Entertainment Coupon Books declares Bankruptcy

I guess I won't be writing about the Entertainment.com Coupon books any more.   They've apparently declared chapter 7 bankruptcy :

Coupon book company Entertainment shuts down headquarters in Michigan, lays off hundreds


Chapter 7 bankruptcy is generally the kind of bankruptcy where a company just shuts down and liquidates.   While its possible they might be resurrected or bought out and continue business in some form, at this point they are essentially shut down.

Their website is still alive and has not notification there but that may be due to the pretty abrupt nature of their bankruptcy filing.   Employees were not given any advance warning.

Its unclear at this point if merchants will still honor the Entertainment book coupons.   In general I see no reason why they wouldn't do so.   My understanding is that the merchants don't pay or receive anything from Entertainment to do the coupons so the bankruptcy shouldn't have any direct impact on the merchants.   But thats mostly my assumption and what will happen remains to be seen.  The answer may very well vary from merchant to merchant.

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New Costco email "Message Providing Notice of Amended Fuel Temperature Settlement"

On December 24th I got a new letter from Costco about their pending class action lawsuit over fuel temperature.   If you are a Costco customer then you may have also received an email recently with the subject  "Message Providing Notice of Amended Fuel Temperature Settlement".    This is a legitimate email and it is not a scam or anything.   However the email isn't really noteworthy and you can basically ignore it.

I talked about this lawsuit in the past when I wrote Costco Fuel Temperature Class Action Lawsuit : What does it mean?.

The letter starts out like this...

__________

NOTICE OF AMENDED CLASS ACTION SETTLEMENT

TO:   All persons who, between January 1, 2001 and April 22, 2009, purchased gasoline from Costco at a temperature above 60 degrees Fahrenheit in any one of the following States: Alabama, Arizona, California, Florida, Georgia, Indiana, Kansas, Kentucky, Maryland, Missouri, Nevada, New Jersey, New Mexico, North Carolina, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, and Virginia.

YOU ARE HEREBY NOTIFIED that based on concerns regarding class representation, the Court did not approve the settlement agreement previously entered into between Costco and Plaintiffs on or about April 12, 2009 (the "Original Settlement") in In re Motor Fuel Temperature Sales Practices Litigation, Case No. 07-MD-1840 (United States District Court, District of Kansas). On or about January 3, 2011, the parties entered into an amended settlement agreement (the "Amended Settlement") based on suggestions made by the Court.

__________

For reference I also found a copy of the email posted online at another site.


Then it goes on for a while.    If you skim down you'll see the important detail...


"Except for the class representatives, class members will not receive any payment."

So you are still not getting anything.   Move along folks... nothing to see here.

The purpose of this email is to explain that they split the class action into 21 separate classes for each of the 21 states in question.    Otherwise there really isn't anything new or noteworthy for us.


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Newsweek Worries about 5% Unemployment Among College Educated White Males

I was in the doctors office recently and was flipping through the magazines.   I found the Newsweek article Can Manhood Survive the Recession?  and I started to read it while I waited.   It seemed like an interesting story about how middle aged college educated men are having a hard time in the recession.   I read through a page or two and then came across the lines

"Through the first quarter of 2011, nearly 600,000 college-educated white men ages 35 to 64 were unemployed, according to previously unpublished Labor Department stats. That’s more than 5 percent jobless—double the group’s pre-recession rate."

I wondered if I was missing some major detail about how 5% unemployment was a tragedy.   I wasn't.   The entire story reads as if its written from an insulated position of people who are not really used to the reality of unemployment.   5% unemployment is something that most Americans would be thrilled to see but this article paints that 5% unemployment rate in the specific demographic as some sort of tragedy.

When I say that they painted it as a tragedy I mean it.  They used over the top language like "Detroit of the soul" and ""this hitherto privileged demo isn't just on its knees, it's flat on on its face."  or "“if they lose their job, they are toast.”   "The gnawing fear that this may be the beginning of a slow, shaming crawl to early Social Security."  You get the idea.

A few pages later they had a sub-story titled Love Means Never Having To Say ‘Get a Job’   That was a story written by the wife of one of the tragically afflicted upper middle class middle age white men with college degrees who had been subjected to actual unemployment.   Few notable details in that story.  The man had been a CEO at one company.  He voluntarily quit his job at Google during the recession because his job had  become "less exciting".   Gasp!    Then he cleaned his garage.   Within 6 months he found another job but it was 2 hours away from home.  I think the 2 hour thing was supposed to make us feel bad.   Oh.. but it was his "dream job".   Not only did this guy voluntarily quit his own job in the middle of the recession but he was able to find another in a relatively short 6 months.   This is a success story if you ask me.  Plus he had some time off to clean out the garage to boot!   Seriously... he quit Google?   Are we supposed to feel sorry for him or angry at him?  I don't know.

Reading the article I had a couple questions to myself:  Why should I care that a group of college educated men are 'suffering' with 5% unemployment when the rest of he country is suffering with much higher unemployment?   and    Why would Newsweek even publish such a story?     I don't know the answer to either of those questions.   If I was a Newsweek subscriber I would consider canceling my subscription.

I wasn't alone in questioning the article.   Feministing wrote Maya and Lori on the “Beached White Male”: Newsweek spews steam out of its blowhole and FAIR wrote Newsweek Bravely Highlights the Plight of the Beached White Male.   Both articles point out that unemployment in black workers is higher.

Maybe it was all supposed to be a joke?   The article was not dated April 1st.  I had to check to make sure.

Wealth Distribution in America: Perception vs Reality

Last month Businessweek ran an interesting article, The Inequality Delusion,  talking about the wealth distribution in the USA.    Apparently Americans think that our wealth is spread around a lot more than it actually is.   A survey was conducted to ask people how much wealth they thought the top 20% of Americans held.  

"On average, those surveyed estimated that the wealthiest 20 percent of Americans own 59 percent of the nation's wealth; in reality the top quintile owns around 84 percent. The respondents further estimated that the poorest 20 percent own 3.7 percent, when in reality they own 0.1percent."


The graphic on the Businessweek site shows the difference between the survey, reality and what people think is ideal.

Wealth actually owned by 20% = 84%
Survey results what people think the top 20% owns = 59%
Survey results what people think the top 20% ought to own ideally = 32%

Foreclosure Problems - A Giant Mess

I just read this New York Times article from Yahoo From a Maine House, a National Foreclosure Freeze
It is the story of the foreclosure of one particular home in Maine which lead to uncovering of improper foreclosure processes by lenders and the recent foreclosure freeze.

The whole thing is a mess.

Here's some points from the article:

• GMAC was bailed out with $17 billion in tax dollars and is now majority owned by the federal government.
• The home is worth about $75,000 and the mortgage payments are just $474 a month.
• The woman who owns the home has not paid her mortgage for two years and lives on welfare and food stamps.
• The lawyer for the woman found out about Jeffrey Stephan who is the infamous 'robo-signer' for GMAC who signed over 400 mortgage foreclosures a day.    
• The use of robo-signers isn't even new information to the courts: "GMAC had been admonished in a Florida court for using robo-signers four years ago but had persisted."
• In this case GMAC filed a 2nd foreclosure but "did not bother to include the actual street address of the property it was trying to seize".

Everything about this is just messed up.  

I'm honestly amazed at how incompetent or arrogant the bank in this case seems to be.  They are either incompetent for filing such poorly documented mortgage foreclosures or arrogant for thinking that they shouldn't need to bother to do it right.   Maybe they are both.

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Wamu Loaned Money to OJ Simpson and other news

Here are some misc. news items I've seen recently that I thought were of note:

Not a good loan

You may recall that Washington Mutual (Wamu) went under and their assets were acquired by JP Morgan Chase bank. The Seattle Times has a 2 part article (part 1 & part 2) on the demise of Wamu. In the first part of their story they reveal that someone at Wamu had made a 2nd mortgage loan to OJ Simpson. The loan was made after he had been found liable in the civil lawsuit and so he wasn't in healthy financial shape at the time. In the documentation for the loan there was a letter from Simpson saying "'the judgment is no good, because I didn't do it."

Supposed Toddler home buyers

The $8,000 tax credit for new home buyers has lead to a lot of false claims and some outright criminal fraud. USA Today article reports that there have been 1.4 million tax claims on the credit and that the IRS "... has opened 107,000 civil cases related to the credit and identified 167 criminal schemes." They even cite one case where a 4 year old was listed as claiming the credit. I am guessing the parents were existing home owners so they filed as if the 4 year old bought the home in order to try and claim the credit.

Wanna house in Detroit?

Its clear that things are not going well for Detroit. They have the highest unemployment and one of the highest foreclosure rates. The situation is so bad that the auction of 9,000 homes or vacant lots that were foreclosed on due to taxes by the county was a "flop". With a minimum bid of just $500 per item less than 20% was sold. Of course many of those buildings are not habitable and the better ones sold for higher prices.


Estate Tax law to be Revised

Another article said that the congressional leadership in the House has said that they will revise the Estate tax law before it expires at the end of 2009. Given current law the estate tax will be repealed entirely in 2010. But it sounds like congress may change that before it happens. The article doesn't say much of anything about what they plan to do but I'd assume they'll have an exemption of $1M or more. So its not anything to worry about in myopinion

Costco Fuel Temperature Class Action Lawsuit : What does it mean?

I just got an email from Costco about a class action lawsuit against them. The mail has the subject of "IMPORTANT INFORMATION ABOUT A CLASS ACTION SETTLEMENT"

One of my first thoughts seeing this email was "oh, so Costco has been ripping us off forever and now I'll get a 10% off coupon and the lawyers get $8M in fees?" But my cynical conclusion is not right in this situation. I decided to take a closer look at this settlement and see what its all about.

Note : I'm not a lawyer and what I'm saying below is my own personal opinion reflecting on the documentation I'm reading about the law suit. Nothing here is meant to constitute legal advice or legal opinion.

The email is addressed to residents of various states who are Costco customers. The body of the email starts with :
"The Court in In re Motor Fuel Temperature Sales Practices Litigation, Case No. 07-MD 1840 (U.S. Dist. Ct., KS) has preliminarily certified a class comprised of the persons identified above and preliminarily approved a proposed class action settlement. The complaint alleges that Costco (and others) misled consumers by marketing motor fuel at temperatures above 60 degrees Fahrenheit without adjusting for the fuel's temperature. Costco denies any wrongdoing."

So basically there is a lawsuit against Costco saying that they sold gasoline at a high temperatures without compensating for the temperature difference.

Why does the temperature of gasoline matter?

If you remember your high school science class you'll recall that things expand when they get hot. Gasoline will expand in volume when it has higher temperature. However the amount of energy in the gasoline is based on the weight not the volume. So when gasoline is warmer its volume expands and you're essentially paying for less energy. Think of it as kind of like paying for some hot air along with your gasoline. That analogy is not exactly accurate but gets the idea across.

How much does the temperature of gasoline it matter?

This report from a Oversight and Government Reform Committee in the House of Representatives on the topic says that the volume will change by 0.069% difference per degree Fahrenheit. So if you have a 30 degree difference then thats about 2% change. Therefore if gasoline costs $2.80 at the pump and you pump it at 60 degrees you'd get 1 gallon but if you pumped it at 90 degrees the volume would be 2% difference so you'd have to pay $2.856 to get the same amount of energy. This represents a worst case situation. So at the very worst you might be paying a few cents more a gallon. However this can add up over millions of consumers.

The impact depends on the climate. Here is a report that shows the average temperature per state over the year. Of course its colder in Alaska and hot in Arizona. But for most states the average temperature is in the 60-70 degree range. For states like Idaho or Indiana the average temperature is close to 60 degrees. While the temperatures are higher in the summer they also drop in the winter. So the average is what you're really paying over the year. Your gas may be 1-2% more in the winter and 1-2% less in the summer. For Southern states the temperatures are higher and average gas volume is 1-2% worse. Georgia has an average temperature of 72 and Florida's average is 82. So those states are paying 0.8% and 1.5% more than the 60 degree level. In Alaska the average temperature is only 46 degrees so they are coming out ahead in the deal.

Is Costco evil? No.

Costco is not being evil here at all. In fact it turns out that "everyone does it". According to the report cited by the Oversight and Government Reform Committee study they said "Though technology exists and has been accepted for near universal use in Canada, no U.S. retailer of gasoline compensates for temperature when selling to consumers." So this appears to be standard practice in the gasoline industry. Costco simply did what every gasoline vendor does. I would not say that Costco is doing anything particularly misleading. In fact in the suit points out that in Dec. 2007 that Costco posted notices at their gas pumps saying: "This device dispenses gasoline solely by volume measured in standard gallons (231 cubic inches). It does not adjust for temperature or other factors which may affect the energy content of each gallon dispensed." So Costco even told us what they were doing explicitly if anyone had bothered to read the notices.

What will the class action lawsuit do? Will I get some money or at least a lame coupon?

The details of the class action are in a couple documents posted at the Costco website. The document Fuel Settlement Detailed Notice explains the basics of the suit.

It has a section 4. "WHAT DOES THE PROPOSED SETTLEMENT PROVIDE?" that explains what the proposed settlement will require Costco to do. The meat of it is that "The proposed settlement provides that Costco will convert its motor fuel pumps in ... [list of states] ... to “automatic temperature correcting” pumps over the next five years ... " The document then goes on to say that : "No payments will be made to any class members, except as stated in 9 below." and section 9 covers the cost of legal fees and rewards of $2,500 for the people who filed the suit initially.

Bottom line is that Costco has agreed to convert their gas pumps to automatically correct for the temperature difference and they are not going to pay customers anything.


To sum up:

• Costco has sold gasoline without accounting for temperature. This is apparently what every gas retailer does and Costco had a notice posted saying so. I don't see any wrong doing on Costco's part.
• The impact of the temperature can be minimal in some states with cold and hot days averaging out over time. However warmer Southern regions can see up to 1-2% difference in the actual gasoline received.
• Costco has admitted no wrong doing but they agreed to install temperature adjusting equipment at their gasoline pumps as the proposed settlement.

You Probably Won't get Paid $100,000 to do that.

I was wandering around over on Yahoo and I came across this article titled "You Get Paid $100,000 to do WHAT?" They say: "With the right education, earning over $100,000 annually can be easy in some unexpected fields." They list the jobs of : Court reporters, Hotel & Lodging managers, Academic Administrators & Deans, Sales Managers Commercial Hair and Makeup Artists and Software Development Managers. Note I put emphasis on the word 'easy' there in that quote. For some of these jobs I really don't think making $100,000 is easy at all. For other jobs it should be expected but the level of training and experience isn't easy to hit either.

First lets look at court reporters, lodging managers and makeup artists. I don't think it is 'easy' to hit the $100,000 income mark for these jobs.

Court Reporters make median pay of $49,710 according to the BLS.
Lodging Managers make median of $45,800 again from BLS.
Makeup artists for Theatrical make median of $26,270 from BLS.

So the median wages for these groups are nowhere near the $100,000 level. You might be able to hit the $100,000 level but such a wage is unlikely for the vast majority of people working in these professions. The top 10% of wage earners for these jobs aren't even at the $100,000 level. From the BLS data the top 10% of each makes : $83,500 for court reporters, $84,270 for lodging managers and $80,630 for makeup artists. The likely earnings for these professions is much closer to $50,000 - $80,000 than $100,000.

Furthermore these jobs aren't something anyone can just jump into. Court reporters really need to have very fast and to be certified by the national association you have to be able to transcript at 225 words per minute. I doubt most people can do that. Lodging managers don't just show up and get a job managing a hotel, thats the kind of job you work your way up to. Its relatively easy to get a job doing hair or makeup, but getting such a job for movie stars or the like is not typical at all.

Consider the other three jobs : Academic Administrators & Deans, Sales Managers and Software Development Managers.

Frankly I'm not at all surprised that these jobs can make over $100,000. I don't doubt they can and routinely do. But they are high end jobs that I'd expect to be compensated well.

Generally I'd assume you'd have to have a PhD to become a dean. It takes many years of education to get a PhD and high paying jobs at that level of education are much more typical. Of course they can make good wages.

Becoming a Sales Managers is probably more a combination of education and experience. You might be able to work up to sales manager if you are a very successful salesperson alone. But this kind of job is not something everyone can do. Furthermore not all sales manager jobs are the same. Many sales managers don't make anywhere near $100,000. Retail sales managers median wages are $35,310 according to BLS and the top 10% doesn't even hit $70,000. Its the non-retail sales management jobs that are likely to hit the high salaries. For non-retail sales manager positions the BLS says the median wage is $68,100 and the top 10% makes $136,810.

Software Development Managers are going to require both technical degree and management skills. Its also not the kind of job you get starting out. A technical degree in computer science or engineering alone should open the door to $100,000 wages with some experience but that shouldn't be a surprise. Median wages for computer software engineers is over $85,000 according to BLS. A manager should make more.

These three positions require a high level of education and/or a high level of experience with specialized skills and talents. So in my opinion while its feasible to make $100,000 doing them its not at all easy to get there in the first place.

Unemployment is NOT at a record

So I'm reading the news headlines and I come across this one: "U.S. unemployment hits record but job losses slow". Oh, no! I think to myself, this must mean that unemployment jumped above 20%. But then I read the article and it says this:

"However, the Labor Department said the unemployment rate raced to 9.4 percent, the highest since a matching rate in July 1983, from 8.9 percent in April. This reading beat the peak in the jobless rate during the 1973-1975 recession that lasted 16 months."

Well reading the title of the article and that quoted bit makes it sound as if 9.4% is the "record" at least post 1973. They say 9.4 is the highest since 1983 when it matched the rate and it is above the rate in the 73-75 recession.

Of course this isn't a real record though. They should know that unemployment during the Great Depression was over 20%, right? OK maybe their records don't go back that far like how the mortgage foreclosure/delinquency records only go back to 1972. No that doesn't explain it either cause the Bureau of Labor Statistics has unemployment data going back to the 1940's.
Its not too hard to find that the unemployment rate hit 10.8% back in 1982. Our current unemployment rate of 9.4% isn't even a record in the past 30 years. If you reread that bit quoted above, it makes it sound as if they were looking at data at least going back to 1973 so surely they should have spotted the peak in 1983. I find it odd that the article talks about "record unemployment" then talks about our current 9.4% rate matching what we had in July 1983 and exceeding what we saw in 1973 but neglecting to mention that unemployment was 10.8% in 1982.


Let me make it clear:

The current 9.4% unemployment rate is not a record. Unemployment was 10.8% in 1982. Unemployment was well over 20% in the Great Depression.

The current 9.4% rate is not even close to a record by any measure.

Now what I bet the author of the article meant to say is that the total number of unemployed people is at a record. That much is true. The total number of unemployed people is a record right now. But you know what is also true? The total number of people in the labor force hit a record in May as well. The population of the USA also hit a record this past month. In fact the nation has had quite a few months of record setting population totals now. While our population is growing it really doesn't make a lot of sense to report the "news" that labor figures also grow. Sure we have more unemployed people now than in 1982 or in 1973 but there are also many more employed people now than in those previous decades.

For a look at how the current recession stacks up to previous see my previous article on Comparing Unemployment Increases During Recessions

Switch to New www.FreeBy50.com Address

I've recently switched the address for this site over to the new www.FreeBy50.com domain. Previously the site pointed to FreeBy50.Blogspot.com.

I have some static links that still point to the old address and I'll try and go back and fix those to point them to the new www.FreeBy50.com address.

If you run into any problems with the address then I'd appreciate it if you let me know. You can leave a comment here if you'd like.

Please bear with mean and I appreciate your patience for any annoyance this may cause.

The "record" 12% of mortgages delinquent is NOT really a record

The media has been reporting lately that 12% of homes with mortgages are behind on payments or in foreclosure. If you skim the article you'll quickly find this : "A record 12 percent of homeowners with a mortgage were behind on their payments in the first quarter, the Mortgage Bankers Association said Thursday." Wow. If its a "record" then that means its the worst ever right?

Does this mean that we're worse off now than in the Great Depression?

No. The current delinquency rates are not nearly as bad as the Great Depression.


A while back I wrote about home foreclosure rates past and present. I had found an article from the Federal Reserve that discussed the foreclosure and loan delinquency rates during the Great Depression. ON page 138 of the article it says this :

"A broader measure of home mortgage distress
is the rate of mortgages with past due payments.
Comprehensive data on mortgage delinquency
rates do not exist for the 1930s. However, a study
of 22 cities by the Department of Commerce
found that, as of January 1, 1934, 43.8 percent of
urban, owner-occupied homes on which there
was a first mortgage were in default. The study
also found that among delinquent loans, the average
time that they had been delinquent was 15
months. Among homes with a second or third
mortgage, 54.4 percent were in default and the
average time of delinquency was 18 months.
Thus, at the beginning of 1934, approximately
one-half of urban houses with an outstanding
mortgage were in default"

So while they say that there isn't comprehensive data from the 1930's the data they do have shows that default rates on mortgages were north of 40-50% level. This is just one reference though and it is hard to find much information on mortgage default rates during the Depression. I came up with this WSJ article that said: " the mortgage default rate of over 40% in the depths of the Great Depression."

The current "record" 12% rate is nowhere near as bad as the 50%+ default rates seen during the Depression.

Why then does the press call the 12% rate a "record" if its not really the highest? Well we can figure that out by reading that they didn't have comprehensive data from the 1930's. When did they actually start tracking it?

The references in the press to the 12% default/foreclosure rate is from the Mortgage Bankers Association. Those are the folks that did the study. If you hit Goggle with their name you can easily find the initial study from them that the press are reporting to us. Here is the original Mortgage Bankers Association press release.

They published the initial findings that 12% of homes are in foreclosure or delinquent: "The combined percentage of loans in foreclosure and at least one payment past due, meaning the percentage of mortgage holders not current on their mortgages, was 12.07 percent on a non-seasonally adjusted basis, the highest ever recorded in the MBA delinquency survey. "

But before that bit they have a very important sentence in their press release that the media seems to have overlooked or not considered worth reporting to us all: "The seasonally adjusted rate is the highest in the MBA’s records going back to 1972 and the unadjusted rate is the highest recorded in the first quarter of any year back to 1972."

Bottom line: 12% is not really a record. Its a the highest they've seen since they started measuring it in 1972.

Thats not a record at all. The media shouldn't be calling it a record if its just the highest since 1972.

60 Minutes piece on how speculation drove up oil

I'm sure everyone fondly remembers the days of $140 barrels of oil. A while back I wrote about Why does oil cost so much? At the time I discussed how I thought that political turmoil, low dollar and speculation were the causes of the drastic increase in the price of oil last year. Well 60 Minutes has a piece discussing the role that speculation played in increasing oils prices.

WaMU is now JP Morgan Chase

Our checking and savings are with Wamu. As of September 25th the Washington Mutual bank deposits are now part of JP Morgan Chase. I went over to the Wamu website for the first time since JP Morgan bought them and found that they have this notice welcoming Wamu customers. So I am now officially a JP Morgan Chase customer. Or is it JP Morgan Chase Wamu now?

According to the announcement, things will remain 'business as usual' for the time being. My account numbers will not change and the bank account will operate as usual. Everything is still FDIC insured of course. Then later JP Morgan will gradually remove the Wamu name and replace it with Chase. I'll also then be able to use Chase bank branches and ATMs in addition to the Wamu ones. Overall I don't expect any problems with this transition. Banks by other banks now and then so this is nothing really special and I'd almost consider it 'business as usual'.

BUT.. right now our online savings with Wamu is at 4.0%. That is a pretty high rate for a savings account and Wamu was running such high rates to attract more customers to bolster their deposits. I suspect that sooner or later the return on our savings will drop significantly.

Graphic from Chase.com

Notable government bailouts in history

With the news of the government working on a bailout of the financial industry to the tune of potentially $700 billion total, its interesting to look back at some of the other bailouts the government has done in the past..

1933 a $3 billion fund created the Home Owners Loan Corp. to buy bad mortgages from banks. The government made a profit on that deal.

1979 the government bailed out Chrysler corp. with $1.2 billion in loans. At the time Chrysler had 100,000 so this saved 100,000 jobs. Plus again, the government ended up making money on the deal in the end.

1989 we had the S&L crisis when the savings and loans were bailed out. The Resolution Trust Corp. was created to take over assets. This one cost taxpayers $125 billion.

2001 The government put $5 billion in cash and $10 billion in loans into the airline industry to help them out after the Sept. 11 attacks.


References:

• AP article List of government bailouts in past century.
• History of U.S. Gov't Bailouts at Propublica
• History of Public Aid During Crisis at NY Times

Why does oil cost so much?

Previously I mentioned the impact of dropping dollar on the cost of oil. But today in the news I see that our Energy Secretary is blaming the increase in price on tight supply and then suggests we should open natural parks to oil exploration. I don't think that argument holds up to much scrutiny and I think its motivated by a desire to increase oil production.

Contrary to our energy secretary, here is a well stated article from Reason Online, : Oil Price Bubble? Supply is up, demand is down, yet the price is soaring. Here's why. It argues that there are 3 main reasons why oil is going up so much: 1) the weak dollar, 2) political turmoil, 3) speculation. You can read the article yourself for the details. It makes a good argument in my opinion.

I decided to look into the demand / supply situation myself. The Energy Information Administration (EIA) from the U.S. government has a lot of data on energy usage. From that site I found information on worldwide oil supply, worldwide oil demand, OPEC specific usage, etc. They have solid numbers up to at least 2006 and some stuff for 2007. I think this is the most recent published data available.

From the data I see, worldwide oil supply is keeping up with demand. From 1999 to 2007 world wide oil consumption went up 12.8% and world oil production went up 13%. The Reason article also then says that production went up 2.5% from the first quarter of 2007 to first quarter 2008 and consumption went up 2%. However, I will note that some years the production is a little less than the consumption. This could cause price increases. But I don't see any trend of that happening in the past. Consumption was more than production in 1999 and 2002 but oil didn't go up a large % in price those years.

Here is a graph that I made showing oil consumption versus production as well as oil prices in both US$ and Euros:

As you can see the consumption and production tracked each other very closely every year from 1999 to 2008. But prices didn't start going up that much until just recently in 2007-2008. To get the value of the Euro I used this Wiki page which quotes high/low annual Euro / USD exchange rates then I took an average of the high and low for each years figures.

Again, comparing the price in US$ and Euro is pretty revealing. While he price in US dollars has quadrupled in the past several years, the price in Euro has not increased quite as fast.

Why you're paying more at the grocery store & frugality in teens

Skimming today's Seattle Times headlines I found a couple interesting articles related to personal finance:

Why you're paying more at the grocery store

Food prices went up 4% in 2007 and are expected to go up 4.5% in 2008. The article discusses the situation and offers some explanations why.

In vogue with teens: frugality

The article discusses how cuts in jobs for teens is leading to the teens cutting back on spending and turning to frugality:

"The souring job market and rising costs of the usual teenage indulgences — a slice of pizza, a drive to the mall, the hottest new jeans — are causing teens to do something they rarely do: be thrifty. ...
It's even becoming cool to be frugal."

Amazon giving a $50 rebate for HD DVD buyers

I just received an email from Amazon saying that they are giving a $50 refund for people who bought HD DVD players in a certain time period. Apparently this is slightly old news. But I just found out today when I received the email. Heres a quote from the mail:

"You are receiving this e-mail due to your purchase of an HD DVD player from Amazon.com before February 23, 2008.
As you may know, manufacture of HD DVD players ceased February 23, 2008, and major studios in the U.S. have ceased production of HD DVDs. In recognition of this development, Amazon.com is providing all customers who purchased qualifying HD DVD players a credit for $50 off any products sold by Amazon.com for each HD DVD player unit purchased from us prior to February 23, 2008, up to a limit of 10 per customer, or a maximum credit of $500 per customer."

They then give you a rebate code to use on your next purchase. It looks like the same thing as a gift certificate code. The email has some more fine print details but you get the general idea from the quoted section.

Circuit City offered a $50 credit. Bestbuy then did also. Its nice to see Amazon following suit.

Amazon filler, HD DVD rebate and laundry detergent caps

A few blog articles I've found that I thought were worth a mention:

• The Amazon Filler Item FInder: http://www.filleritem.com/ was mentioned on WiseBread article Filler strategies for Amazon’s Free Super Saver Shipping It lists low priced items on Amazon that can be used to make sure your order exceeds the $25 minimum required to qualify for Amazon's free super saver shipping rate.
• Consumerism Commentary has an article on a rebate offer for HD DVD units from Best Buy. If you bought a HD DVD player from Bestbuy then they'll send you a $50 gift card. And even if you didn't buy one from BestBuy they have a tradin offer. I checked the quote on my Toshiba HD DVD unit and 5 HD DVD movies and it was a little over $49. Not quite enough to entice me to give up the 5 movies and the player to watch them on.
• I also heard from Consumerism Commentary about an article posted by No Credit Needed about measurement lines on laundry detergent caps. The point is that it might be worth checking the line you fill up your detergent cap to. Some of us may be using too much detergent and may not even realize it. I'll have to check that myself.