capitalism *is* fun :-)

… was $40.7 trillion (that is 40700 billion dollars) in 2007 … up 10%, driven by Indian, China and Brazil. Wealth growth in the western countries declined in the meanwhile. I guess it’s better to sit on top of a large pile of gas, oil and other minerals, rather then useless dotcom stock options No wonder that the major wealth managers of the world (Merrill Lynch, UBS, etc), are opening offices in Moscow, Istanbul, Dubai, etc…

If all the wealthy in the world would combine their resources, they could buy their own country Welcome to Richistan

I was reading the usual stuff this weekend (Bloomberg and a few more sites) and 2 things got my attention. One is about people’s greed and ingenious ways of making money, and the other is a good example of how to lower a car’s fuel usage, at the expense of innocent lives.

A new business in town will allow you to sell your life insurance to an "investor" in case there is nobody left to cash in your policy once you die. You get a nice amount of money in exchange, and they will continue to pay the premiums for you. Wonderful idea indeed. I wonder how long it will take until obscure little companies running this business, will hire the mob or other dubious characters, to help the person cash in the policy, a bit "sooner".
Capitalism is sick

On another article, the environmentalists started their usual protest, against a new European Union directive, which will require all cars to drive with their headlights on, all the time. According to the environmentalist, this will increase fuel usage by 5%. That is if you are driving a golf-cart. Has any of those green geniuses thought of actually experimenting this, since almost all cars have a trip computer which shows you your average fuel consumption?
Let’s do some math. A crappy little car engine has at least 50Kw of power. That is 50.000 watts. Turning the headlight on, uses at most, 200 watts. That is 0.4% … That’s 12.5 times less then what they claim.
I suggest that the EU should ban the usage of headlights at night. This will allow car manufacturers to lower the production costs since headlights won’t be needed, cars will get cheaper, and the amount you save, can be used to offset the high costs of gas. I am all in, for the environment’s sake.

Driving a hybrid car, is like sleeping with another man’s wife. It makes you feel better that you don’t adopt a habit that causes major issues to the environment. Only a small (and good) part of it.

I was reading some articles in the latest issues of NewsWeek when I stumbled across another great one. Again, the theory that when people are confronted with a serious issue, it’s easy to find some to blame it on, enact some penalty against the respective entity, feel happy at the end of the day that the one to blame has been punished, just to wake up the next day and find the problem is still there. No big deal! We will find someone else to blame and punish by the end of the day … and perhaps after a long period of overlooking the actual problem, and trying to use some creative thinking to solve it … we will start doing something. Here is the story:

Gas-stations are starting to ban the use of credit cards, to avoid paying a 10 cents fee for each gallon of gas paid with a credit-card (at $4 a gallon of gas). Credit card fees are up to 2% of the transaction amount. 2% out of $4 is 8 cents, but let’s bump it to 10 cents (price gouging?) to make MasterCard, Visa, American Express and others, look more guilty … shall we?

Let’s see all the "benefits" of banning credit cards:
- we save 8 cents on each gallon of gas we pay
- we start carrying around large amounts of cash with us. Very good thing. It will definitely help drive small crimes up, and justify some extra government spending on law enforcement.
- we will still pay cash advance fees at the ATM we use, and also, cash advances will carry an interest payment on your credit card, as opposed to POS payments, which carry to interest and offer a free credit for those that pay their credit card bill on time. You get to lose around 1% here.
- Factor in the extra hassle of finding and driving to (using expensive gas) an ATM machine or bank branch, to obtain cash.
- There are still a lot of scenarios that can happen, will happen and erode that great saving by a lot. You don’t have enough cash with you to fill up (since you are used to pay with your credit card for everything), and you will have to drive back again, to fill up your tank.
And many more.
Let’s do some math. I will take the best case scenario for you, the consumer.
Let’s assume you use 200 gallons of gas each month. You will save 2% from credit card fees which means $16.
You lose 1% at the very least, which drags down the total saving for you to $8.
Is it all worth it for a maximum of $8 you can save every month?

Think about for a second. Credit cards are product of free markets and capitalism. If there wouldn’t have been any benefits of using them, would have they become so widespread and accepted by everyone? I really don’t think so.

This reminds me of a story from my past. I was once discussing with a friend, about paying my bills. Instead of going to 5 different places to pay them, I use my internet banking service, pay a maximum of $5 in fees, and pay them all in 10 minutes. He argued with me that it was expensive, since I could just go and pay them with cash for free. No matter how hard I tried explaining him that at least $2 would have been the fee to withdraw that money from my bank account, plus factor in the cost of 5 trips to 5 places (I even considered 3 places to be within walking range, and only pay $2 for cheap public transportation to get to the other 2) … I am still only saving a maximum of $1, while wasting a lot of my time. I told him that the very best case scenario was saving half a dollar at expense of wasting a good portion of the day to walk around paying those bills. Still … he insisted that he was better of then me … with half a dollar

This is the kind of thinking we have to stop using. Overlooking good solutions for an issue we are facing, just because we are looking at an easy to apply and shortsighted solution right at hand … won’t get as anywhere.

Since this blog has a section dedicated to "Serious stuff", from time to time I write with a serious sound on serious things. I just got home after another day spent in heavy traffic, doing paperwork, keeping an eye on my BlackBerry and so on. I came across a nice link. Vlad Berte’s blog, where he presents his creations. In a world where everything is powered by some form of energy, or derived from raw materials through complex chemical processes, he takes time to give life to inert materials without altering their composition, but only their shape.
I had the privilege to see most of his work at his place. He is one of those guys you never hear talking about money, or wanting this and that. He just enjoys every day, as is. He doesn’t have a business plan. There are no numbers and percentages. Nothing. Just fine art. I trust his success. Behind every major success there is always a lack of a business plan, and goals to achieve. Which leaves plenty of room to express one’s creativity, without being pressured.

And my personal favorite is this. Check out his entire work on vladberte.com

I find my conversations with Dan to be an infinite fountain of wisdom. Dan has a job. Having a job, is like using public transportation as opposed to driving your own car. You get to do the same thing, but you do it in a coordinated group, where your opinion doesn’t matter and nobody cares about you, as long as you have paid your contribution (be that work or paying the ticket). But as Dan likes to put it (and I quote him):

" I can still jerk off all by myself at home. That’s how I remember I’m still in control"

I was surfing the Apple website to checkout the new iPhone 3G, when I came across this. Cool! I am looking forward for the release of fixed rate mortgages for iTunes. Or even better, an iPhone equity loan, backed by my iPhone as a collateral Watch out people … we could be heading for the next credit crisis, once the value of the iPhone will drop, leaving people with negative equity.

Capitalism surely is fun

P.S: I am changing my recomandation on Apple (AAPL) stocks to: BUY and HOLD :) 

Last night I read an excellent quote. I decided to change it a bit, so that some people don’t find it offending.
"10 years ago we were using oil. Today we are paying for oil" … hence the pain at the pump

Well, I was reading the latest issue of  The Economist and noticed nice link to howispentmystimulus.com. Looking at what people bought with that money almost made me cry. Poor people where helped out by the stimulus to buy those everyday necessities. Let’s name a few:
- a gas guzzling SUV
- cat dentist (???)
- Runescape player upgrade account (everyone needs one, really)
- guns!
- vacation to Mexico
- Las Vegas (really, this one couldn’t have been missed)
and so on. Visit the site and enjoy. Those poor guys.
I think those checks stimulated something else then the economy. Let’s hope that next time, Ben the helicopter Bernanke will decide to to throw the dollars straight from a bio-fuel powered helicopter, and save a couple of thousands of trees that were used to make the paper on which the checks were printed.

I love the way politics work. They are like a retail store offering a 5% rebate on a 50% overpriced product. From the 2 sides of the coin, people always see the side which has the 5% rebate printed on it, and cheer along.

With crude oil hitting a new record, of over $138, every newspaper and the entire media are out for finding the new guilty ones. OPEC, governments with taxes, little green men, etc. Face it people. We are almost 7 billion, chewing on limited amounts of the black stuff.

I got to watch "The Mist", based on a novel by Steven Hawking. I suggest you watch it. Underneath the cover of a horror movie, it actually does a wonderful and subtle job of showing how people react when confronted with dangerous situations. Watch the movie, and observe the similarities with the actual world we live in.

Cheer up. My investment portfolio is up 5% for this year. Things don’t look that bad.

I guess there is nothing more cool on this world, then buying oil with US dollars
I know this post doesn’t make much sense, but I am just giving Windows Live Writer a test .