Don’t Quit Your Day Job – Personal Finance, Economics and Investing

Sometimes budgeting tricks undertaken by the Federal Government boggle the mind. Take, for example, the Treasury debt ‘held’ by the Social Security Trust Fund. The trust fund operates much like a pyramid scheme… except investors are new generations of workers and they have no way to opt out.

This article is not about Social Security. It’s about the Federal Deposit Insurance Company, better known as the FDIC.

Gold, the 79th element in the periodic table, is perhaps the most controversial of any investments. Every investor seems to have an opinion on the metal. Some people, particularly enamored with the constitution, read into it the necessity for the government to only issue gold (and silver) coins.

Regardless of your viewpoint on the legality of fiat currency, perhaps you have decided to invest some of your hard earned funds into the stuff. There are many ways to approach investing in gold; I will lay out a few approaches to gold investing in this article.

If I told you that increased fuel efficiency leads to more fuel consumption, what would you think?

Jevon’s paradox states that increases in the efficiency of the use of a resource lead to the increased usage of that resource. Throughout history, examples of this effect in action can be found. This brings me back to the topic of the gas tax. If you are of the belief that we need to reduce our consumption of gasoline, increased efficiency (and attempted legislation to increase efficiency) alone will only lead to more gasoline usage. If less gasoline usage is the goal, only a tax on gasoline will make it happen.

“Bennet Sedacca announced to the world at 10:15 on the morning of March 5, 2008, that venerable Bear Sterns & Co., the nation’s fifth-largest investment bank was in trouble, big trouble.” The first paragraph opens with a bang. Ten days after Sedacca made that call, he was proven right. Bear Sterns was no more. William D. Cohan’s House of Cards: A Tale of Hubris and Wretched Excess on Wall Street, explains how Bear Sterns got there.

Next month, the minimum wage in America is going to raise from $6.55 an hour to $7.25 an hour. The $6.55 to $7.25 jump is the last of the increases to the minimum wage under the Fair Minimum Wage Act of 2007. The minimum wage is a sexy law; politicians can stand hand in hand with the lowest income workers and say, “I’m fighting for you!”. Unfortunately, the low income workers are holding the hands that hold them down.

Rortybomb, a blogger and financial engineer from San Francisco posted an interesting spreadsheet based on the stress test results. Hunting through the stress test results, he found a chart on page 6 with ‘Baseline’ and ‘More Advanced’ numbers. Since that’s enough to do a linear extrapolation (of course, with two data points that probably isn’t the most accurate way to do it… see his background post) allowing you to set your own estimate for worst case unemployment numbers. Read on…