In Search of the Perfect Investment

The Fed believes people businesses will borrow if they keep rates low.  They won’t. The banks won’t lend. The Administration’s Small Business Administration doesn’t lend. And the banks are hoarding their money because the regulators are encouraging them not to lend.  From yesterday’s New York Times,

Last week, one entrepreneur had the opportunity to ask President Obama a question that no doubt has been on the mind of many others. The venue was a town hall meeting in Tampa, Fla., on Thursday, the day after the president’s State of the Union address. “I’m frustrated because I can create 500 jobs,” began Steve Gordon. “I’ve gone to the banks, I can’t get a loan. You lent directly to Wall Street, you lent directly to the automakers, you lent directly to the banks — why can’t the government make [small-business loans] available directly to us?”

The guy still doesn’t have his money. You can read the full article and hear our president burble on and on with his stupid answer.  It’s all thoroughly depressing. Click here.

Meantime, the banks are borrowing huge amounts of money from the Fed at zero interest and lending it back to the Feds via Treasuries — making a huge spread. If you were cynical, or worse conspiratorial,   you could conclude that it’s a really neat scheme for the  government to make the banks rich and be able to pay large bonuses, some of which are then recycled into campaign contributions for  the same politicians that came up with this brilliance.

Back at the farm, these low interest rates are screwing all of us with a few shekels in cash. What to do with it? You can earn a grand 1.65% to 2.0% if you give it to your local bank on a 12-month CD. Or you could gamble with it in the stockmarket. Of course, you could argue (cycnically?) that the administration is trying to encourage us to gamble. If stock prices  go up, then our  politicians will look good and get re-elected. And even better, since the finance industry is now the largest single source of campaign contributions… Well you get the idea. I notice my local Senator Kirsten Gillibrand is spending oodles of time with hedge fund managers. Read this piece Senate Race in New York Is a Tug of War Over Donors.

Muriel, my wonderful assistant, and I spent yesterday renewing bank CDs. Not only did it give boredom a whole new meaning, but dealing with bank flunkies is totally debilitating. I have friends who’ve   given up on them and are sitting on cash. Some friends are buying two year bonds, for which they can earn as much as 4.5%. They tend to believe that being tied up any longer will run them into the massively higher interest rates they’re expecting as a result of our gigantic deficit. If interest rates rises, then the value of bonds will fall. The fall would be massive if interest rates spiked from today’s basically zero to 15% (as they were during the Carter Administration.)

I have bought some long-term muni bonds recently. My feeling is simple. I’m happy clipping the coupon. And I’ll get my money back when the bond matures. Hence its value along the way is irrelevant.

Google’s Chrome is good, but… it doesn’t work well on all web sites. Most web sites are written for Microsoft’s Internet Explorer. My strategy: Use Chrome. It’s faster. When something doesn’t work (e.g. the video of the president above), then I switch to IE.

Commodities suck. As you know, I once had money in a commodities fund. I watch it occasionally. It’s down 6.60%. for January. Maybe it will go up, one day. But it will go up without me.

Oops, I just noticed on BubbleVision coffee and sugar (or something) are up strongly. I hear copper is up also.

Don’t use Windows 7 — yet. Every new Microsoft operating system has bugs. They get repaired in a Service Pack, typically released 6-9 months after the release of the operating system. By SP2, Microsoft had fixed Windows XP. And it now works well. That’s what I use. Eventually I’ll switch to Windows 7 — but only after:

1. Ten to 12 months.

2. Microsoft releases its first service pack for Windows 7.

3. The computer trade press reports no more problems with Windows 7.

On Tuesday, Computerworld said Microsoft was looking into battery problems apparently affecting Windows 7 notebooks. Said Computerworld:

Users have complained of battery issues — including premature warnings that the power is exhausted, as well as more dire demands to replace the battery — for months, long before Windows 7 went final.

Microsoft claimed that the problem was in the Windows 7 tool that decided when the battery had been drained, or was unable to hold a charge. “We are investigating this issue in conjunction with our hardware partners, which appears to be related to system firmware (BIOS),” a Microsoft spokeswoman said today, referring to the firmware that boots the PC and initializes the hardware components. “The warning received in Windows 7 uses firmware information to determine if battery replacement is needed.”

A very long thread on Microsoft’s support site dedicated to Windows 7 battery problems kicked off in early June 2009, and remains active; more than a dozen new messages were posted on Tuesday, for example.

While some users on that thread agree with Microsoft that the warnings are spurious, others believe that the new operating system has permanently crippled their batteries.

For more, read Computerworld.

Fuel oil and propane are semi-scams. They deliver when they will. And charge what they feel like. Vigilance is the only solution. Item: My guy was charging me $2.19 or so a gallon for propane. I checked with others in the neighborhood. Some were being charged more — as much as $2.49.  Some less — as little as $1.87. It was all over the place — as they say in Australia, like a mad woman’s feces. I called our supplier and using techniques ranging from begging to groveling, got him down to $2.09. Which, as they say also in Australia, is better than a slap in the belly with a cold fish.

The latest hotel scam. Sign up for the room at  Hotels.com or on the hotel’s own web site. Then suddenly, you’re hit with an extra 5% or 10% charge for something spurious, like access to the front door. Here’s the story: The hotel won’t negotiate up front. But  the front desk is authorized to remove the charge and associated taxes when you check out.

In short, don’t bargain up front. Bitch at the end.

That’s the new game.

Anyone got a decent car rental place at or near LAX? I need a six-week rental, out of LAX, returning the car to Las Vegas. The biggies — Avis, Hertz, etc. — are outrageous.

Favorites one-liners.

There’s big controversy on the Jewish view of when life begins. In Jewish tradition, the fetus is not considered viable until after it graduates from medical school.

Why don’t Jewish mothers drink? Alcohol interferes with their suffering.

When the doctor called Mrs. Liebenbaum to tell her that her check came back, she replied,  “So did my arthritis.”

I once wanted to become an atheist but I gave up . . . they have no holidays. – Henny Youngman

My father never lived to see his dream come true of an all-Yiddish-speaking Canada. – David Steinberg

Harry Newton, who is convinced he’ll find some creative way to become a safe yield hog.