks plan to flood the FDIC with about 5,000 letters in protest of the fees, according to a trade group

So she’s got herself covered with the warning issued and I can already see the news clip, “I warned the public back in March that this could happen…..people should have taken action….blah…blah…blah…”

Let’s not forget the rumors of a bank holiday coming in September either.   It seems it’s all coming together to form the perfect storm doesn’t it?

So what action should a person take?   I’ll repost this one last time:

When people realize that the money they thought they had in the stock market is gone, when they realize that their credit lines have been cut and when they have no cash on hand left to pay for fuel, groceries or medicine there will be a stampede at your local bank.   The first ones to get there and pull out some or all of their cash will get their money; the lazy, the ignorant, the socialized, the optimists, and the clueless will be left cashless.

You’ve seen this governments response to crisis already and it’s not exactly a positive record: 9/11, Katrina, Bailout.  Don’t expect air drops of food and water anytime soon when you run out of credit and cash.

I’ll repeat what I posted earlier numerous times here, here, and here.

1. Keep your payroll check in MULTIPLE bank accounts
2. Keep some amount of emergency funds in your home somewhere safe and sound, don’t assume ATM machines will have cash.
3. Keep your savings in a SEPARATE account.
4. Keep well under the 100k limit of FDIC and don’t assume FDIC will bail you out; you’ll learn why later
5. Forget about money market funds
6. You should already have a large cash position if investing in the market, if not you’re going to have to ride it out
7. Keep plenty of food available in your home
8. Keep you gas tank full at all times when possible
9. Be vigilant at all times; worry about burglary, robbery and assault at any time from now on until this crisis is over
10. Have a worse case scenario plan for yourself and your family
11. If you have large amounts of money buy US Treasuries.
12. <Added Today> Worry about the “safety” of your safe deposit boxes at the bank and rethink if that’s the best place for your property.

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Back in January, I along with a few coworkers, were all laid off.   A few weeks later I got a call from one of those co-workers.  He was BEGGING me to find him some leads to get work.  Evidently, his wife got laid off the following few days after he did so they were BOTH unemployed.    I ended up helping this guy find a job going so far as to give him a glowing recommendation to the potential employer.

He ended up getting the job and through a quirk of consolidation, he ended getting a promotion a couple of months after that and I hadn’t heard from him for a while until some mutual acquaintances informed me that he had gone out and purchased a new Mercedes vehicle.   I don’t know the make or model of the car but I just shrugged my head.   Just a few months ago this guy was begging for work, he got lucky and landed a good position but he’s acting like the economy isn’t in shambles.

This guy has young kids that he still (presumably) needs to put through college and was very nervous about being unemployed so I know he doesn’t have a huge volume of cash lying around to buy cars.  I just don’t get it, this guy had spoken to me about a year ago about how he JUST HAD TO HAVE a luxury car and I advised him to wait until the economy stabilized (this was back in Fall of 2008) before he made any moves like this but he must feel its stabilized enough for him to take the plunge and buy the car.

Oddly enough, my wife knows people at his new company and they’ve been laying off people!  When I asked him about the layoffs he said they were “low level” people that they didn’t need.   Lol!   He may end up becoming “unneeded” soon enough because his new company’s success is predicated largely on that “infrastructure” money that doesn’t seem to be moving anywhere out of Washington D.C.

Well if he loses his job, I’m going to recommend he go work for a Mercedes dealership so he can meet other dolts just like him.

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I spend a great deal of time watching Discovery Channel because I love learning and I couldn’t figure out why I was addicted to this channel until a slow realization dawned on me….most of the shows on Discovery are about destruction of the planet earth for profit.

Let’s take a look at some of the themes for their shows:

Cash Cab – A guy drives around in a cab burning fuel asking people questions for a chance to win money.

Deadliest Catch – A group of guys drive around the ocean burning fuel to catch crab for profit.

Dirty Jobs -  A guy goes from filthy place to filthy place to do “dirty jobs” of companies that make profit the dirty way.

Mythbusters - A couple of guys burn fossil fuels, destroy a variety of objects to prove a point.

Pitchmen – A couple of guys sell the best crap from China at a reasonable price for China

Other shows I watch have similar themes on various channels (e.g. History or Discovery):

Ice Road Truckers – Burn fossil fuels to deliver stuff that extracts more fossil fuels…rinse and repeat.

Ax Men – Slash down trees for profit!

Swamp Tree Loggers – Slash down trees for profit using heavy equipment burning fossil fuels!

Life After People – The show for those who want to know what happens when we deplete the planet of all resources!

Oh man, I gotta cut back on watching this channel.

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Call your Senators and ask them to Support the Demint Amendment!

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