Not everyone is hurting

As a followup to my last post I thought I would add the "glass half full" take as well.

At least someone is making money :) I don't suppose everyone will look at this as a positive.

Exxon Mobil: Biggest profit in U.S. history

Largest U.S. oil company surges past analyst estimates to post net income of $14.83 billion.

NEW YORK (CNNMoney.com) -- Exxon Mobil Corp. set a quarterly profit record for a U.S. company Thursday, surging past analyst estimates.

Exxon Mobil (XOM, Fortune 500), the leading U.S. oil company, said its third-quarter net profit was $14.83 billion, or $2.86 per share, up from $9.41 billion, or $1.70, a year earlier. That profit included $1.45 billion in special items.

McDonald's Profits Climb -- For 10th Straight Quarter

McDonald's Corp. posted a 15% Q3 profit increase yesterday, extending their 3 1/2-year string of progressively stronger results. Premium coffee sales, more 24-hour restaurants, and strong European growth were among the key areas. CEO Jim Skinner said the company will continue to expand at a modest pace with new U.S. drive-thrus and new Happy Meal entrees and beverages that meet nutritional guidelines. He also committed 20% of its children's marketing budget to promote youth physical-activity. Net income was $0.63/share ($843M), up from $0.58/share a year ago. Same-store sales improved in every international and domestic region. Its shares have gained 30% in the last year, closing at $40.77, down $0.70. Citigroup analyst Glen Petraglia said promoting health and nutrition is a strong-suit for McDonald's, calling its menu the healthiest of the hamburger-restaurant operators.

Credits
http://money.cnn.com/2008/10/30/news/companies/exxon_earnings/index.htm?eref=rss_topstories

http://seekingalpha.com/article/18909-mcdonald-s-profits-climb-for-10th-straight-quarter

The Credit Roller Coaster

Ok, we have all seen the ads promising to lower your payments, decrease your interest rate, increase your p##is size, ok not those ads but those are also everywhere.

So what do these ads actually do?

Well in the ad above they mention the Mortgage Bill signed by President Bush on July 30

This bill promises to clean up this mortgage mess and bring financial freedom to millions of struggling home owners.

$700 Billion later we all know how that turned out.

I was curious so I went through the motions of following the ad above and what do you think I found?

Yup, you guessed it, shady marketing tactics to continually gather personal information in order to keep calling you to refinance your home or offer a quick home equity loan to buy all the things you ever dreamed of.

THIS IS EXACTLY THE TYPE OF ACTIVITY THAT GOT US INTO THIS MESS.

People don't need a home equity loan to take a vacation. People don't need to refinance their homes and pay thousands in closing costs for a few 1/10ths of a % of interest saved.

What people aren't realizing yet is that the credit splurge will become the credit desert very soon. High risk refinances will disappear, banks will not be able to give out home equity loans at the drop of a hat and credit card max limits will start to get lower and lower.

It's just sad that it constantly feels like we are riding on this giant credit roller coaster, when all we really need is just a bit more self control and responsibility.

Are We Ready?

So, I'm not a huge Dixie Chicks fan but I do admire their ability to stand up for something and not simply cave in to all the media pressure.

Ironically, after almost every radio station boycotted their music they ended up winning "Album of the Year"

I thought this song was relevant with the election only a few weeks away.

I wonder if she's ready yet?

I Want a Distressed Asset

Ok, hopefully by now the average American has some ideas on how we got into this current financial mess. You have probably heard about the recent $700 Billion Bailout plan.

SO, the next big question is Who Gets The Money???

"is a law authorizing the United States Secretary of the Treasury to spend up to $700 billion to purchase distressed assets, especially mortgage-backed securities, from the nation's banks."

On the surface it appears that we are assisting the irresponsible in buying up "distressed assets" aka mortgage foreclosures.

I found the above image humorous when doing a Google search for "who gets the money from the bailout"

Notice "This question hasn't been answered yet"

Financial Crisis Explained

A friend of mine sent me this video which I think does a nice job of explaining the current mortgage mess.


Crisis explainer: Uncorking CDOs from Marketplace on Vimeo.

When will we learn?

Pop Quiz the following is a title to a paragraph from a wiki article, I want you to guess which one.

Imprudent real estate lending

No, not the current mortgage mess we are in now. It comes from the S&L crisis article

In an effort to take advantage of the real estate boom (outstanding US mortgage loans: 1976 $700 billion; 1980 $1.2 trillion) and high interest rates of the late 1970s and early 1980s, many S&Ls lent far more money than was prudent, and to risky ventures which many S&Ls were not qualified to assess. "The banking problems of the '80s and '90s came primarily, but not exclusively, from unsound real estate lending."

DOH!

Sound familiar?

This isn't the first time we have been in this mess but hopefully we can learn from this mistake.

From 1986 to 1995, the number of US federally insured savings and loans in the United States declined from 3,234 to 1,645. This was primarily, but not exclusively, due to unsound real estate lending.

The market share of S&Ls for single family mortgage loans went from 53% in 1975 to 30% in 1990. U.S. General Accounting Office estimated cost of the crisis to around USD $160.1 billion, about $124.6 billion of which was directly paid for by the U.S. government from 1986 to 1996.

The concomitant slowdown in the finance industry and the real estate market may have been a contributing cause of the 1990–1991 economic recession. Between 1986 and 1991, the number of new homes constructed dropped from 1.8 to 1 million, the lowest rate since World War II.

Some commentators *raising my hand* believe that a taxpayer-funded government bailout related to mortgages during the savings and loan crisis may have created a moral hazard and acted as encouragement to lenders to make similar higher risk loans during the 2007 subprime mortgage financial crisis.

DOUBLE DOH!

3 Reviews

So, I thought I would review 3 new unrelated items all in one post today so here goes.

1. Burn After Reading

This was a another great Coen brothers movie. If you liked Fargo or No Country for Old Men, you will definitely like this movie. I hate to admit it but Brad Pitt steals the show in this one. I was surprised at how little violence there was however. I have been accustomed to a lot more in these movies but in this case it didn't need it to succeed as a great dark comedy.

2. 4th Generation 8GB iPod Nano

I recently purchased one of these for my wife and I'm already jealous. This was an upgrade to her existing Nano and so far this one is superior in many ways.

For starters the sound quality seems better, not sure if that's the headphones or something in the playback technology.
Secondly, the new "shake to shuffle" feature is very cool. The first Nano model to have an embedded accelerometer similar to the new iPhones. This feature not only allows you to shuffle up your songs but when tilted sideways you can access the Cover Flow and view your pictures in landscape mode.

It also includes the new "Genius" feature, introduced by Apple the same day. The Genius feature automatically creates playlists based on a selected song using an algorithm built by Apple. This feature should feel very natural for all those Pandora streamers out there.



3. Google Chrome Web Browser

Yes, it's true Google entered the browser market now. I wouldn't be surprised if they launched a new line of frozen entrees with all the new stuff they keep creating.

Well, I have to be honest I haven't fully switched to Chrome yet. It still feels very beta to me. I'm sure Google will continue to make improvements but let's examine the new features.

• Stability - One of the main features of the Chrome browser is to run a separate process for each browser tab you have open. What this means is fewer complete browser crashes and more efficient use of memory and garbage collection. In my initial tests Chrome was able to recover after certain sites were misbehaving without the need to close the whole browser.
• Speed - Since Javascript doesn't appear to be going away Chrome took on the challenge of speeding up the rendering, parsing and overall presentation of JavaScript prevalent on most web sites. The end result was a faster browsing experience with most sites. In my testing some tests did appear to load faster but for those sites with lots of embedded Flash animations, there were no noticeable speed differences.
  
• Security - The Chrome developers wanted their browser to be the most secure browser available and from what I can tell they have implemented all the features to make end users "appear" safe. The end result however is that it takes the combined effort of a secure browser and a semi-intelligent user to truly have a secure browsing experience. Also, Google has been criticized already by the amount of personal browsing data collected by Chrome. It collects this information for marketing of course and I don't believe they are doing anything malicious but personal data is should remain personal in my opinion.
• User Interface - Chrome is definitely sleek and clean, it definitely makes the web itself the main feature and not the many toolbars present in most browsers. If you ever used the F11 feature in IE you will be very happy with the overall look and feel of the Chrome UI.
  

Other features are nice such as "Application Shortcuts" and "Incognito" browsing but these features are also present in other browsers and aren't the main attractions for using Chrome.

Finally, because it is still in "Beta" many sites just don't work properly with it yet, such as ESPN, CBS and a few others that I ran across.

As far as competition goes, I will continue to use Firefox for now but I'm sure Google will continue to make improvements and enhancements to the current version in hopes of gaining mainstream popularity.