Credit Card Cash Back

This is a follow up to post "Saving Money With Credit Cards".  See also "Paying off Credit Cards"

Since that post, I acquired the primary three cards mentioned in the post, and since then flushed out details.
To help you calculate your annual savings, I have put together an Google Spreadsheet, accessible below.

Short version is by getting these three credit cards, you can maximize your cash back from all household spending.   Your spending habits may reflect different categories selected by the USBank card, which offers 12 different 5% categories for cash back.  Fidelity Investments card does require an account to recieve 2% back on all purchases, which may be worth while depending on your spending habits.   A typical American Express or other point systems work out to 1/2% to 1% cash back, excluding travel rewards.

For most families, the 6% Grocery and 3% gas cash back is well worth getting American Express Blue Preferred card. (Max $6000 per year for grocery)
NOTE: if you get two cards, one for him different account for her, can get back on 12,000 per year for groceries!

To access the sheet, click on the image below or the link here.
*WARNING* If someone else is modifying the sheet at same time as you, you will see each other making changes.  To get a private copy select "File" then "Download as" and pick EXCEL. Or come back later when the sheet is not in use.  Look in upper right corner to see if others are viewing the sheet.

I used stickers to mark the cards to make it easier to follow.  You can access the template I used for Avery Template 5162 by clicking here.  It will look messed up, you need to download the file. Click "File" then choose Download.

I researched American Express points, various Citibank cards, and other rewards.  Excluding travel rewards, the cards above are the best rewards I could find.  If you find better, please click the word comments below to add to this post.

After searching the web, it seems cash back is considered a discount, not income.  Only tax implication is if you spend 100 bucks, you can write off 98 bucks (2% Cash Back) as an expense.

Alternately, you can SELL your points for cash, at a 'grey' market vendor I had no issues with, www.rewards2cash.com.  If you sell your points, buy airfare on sale and get points it usually works out better.

UPDATE: I booked flights with Amex points.  The airfare was 841 bucks.  The points to pay for it was 84100 points.  Since each 1 dollar gives 1 point, that works out exactly 1% payback.  Therefore best ROI is to get cards above and simply pay for airfare from cash back, and as bonus get additional 2% off the airfare itself.   It is possible to get special trips for better ROI if shopping offerings.

Giving opinion, is it worth it?

I have posted before about some concerns about blogging some of the political aspects of the topics before. What I find most disconcerting in the years ahead, police will be able to sweep a room and using face recognition technology to associate me with things I posted....anywhere.....ever.
In effect the posting on the net will put me into different categories, one of which may plop me into "anti-XXX" or "radical", etc.  That future cop will likely be WAY less open minded than I'd like.

I could delete this entire blog today, and it would make zero difference.  Everything is backed up, archived, and indexed.  I could even change as a person to the core, heck, I could be one of the worst people I rant against today someday. But the internet scan will not take this into account.  

I used to hear in high school behave or "it will go on your permanent record".  Like anyone looks at such a thing.....  But the internet EVERYONE looks at it!  Even a future employer.
A simple search on WebSurfinMurf reveals WAY too much about me that the random public should not have.  Its a pretty small jump to find out my real name from there.

I had a super tiny altercation via email on an opinion with a friend today.  It amplified to me that if a friend has such a radical reaction to relegate me to crazy.....what about people who find offense about my postings on Goldman Sachs? Financial Companies? US government? Current or Future employer?  Worse yet, for my son's future college or employer!

I am in effect, playing with fire posting ANYTHING that could offend against my future self.

Therefore, I am going to try to roll back severely my rhetoric.  I did a notch back in 2009 when I realized above, but I didn't turn it down enough.    I want to cut this blog back to more dry facts and avoid calling out opinions on corruption, or specific companies issues like Goldman Sachs, etc.

I'll continue to report on Money, USD, Fiat Currencies, bonds, and some other topics along these lines that are controversial.  These topics are  the next crisis and it  too important to not contribute to the social discussion.

I am adding this post to my corruption tag, so it can show when I tried to tone it back.
I urge people to read Mish and Market Ticker, for they do not pull any punches.
 10-24-2014 - see update 2013 Giving opinion is NOT worth it

Take control of your finances with mint.com

The number of accounts I have between checking, savings, investing, as well as debt accounts like credit cards, car loan, mortgage, etc is daunting to track and fully understand your finances.

A web site offers for free to track all your finances, help categorize, and automatically monitor spending.  In under an hour, you can easily have a full view of every transaction and your total net worth.  The web site is called https://www.mint.com/ .  They use high encryption, and represent bank level quality protections.

So make it your new years resolution to get organized, track, and tighten those budgets.   For a penny saved adds to your 0.1% savings account earnings.

:)

Thanks to all readers and bloggers

I have been blogging since August 2008, when I was inspired to use a blog as an outlet for my rantings of the financial situation I was following since August 2006.

Over the years, this blog has helped me articulate my own thoughts, during the process of creating articles. It also helps keep me honest about what I thought and when. It provides me a way to reflect and learn from my mistakes.

Frankly, 99.5% of my knowledge is owed to the internet, for without it, I would rarely get any meaningful information from the mass media. Of special thanks are the bloggers I place in highest regard. Mish is by far the best, with his general dissection of nearly everything. Karl of the Market Ticker is tirelessly tilting at windmills, trying to make a difference. Zero Hedge for groundbreaking news, Gary of the Smart Money Tracker for his insight into precious metals in this time of uncertainty, to the Slope of Hope for his charting pontifications, for John Hussman for his posts, and finally the Chart Store for providing the wide view when so many focus on the narrow view.

There are literally about 100 more people and sources I depend upon to get snippets of information, from podcasts, hedge fund managers, money managers, too many to list. Most of the information is through the internet. The top important ones I list on the right hand side of this blog, and under my new reader link at the top.

I am of course thankful for those who take the time to read this blog, I hope I have had a positive effect on you. At a minimum I hope I have inspired you to question and think about the events as they unfold.

I started tracking blog visits on September 4th, 2008, and have a summary of the statistics through November 24th, 2010.

Over 33,000 visits from 8,514 unique visitors in 99 countries (why couldn't it have there been 1 more?). Gary of Smart Money Tracker blog has directed 13% of total visitors to this blog.

I use Google Analytics, below is the stats.

Special thanks to Happy John, for that ill fated discussion in August 2006, that turned the light on in my head for the financial depression ahead.

Special thanks to my wife, who endures this old lunatic typing away, ranting about financial world apocalypse, and giving me a such a positive life.

Happy Thanks Giving

From WebSufinMurfs FinancialBlog2

Savings vs Deficit spending, which is better for economy

Special thanks to Harry Yee for sending me this link.

Below is a snippet from the article, click on the text to read.

The foundation of the Obama stimulus plan is easy to understand, and to Chris and lots of smart people, it appears to make sense. Once again, its goal is all about raising growth right now by shifting money around, without durable incentives for expansion -- what we call "Static Impact." It seeks to shift hundreds of billions of dollars in U.S. and foreign savings to government and consumer spending. The Treasury is borrowing $862 billion in funds that families and governments don't need to use now, and hence are saving. The federal government is then spending part of it quickly and returning the rest, through programs like the "Making Work Pay" tax rebates, to consumers most likely to spend it. The rationale is that all the extra outlays in these two categories will raise GDP far more than if all of that money had flowed to places where savings go, into corporate bonds, stock offerings, CDs, or bank deposits.

But the plan contains a gaping hole. The rub is that savings, just like the dollars government channels into salaries and auto fleets -- and that consumers lavish on restaurants, tourism and computers -- are all spent. They're simply spent on different things, namely corporate investment for research, robots and software. Hence, a dollar transferred from savings to consumption doesn't add to total spending, or to GDP, at all.

So let's answer Chris' question directly. Let's assume that the government never borrowed that $862 billion and that the money stayed in the hands of American families and foreign governments. Remember, all of that $862 billion is being spent under the stimulus by our government or consumers. If the savers simply kept the money, all of it would remain as savings. So those dollars would flow into the banks in savings accounts and CDs. That money would then be available for the banks to lend, chiefly to large and small businesses.

Chris' point is well-taken: In this sluggish economy, would companies actually borrow those extra savings, and then spend the money on such investments as R&D or computer systems?

The answer is that banks are in the business of collecting interest, and would indeed lend the extra deposits. "Money never sleeps," says J.D. Foster, an economist at the conservative Heritage Foundation, borrowing a line from the title of the new movie "Wall Street II." How would that money make its way to private investments in a market where demand for capital is extremely weak?

It would happen in two ways. First, the supply of savings would surge, and government borrowing would be far lower. So the pool of funds available for companies would increase, and the competition for those funds would fall. As a result, interest rates would drop even below today's bargain levels. Lower rates would reduce financing costs for companies, making it more attractive to buy everything from forklifts to new systems for logistics.

Articles worth reading

A few good articles to read on economic topics:

McHugh
The Sabotaging of the American Economy

Hussman Fund
A Blueprint for Financial Reform

Jim Jubak (moderate economic writer)
8 reasons for investors to worry

Mises Institute
What has the government done to our Money?

Congressional Oversight Committee
Commercial Real Estate losses and the risk of financial stability.
( Abridged version at Mish )

This week in Charts

My last post is about how Elliot Wave Chartists are calling for a "Catastrophic wave c", downturn in the markets. For this week in charts, I went a little nutz and created a bunch of graphs, some long term view, others since march 2009. Purpose is to help me and readers put current situation in context of history.
NOTE: The wave C that is being called for is clearly NOT CONFIRMED according to the charts below.

From WebSufinMurfs FinancialBlog2

From WebSufinMurfs FinancialBlog2

From WebSufinMurfs FinancialBlog2

From WebSufinMurfs FinancialBlog2

From WebSufinMurfs FinancialBlog2

From WebSufinMurfs FinancialBlog2

From WebSufinMurfs FinancialBlog2

From WebSufinMurfs FinancialBlog2

From WebSufinMurfs FinancialBlog2

From WebSufinMurfs FinancialBlog2

From WebSufinMurfs FinancialBlog2

From WebSufinMurfs FinancialBlog2

This isnt a typical recession, revisited

A while back I posted the chart below from Mish's blog. This time, a blog called Financial Armageddon put together some interesting charts worth looking at.

I lifted only the first chart, got to click to the blog to see the rest. Pictures tell the story. The takeaway to me is, this isn't the typical recession. I doubt charts presenting the downturn like this would ever appear in a mainstream publication.

Click on image to see the full blog article.

From WebSufinMurfs FinancialBlog2

MainStreet Media starting to get it

An editorial in the NYT is refreshing, but much more focus and wide coverage around the financial dealings with the citizen's money needs to be done.

Click to read full article, snippet below:

Why was our money used to make these high-flying gamblers whole while ordinary Americans received no such beneficence? Nothing less than complete transparency will connect the dots.
.......
If they all skate away yet again by deflecting blame or mouthing pro forma mea culpas, it will be a sign that this inquiry, like so many other promises of reform since 9/15, is likely to leave Wall Street’s status quo largely intact. That’s the ticking-bomb scenario that truly imperils us all.

Make no mistake transparency will bring stocks down, and a jolt injuring the economy, but so will long term malfeasance. Best to get to business and clean house rather than let malfeasance fester over decades like Japan.

Unavailable first half of this week

I will be unavailable to post on this blog through Wednesday, but I may be able to find some time.

The markets soaring on an already over-extended run, farther than the 1930's, is disturbing to say the least. What we now face, due to the interference on a grand scale by the world governments is one of two "broad" scenarios. A large market correction, over months or many years, or currency crisis.

The currency crisis will be in the form of currency devaluation to a new low, and that will send commodities, something that the world is competing for, into a price surge up. Ironically, that is the theme I starting talking about in the fall of 2008, and why back then I bought gold miners (but didn't hold).

Gary of the market ticket expands on this thought, and pretty much says doing chart patterns is idiotic. If inflation does come, in the form of currency depreciation, the markets returning will look like a party until the bill comes. Then through the face of rocketing resource prices, then the market will fall.

All of this will end badly

US dollar is finally on the mend, US stocks hit new 12 month highs, US manufacturing increased in December. All is well, and another 5 year bull market is to begin.

Or is it? I really want to believe it. I would love to just end my fixation with the stock market, go back to focusing only on computers. But I know that the largest financial bubble ever created has weakened, and all the printing of paper, changing accounting rules, and lack of law enforcement will NOT result in prosperity.

What I don't know is how the downside will manifest. Stock market collapse lower than before? Market flat-lining 30% lower? US dollar collapse? Hyperinflation?

Point is, this rally will continue to whatever level the steam runs out. Heck, another 6 months is not impossible.

But a few facts to consider.

• Root problem of the financial system as not been addressed, only papered over.
• The greatest stock market rebound since 1930 is now. SPX 666 straight up (almost straight) to SPX 1132 today in about 9 months.
• US dollar recently retested historical lows before firming up. US dollar isn't high enough to call it safe from being devalued to new lows.
• Unemployment is about 10% officially, and closer to 16% if you include underemployed and those who couldn't find a job after benefits expire.
• There is no growth leadership industry. late 90's was Internet. 2002+ was cheap loans to finance very nice large houses. As covered already, 30 year interest rates for US treasuries is approaching a long term trend line, that if broken, will signal significantly higher rates.
• Events like Iceland collapsing, Latvia, Greece, Ireland, and other countries under severe pressure from world community. Large corporations failing or becoming zombie institutions under government control.

These are NOT normal times. Hence the reason why laws are not being enforced, and litterally trillions of taxpayer money is being used to cover private debts.

But covering debts doesnt make it go away. It shifts who takes the hit from the bad investments. If capitalism was adhered to, the investors of the corporations who took too much risk would fail. That's it. The economy would take a significant hit and begin to rebuild.

But instead the losses are shifted, not eliminated. The manifestation of those losses will come as higher interest rates for eveyone and every business, US dollar devaluation, or some other way. The losses just don't go away with no impact.

So rejoice the market is higher. But if the market goes 100% higher, everyone's life savings will be destroyed through inflation. If interest rates rise in response to ridiculous spending curve of the US government, then housing will fall, more companies will fail as debt load will cripple, and US government budget will get pinched as the 15 trillion of debt has a higher cost to maintain it.

The image on this blog states "There is no such thing as a free bailout", and I firmly believe it.

S and P 500 new highs

Monday December 28th, the S&P 500 hit new highs, 1,130.38, as well as some other market indexes. What amazes me, that it wasn't significantly higher. On December 26th, the US government announced that all losses, no matter how big, are 100% backed by the US government from private institutions Freddie Mac and Fannie Mae. By inference, the market can assume that this isn't the last no-hold-bar, we got your back maneuver, and that there is more to follow.

With a one-sided bet, all upside, and no downside now in the pocket of private large financial institutions, I expected a much higher blow off. The last week in December is so far extremely light on volume. I would not be surprised to see the S&P 500 hit a new high of about 1155 before this market finally turns.

However, make no mistake, these actions are sealing the US fate, if not the world to a horrible multi-year economic downturn, similar to Japan's lost 20 years trying to cover their debts through government intervention. Japan was a CREDITOR nation, and that country took similar steps to prevent their companies from taking huge losses through government intervention. The result was that stock market fell from 40,000 down to 7,000 to 20,000 range for 20 years, currently at 10,800. The US is a DEBTOR nation, and if in the next 10 years the US can muster it's currency from collapse, and keep market valuations higher than here, then that is a great feat.

So, yes, the market made new highs. But nothing is fixed. All that has happened is transferring risk from the private sector to the US government, and by inference, the solvency of the nation. This fixed nothing, and is a direct repeat of history from Japan to the US's own great depression.

The wall that the world will hit, is the US bond rates. That is already happening as 30 year bond rates are creaping higher. There will come a point where mortgage rates will rise enough to further crush housing prices. And the government will have to choose, the stock market or the housing & debt market. To me the choice is clear, tank the stock market and save the debt market.

But one thing 2009 has taught me, stupidity runs no bounds, and the choice may be to crush the housing and debt market, and throw this country into a GREATER depression in an effort to keep the stock market valuations higher.

Happy Holidays, the multi-millionaires got their bonuses, and trillions in government handouts, what will be left for the pension funds, retirees is going to be coal in a few years.

Twitter

I ran across http://FedUpUSA.org twitter account here (click).
Worth following for highlighted stories.

I really don't feel like posting on the market today, I will close out 2009 prognostications and create 2010 prognostications.

I am so disgusted by the actions I posted on Sunday.

Market Summary in Pictures

Pictures speak louder than words, here is my weekly focus.

From WebSufinMurfs FinancialBlog2

From WebSufinMurfs FinancialBlog2

From WebSufinMurfs FinancialBlog2

From WebSufinMurfs FinancialBlog2

Where should long term investors invest?

The topic comes up frequently of where for retirees, long term savers, or just extra savings regardless of time horizon, put cash for safe storage and growth?

The number one real answer is, seek a certified financial adviser, I am not qualified.
With that out of the way, here is my opinion :)

The vast majority of savings should be in short-term low-yield US Treasury backed funds. Not state, not 30 year bonds, basically keep liquid.

The goal is to roll the cash into a longer term savings. But not now. US stock market is super-extended due for a correction. The US has done minimal reform, it has papered over its problems. The good news is, so has most of the world, making the US "not that bad" as being judged by it's peers.

Gold/Oil/Food/Resources? The time to load up was November of 2008. If equities pullback, as I expect it, they should deflate too.

The real question is, what is the next BUBBLE? 2000 was tech, 2008, was real estate, next up is resources (either just peaked or about to peak), the final end all bubble is US treasuries.

There is really 4 places to look to move from cash to investments. All of them require PATIENCE.

1) US international corporations - If/when the markets fall significantly, when prices look cheap again, us companies with international exposure should fare better in the next 10 years.
2) Natural resource companies - Right now, my opinion is with the market they pull back, but buying some natural resource based companies "on the cheap" to help hedge against a dollar fall . Alternately could put money into a currency you have more faith in, like Chinese yaun. (not sure if wise)
3) US Treasuries - if the day comes where US treasury interest rates go higher and higher, then one day, the treasuries change direction, perhaps after the Fed raises rates it starts to lower, 30 year treasuries to "lock in" the higher interest rates. Right now the rates are at lows compared to the last 20 years.
4) Emerging countries - once again, emerging countries are not valued cheaply. All the world markets have risen due to loose monetary standards. One day when it looks like the worst time ever to buy stocks, buy a little of emerging country index funds. India, China, are decent starts.

By investing when the next collapse occurs, or when one pops, your buing on the cheap. Right now, nothing is cheap. Make a plan and stick to it. Diversify when the sector is depressed.

Good luck, and don't put all investments in US cash and/or US stocks. Diversify into resource based funds, international corporations, and emerging markets. Thats a plan for the next 10 years.

Near term stock pricing
Slope of hope has excellent chart support/resistance lines, one dating back to 1932!
Gary's two cents on US dollar hitting a bottom and reversing.

Japan announces it is NOT dumping US Treasuries

There was a rumor flying around today after hours that Japan was going to start selling US treasuries. Of course, no one will get prosecuted for market manipulation, but that's a different post.

In any event Japan clears the air there is no plans to sell us treasuries.
This news should help support a stronger US dollar, which at end of day Thursday started to gain strength again.

The chart to watch is the long term bear trend line, which remains in-tact. I am out of gold miners (maybe 2% in), long nothing, short everything. But quick to cover if we break out above the line. See chart below. And good luck.

From WebSufinMurfs FinancialBlog2

New Market Highs

The S&P 500 hit a new high today. Everyone but everyone believes the market is now entered into a new era. The sky is the limit.

And they are right, if you believe an infinite debt machine (US government), infinite US dollar devaluation, and increasing number of people unemployed are all fine without repercussions in asset valuation.

By reading this blog, it is quite obvious trying to pick the top of an irrational stock market is just plain idiotic. But it is equally idiotic to buy into a stock market based upon perception and not reality.

Gary of the Smart Money tracker, one of my favorite pay bloggers, sent the following in his daily update. (snippet of a much larger email)

I don’t know about you but when the average retail trader is sure the market can’t go down I start to get nervous. Even more interesting is the fact that large traders also don’t believe a correction is possible and their level of put buying has dropped even further than Moe Ronn’s. Folks, apparently no one thinks the market can correct. One thing I’ve learned is that when everyone is thinking the same thing then no one is thinking.

I’m going to add to that the recent Investors Intelligence numbers. This week’s survey had bearish advisors at the third lowest reading in twenty years. This kind of complacency hasn’t led to positive results over the next month. Considering we have a cycle low coming due in the next 3-4 weeks, I’d say we have another big restriction to further sustained upside.

Some Basic concepts I have learned in the last 3 years.

1) If everyone is "betting" on one outcome, that outcome cannot be the result.
2) Your chances of being right in an investment is significantly improved if you following the of insiders and large investors when it is good to buy or sell. This isn't to say they could be wrong on timing, but odd are better.
3) Items like This week’s survey had bearish advisers at the third lowest reading in twenty years. Must be taken as a warning. Rare events such as "3rd lowest reading in 20 years" means that this is not normal. And the more abnormal a situation is, the more likely the environment will return to the "Center".

Am I concerned the market may run much higher before turning? YES! The stock market could stay strong into January.

Am I concerned the market will never again cross below SPX 1025? Not at all. It will hit lower in the next 2 years, if not 2 weeks.

Good luck as always, and keep majority of savings in cash, under FDIC insurance. Or more preferably across 3+ banks to ensure you can't lose all your savings. Be ready to start buying gold miners SLOWLY when the next selling wave eases.

Chart Crazy

The US Stock market seems to be flat lining, the question is, what next? Is the market resting bfore lunging much higher, or a correction? If you know the answer for a fact, let me know.

For your enjoyment, some charts I am looking at. First up is S&P 500, will it break above bear trend line.

From WebSufinMurfs FinancialBlog2

I expect GDX to hit new highs then to roll over....but maybe this is the big move up already?

From WebSufinMurfs FinancialBlog2

From WebSufinMurfs FinancialBlog2

http://picasaweb.google.com/WebSurfinMurf/WebSufinMurfsFinancialBlog2#5410528893468593922

From WebSufinMurfs FinancialBlog2

It really is a crapshoot, but the market must go lower in the next 6 months.

Dubai World and US Dollar

Dubai World
Quote from article:

“It is correct that the government owns Dubai World, but the decision when it was set up was that it should receive financing based on the viability of its projects, not on government guarantees. It’s not correct to assume that Dubai World is part of the government of Dubai. The lenders should bear part of the responsibility.”

Dubai world is a "flagship" financial company of the country of Dubai. That company is akin to Fannie/Freddie in the USA, where private sector assumed the government would back the companies debt in the event of a crisis.

In the USA, there is no amount too great to put onto the public debt load, in effect taking private companies and making losses public, while profits remain private.

In Dubai, so far, the country has not backed Dubai World. Do I think Dubai flinches and backs Dubai world, probably. But atleast that government is using this as an opportunity to strong arm compromises and political power before it assumes the private debt.

US Dollar

Within the next 12 months, the U.S. Treasury will have to refinance $2 trillion in short-term debt. And that's not counting any additional deficit spending, which is estimated to be around $1.5 trillion.

Put the two numbers together. Then ask yourself, how in the world can the Treasury borrow $3.5 trillion in only one year? That's an amount equal to nearly 30% of our entire GDP. And we're the world's biggest economy. Where will the money come from?

Click on the quote to read the full article. What we have here and now is the world facing the US debt machine and questioning if it should be backed by the world. This crisis of faith is reflected in the US dollar valuation. If the US behaves more like Dubai, making private companies take their own losses, or at the very least use the issues as leverage to maximize the governments position.

I for now, am voting against US dollar collapse, and therefore I am once again out of gold miners.

Remember, if your for a stronger US dollar, and therefore, a stronger America in the eyes of the world, you are in effect for the US stock market to fall. If you want the US stock market to rise, without making REAL changes to the financial system, then your for a continued policy of US dollar devaluation until the US faces total collapse, and more than likely US government instability.

I'm for a stronger US, and stronger dollar, let the chips fall as they may. 2009 was not a fun year to trade, 2010 is setting up to be a tad bit more exiting.

A Coin Toss

The markets are pushing into a decision on direction based on longer term trend lines.
So is the market about to go down like a cheap hooker? Or rocket higher?

Its all about the USD valuation, and the devaluation game to get the markets to go higher can continue, but not forever. USD is at about 75 on the charts, somewhere between 65 and 25 would trigger a panic and collapse of the USD. That won't be good for stocks.

From market index perspective, this chart says it all. I am short the market, but not with heavy conviction. If we are significantly lower into Wednesday, I will probably cover a bit in anticipation of black friday doing better than expected.

From WebSufinMurfs FinancialBlog2