So I Went to the Movies Yesterday…

Yesterday, my wife and I went to the movies. Sounds like a typical Saturday, right? Wrong. Whereas I’m a pretty big frequenter of venues such as art galleries, theatrical productions, concert music, and even independent movie theatres, I very rarely go to the mainstream cinema. VERY rarely. In fact, the last movie I watched in a mainstream movie theatre was Lord of the Rings: Two Towers. And that was nearly seven years ago, back in December 2002.

So, what made me break my mainstream-movie-going fast and venture forth to my nearest cinema? Zombieland? Heck no! I’m talking about a film so powerful that even the mere mention of the filmmaker’s name is enough to send some people into fits of erratic and aberrant spasms. And no, I’m still not talking about Zombieland!

I’m talking about Capitalism: A Love Story, by Michael Moore (cue the “Ack! Err! Blahr!”). It’s a comedy… and a tragedy. Above all, it’s a documentary about the failure of capitalism that we all witnessed in 2008. Because like it or not, that’s exactly what we saw. Many people have passionately argued that communism, though it may look appealing on paper, ultimately fails because it does not take into consideration human greed and corruption. I would point out that capitalism ultimately fails for the exact same reason.

When a free-market, sink-or-swim, only-the-strong survive system is brought to its knees by greed and corruption and has to turn to the federal government for a bailout funded by the taxpayers, that’s called a failure of the entire system. When many of the same banks who were rescued then turn around and slash credit lines, raise interest rates, and gorge themselves on newly added fees, that’s called a slap in the face.

Then again, this post is not meant to be a review of Moore’s new movie. Yes, I did enjoy the film, and yes, I’m glad that I chose to drive to the theatre and spend a whopping $9 per ticket to watch it. That was my choice, and I’m glad I did so. Capitalism: A Love Story is a movie that all of us should be able to enjoy, regardless of any political party affiliations.

Moore’s greatest problem, however, is that he is Michael Moore, and people will pooh-pooh him and his movies no matter the topic. I seem to recall lots of outrage and ire across the board over TARP and AIG last year, and yet many of these same people who railed against TARP, AIG, Citi, and the other too-big-to-fail crooks now rail against Michael Moore for… railing against TARP and those same Wall Street fat-cats! Strange.

That’s just the way it is, I suppose. Michael Moore makes a movie, and people get outraged over it without even bothering to watch it. Moore could make a movie in praise of Ronald Reagan and how tax cuts will be the saving grace of America, and those same detractors will ridicule and try to discredit it. Oh well.

Speaking of greed and corruption…

On a different note, before heading to the movie theatre, my wife and I swung by a nearby mall. I’m not a very good consumer – I haven’t been inside a mall since Fall 2004… seriously. Anyway, while heading into the mall, I saw something that really made me scratch my head. Take a look at this photo. Notice anything odd about it? Yes, this is in Texas.

handicapped hummer

Don’t see it? Look closer. See the handicap wheelchair tag hanging in the rearview mirror? Wow! While I concur that it’s entirely possible for a handicapped person to drive (or ride in) a Hummer… I don’t know… something just seems odd about it.

And here’s another thing – I mentioned that I had not been to a mainstream movie theatre since 2002. One thing I DID remember is that the price for the junk food at the concession stand is outrageous, even criminal. Nothing could prepare me, though, for exactly just how expensive it was. Here’s a cell phone snap:

AMC concession prices1

Nearly four dollars for a small drink?! Almost five dollars for a small popcorn?! Pardon the sophomoric interjection, but LOLwut seems to satisfactorily express my confusion and incredulity. Oh, but it gets better….

AMC concession prices2

This picture is a little harder to read, but c’mon, $7.50 for a personal pan pizza from Pizza Hut? Or, for the same price, you can get a few chicken tenders. What a deal! Want a regular hot dog (not a Coney)? That will be four dollars, please. How about an Icee? Oh, it’s $4.50. An ICEE! It’s just ice with some artificial flavoring! At least a pretzel is the same price. Holy $*@! That pretzel better tap dance and yodel for me before I suck it into my body and wash it down with a small bottle of water ($3.75).

If you can’t guess, neither my wife nor I bought anything. Since we were at the theatre a few minutes early, we watched with mixed amusement and horror as LOTS of other people did. Make that a large popcorn since I can get a free refill on it! It’s the best deal! Just slide your credit card. It will be alright.

Who knows when I will decide to go back to a mainstream movie theatre? Maybe another seven years? No matter how long I wait, I will be curious to see how much more inflated the prices will be for tickets and junk food. Maybe, just maybe, the skyrocketing prices will finally hit a breaking point, causing consumers to stop attending en masse, which will then result in massive profit losses for the movie industry. Will they scurry to the federal government and beg for a taxpayer bailout of their own? If they do, I will preemptively suggest that we consider calling it CRAP (the Cinematic Resource Alleviation Plan).

The Great Portfolio Pummeling of 2008

A New Year is upon us. At the end of a year, I normally have feelings of pensiveness and of reflective nostalgia about the year past and the inexhaustible marching forward of time.

This time, not so much. Sure, I still have those nostalgic feelings on a personal level, but economically, I’m ready to kick 2008 to the curb. As painful as it is, here is how my meager portfolio fared for 2008. Suffice to say, it got pummeled.

All of my mutual funds are held at Vanguard. I like them for their simplicity, consistently low expense ratios, and selection of no-load index funds.

Retirement – Roth IRA

Here’s an overview of my Roth IRA. I started contributing to it in 2007, so there’s not a ton of money in it yet, and there’s even less after the brutal beating of 2008.

The yellow line is what I have contributed, while the blue line show its actual value. That huge dip in late 2008 is depressing, but perhaps the upward curl at the end is a foretaste of the feast to come? Maybe I’m just optimistic….

Here’s a comparison of year-end values:

At the end of 2007, my Roth IRA had just over $9,000 in it. Fast-forward one year, and my Roth IRA has… just over $9,000 in it. Had I not maxed out my contributions for the year, this would not be so depressing. As it currently stands, all my contributions for the year disappeared. That’s okay. This is long-term money, right? RIGHT?

Taxable Mutual Funds

In addition to my Roth IRA, I also have a meager selection of mutual funds in a taxable account at Vanguard. These funds are not quite as aggressive, but they have still taken a nice pummeling.

Once again, the yellow line represents my contributions, while the blue line represents the current value. Things were going pretty well until the bottom fell out in mid-2008. Phooey.

Here’s a comparison of year-end values:

Yet again, the value of my taxable portfolio ended slightly up, but when one considers the contributions that I made, depression sets in.

All together, my Roth IRA is about -41% into the red for the year, while my taxable funds are about -24% into negative territory. Ouch.

Care to share how much your portfolio has been bruised by the Great Portfolio Pummeling of 2008? Misery loves company, so I’d love to hear that I’m not alone.

Here’s to a better 2009!

Sigh. Fed Cuts Rate to Almost Zero Percent

As expected, the Fed cut its key lending rate to almost 0% today. Apparently, it’s in a variable range between 0% and 0.25%. Wow.

I suppose the only good news here is that the Fed really has no more room to slash rates. All it can really do now is pump billions/trillions of dollars into the money supply.

The bad news is that we can expect banks to start slashing their savings rates accordingly. I’m updating the rate Wiki right now with some recent drops that I missed a few days ago, but I expect more to fall soon, perhaps starting with ING and WaMu/Chase.

Hold on to your pocketbooks, folks.

I’m a Prophet – Fed Slashes Rate to 1%

Back on 30 January 2008, I made a prediction. In response to the Fed cutting the rate down to 3%, I wrote:

Where will it stop? Allow me to make a (hopefully erroneous) prediction – interest rates will hit 1.0% by Summer 2009.

See for yourself.

Alas, I regret to say that my prediction has come true, albeit about 8 months early! Today, the Federal Reserve slashed the Funds Rate all the way down to 1%. What does this mean? It means we can probably kiss our 3% savings accounts good-bye!

Just call me Nostradamus.

Since I am now such a widely revered prophet, I will graciously and generously bestow upon my readers five answers to your question about the future. Free of charge!

Behold! Nostradamus speaketh!

Q: How low will the Federal Funds Rate go?

A: By October  2009, the Funds Rate will actually hit Absolute Zero.

Q: How long will this recession last?

A: 42, naturally.

Q: Who will win the 2008 Presidential Election? McCain or Obama?

A: Neither. Ron Paul will win a landslide victory by write-in votes. His first executive order will be to tar-and-feather Bernanke and Paulson.

Q: So far this century we’ve seen both the dot-com and the housing bubbles burst. What bubble will inflate next? Gold? Oil? The Dollar?

A: No, no, no. Tulips.

Q: Do you have any winning lottery ticket numbers for me?

A: Uh, sure. But if you win, you have to cut me in at 3%, or whatever the current Fed Funds rate is, whichever is higher. On second thought, let’s just stick to 3%.

Here they are: 4-16-24-35-51-14. Wait a minute, maybe there should be a 42 in there somewhere….

Thus spake Nostradamus!

Fed Cuts Rate – Dollar Savings Direct Savings Rate Goes UP?

(Rates may be out-dated. Please see the Current APY Wiki for updates)

Can you believe it? This morning the Fed issued an emergency rate cut down to 1.5% (from 2%). While this is not unexpected – Wall Street has been crying and blubbering about a rate cut for a while now – the reaction of Dollar Savings Direct IS surprising.

Instead of dropping their savings rate, which is what tends to happen following the Fed cut, they RAISED their rate from 3.75 to 4% APY. Here are a few highlights of the account:

  • Current rate: 4% APY
  • Minimum required: $1,000
  • Can link up to 2 external accounts

Dollar Savings Direct is a newly-spawned online savings account from Emigrant Bank. I’m still perplexed as to why Emigrant didn’t just raise the rate on their existing Emigrant Direct site instead of creating a brand new division. Oh wait, I forgot about that whole GREED element. You know, that same greed element that’s currently causing our economy to crater?

I’m on the fence as to whether or not I will take the time to open this account. I admit that I sprung for the Washington Mutual 4% offer a few weeks ago, and we saw what happened there. I was only able to enjoy a brief period of high rates before the bank changed names and dropped the savings rate to 3%.

Still, any rate increases are good right now, and I applaud Dollar Savings Direct for raising their rate despite the Fed’s move to punish those of us who keep a chunk of change in savings accounts. I only hope they manage to keep the rate that high for more than a few days/weeks.

Dear Economy – I’m Helping!

Dear Economy,

I am sorry to hear that you have not been feeling well lately. However, I have some news that might cheer you up! Last night, my wife and I did something that we haven’t done in a long time. No, not that, you pervert. 🙂 Ahem… we drove our car. Furthermore, we bought gas.

I only mention this because it’s such a rare thing for us to do. You see, my wife and I live in a glorious little town with excellent public transportation. We also make great use of our glorious little bicycles. As a result, we only buy gas every few months. Before last night, the last time we bought gas was in early June.

We only drove our car because we went out to eat at a glorious little restaurant. You’d like it. It’s a local place, middle-eastern cuisine. It’s popular in our town for its uniqueness, attractive prices, and delicious food. The Greek/Turkish coffee is amazing! Continue reading