Vestibulum sapin prin quam

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Vestibulum sapin prin quam 1

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Integer nec odio. Praesent libero. Sed cursus ante dapibus diam. Sed nisi. Nulla quis sem at nibh elementum imperdiet. Duis sagittis ipsum. Praesent mauris. Fusce nec tellus sed augue semper porta. Mauris massa. Vestibulum lacinia arcu eget nulla. Class aptent taciti sociosqu ad litora torquent per conubia nostra, per inceptos himenaeos. Curabitur sodales ligula in libero. Sed dignissim lacinia nunc. Curabitur tortor. Pellentesque nibh. Aenean quam. In scelerisque sem at dolor. Maecenas mattis. Sed convallis tristique sem. Proin ut ligula vel nunc egestas porttitor. Morbi lectus risus, iaculis vel, suscipit quis, luctus non, massa. Fusce ac turpis quis ligula lacinia aliquet. Mauris ipsum. Nulla metus metus, ullamcorper vel, tincidunt sed, euismod in, nibh. Quisque volutpat condimentum velit. Class aptent taciti sociosqu ad litora torquent per conubia nostra, per inceptos himenaeos. Nam nec ante. Sed lacinia, urna non tincidunt mattis, tortor neque adipiscing diam, a cursus ipsum ante quis turpis. Nulla facilisi. Ut fringilla. Suspendisse potenti. Nunc feugiat mi a tellus consequat imperdiet. Vestibulum sapien. Proin quam. Etiam ultrices. Suspendisse in justo eu magna luctus suscipit. Sed lectus. Integer euismod lacus luctus magna. Vestibulum lacinia arcu Quisque cursus, metus vitae pharetra auctor, sem …

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Are Oil Loans the New Subprime Mortgages

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oil drilling rig

Remember when banks got too greedy with subprime mortgages? Remember when banks (and their executives) just couldn’t say no to the massive earnings (and by extension massive bonuses) that came from building bigger and riskier portfolios of subprime loans? Well, get ready for oil loans. Oil Loans and Bank Risk If you think Wall Street and the big banks learned their lesson from the subprime loan driven banking crisis, you really don’t understand how compensation works in the financial industry. You see, bonuses are paid based on big gains. This encourages risk taking. However, there is no downside for being wrong on those big risks, not even losing some of the bonus you earned earlier in the year. As a result, risk is the name of the game at Wall Street’s big banks. This time, banks rushed to lend money to companies in the oil industry when prices where high. In addition, they extended very generous lines of credit to those same companies on pretty sweet terms. Just like with the subprime mortgage crisis, as long as oil prices didn’t fall too far, too fast, everything would be fine. Deja vu. With oil prices at low levels, and any oil …

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Model 3 Pre-Orders and Tesla Stock

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tesla stock chart model 3

Tesla has had a big weekend. At last count, according to Elon Musk’s Twitter account, there were 276,000 pre-orders for the new Tesla Model 3. An earlier tweet referenced an average order price, with options, of $42,000. Musk is Tesla’s CEO, so this counts a public disclosure of material facts of a publicly traded company. As you can imagine, there is a lot of jabbering about what this does or does not mean for Tesla. Let’s look at the facts to get an idea of just how much good news there is, or is not, going on here. First, as some have pointed out, multiplying $42,000 times 276K pre-orders comes out to over $11 billion in Model 3 pre-orders. That would be by far the biggest income Tesla has ever had. However, that is nothing more than a paper calculation. How much of that money Tesla actually sees depends upon a lot factors, including how many people decide to cancel their fully refundable pre-order. That being said, pre-ordering a Model 3 Tesla requires registering, and a $1,000 deposit. While the deposit is fully refundable, it is money paid. In other words, this isn’t a bunch of internet kids running bots to …

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What Does Credit Card Fraud Look Like?

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credit card theif

You can do all the right things, and you will still probably, eventually, be a victim of some sort of credit card fraud. Sometimes, a person you give your card to willingly will somehow steal the information. You may lose a card, or someone may compromise your credit card another way. Or, like me, maybe a merchant will be compromised and your credit card company will call you, telling you that your card needs to be canceled. Credit Card Fraud Detection I have a Capital One Rewards card, among others. I like using it because the points seem to add up pretty fast, and I can always use them instantly just by logging in and using them to “erase” a travel purchase instead of having to get a Capital One Rewards catalog and pick some sort of reward out of it. Another reason I like it is that they seem to have pretty aggressive fraud protection. This annoys some people because it always seems to kick in when you are on vacation and their computers notice that you are buying a lot of stuff in Chicago all of the sudden when you live in Dallas. Recently, however, all that happens is …

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Oil Drillers and Oil Industry Outlook

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There was recently a fascinating presentation regarding the state of the oil industry. The presentation is from Schlumberger CEO Paal Kibsgaard. Schlumberger is one of the biggest oil drillers in the business, so he knows what he’s talking about. The surprising candor of this oil industry outlook presentation is what makes it so fascinating. In the presentation, Kibsgaard notes that unlike previous oil price implosions that were caused by what he calls “demand events,” this one is caused by OPEC’s decision to protect its market share rather than protecting the price per barrel. This creates a very different world for the oil industry. He goes on to describe what his particular company is looking at doing in the future. For our purpose though, what is interesting the confirmation that things really are different this time. Boom and Bust in Oil The oil industry is no stranger to the boom and bust cycle. The oil bust of the 1980s hammered the local Denver economy until the internet bubble managed to rescue the city. The resulting merger and consolidation turned one-word household name energy companies into combined energy companies such as ExxonMobil (formerly two separate companies Exxon and Mobil). In the end, however, …

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Market Still Crashing… Wait, No It Isn’t

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stock market back even

Still waiting for that market implosion everyone was certain was going to happen a few months ago? Looks like you’ll have to wait a little longer. I usually have to wait a little more to pull out the “I told you so,” on the stock market being a constant swirl of ups and downs that should be ignored by long-term investors. Long-term investors, of course, should be sticking to their long-term plans and only making adjustments to rebalance their portfolios. This is often easier said than done. Usually, in the middle of a down period, people start showing up or calling to tell me that they were, “right,” and that they pulled all of their money out of the stock market and now they weren’t losing anymore money and I am dumb for saying they would be better in the long run if they had just stayed put. They never call me to tell me they put their money back in right before things start going up, but that’s another matter *eyeroll*. This super, mega, down, recession is coming, batten down the hatches, plunge was too short for that to happen this time. Market Back To January 1 Levels Right …

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Fed Stands Pat and Lowers Expectations

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Since before the rate hike in December, Fed Chairman Janet Yellen has repeatedly said that all interest rate hikes were going to be dependent upon the data. In other words, while the Fed was willing, and ready to raise interest rates, they were not going to just keep raising them to meet expectations. The announcement today that the Fed will not be raising interest rates in March surprised no one. However, they also took the step of modifying their anticipated rate hike schedule, which originally anticipated four rate hikes this year, to a total interest rate of 1.25%. The new estimates now anticipate only two rate hikes during 2016. If that holds up, then the maximum Fed Funds Rate by year end would be just 0.75%. While commodities and oil ran higher on the news, that is likely to be short lived. The whole, lower interest rates equals weaker currency thing only works when there is a stronger currency out there to run to, and right now, there just isn’t. The Dollar might not be particularly strong right now, but nothing else is any stronger, so those trends are likely to reverse themselves over the next month or two. The …

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Interest Rate Confusion – Raise or Hold?

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I’ve been writing about interest rates much more than I wanted to lately because I often write about what people talk to me about, or what I hear all over the place, and interest rates seem to be holding people’s attention. I’d like to offer up some ideas about how to think about interest rates. If everyone started keeping these things in mind, maybe there wouldn’t be so much talk. Interest Rates are a Continuum One of the biggest problems people have wrapping their heads around the concept of the Federal Reserve raising interest rates is that it is not some sort of on or off type thing. Sure, each increase is a Yes or No to the question of whether or not the Fed will raise interest rates, but the resulting rates are not simply “high” or “low”. Consider the Fed’s interest rate increase in December. It raised interest rates from 0% to 0.25%. Yes, that is an increase. Yes, it is the first increase in some time. But, is there really much difference in the world because of it? Your credit card interest rate, or your adjustable mortgage interest rate may not have even changed because so many …

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Job Losses Now Due to Market :)

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Not too long ago, I wrote about how context in articles and statistics is critical regarding the huge boom in employment in North Dakota. Now, North Dakota and a handful of other states lead the U.S. in job losses. Of course, not too long ago, the gains in these states were due to the genius of their governors or legislatures. Now, it’s just market forces. Of course, it was the same thing both times around, the oil and gas industry. When oil was booming and drillers were hiring as fast as people would show up, job growth exploded in North Dakota. Now, that oil prices have plunged and the industry is mothballing rigs, while entirely stopping drilling new ones, employment numbers are crashing. Context is everything. Overall, nothing new is happening, good or bad, in the states with the greatest number of job losses, it is just that in one particular industry, the bottom fell out. Interestingly enough, this might be the actual bottom, meaning that there is nowhere but up for these job numbers to go. When they do start climbing, watch for the politicians who claim no blame for this downturn, come scurrying out of the woodwork to …

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Avoid IRS and Tax Scams

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tax scams and crimes

The IRS is used as a way to scam Americans out of money every year. Some the tax scams are very sophisticated. Others, seem like they would defy common sense. This year, the IRS put out a list of the Dirty Dozen tax scams for people to look out for. Here are some of them. Promises of Big Refunds – This is where the complexity of the tax code bites the unwary. Yes, there are a lot of deductions, and tax credits out there, and yes, some of them can be pretty unknown, but don’t believe that you’ve been way overpaying your taxes all these years, if only you’d known about a tax loophole. Research and be sure you understand before you sign your name to any weird forms. IRS Phone Call Scams – Remember, the IRS is legally required to send you notifications of most actions before you get some phone call. Ask them to put it in writing. Also, IRS agents don’t threaten to arrest people out of the blue. Arrest, garnishment, and property forfeiture all require a court proceeding. Real IRS agents won’t tell you that this is your last chance and that you have to send money …

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