Black Coffee: My Favorite Blogs, Money News & Opinions #32

It’s time to sit back, relax and enjoy a little joe

Blogs I’ve Been Following This Week

Welcome to another rousing edition of Black Coffee, your off-beat weekly round-up of what’s been going on in the world of money and personal finance. Here’s what caught my attention over the past week…

Being Frugal – Lynnae had a fun post about why the five second rule is a necessity at her house. As a public service I felt it was my duty to share this story with her about the time my grandfather dropped a piece of chicken on the floor.

It turns out he picked the chicken up and put it back in his mouth, but not before saying to me “5 second rule!”

God knows I tried to stop him. “Grandpa,” I said, “That was six seconds – not five!”

He just laughed at me. Then he chewed up that piece of chicken he rescued from the floor and happily swallowed it.

Thirty-six hours later he was dead.

Was it because he left that piece of chicken on the ground for one second too long?

I’ll never know for sure, but now I only eat food that has dropped on the floor if I am certain it has been there 3 seconds or less.

You never can be too safe, you know.

Okay, Len, is that really a true story?

Do you dare take the chance that it might not be true? I didn’t think so.

My Two Dollars – David recently read a government study that determined that attractive people make more money in the workplace than ugly ones and wonders if that money wouldn’t be better spent on other endeavors. Of course, my response to David was, “Heck ya those studies are useful! Are you kidding?” I had no idea attractive people earn more money in the workplace. I know I for one will be taking a copy of that particular study to my boss first thing Monday morning and demand a raise, as I am obviously underpaid compared to my peers. Wait a minute, on second thought… I’m so confused.

Mighty Bargain Hunter – I saw MB had an article entitled “Sow Your Wild Oats at Work” and I was there in a flash. It really was a good article – but I’m not ashamed to admit that I was disappointed to find out that the article was actually about how you can save money at work by snacking on oatmeal.

The Smarter Wallet – If you do any on-line stock trading, you may want to check out this quick little primer by Tim on capital gains and dividend taxes.

Bargaineering – Jim wrote an interesting article this week regarding the expiration dates on drugs and vitamins. I know I’ve thrown a lot of expired drugs and vitamins away over the years. So what exactly does that expiration date signify? It is a very interesting read and, without giving all of Jim’s article away, it does look like the expiration date is there mainly for legal purposes. Obviously, people that dutifully toss away old drugs after their expiration date can only be a big benefit to the drug makers. It kind of makes you wonder why the street dealers don’t put expiration dates on their, um, products. Of course, street product doesn’t last that long after it gets into the hands of the consumer – so the expiration mark would have to say something like “Expires in 8 hours.” How do you know that, Len? Uh, I knew somebody in college who told me that once.

Redeeming Riches – Just like “mighty” and “Len Penzo,” it’s not too often you see the words “fun” and “geeky” used in the same sentence, but Jason did it when he wrote about three “fun and geeky” money-saving tricks you can do with e-mail.

The Suburban Dollar – Uh oh. Kyle and his wife are in a bit of a tug ‘o war over the need for a new car. I’m with Kyle on this one, as it sounds like they have two perfectly fine (and paid for!) cars already. But as I told, Kyle, without a long-term strategic plan developed by he and his wife, these kind of arguments are going to happen now and then. My regular readers know that I achieved financial freedom by running my household like a business since I graduated from college twenty years ago, and I ask them to do the same – having a strategic long-term plan in place is just one part of that. For more information on how to run your household like a business and get on the path to financial freedom, click on “The Basics” under my blog header.

CESI Debt Solutions – Check out this post on 100 ways to save $1000 in one day. It’s a great list, but there is a lot to do – so much so that I doubt all of those suggestions can be done in a single 24-hour period. You know, I remember learning that a day on Venus is equivalent to 243 Earth days. Maybe the title should be 100 Ways to Save $1000 in One Venetian Day?

Credits and Debits

Credit: The Canadian rag The National Post reported that Newfoundland Premier Danny Williams decided to undergo heart surgery later this week – in the United States. I’d really be interested in hearing some comments from my Canadian readers regarding their thoughts on this. Do you consider Mr. Williams to be a hoser for doing this? Should Americans consider this to be much ado about nothing or a valid indictment against national health care?

Credit: In outlining his 2011 budget proposal this week, President Obama noted that, “We simply cannot continue to spend as if deficits don’t have consequences, as if waste doesn’t matter, as if the hard-earned tax dollars of the American people can be treated like Monopoly money, as if we can ignore this challenge for another generation!” Yes! Obama, my man! Hoo-rah for hope and change!

Debit: Do as I say, not as I do… So can somebody please tell me how Mr. Obama can justify those remarks after submitting a budget that proposed an unprecedented $3.8 trillion mish-mash of unrestrained Federal spending that has become an icon for fiscal irresponsibility? The president’s newly proposed budget predicts the national deficit will crest at a record-breaking $1.6 trillion in the current fiscal year, then start to recede in 2011 to just below $1.3 trillion. The astronomical numbers— budget deficits would total $8.5 trillion over the decade—are raising worries among voters and the foreign investors who buy much of the country’s debt. Those are his numbers, by the way. I’m sure the actual figures are much more dire.

Debit: Don’t think this hasn’t gone unnoticed. The Washington Times this week reported that, “the era of big government has returned with a vengeance, in the form of the largest federal work force in modern history.” The Obama administration will grow the government work force to an astounding 2.15 million employees this year. It will be the first time that the figure has topped 2 million employees since the Republican-led Congress instituted a major pull-back of the federal work force upon their return to power in 1994. Is this where all the stimulus money is going? We need to remember that government jobs do not result in wealth creation, nor do most of those jobs lead to the innovations that are required to expand the economy and improve our standards of living.

Debit: At least housing is making a comeback – not! The share of borrowers who are falling seriously behind on loans backed by the Federal Housing Administration jumped by more than a third in the past year, foreshadowing a crush of foreclosures that could further buffet an agency vital to the housing market’s recovery. About 9.1 percent of FHA borrowers had missed at least three payments as of December, up from 6.5 percent a year ago, the agency’s figures show. If the trend continues and the FHA’s cash reserves are exhausted, the federal government would automatically use taxpayer money to cover the losses — a first for the agency, which has always used the fees it charges borrowers to pay for its losses.

Credit: A California judicial commission has admonished a retired judge for ordering that an attorney who settled a class-action lawsuit be paid in $10 coupons for women’s apparel. The lawsuit accused Windsor Fashions Inc. of invading customers’ privacy by requesting personal information during credit card transactions. As part of the January 2009 settlement, the company issued coupons to the plaintiffs, and the judge ordered that the attorney fee of $125,000 be paid similarly. What’s wrong with that? What’s good for the goose should be good for the gander.

Debit: Meanwhile, WorldNetDaily reports that agents for Britain’s MI5 intelligence service have discovered that Muslim doctors trained at some of Britain’s leading teaching hospitals have returned to their own countries to fit surgical implants in women’s breasts filled with explosives. According to the report, women suicide bombers recruited by al-Qaida are known to have had the explosives inserted in their breasts under techniques similar to breast enhancing surgery. In response to this emerging new threat, there has been no word yet from the TSA (Thousands Standing Around) on whether they will begin profiling women with C-cups or larger.

Credit: On Tuesday, the U.S. Tax Court ruled that a Massachusetts woman can write off the $25,000 price tag of her hormone therapy and sex-change surgery because the procedures were medically necessary. The woman, who was born a man, had sued the IRS after the agency denied her $5,000 deduction because it was ruled a cosmetic surgery. Clearly, this ruling gives new meaning to the term “tax cut.”

By the Numbers:

Explaining the dirty low-down behind President Obama’s budgetary “spending freeze.”

3243 The size of the budget in billions of US dollars that IS NOT subject to a budget freeze.

447 The size of the budget in billions of US dollars that IS subject to a budget freeze.

88 The percentage of the total Federal budget that is NOT subject to a budget freeze.

6.22 The average annual growth rate of government departments NOT subject to a budget freeze.

2.70 The average annual growth rate of government departments subject to a budget freeze.

Letters, I Get Letters (…but not this week)

No letters again this week. I’m starting to get a bit of a complex. (No I’m not. Yes, I am. No, I’m not.)

If you have a question you’d like to ask, or a comment you’d like to make regarding some of my irritating opinions, please feel free to drop me an e-mail at:

I’ll feature the most interesting question or comment I get each week here on Black Coffee – assuming I get one, that is.

If you’re lucky enough to be the only question in the mail bag I’ll highlight your letter, whether it’s interesting or not. ;-)

Other Useless News

This Sunday I will be hosting the Best of the Best in Money and Personal Finance Carnival, featuring the ten best personal finance articles from around the blogosphere from the month of January. Please stop by and check it out – as always, we have some really terrific articles to showcase this month! :-)

As promised last week, here are the Top 10 referring blogs and aggregators to Len Penzo dot Com for the entire month of January…

1. Tip’d
2. The Simple Dollar
3. Wisebread
4. Million Dollar Journey
5. Political Calculations
6. The Kirk Report
7. Life Hacker
8. Financial Samurai
9. Bible Money Matters
10. Ramblings of a Non-Conformist

I really appreciate the links, folks! :-)

Samurai Fund Update: The housing corporation Lennar, after trying to come back down to Earth last week, surged again this past week. As a result, it remains the top performer for the honorable index for the month of January, up 20%!

As a reminder, if you happen to enjoy what you’re reading – or not – please feel free to follow me on Twitter. And don’t forget to subscribe to my RSS feed too! :-)

The Way-Back Machine: Past Posts You May Have Missed

From May 2009:

Does Buying Your Gasoline in the Early Morning Really Save Money? – …or is it really just an old-wives tale? Check out my crack investigative report for the real story. (You just may be surprised at the answer!)

Carnival News

This week I had articles featured at the following carnivals:

- The Carnival of Personal Finance #242 at Cash Money Life

- The Festival of Feline Football Fans at The Super Bowl

12 comments to Black Coffee: My Favorite Blogs, Money News & Opinions #32

  • See Len, glad you stuck with Lennar (even though you don’t have a choice) haha :)

    You’re #1! Good to be #1 in the fund huh? Big bonus for you this year if it keeps up!
    .-= Financial Samurai´s last blog ..We Have Peanut Butter, But No Bread – Making Do With Less =-.

  • Great posts that participated in the Carnival this time!

    Paula Jameson

  • Ok, your story might have me rethink the 5 second rule…or maybe not. ;)

    Thanks for the link!
    .-= Lynnae´s last blog ..Friday Financially Savvy Links – Happy Birthday Stargirl Edition =-.

  • I think it’s Venusian day since a Venetian day is a day in Venice, which I bet is pretty much as long as a normal one. :)
    .-= Giorgio Sironi´s last blog ..Automated refactoring without heavy IDEs =-.

    • @Sam: You def dragged me kicking and screaming with that pick. As I’ve said before, it’s still a long year, so we’ll see…
      @Lynnae: Thanks for the fun post!
      @Giorgio: Ha! Good catch! And I’m leaving my error in there – consigning it to posterity. :-)

  • MLR

    Just to take a look at the budget Obama submitted:

    Effects of the recession: By the time CBO issued its new projections on January 7, 2009 — two weeks before Inauguration Day — it had already put the 2009 deficit at well over $1 trillion. Using CBO’s August 2008 projections as a benchmark, we calculate that the changed economic outlook accounts for over $400 billion of the deficit in 2009 and slightly smaller amounts in subsequent years. Those effects persist; even in 2018, the deterioration in the economy since summer 2008 — including the extra debt-service costs — accounts for over $300 billion in extra deficits.

    Financial Rescues: In October, the Bush Administration and Congress enacted a rescue package to stabilize the larger financial system by creating the Troubled Assets Relief Program (TARP). Together, TARP and the GSEs accounted for $247 billion (including extra debt-service costs) of fiscal 2009’s record deficit. They are expected to cost significant amounts again in 2010, but then fade quickly. In February 2009, the new Obama Administration and Congress enacted a $787 billion stimulus package – the American Recovery and Reinvestment Act (ARRA) – to arrest the economy’s plunge. By design, this package adds to the deficit. By our reckoning, ARRA accounts for $1 trillion in deficits over the 2009-2019 period (including the associated debt service). ARRA’s effects are highly concentrated in 2009 through 2011 and fade thereafter — delivering a boost to the economy during its most vulnerable period.

    Tax Cuts / War: Just two policies dating from the Bush Administration — tax cuts and the wars in Iraq and Afghanistan — accounted for over $500 billion of the deficit in 2009 and $7.1 trillion in 2009 through 2019, including the associated debt-service costs. [6] These impacts easily dwarf the stimulus and financial rescues. Furthermore, unlike those temporary costs, these inherited policies (especially the tax cuts) do not fade away as the economy recovers.

    (^^ One interesting thing to note on the war is that during the Bush administration a lot of the spending wasn’t budgeting and was instead put through as emergency spending. The new administration has added the war spending to the budget. “That is why this budget looks ahead ten years and accounts for spending that was left out under the old rules – and for the first time, that includes the full cost of fighting in Iraq and Afghanistan,” he said. “For seven years, we have been a nation at war. No longer will we hide its price.” )

    Center On Budget and Policy Priorities /

    So, I guess what I’m saying is — Obviously Obama inherited a huge deficit. So when we look at the steps he is taking in the new proposed budget, are there any good things? The CBO estimate says he will lower the deficit by $750 billion over the next 10 years. That’s a small step — it could be better. I think blaming him for submitting a $1.6 trillion deficit is a bit disingenuous, though.

    As always Len <3


    • Thanks for the counterpoints, MLR. :-)

      I’ve seen those same budget analysis machinations made by the liberal think tank known as The Center on Budget and Policy Priorities.

      Lowering the budget deficits by $750B over 10 years is noble, but let’s put it into context: with respect to what benchmark? The more important area to focus on is the National Debt. Obama admits his budget will also be doubling the national debt over that same period.

      His economic stimulus plan is a joke. I saw a graphic in the LA Times awhile back that showed true economic stimulus projects – infrastructure stuff with long term benefits, things like building dams, rail, highways and ports, repairing bridges, and upgrading airports and public communication systems – made up roughly $80B of that $787 “stimulus” bill. As I’ve highlighted many times before here, the rest of the money went to expanding government, and gov’t boondoggles like buying “fish sperm freezers,” buying rust undercoatings for $20,000 per government vehicle, and paying for academic studies on radioactive rabbit droppings.

      Bush and Congress lost their way, no doubt, when it came to overspending during his administration. But we can’t deny that government spending is making a very significant jump over and above Bush’s pitiful performance in Obama’s budget – more so than anything George W Bush, or any other president in the history of the nation. We can both spin Obama’s spending issues however we want – but if we look at the average federal deficits as a Percentage of GDP on an administration by administration basis, this is what is certain:

      Reagan: -4.1%
      GHW Bush: -4.1%
      Clinton: -0.1%
      GW Bush: -3.2%
      Obama: -10.6% in 2010 and -8.3% in 2011 (projected)

      Somehow, those numbers make it hard for me to believe that Obama’s huge numbers are Bush’s fault.

      Remember, Bush came into office in the middle of a recession too – and he managed to get us out of it largely thanks to those tax cuts.

      Instead of blaming the Bush tax cuts for these huge deficits, let’s put the blame where it really belongs. Government’s unabated growth and its general inability to restrain itself.

      You get the last word if you want it, my friend… (God, I feel like Bill O’Reilly.) LOL

  • MLR

    Instead of an ad hominem “attack” against The Center on Budget and Policy Priorities, why don’t you instead discredit the numbers? Are they incorrect in their reiteration of the CBO’s data? Because that’s all it is, a reiteration of the data released by the highly non-partisan CBO.

    GW’s -3.2% is ignoring Iraq and Afghanistan war spending. He was (unfortunately so) big on misrepresenting the budget. Once you add those “emergency spending” line items into his budget, what percentage is it? And then the question remains, why is that the most relevant measure?

    All I am saying is that it is disingenuous to blame Obama for a $1.6 trillion deficit when he INHERITED at least a $1 trillion deficit.

    I don’t know why you think I am blaming the tax cuts, just merely pointed out all of the factors that preceded Obama and added $1 trillion to the deficit he has since added to.

    However, one thing I would be careful about is comparing government spending regardless of circumstance. Government spending during an economic expansion can lead to a crowding-out effect. Government spending during an economic contraction can actually lead to a crowding-in effect.

    GDP = C + I + G + (X-M)
    GDP = Consumption + Investments + Government Spending + Trade Deficit (Exports – Imports)

    So during an economic expansion, consumption (consumer spending on household goods and services) increases and investment (business spending on capital goods and services) increases. That being the case, an increased government spending can lead to more inefficient spending than the market would normally dictate.

    Now, the economy starts contracting. C & I are obviously going to go down. We can sit by idly and watch as GDP goes down or we can increase government spending to stabilize the economy.

    It’s the bathtub effect — and an effort to smooth it.

    • I didn’t realize I made an ad hominem “attack,” MLR. Please tell me where I did that and I will remove the offensive remark. Should I have used the term “progressive” instead of “liberal?” ;-)

      Since you asked, if we can stipulate the war costs attributable to Bush at $800B over his 8 years in office – that would mean an extra $100B per year added to the budget deficit. The GDP in 2008 was $14 trillion. That hardly registers a blip on the numbers I provided with respect to deficits as a percentage of GDP.

      I thought it was reasonable, MLR, to assume that you were trying to tie the Bush tax cuts to Obama’s deficits. “…tax cuts and the wars in Iraq and Afghanistan — accounted for over $500 billion of the deficit in 2009 and $7.1 trillion in 2009 through 2019, including the associated debt-service costs.” Yes? Was I out of line there?

      Finally, I will argue that in times of economic contraction, the government should be able to stimulate and stabilize the economy by reducing the size of government and lowering taxes just as easily as ramping up deficit spending.

  • Regarding Williams getting surgery in the US – I don’t know the reasons behind his decision (less waiting time perhaps?) but I don’t think it should be relevant one way or the other to the US health care reform.

    Williams is loaded with $$ and can do whatever he wants. He could have gone to the US, Europe or anywhere to do the operation. This is the same for rich Americans – they can get good health care in their own country now or go elsewhere if they choose.

    He’s not the average Canadian (or American).

    • Thanks, Mike. I got a couple e-mails from two other Canadians who basically said the same thing. If he had to wait “in line” for his health care and it is a life or death situation, I can’t say that I blame him. Those “lines” are a big reason why I personally am wary of a national health care system.

  • Four Pillars

    I doubt it was a matter of life or death, otherwise he would have been able to get it done quickly in Canada.

    Usually, when Canucks go to the US for health care it’s because there is a difference of opinion of the urgency.

    It’s also possible for a Canadian to get treatment in the US if they can’t get in time here. In this case the gov’t will still cover it.

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