Archive for the ‘Money Funny’ Category
I recently received an email I believe was intended for my joke blog, but I took it up seriously. Below is the thread with names removed:
I’m not good at calculating these high numbers….but sure makes ya scratch your head!
Working in the oilfield with others such as myself and a wealth of combined experience we understand the accuracy of the following.
Think of it this way:
A clunker that travels 12,000 miles a year at 15 mpg uses 800 gallons of gas a year.
A vehicle that travels 12,000 miles a year at 25 mpg uses 480 gallons a year.
So, the average Cash for Clunkers transaction will reduce US gasoline
consumption by 320 gallons per year.
They claim 700,000 vehicles so that’s 224 million gallons saved per year.
That equates to a bit over 5 million barrels of oil.
5 million barrels is about 5 hours worth of US consumption.
More importantly, 5 million barrels of oil at $70 per barrel costs about $350 million dollars
So, the government paid $3 billion of our tax dollars to save $350 million.
We spent $8.57 for every dollar we saved.
I’m pretty sure they will do a great job with our health care though.
Yup, those numbers are about right. Only thing is, saving spending on oil had nothing to do with the program. The program had to do with stimulating the economy by propping up an industry that was almost bankrupt, making the politicians look good by showing improved consumer spending and a rise in the stock market based on false recovery numbers and reduction in unemployment growth by employing those auto workers a few weeks longer.
The real number to look at is what the consumer that got cash for the clunker got out of it. Saving 320 gallons per year at 2.89 cents per gallon = $896 per year. A crappy car after the rebate is still about $10k financed. With an average credit rating, you will get it at about 7% and being the average desperate person you go for 6 year financing. That is $170.49 per month, or $2045.88 per year. The first 2 years are almost pure interest, so for the first two years you throw away $1149.88 per year for the privilege of improving the lifestyle of someone who owns Ford stock (do you?).
See today’s Non Sequitor for a perfect illustration of the whole concept 🙂
I don’t know how I started getting emails from Chris Johnson of the OptionsZone, but they have been somewhat useful. I don’t go for options investing because I don’t like the commissions on options (that’s the Cheap part of the blog name asserting itself there) and they are more work than my usual limit buy/sell approach (and there’s the Lazy part). However, options trading is still based on homework, and I much prefer it when someone else does a bunch of it for me for free (Cheap and Lazy together). As a teaser he sent me a doubler a day email series for a week. I did not double anything, but, to be totally fair, he meant on the options. I did buy ADTN for my virtual portfolio at Wall Street Survivor and made a quick 20%. I also bought MCD in my WSS portfolio when Johnson said to buy the option, and am just now getting to profit on it. But I bought it for my real-world portfolio a few days later when the price dropped (where Johnson said it would go up) and am already up 10%.
Anyway, I mention all this because every other day I get a last chance email from Johnson, and today’s included the promise to give me a trade on TD if I subscribe today. Not sure how dumb someone has to be to think they are getting something for free by paying for the service that provides it, but it did give me a lead on TD. They are trading today $7.41 over the 1 year target, so it will go on the watch list until the price comes down or the target goes up.