Cats and Money

I recently opened my end-of-year 401(k) statement that was mailed to me. I looked at it, and, like most individuals in recent months, felt my heart stop momentarily. Yes, it's an ugly scene for investors out there; open statements with caution.

So as is customary, I set it aside on my desk to file it away for future reference.

Today, I went to pick it up to file it and noticed that my cat also had reviewed this 401(k) update. I could tell because there was a gigantic, mushy hairball on it. I promptly filed that in the circular bin, which is what I should have done in the first place. Perhaps we don't give cats enough credit for their investing skills...

More Green = Less Green?

I've long been a supporter of the so-called green movement and I'm encouraged to see it succeeding in everyday life, from people determined to buying cars with better gas mileage to shoppers using fewer disposable bags to homeowners replacing their incandescent light bulbs with compact fluorescent lights.

The increase in these types of actions, to me, is all great news. It means we're conserving our resources, helping to make our world more sustainable, and also in many cases saving money.

Which is where I'm getting increasingly curious as to whether or not the green movement is causing at least part of the readjustment in the stock markets.

Considering the fact that Americans are driving less year over year and that cars are getting more efficient, it should help to cut back on money spent on gasoline. Additionally, if people are using reusable bags to carry their groceries, that's another huge source of petroleum that is not wasted. Or having people use more energy efficient light bulbs means saving money on electric bills. All of these initiatives and others inevitably will result in less money for the oil, electric, and industrial companies. And as these initiatives increase across the country and worldwide, it will have a major impact on corporate bottom lines... read: less profit.

So perhaps part of the sell-off on Wall Street and other stock markets around the world is a result of this fundamental change in society of being more green. If less money is being wasted on oil, electricity, etc. then it means more money to spend elsewhere, but it would also mean less money for those industries and fewer jobs. The net result could end up in people saving more money, or it could result in deflation which could shake up the entire system. Perhaps it will be the starting point of taking wasted money away from companies and putting it back in consumers' pockets, which means a fundamental change in the way we spend money in the future.

I'm clearly not an economist, just a rational observer of what's going on and I would be curious to learn more about the impact of green practices on the bottom line regarding corporate greenbacks. Eventually we'll start to see long term trends, but in the meantime we will have to do our best to adjust to the changes.

A Dumb Economics/Financial Question

I follow the economy pretty regularly, though I have no formal training in it. I like to learn about the world of finance, without delving deep into complex formulas and numbers. Call me a minor league financial fan, if you will. Not quite ready for the big leagues, but definitely way more advanced than tee ball.

So here's my dumb question:

In a market like the one we're facing today, where virtually every sector is losing money... WHO is making money?

I don't think anybody would argue with the fact that the industries of housing, banking, retail, manufacturing, and so on are struggling right now, both in America and in many other countries. On the flip side, energy companies have done well and perhaps a few other sectors.

But ultimately, it seems like a LOT of money has been lost all across the stock market and in the housing market and elsewhere, and I'm not quite grasping as to where it's all going. Consumers are getting squeezed by higher prices all over the place (read: inflation), companies are starting to cut back on employment and production it seems, houses still are not selling all that well, savings rates are low so holding money in a safe account doesn't reap big rewards, and on and on.

So I ask again, WHO is on the other side of the transaction, making money right now? Average John and Suzy homeowner, stock investor, employer, and consumer sure aren't making money... so where does it all go???

-Curious in Jersey

Halloween is Here: Scare Up Some Moolah

Halloween is the sixth biggest spending holiday for Americans, according to the National Retail Federation.

An estimated $5 billion will be spent for Halloween costumes, decorations, candy, and other fodder.

Now that's scary.

The Mystifying Ways of the Auto Industry

I was never a big admirer of cars. Some people collect them, refurbish them, pimp them up, and dream about them. That's cool. Everybody's got their thing. I've always considered cars to be a machine that gets me from here to yon.

I'm not quite sure why I never took to cars. My dad loved and still loves cars. He can watch a throwback movie from the 50's and name the year, make, and model of cars that are in the background. It's quite an impressive talent actually! But for some reason I never caught on.

I think it's mostly because I'm jaded by the whole auto industry. Their ways of doing business just totally mystify me.

Here are some points to chew on about why the auto industry bugs me:

• Dealers: Granted, some dealers have caught on of late, but how many times do you see a car dealer commercial where the rich, slickly dressed dealership owner is yelling at you about how cheap his cars are or how fast you have to act before this price break ends? It's totally tasteless and out of control! Since when do people want to be interrupted with this garbage? Sadly, it seems to work or else they wouldn't continue to do it. But not for me.
  
• Dealers, Mechanics at the: It's a universal fact that the mechanics at the dealers charge you your firstborn baby to fix a rusted tailpipe. Independent mechanics aren't usually much better. I utterly respect mechanics' knowledge of fixing cars, but don't markup the cost of a part by 200%, and don't tell me I need something when I don't. Why would I want to come back to you if you're screwing me? On the bright side, the internet has made a dent in the price of parts. To wit, I just bought a new mirror at PartsTrain.com for a total of $43, and a guy at work popped it on for me at no charge. That's the way to do it.
• Jobs: Used to be that jobs in the auto industry were good, honest work for hard working people. Obviously things change over time, but I can't quite get excited about buying a car when I hear that 10,000 jobs need to be cut here, or 30,000 there, etc. There's got to be a better way to go about this.
  
• Marketing: Twenty years ago, environmentalists were called crazy for worrying about carbon dioxide emissions, fossil fuel shortages, and so forth. Now all of the sudden, all of these car dealers are "going green" and claiming to save the environment. Look, I'm all for hybrid cars. These should have been mainstreamed decades ago. But don't all of a sudden act like you're on my side, and also, don't tell me that "the environment thanks you", as Honda says. The environment thanks me when I walk to the store, or ride a bike to work (which, unfortunately, I am guilty of not doing enough of either). It doesn't "thank me" for continuing to pump out CO2, just in lesser amounts. Let's be real here.
• Numbers: Can anybody tell me what all those numbers are all about at the end of a commercial, on a contract to buy a car, on a car rental contract, or in the owner's manual? Whatever happened to making things simple? Not in autoland. It's just one big numbermash!
  

Well that's a small taste of why I dislike the auto industry. Maybe by the time I'm ready to buy my next car in a few years, they'll have figured it all out. If not, maybe it's time for a Schwinn. Keep on truckin'!