Get Rich Slick

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While there have been many articles written about HOA fees not being paid by foreclosed owners or banks that have taken possession I’ve yet to see any articles written on the trickle down effect on the local community.   HOA fees pay for things like keeping community pools clean, landscaping around common areas, security, road & sidewalk repair and maintenance.

From California to New York and back around the South, there is story after story about HOA fees going uncollected but perhaps the real story is who gets impacted when fees go uncollected.   No money for pool cleaning means there’s a pool cleaning company losing revenue which means job cuts if the cutbacks continue.    No money for landscaping means no work for landscaping companies or their employees.   The same goes for all the other things HOA fees pay for in your local community.

With oil at $146, I find it less likely that those fees are going to be paid anytime soon.  Would you rather have gas for your car or nice landscaping and a clean pool?   The problem becomes greatly exacerbated when dues aren’t paid, upkeep isn’t done and it becomes much more difficult to sell or rent a home in the community because of the dilapidated environment so the cycle repeats itself deeper and deeper.

So in the grand scheme of things, even if you saved money, paid off your mortgage and happily pay your monthly dues every month it might not matter much if your neighbor doesn’t pay his mortgage, dues or taxes because you’ll still suffer the same when it comes to your local community.   Ultimately it begs the question, Am I my brothers keeper?  Should those that have the money to pay, cover for those who don’t to preserve the community?

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Airlines are now charging $25 to $50 to redeem air miles so they’re becoming worth much less every day.   Additionally, airlines continue to increase redemption reward  miles and with oil projected to hit $150/barrel you might as well get something out of your air miles before they become completely worthless or your favorite airline goes bankrupt!

Here’s a quote from an article,

Delta Air Lines said Monday it will begin charging fees for customers cashing in their frequent flier miles. Starting Aug. 15, Delta will add a $25 fuel surcharge for flights to domestic destinations and Canada. It will charge $50 for international flights.

The other problem is that airlines are cutting flights and destinations as American Airlines has made the most changes.

NEW YORK (CNNMoney.com) — As oil prices continue to break records, the nation’s six leading airlines have announced capacity cuts for 2008, trimming flights in major hubs and cutting off service to dozens of discount destinations.

All told, the industry will cut capacity by 9% in 2008, according to James Higgins, analyst for Soleil-Solebury Research.

I expect to see announcements of even higher miles redemption requirements before the end of the year along with more fees for redemption.   It’s really getting ugly in airline land now.

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Many electricity generating entities rely on a variety of fuels to create electricity:  natural gas, coal, nuclear or hydro.   I can’t speak too much of hydro but as far as the other three, there has been a significant increase in the prices of all these commodities and many consumers will feel the pinch this summer as heat waves bake most of America and electric bills sky rocket.

I got a taste of the coming bitterness this past week when I got my electric bill.   My May bill was $327 when it had been traditionally about $150.00.   When I digged a little deeper, I realized that my electric rates when up from $0.10/kw to $0.185/kw.   That’s a significant increase and based on the new rate, my August electric bill will likely hit $500 to $600 this summer if we utilize the same amount of electricity as we did last year.

Thank goodness we purchased a new more energy efficient A/C unit last year otherwise I’d be facing a $700 bill this August.  I can’t see how $4/gal gas and $400 electric bills are going to bode well for the economy this summer but we’ll see what happens.  Perhaps Congress can initiate a “cool summer cash” rebate to pay for A/C this summer.   Thank goodness the Fed is fighting inflation or we’d all be in real trouble ;)   .

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I’ve written about hoarding food and I decided that I’d might as well reveal that I’ve been hoarding medicine too.   It’s primarily antibiotics which can be obtained overseas fairly easily but I’m also given a set of antis every time I travel internationally in the event of sudden illness.

So why medicine?   There’s no particular shortage of medicine as far as I know and I’m not concerned about the production of pharmaceuticals but I am concerned about the distribution and delivery model of medicines in our current gas guzzling trucker infrastructure.

Like I wrote about before, it’s not too implausible for a hurricane or two to barrel through the gulf of Mexico hitting the US gulf coast and damaging or wiping out a refinery or two which in turn would cause the price of oil/gas to spike into the stratosphere.  It’s during disasters that a peak demand for medicines and other necessities (e.g. food/water)  hit the hardest.

As Murhpy’s law suggests, I’d end up needing medicine when disaster strikes the most and I want to be well prepared.

Food for thought…..

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Well it happened again, I stopped by the mall and couldn’t help but notice how packed the parking lot was yet few people inside actually shopping.   Too many people hanging around the food court eating ice cream or pretzels.   I could see many of the food shop owners hungry for customers as people were just milling about.

It occurred to me that shopping malls should start charging admittance fees.  I’d honestly prefer this to the shops inside the mall tacking on an “energy fee” to my purchases in the very near future.   Don’t laugh, if energy prices keep climbing, you can expect retail outlets to start squeezing the consumers some how to make up for their additional expenses.

If airlines can tack on a fuel surcharge then why can’t retail outlets tack on an energy fee surcharge on the stuff they sell?   Perhaps the energy fee can be refunded with a purchase of $100 or more at the shops.   Just food for thought….

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I was reading an interesting article this weekend over at Slate.com discussing the next wave of housing foreclosures that will likely involve prime borrows vs. sub-prime borrows.   The one paragraph that really caught my eye is below:

Consider, too, that, yes, going through a foreclosure kills your credit rating and makes it a lot harder to buy a new house—but as more and more prime borrowers go into foreclosure, it’s perfectly possible that buying a new home a year later will in the near future be as routine and unsurprising as the once inconceivable idea that you can get a whole batch of new credit cards two years after a bankruptcy.

If millions of people are foreclosed on, there is an essential loss of millions of home “consumers” and the only way to get them to consume that inventory would be to re-issue credit to them.   So walking away from a home isn’t such a bad idea as everyone suggests as this is ultimately the way to “short” your house just like you would short stocks that you think are going to go down in value.

The other intriguing piece of information from the article,

Just two banks, Washington Mutual and Countrywide, wrote more than $300 billion worth of option ARMs in the three years from 2005 to 2007, concentrated in California.

Just two banks in one region wrote $300 billion and prime borrows may start walking away makes my spine chill because many of the assumptions about the foreclosure debacle is that only sub-prime borrowers would default.  What if prime borrowers start defaulting?  We’re looking at 2+ trillion dollars in losses!

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I got an e-mail from Chase Bank regarding a change of terms and services and I simply couldn’t believe it.  It reads (emphasis mine),

Dear XXXXXXXX:

As part of our continued effort to enhance online security, we’ve changed the way we process online payments or transfers, and have updated our online terms and conditions to reflect those changes.

The updated terms and conditions will be available online and will take effect April 13, 2008.

Here’s a summary of what we’re changing:

We may delay or cancel a request to transfer or charge money back to the Pay From or other account at our discretion including if the payment:

* Looks suspicious or fraudulent
* Appears to have incorrect amount or recipient information
* Seems to duplicate another payment

You can review the latest Online Services Agreement For Consumer Customers with Checking Accounts online anytime by logging on and clicking “Legal Agreements” at the bottom of any page.

So Chase Bank may delay or cancel a request if they don’t like the way something looks huh?  I suppose that if I pay off some credit card arbitrage for say $25,000 it may look “suspicious” and Chase will not process the transfer or payment.  This philosophy will do wonders for your FICO score when payments don’t go through huh?

What really peeves me is they don’t write something like, “if a transaction look suspicious, we’ll call you because we’re watching your back” but no, they’ll simply not process a payment because they don’t like the way it looks.

Additionally, I actually do duplicate payments on occasion because I may be expecting an additional expense to an account but those may not get processed now because Chase doesn’t like duplicate payments.  I wonder if this applies to ACH transfers that might be setup to go to online accounts like ING.   Are those duplicate payments?

Needless to say, I’ll be closing my account with Chase bank soon.

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