Thursday, April 24, 2008

We Dodged a Bullet: Extremists Failed to Privatize Social Security

The stock market, like any other market, goes through cycles of activity. A secular bear market is a long period of time in which prices stagnate or decline and investors suffer punishing losses from which they might never recover. Such secular bear markets can last as long as 25 years!

Since the mid 1990's, Washington extremists have been pushing the idea of privatizing Social Security. In this endeavor, they have shown themselves to be ignorant of - or maliciously indifferent to - secular stock market trends.

Up to now, they have been unsuccessful in privatizing Social Security so as to enrich Wall Street.

A commentator reflects on their failure and says,
The best thing to have happened during the Bush administration is something that did not happen.
Listening is more enjoyable!

Read if you must!

Macfrugality? Are Mac Owners Smug and Clueless?

A new marketing study has found Mac owners tend to think they're more extraordinary than the average Joe. They're also more likely than PC users to whiten their teeth, drive hybrids, drink Starbucks coffee and eat organic food. Andrea Gardner reports.
This is even more amusing heard (interview lasts about 90 seconds) but read if you must.

Frugal Ben wants to know: What is MacFrugality?

Wednesday, April 23, 2008

Economics as Science or Religion: McCain Must Decide

David Leonhardt paints an insightful picture of the dilemmas faced by politicians who try to use scientific, evidence based economics versus faith based economics:
When Douglas Holtz-Eakin took over in 2003 as the director of the Congressional Budget Office — the nation’s bean counter in chief — he walked right into a firestorm.

For years, Republicans had been pushing the budget office to change the way it estimated the cost of a tax cut. Rather than looking only at the revenue lost, they argued, the office should also consider how tax cuts would change behavior. With lower tax rates, businesses would invest more, workers would work more — and the government would thus get a tax windfall. This, in a nutshell, is supply-side economics.

A bearded academic, Mr. Holtz-Eakin had just finished a stint in the Bush administration and had spoken favorably about dynamic analysis. So his appointment excited Republicans almost as much as it scared Democrats. Senator Kent Conrad went so far as to call it “a mistake.”

But it turns out that both parties underestimated Mr. Holtz-Eakin. He did indeed begin using dynamic analysis, which makes a lot of sense, since tax rates really do alter people’s behavior. Yet he used it as it should be used.

What the budget office found, as study after study has shown, was that any new revenue that tax cuts brought in paled in comparison with their cost. This is why the deficit jumped under the last two tax-cutting presidents (Ronald Reagan and George W. Bush) and fell under the last two tax-raising presidents (George H. W. Bush and Bill Clinton).
Leonhardt goes on:
Today, Mr. Holtz-Eakin again finds himself in a firestorm. He is the top economic adviser to John McCain’s presidential campaign, and some fiscal conservatives have begun wondering what happened to the Douglas Holtz-Eakin who was a teller of unpleasant truths. For that matter, they’re wondering what happened to the John McCain who was a fiscal conservative himself, the man who not only railed against profligate spending but also voted against Mr. Bush’s deficit-creating tax cuts.
Now McCain must decide whether he will use scientific understanding to illuminate the country's economic condition or pander to extremists who value ideology over facts.

Frugal Ben Says: Benjamin Franklin and the other fathers of our country were proponents of science. Duh Uhhh! What do you think these patriots would tell McCain to do?

Tuesday, April 22, 2008

Free Market Ideology: The Danger to Real-Time Investors

If you are a middle-class investor protecting a family, you should learn as much as you can about "free market" ideology. It's a set of faith-based beliefs that shapes the financial industry in general and the corporate philosophies of many companies whose stock you purchase. If you think you can safely invest for your family without critically examining how this faith-based economics affects the managers of your investments, you are a sheep headed for a shearing.

The central element in free market ideology is a utopian vision of society in which economic activities can be pursued with little or no government regulation.

Concretistic descriptions of a free market can be found all over the internet. Wikipedia's is a bit more sophisticated:

A free market is a market in which prices of goods and services are arranged completely by the mutual consent of sellers and buyers. By definition, in a free market environment buyers and sellers do not coerce or mislead each other nor are they coerced by a third party.

Say Again? Buyers and sellers do not mislead one another?

On April 17, 2008, two stories ran in adjacent columns of the New York Times business section. The position of the articles invites the attentive reader to wonder, "Has American business leadership deteriorated to a point where executives are expected to deceive and mislead as a normal part communication with shareholders?"

The centerfold story: Patience Wears Thin: G.E.'s Shortfall Calls Credibility Into Question

For seven lean years, Wall Street has given General Electric and its chief executive, Jeffrey R. Immelt, the benefit of the doubt.

...Now, in the wake of a surprise earnings shortfall last week, Wall Street's patience has run out as the stock has plunged to its lowest level in four years.

...Shares of G.E. closed at $32.23 on Wednesday, down from about $37 a week ago, and off sharply from where they were before Mr. Immelt took over on Sept. 7, 2001.

For Mr. Immelt, the problem now is not just the earnings disappointment — the consensus estimate for the first quarter was 51 cents and G.E. reported 44 cents — but a looming credibility gap. On March 13, he assured investors the company was on track to meet its profit targets. And in December, he told analysts that G.E.'s goal of earnings growth of at least 10 percent in 2008 was "in the bag."

..."I've been covering the company since 1996, and I've never seen a miss this big," said Nicole Parent of Credit Suisse, who had rated G.E. as her top pick but downgraded it to neutral after the earnings report...

When the news broke shortly after 6 a.m. last Friday, Mr. Tusa said: "I was on the train, and I almost fell out of my seat. It was a shock — people thought it was a misprint."

...Even defenders of Mr. Immelt admit that the juxtaposition of the rosy predictions and the ensuing shortfall have shaken the reputation of G.E., which is the sixth-largest American company by revenue as well as a barometer of the broader economy.

The adjacent story: Retailers Get Stingy With Data

J. C. Penney says the tumultuous economy is making it impossible to predict earnings over the next year. Macy's asserts that providing monthly sales information is too distracting and confusing. And Starbucks argues that annual profit estimates are unnecessary.

In American retailing, less is suddenly more — at least when it comes to giving investors the sort of financial information they have long expected from companies.

Faced with an economic slump, a growing number of national retailers are abandoning the longstanding tradition of reporting monthly store sales and forecasting annual profits.

The stores say that they are eliminating outdated practices that encourage short-term decision-making and can confuse investors.

But many Wall Street analysts and investors, who rely on these numbers to gauge a company's health and the mood of the American consumer, are crying foul. The motive for providing less financial insight, they suspect, is to avoid issuing embarrassing numbers in the middle of a recession, numbers that can drive down a company's stock price.

So far this year, Starbucks, Macy's, CVS, Caremark and Jos. A. Bank have ditched one or both of the financial reporting practices that were once standard in retailing.

And on Wednesday, J. C. Penney joined the list, saying it would stop offering annual profit estimates, known in the industry as guidance, at least for now. (It will still provide monthly sales and quarterly profit estimates.)

Myron E. Ullman, the chief executive of J. C. Penney, said that with the housing market in turmoil and gas prices surging, "there is not enough visibility to give something meaningful."

The analysts who track J. C. Penney and the rest of the retail business can barely contain their frustration with all the lip zipping. "Withholding information is not what investors want," said Bill Dreher, a longtime retail analyst at Deutsche Bank Securities. "They want clarity."

A tough economy, Mr. Dreher added, "is a time to be more communicative, not a time to deprive us of guidance or clamp down on information."

How does this affect you? It's simple!

You can't make good investment decisions about companies whose executives camouflage the company's state from its investors!

Look at the situation of a buy-and-hold investor who trusted Immelt in December when he said 10% earnings growth was "in the bag" or trusted him in March when he said the company's profit targets were on track. On April 10, that investor's GE closed at $36.75. On April 11, after the earnings report was issued, Frugal Ben bought some GE for $32.

Today, the stock is trading at $32.25. Ben is happy enough with that. The stock pays a 3.25 % dividend yield which allows Ben to wait for the first good selling opportunity so that he can dump this speculative puppy.

The trusting investor lost about 13% of his investment overnight. If he needed to sell now, he's screwed. To break even, he has to wait until the stock appreciates almost 15%.

Free market dupes often argue that stories like the above confirm the effectiveness of a deregulated market: Eventually, the dupes tell us, misrepresentation or concealment gets discovered without government intervention and the market corrects the problem. This sort of wacky reassurance misses the point and is of no use to retail investors! You are not and never will be the market as a whole over an infinite period of time. You're the investor who gets robbed today and all too often cannot make up the loss over the rest of your investing lifetime.

The free market utopia pops up all the time in our political discourse but is rarely recognized for the faith-based reification that it is.

Few people would be taken in by the wackiness when someone says "Vote for me! I want to eliminate all government regulation concerning car thefts. We don't need that kind of regulation, we need freedom! We live in a country where the general economy keeps improving. You will be better off in the future than you are now. So, if your car is stolen, eventually you will recover from the loss."

If that doesn't play, why should one believe a free market utopian who promises, "Vote for me! I want to eliminate all government regulation concerning corporate investment misrepresentation. We don't need that kind of regulation, we need freedom! We live in a country where the general economy keeps improving. You will be better off in the future than you are now. So, if your investment gets whacked 13% or 50% or even 100% because executives deceived you, eventually you will recover from the loss."

When you shop for a house, you enjoy some protection because the seller is required to truthfully disclose information in response to your direct questions about house defects. Why should the situation be different when you shop for a stock?

Frugal Ben Says:

Inoculate yourself against simple-minded arguments from free market extremists. They are preachers of a utopian fantasy irrelevant to real middle class people. Teach yourself to think critically about their assurances that an unregulated market helps investors.

In the real world, investors are entitled to accurate information about what they are buying. We cannot trust executives to provide such information in unregulated markets. By the time the market catches on to cheats, irreversible damage to middle class people has already been done.

You will never have perfect information when you make an investment decision.

On the other hand, you are entitled to good information - that is, information free from distortion rooted in incompetence, irresponsibility or outright deceit.

In short, you are entitled to market regulation that guarantees transparency from prima donna executives.

Monday, April 21, 2008

Lend Your Loved One Money, Then Pay Gift Tax?

When helping your kids or other loved ones with a loan, you can run afoul of the Federal Gift Tax.

One way to deal with that tax is by lending children money:
Lend and borrow money.

Credit between family members requires the formalities of a bank loan, but the rate can be more favorable.

If you lend money to family members — say, to buy a house or a car, start a business or pay off an unfavorable bank loan — you must charge a minimum rate of interest set each month by the Treasury, called the applicable federal rate. In April, the rate for long-term loans (those lasting more than nine years) and requiring monthly payments is an extremely attractive 4.31 percent.

Alternatively, you can benefit parents or siblings by borrowing money from them and paying more interest than they could get from money markets or bank C.D.'s. There's no maximum government-set rate, but Mr. Moore suggests you "mimic the market" by paying what a bank in your area would charge for a comparable personal loan.

See more about other frugal techniques for dealing with this issue:

When Generosity Bumps Into Gift Tax
April 21, 2008
THESE days, many prosperous baby boomers are subsidizing parents, and sometimes siblings, who are less fortunate. Innocuous as this may seem, being generous can also subject you to gift tax. While helping a family member often occurs under the radar, if the gift exceeds a certain value and the I.R.S. catches it, you could be forced to pay the tax as well as interest...

PC World Editor: Free Web Services Disappear, Then What?

Harry McCracken warns: Pay attention to "Important" e-mail from free Web services!
If your favorite free Web service sends you an e-mail that declares itself "Important," open it pronto--and brace yourself for grim news. If my in-box is any indication, "Important" is becoming a cold, hard euphemism for Sorry, pal, the free ride is over.

In just the last month or so, Driveway notified me (and 8 million other users) that it was discontinuing its online storage service. told me it was taking away my all-in-one messaging service--unless I started paying at least $5 a month. And
Searchbutton, which hosted the search engine for my personal Web site, instituted a $500 annual fee for the service it had been giving away.

There's no denying the facts: Lots of companies that thought they could make a business out of free services can't. Either they start charging, or they disappear...,47511/article.html

Frugal Ben Says: Is this problem with free web services or with all web services? What happens if you are trustingly backing up your important data to a backup site for which you pay a monthly fee and the company goes out of business? You might wish you had also been backing it up to a hard drive or DVD in your personal possession.

Saturday, April 19, 2008

Freebies Vintage 2003: Some that aged well

From PCWorld, Best Free Stuff on the Web 2003
Fed by the Fed

Federal Web sites can out-shovel anyone when it comes to free data, but they often lack interface niceties. Still, for certain kinds of statistics, there's no better place to poke around. FedStats is a gateway to stats from federal agencies. Just pick a subject (Environment, say), and a list of relevant agencies, from EPA to NASA, pops up. Click the Key Statistics link to get quick hits on notable studies. You could also turn to the Social Law Library's State Law Page for a comprehensive and current list (organized by state) of links to state agencies, courts, and laws.

Frugal Ben Says: FedStats is very convenient when you are starting some research.
Scouting the Web

Web newsletters appeared minutes after the Web debuted. One of the first and best is The Scout Report, a weekly digest of useful sites with an academic bent. (Specialized spin-offs are devoted to physics, life sciences, and math/engineering/technology.) A typical 20-item report might reveal new figures from the Bureau of Labor Statistics, an archive on the free speech movement, a cool online collection of sheet music, and a special focus on a topic in the news.

Frugal Ben Says: Worth subscribing to. See Scout Report Archives for sample newsletters.

Wednesday, April 16, 2008

2007 - Soros Predicts Recession. 2008 - Bernanke and Paulson Still In Dark

Frugal Ben says investors need truthful information from public officials, not cloying bon-bons. Well, it was Valentine's Day!
February 14 2008
Treasury secretary and Fed chairman say rate cuts and rebates should keep economy out of recession

NEW YORK ( -- Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson both acknowledged problems in the U.S. economy Thursday, but both said they believe the nation will avoid falling into recession.

The two made their comments at a hearing before the Senate Banking Committee about the economy. Their testimony comes in the wake of troubling economic readings that have raised recession fears on Wall Street...
Not everyone was still in the dark:

From "The Face of a Prophet": April 2008 Article about George Soros.

...But last summer, at a luncheon at his home in Southampton with 20 prominent financiers, he struck an unusually bearish note.

"The mood of the group was generally gloomy, but George said we were going into a serious recession,” said Byron Wien, the chief investment strategist of Pequot Capital, a hedge fund.

Mr. Soros was one of only two people there who predicted the American economy was headed for a recession, he said.

Shortly after that luncheon Mr. Soros began meeting with hedge fund managers like John Paulson, who was early to predict a crisis in the housing market. He interrogated his portfolio managers and external hedge funds that manage his fund’s money, and he took on new positions to hedge where they might have gone wrong. His last-minute strategies contributed to a 32 percent return — or roughly $4 billion for the year.

You think Henry Paulson might learn something from John Paulson, or what? (They are not related. )

Tuesday, April 15, 2008

Taxpayers Foot the Bill for Olympic Torch Fantasy

Forget about Bay Area economic problems! San Francisco Mayor Gavin Newsome was determined to have his Olympic Torch Relay Farce despite the fact that no one had any idea how much the massive security measures would eventually cost local, state and federal taxpayers.

What's the history of this ritual that Newsom deemed so important? Edward Rothstein lays it out:
Look to the opening of Leni Riefenstahl’s 1938 film, “Olympia.”

In that homage to Berlin’s 1936 Olympic Games the origins of this ritual are revealed. Never before had a lighted torch been relayed from a Greek temple in Olympia to an athletic competition, let alone by thousands of runners trying to keep it from being extinguished.

So Riefenstahl creates the myth the Greeks never got around to telling, creating a filmic counterpart to the opening of Wagner’s “Ring,” in which an entire world gradually emerges from elemental fragments. The camera begins by surveying a misty landscape of ruins, of shattered pillars and overgrown grasses. Restless and circling, the camera reveals a Greek temple standing amid the stones. Heads and the bodies of Greek statues appear in an eerie erotic landscape. Under the sensuous caresses of Riefenstahl’s lens, a naked discus thrower comes to life, polished stone becoming muscular flesh. Another athlete prepares to throw a javelin, its trajectory leading toward a bowl of fire. Lighting the Olympic torch, another nude acolyte triumphantly raises it aloft like Wagner’s Siegfried displaying his sword.

Humanity is given its purpose; the relay begins. The torch is conveyed from one bearer to the next and ends in Berlin at a 110,000-seat stadium where it ignites an altar of flame. Through shimmering heat the sun itself can be seen, vibrating in sympathy. And Hitler salutes the cheering crowds.

This passing of the torch thus demonstrates a lineage of inheritance — a historical relay — making Nazi Germany the living heir to Ancient Greece.
With a history like that, would anyone be surprised that the torch run lends itself to controversy? But somebody seems to be: Olympic Committee President Jacques Rogge said, "It is a crisis, there is no doubt about that." He added, "But the IOC has weathered many bigger storms." Bigger storms? What's he talking about? Integrity issues? If that's what he's talking about, just wait and see what the politically connected do in Daley's Chicago if that city wins its Olympics bid!

Sports are wonderful when everyday people are the participants. But big time sports are just another mechanism for transferring wealth from the middle classes to elites.

Frugal Ben says taxpayers should evict officials who intemperately spend on divisive, wacky Aryan fantasies.

Monday, April 14, 2008

Frugal Ending to Lives of Subway Cars

From the New York Times, we learn that Delaware is frugally putting old subway cars to good use:
One by one, a machine operator has been shoving hundreds of retired New York City subway cars off a barge, continuing the transformation of a barren stretch of ocean floor into a bountiful oasis, carpeted in sea grasses, walled thick with blue mussels and sponges, and teeming with black sea bass and tautog.
According to Jeff Tinsman, “They’re basically luxury condominiums for fish.”

Enjoy! Be sure to take a few seconds to see the slide shows!

Sunday, April 13, 2008

Is TurboTax Worth the Price?

Last year I used TaxCut to prepare my income tax returns. I did it because TurboTax - the program I used for the prior five or six years - kept asking me about a leased car that was long gone from my life. Many years ago I used the car for business, then returned it to the leasing company when the lease ran out. After that, the car was sold, probably more than once. Meantime, TurboTax kept obsessing about it, kept demanding information about its mileage and expenses, kept refusing to let me delete the thing from my tax preparations and move on with my life.

TaxCut made the deletion simple, just as I hoped it would. My prior experience with both programs indicated that TaxCut always performed better than TurboTax in regard to deletion of irrelevant, obsolete data. Maybe its makers should go into the divorce business?

This year I went back to TurboTax because I got a better software bundle and rebate with it.

But when I got to the end of the filing procedure, the program disappointed me. It charged me $17.95 to electronically file my federal return, just as the package said it would. Then it whacked me another $17.95 to file state tax forms. This charge is a large bump-up from last year, when I used TaxCut. Was it really worth almost 36 bucks to file electronically? Probably not.

So what's a frugal person to consider in regard to tax preparation software?

First, do you need it all? Well, probably you do:

  • For all but the simplest tax situations, a computer program for doing your tax returns is a must! If your tax situation is complicated enough to require you to use the long Form 1040, it's unwise (errors will occur) and very difficult to do your return by hand.
  • All major tax preparation programs guide you through an interview which will allow you to prepare an accurate form. Needed information is automatically placed in all the proper spaces and all calculations are guaranteed correct.
  • Using a program saves a lot of time compared to doing taxes by hand. It might even be faster for you than using a tax preparer! I still shake my head over how long it took to gather tax materials, organize them, write notes and then drop the package off with my accountant. Even more time was burned up in inevitable phone calls and emails needed to clarify things. When I started using software to prepare my own taxes, I saved time.
  • Using even the most expensive program probably costs less than taking your stuff to a tax preparer.
The big problem with tax preparation software is that it is way overpriced! This is especially true of the most popular programs like TurboTax or TaxCut.

No matter that you factor in rebates and bundles, your final cost for such programs has steadily increased far more than inflation during the past several years. What justifies the increase?

Even when there are huge changes in the tax code, the bulk of the material in the tax forms filed by individuals changes little from year to year. When tax regulations require program adjustments, the software manufacturers need do little except tweak the code and the programs will compute taxes perfectly for their targeted tax year. If you use these programs long enough, you will see that any advertised "improvements" are mostly marketing hypes that ultimately benefit the software company, not you.

Real improvements occur slowly and incrementally. That's why there are no substantial differences between the most popular tax products - competitors have plenty of time to copy one another. Any minor differences that exist are probably going to be undiscoverable until you purchase and install the product and fill out your tax forms. By that time, you are not going to ask for your money back so you can start from scratch with something else.

Confronted by these unjustifiable price increases, most people just suck it up: They pay a bloated price for software that remains, from the user's perspective, basically unimproved from year to year. Then they get over it!

But there are other things you can do:
  • Watch for the best sale prices you can find. For example, consider what I thought was a good deal at Staples. Here's an update. I got Quicken Starter bundled with TurboTax but had to pay for electronic filing. The Quicken, TurboTax and filing fees finally cost about $75. At the Intuit website, I would have gotten "free" filing, but would have paid $84.90 for state and federal tax programs and would have gotten no free Quicken. Total savings: Around $40 on $85 purchase.
  • State and federal tax sites are improving every year. Be sure to check out how they can help you deal with regular income taxes. What do they offer in the way of free filing, online or otherwise? What do they do for you in terms of free electronic payments or refunds? Practice frugality by exploring these resources well before you need them. For example, do it around December or January instead of shopping and partying.....Weeeeell, NOT! Just do it early.
  • If you should pay estimated federal or state taxes, check government websites for programs which will automate the process for you without any charge.
  • There are three reasons to electronically transmit your tax forms: Transmission leads to fewer errors than scanning paper forms, it is said. Transmission is faster if you let things go to the last minute and the post office has closed. Finally, your government likes it because it makes things easier. Should you pay $35 for someone to transmit your forms and payment to the government after you have already paid a bloated price for software? That doesn't seem fair.
What's the most frugal solution to the problem?

Before the tax deadline, check with your friends and relatives. Who will be installing tax software on their computers?

Prepare your return on one of those computers and print the return. Then drink some beer with your benefactor. Later, mail the return to IRS with a check. Frugal and fun! If you are in a hurry to file and your form is simple enough, another alternative might be to transfer the information to forms on a free government website and pay taxes or get your refund electronically. That would be frugal and fast.

Either way, you're not paying $36 for a service which would be fairly priced if it were reduced by 50 to 75 percent.

Friday, April 11, 2008

Using Government Websites to Pay Taxes: Practical Tips

At the end of the tax season, it makes sense to think about what you might have learned that could make tax payments easier or cheaper next year.

My lesson this year involved using government websites to manage tax payments: Income tax payments and, more aggravating for me, payments of estimated taxes.

Paying estimated taxes is a hassle, especially when you pay them by check . You have to remember to put them on your calendar for four payments a year. Then you have to actually look at your calendar at weird times. It's easy to overlook the mid-year payments because vacations occur in June and, in September, the kids go back to school and you are depressed about the end of summer. To top it off, the final payment is due in January, after the holidays leave you dazed and broke! Who thinks about income taxes at such times of the year?

This year I used TurboTax to prepare my returns. At the end of the procedure, I caught myself staring morosely at the pile of paper forms TurboTax had generated for paying estimated taxes. How long I had been immobilized? When I finally woke up, well, you know what people do when they recognize they face something that desperately needs to be done. We'll feel better if we surf the net for a few minutes!

Intuit had already emailed me to say that my returns had been electronically filed with the Illinois Department of Revenue. The filing process was easy and made me wonder whether estimated taxes could be electronically filed equally easily. I went to the Department's home and thence to the start of the Estimated Tax Payment Process.

Now I have to apologize. I am going to sound like I am pimping for a tax collector: It took just a few painless minutes to schedule the first electronic 2008 Estimated Tax payment so that it would occur automatically on time and keep my money in its interest-earning checking account as long as possible. Even far better, the remaining three payments were scheduled so they would happen automatically! No fuss, no muss, no more penalties for forgetting the payments when they were due and no more dealing with complex forms that by which you try to escape the penalties!

That success led me to investigate federal resources to e-file or make electronic payments.

I found that there are two different websites for these tasks.

First, learn about regulations, forms and procedures at the regular IRS federal website with its faqs and e-filing pages. (Notice the logo on the federal site is similar to the e-file logo at TurboTax. Are all these tax programs charging you for payment services that state or federal government gives you for free?).

At the IRS site, I eventually found an old news release describing a program for electronic payment of estimated taxes. A link at the bottom of the news release takes you away from the IRS home to a second website, EFTPS Online.

At EFTPS Online, you pay taxes rather than just learn about them. I gathered links to post, but none of them worked when I entered them in the blog. Pages from the website time out pretty quickly, probably for security reasons, so you have to enter the site from the IRS website or from its home portal: Individuals can pay virtually all their federal taxes from this site. The only problem is that you have to register in advance for EFT payment of estimated taxes and it might take 10-15 days for your account to open.

So here's two frugal tax things you might want to think about for next year:

First, at the federal tax site, you can schedule automatic payments of your federal estimated taxes. You can also pay income taxes. There are no charges for these services.

Second, some (maybe all?) states provide the same free services.

It's well worth investigating these and other services your state and federal websites might provide to help you with your particular tax problems.

Just do so well before you need them! You don't want to be farting around with new websites and new procedures when it's April 14 and you're over the top with stress.

Wednesday, April 9, 2008

Items on the Freecycle Network - Oh, Gross!

If you ever needed to know why some temperance and prudence are needed when you Freecycle, see the Chicago Tribune story about pet urine and other Items Offered.

After I finished chuckling about the eccentricities the Trib uncovered, I remembered some of the really good experiences I had when Freecycling. For the most part, useful small items were involved. But the best transaction was when a young man showed up and dug out a 6' pine tree to replant in front of his own house. To me, the tree was indeed a weed - a "plant out of place". I was glad to have it gone and he even filled the hole. For him, it was a gorgeous evergreen at a great price.

Tuesday, April 8, 2008

Condo Hotels Good Investments? NOT!

From the Wall Street Journal:

Rooms With a Bubble View

April 5, 2008; Page B1

For many investors, the condo hotel may go down as the of the real-estate bubble.

Many buyers purchased the hotel rooms from developers hoping to get paid every time the room was rented. But condo hotels, which account for as much as 10% of all hotel rooms under construction and a much greater percentage in resort markets such as Orlando, Fla., and Las Vegas, are coming back to haunt many of the people who bought the units, the developers that constructed the buildings, and the operators hired to run the hotels.


Called to TS attention by BloodhoundBlog

Monday, April 7, 2008

Ford and Toyota in Ohio

Received this in my email with no citation or link, but too good not to pass on. Please send me information if you know source of material so I can attribute properly:


A Japanese company ( Toyota ) and an American company (Ford) decided to have a canoe race on the Ohio River. Both teams practiced long and hard to reach their peak performance before the race.

On the big day, the Japanese won by a mile.

The Americans, very discouraged and depressed, decided to investigate the reason for the crushing defeat. A management team made up of senior management was formed to investigate and recommend appropriate action. Their conclusion was the Japanese had 8 people rowing and 1 person steering, while the American team had 8 people steering and 1 person rowing. Feeling a deeper study was in order, American management hired a consulting company and paid them a large amount of money for a second opinion. They advised, of course, that too many people were steering the boat, while not enough people were rowing.

Not sure of how to utilize that information, but wanting to prevent another loss to the Japanese, the rowing team's management structure was totally reorganized to 4 steering supervisors, 3 area steering superintendents and 1 assistant superintendent steering manager and 1 rower. They also implemented a new performance system that would give the 1 person rowing the boat greater incentive to work harder. It was called the 'Rowing Team Quality First Program,' with meetings, dinners and free pens for the rower. There was discussion of getting new paddles, canoes and other equipment, extra vacation days for practices and bonuses.

The next year the Japanese won by two miles. Humiliated, the American management laid off the rower for poor performance, halted development of a new canoe, sold the paddles, and canceled all capital investments for new equipment. The money saved was distributed to the Senior Executives as bonuses and the next year's racing team was out-sourced to India..

Sadly, The End.

Ford has spent the last thirty years moving all its factories out of the US , claiming they can't make money paying American wages while Toyota has spent the last thirty years building more than a dozen plants inside the US.

Here are last quarter's results:

Toyota made $4 billion in profits. Ford had $9 billion in losses.

Ford folks are still scratching their heads....


Also sadly, this fable paints an overly flattering portrait of Ford management. Pity the poor shareholders, not to mention employees, who thought Ford executives knew what they were doing as they hatched their hare-brained schemes to buy Jaguar and Land Rover, deals which resulted in a 67% investment loss for the company.

Ford Motor Company represents yet another test of the "buy and hold" folk wisdom: Sold for about $3.00 a share on April 9, 1998, sells for $2.41 today. Oh, yeah, while the company was talking about restructuring and getting concessions from its employees and other such stuff, the stock worked its way up to a high of $26.40 in November, 2005, then descended back into the pits. Yo! You investors who believed this kind of management would be able to hold on to those gains: What were you thinking?