American Express to cut 7,000 jobs


Credit card unit costs Bank of America $373m

Boo.Hoo. I should. have taken. any one of the eighteen. promotions. American Express wanted to give me. But no. I was holding out for a no-transaction-fee, 25-day grace period, 0% APR for 12-months offer. Not in the literal and figurative cards. And now jobs are lost. Because of me. I was supposed to be desperate and brain damaged and illiterate enough to not notice how the terms and conditions of the agreements were getting more restrictive. I was supposed to borrow and borrow and not notice I was restricting my buying power through paying interest to credit card companies. As long as consumer insecurity and spending and foreclosures have rolled back the clock, I invite the credit card companies to roll back their clocks to a set of terms and conditions that would actually be PALATABLE. Like 25-day grace periods, and no changing the terms and conditions when the customer hasn't done anything to warrant a change. I haven't used one card in over four years -- I received three changes in terms and conditions. Business practices changes across the industry, they said.

But that Bankruptcy Reform Act should bring the profits rolling in, shouldn't it? It wasn't meant to create humongous losses for credit card companies, was it?
It's preferable to lose these hundreds of millions of dollars every quarter than to reset industry settings (smaller fees, longer grace periods) back to the 1990s, or to any sort of standard that would seduce me to use a credit card. Whatever. We can see how that's working out.

In the irony of ironies category:

A desert state leads the nation in underwater borrowers. The sluggards? One state whose major city is below sea-level and is at risk of flooding; another state comprising several islands in the Pacific; and a state widely recognized for its constant drizzle.

About credit cards terms and agreements: credit card companies have the right to adjust annual percentage rates without notice, and even to apply raised interest rates to existing balances. One can have an inactive credit card and still receive notices of decreased grace periods, introduction of universal default clauses, and suchlike. One can go from a $12/hr job and renter status to a $90K/year job with 120 months of regular mortgage payments, pay one's cards in full, and still not have one's credit cards reflect improved credit status, especially if one has a Bank of America card.

12/01/2022 look at those lovely twos, and zeroes, and ones. Eight months shaved -- [insert Sesame Street Count laugh]. Do you think the Count loves to do his taxes? "Four lovely Schedules! Uh uh uh uh aaahhh! Ten terrific itemized deductions! Uh uh uh uh aaahhh! I do not fill in... 1040EZ forms." Do you suppose he approaches paroxysms of ecstasy calculating the Alternative Minimum Tax and annualization of stock option gains?

I suppose you're going to tell me the Count works for the IRS, bloodsucker that he is.

My goal next year: to surpass in retirement contributions what we spend on principal, interest, insurance and property tax.

Coming up next: Grover and Elmo as daytraders.

I delivered my November mortgage payment this morning. I had hoped to be cheery, and wrote a cute note of gratitude to wrap around my cheque. However, the vibe I got from the bank (8:45 am) was not chipper, not informed (I was asked to endorse my payment). I removed my cheque from my envelope, and kept my note hidden.

I just want to celebrate the fact that 20% of my mortgage principal has been paid off. For those of us who are reducing debt and saving and building equity, we know the thrill of bounding over an early hurdle.

I know my savings tribe will share in my celebration, even if the bank wasn't in a mood to. I treated myself to a Viennese mocha from Dilettante en route to the bus stop as a reward.

Phew! I had worried that I forgot to make BEARX part of my automated purchase plan. That's not the case! I don't have the r-to-the-power-of-3s (write it out, math geeks) to look at my balance. Other things gnawing at my nerves.

401(k): down 40%
Rollover IRA: down 10%
Roth IRA: I CAN'T LOOK.

Link du Jour: Dividend Stock Investment Strategy

I know someone personally who's gone through a foreclosure. I wondered if he knew of the Hope for Homeowners program or if it rolled out too late or something. I'm wondering, if lenders/mortgagors are so willing to reduce the inventory of REOs, why notice of trustee sales are up so much. Are the programs ineffective, are they useful to only 3% of the population, did the troubled seek out help only to be denied and turned away?
---------------------
On my scooter trip yesterday I paid $3.60 to fill up for 120 miles. I did start out with a full tank and it's now 55% full, but still -- it's rare for me to have an eight-hour travel tour for $3.60. It helped to fuel up in the rural areas without so many gasoline taxes too. We talked about how the global recession/depression might delay the peak oil crisis. Fewer vehicles on the road, fewer imports, more reliance on bicycles, car-sharing and public transportation in urban areas. People who freaked out at USD $4.50/gallon and bought Priuses won't be able to easily go back to the SUVs when gas gets cheaper as the flow of consumer credit has contracted: they'll be "stuck" with their 40+ mpg cars for longer than they planned. Then again, they won't be able to borrow for alternate fuel or electric vehicles either. I wish car-sharing companies were publicly traded.
-----------------------
Fave money podcasts right now: Money Girl and NPR's Michelle Singletary.

My Congresscritter wants to abolish the 401(k) tax benefits. However, a different kind of mandatory retirement plan is being discussed.

Smart Money identified my city as one of nine whose real estate values haven't completely tanked. Depends what neighborhood, size, school cluster, economic vitality we're talking about. The schools where I live are crowded and we need more capacity. Still, many houses in our area are for sale.

No Microsoft Money for 2009, but Quicken Online is ditching its fees.

I'm paying attention to peer-to-peer lending sites in the wreckage of tapeworm bank implosions.

If the US dollar is rising, why does it buy fewer Yen than it did a month ago? Look at the Yahoo! currency chart.

Doctor Housing Bubble lays out the reasons in an October 21, 2008 post.

1. The contingency part of my remodel budget is sadly getting a workout. Water/drain supply issues and new circuits. Perhaps the solution to the plumbing issue will result in fewer leaks and lower water usage costs.

2. People in my life are being more open with their finances. This is comforting and refreshing, for I was a stresscookie due to believing I was failing to keep up. Several families are sharing experiences in redoing their "never touched" kitchens. There's some relief in buying a home that hasn't changed ownership in 50 years, but there are some headaches too.

3. Milestones reached this week:
20% spending on the kitchen (no reward);
40% costs for Osaka;
90% annual 401(k) contribution;
75% annual Roth IRA contribution;
20% proposed saving for replacement 4-wheel covered vehicle (no reward)

Rewards:
close to retail priced item of clothing (shoes or boots)
daytrip out with the scooter (scheduled for Sunday: I can fill up for less than $10 again! Bonus!)
two neat magazines (I bought ShopSmart, I can have one more)
scented sea salts for the bath, Market Spice Tea (when I empty two tea boxes) and an at-home facial.

4. I am 0.34% away from reaching the 20% mortgage principal paid milestone. One more week...

5. I've read a prediction that the prime rate will be reduced at the Oct. 29 meeting. Please, yes, reduce that rate. I hope I won't be dinged for the $19000 cabinets prior to the rate cut. If yes, I guess it'll be cash, as my credit card doesn't run that high and I don't feel like exhausting my emergency fund right now.

My mid-1990s cookware is past its warranty. I've just read Mad as a Hatter and am considering gradually replacing my cookware with Le Creuset, which can be pricey. However, I will use eBay when I can.

No fooling: when our cabinets were removed yesterday a September 22, 1947 issue of TIME magazine was unearthed. Jackie Robinson was on the cover.

Trivia bits:
an eleven year old called Vatican City to compliment the Pope on the Vatican Choir. The cost: $35.60. That eleven-year-old by now has had to take a disbursement from her retirement portfolio, probably the equivalent of $35.60 in 1947 dollars.

A Crosley light car got 35 - 50 miles to the gallon. In 1947.

1947 was a banner year for postwar prosperity. More Americans were visiting the Dominion of Canada, buying Philco, Magnavox and Westinghouse phonograph consoles priced at what would be $2000 in today's dollars, flying to Paris. Lots of industrial ads from Alcoa, Champion spark plugs, Pitney-Bowes, Merrill Lynch Pierce Fenner & Beane, Clary adding machines. Ads for DeSoto, Cadillac, Dodge, Ford. No television!

Profiled: Mackenzie King, Canada's longest-serving Prime Minister; Francis X. Bushman; Andre Gide; Jackie Robinson (duh!), Rudolf Bing. Lots of hard liquor ads.

Link du Jour: smartstops.net Oh that I had learned of this site back in August...

Smart starts
Potential long-term growth industries worth researching this fall and investing this winter:
environmental companies
low-end retailers
educational companies
infrastructure companies
biotechnology
Real Estate Invetment Trusts
tax preparation companies
asset management firms focused predominantly on retirement assets

How do you gird yourself to open the envelopes and look at the statements: epidural? bourbon? marijuana? gin? yoga? deep meditation? hypnosis?

As I pushed $4000 to the chequing account for the kitchen remodel, I thought about everything else I wanted: Osaka for the lads, maximizing my Roth IRA contribution, paying off the kitchen within three years if I decide to stay here, a car within twenty-four months, and wondering if we're really saving enough to make that happen. I have to get through my head that this is not a normal month for expenses: who buys appliances, fixtures, tiles, flooring every month?

Maybe it's time to put 1/4 to 1/3 of my savings in laddered CDs or TIPs to handle debt repayment. Maybe I should start amortizing, and stop dreaming that I'm going to afford a new car. Or, gasp! horror! slow down the debt repayment because the interest rates are low and build up cash to buy the car and for the lads to, it is hoped, follow my weak lead for dollar-cost averaging and buying low.

Even Warren Buffett says that now's the time to buy, so let's have another cup of coffee, and let's have another piece of pie.

I'm reading The Dick Davis Dividend, a present to myself with my husband's $50 gift certificate (he's had $150 of 'em, and I've used less than my community property share). If I were to accumulate buy stock right now, here's what I'd pick up:

Procter & Gamble (PG)
Gilead Sciences (GILD)
Prudhoe Bay Trust (PBT)

Looking at Canadian natural resources and Canadian & Australian uranium companies for laffs. Some ferrin stahx: SNY, TCK, Probably going to stick with mutual funds, although if my son says something earth-shatteringly wise, I may reward him with a share of Google. I'm trying to see what companies he'd be interested in owning: he's not a Disney/McDonald's/Coca-Cola/Nike kid, but he recognized very early in life the logos for Boeing, Microsoft, RealNetworks and Amazon.com, and spots companies supporting NASCAR entries (Lowe's, Office Depot, FedEx).

I am furthermore being nice to myself by accepting an invitation from a kind and friendly scooterist to trek up to the next county. It'll be slow going, as I'll be with Vespas (think Gulliver among the Lilliputians or Dorothy among the Munchkins), but it'll be more interesting than the major highway and the freeway I took a few weeks ago. And it's not the size that matters, it's the chicness of taking to the open road.

$23.98 food for dinner, wine, card
$95.24 sheepskin-lined waterproof winter motorcycle gloves
$13.50 lattes and donuts for neighbourhood stroll
$135.20 Tiles for backsplash
$100 Roth IRA contribution

second disbursement is for 4000 dollars, not 19000 as I projected.

Spending:

$184.00 haircut and colour (I know, that's obscene! Even with french-press coffee, tip and a foot massage. I look like Candice Olson from HGTV now.)

$??? emergency dental work

Both service providers discussed their respective interest in making me look good and not hurting me so I'd help them bring in new customers and come back. We've never had these kinds of conversations before: sure there's always some billing and payment going on but never before the blatant "I can always use some more customers!" I've never heard them open up about their political stripes before either, but they sure did today. It's not as if I sit down in their chairs where they're at liberty to hurt me and make me look like a dork and open with the salvo: "Who ya votin' for?" Hair will always need to be cut (maybe not professionally coloured) and teeth will always need maintenance.

I did make a point of visiting these service providers within 1.2 miles of my house though: gotta keep the local economy going. They're interested in doing the same.

$5.90 Lunch w/friend-excoworker
$9.58 gas for scooter
$51.32 Prescription & vitamins (2 for 1 sale at WAG: Whee! $11.32 saved in $20 challenge)
$90.60 CSA pickup boxes starting from beginning of this month
--------------------------------

Received gas bill: $30.12. Much lower gas use from same billing period last year; however, it's been +4F degrees warmer on average. Bad news, as of 10/1 we're paying $0.90/therm for procurement cost, a 16% increase in rates from September. We use a lot of natural gas (940 therms per year, compared with the average Kansas use) because someone stays home during the day, saving us about $100/month on gas and an extra $100 on daycare, and we use gas for our hot water and for our kitchen range, leaving us with an electricity bill of about $22/month. This will get lower when I get a laptop and a new refrigerator and use powerstrips. Inexplicably, I find thermostat-adjustment humour very funny in cartoons (e.g. SpongeBob Squarepants, Aqua Teen Hunger Force). It is very cold in the mornings and at work: my fingers were tingling and pink when I entered the work building, and didn't warm up until I went to my friend's building for lunch.
------------------------------------------
Steeling myself for major squandering: boots, gloves, hat, cabinets. I owe my kid $50 because I challenged him to spell a bad word (seven letters long) and he did it. So $20 he takes with him to the Book Fair, and the rest goes into his plummeting college fund.
---------------------------------------
Delighted to learn that our mortgage is looking more and more reasonable, commensurate with what mortgagees in Ohio cities are paying, and what a single worker with a cushy job is paying for a one-bedroom apt. in Seattle.

Yipe!
Anyone know when the prime lending rate is typically changed? On Monday the contractor wants to collect on the second disbursement (the BIG disbursement).

Edit: sheesh, I meant kitchen. I am suffering from "premature election," learning how angry the Libs and Tories are and the low election turnout.

My stepmother told me it was a sweet feeling to know there are no more payments to make to the bank. At my dental examination this morning the hygienist told me she was one year away from ending her mortgage.

Mind you these two women are numbers-oriented: one had a career in insurance (she is NOT happy with the scooter), and another invests much the way I do (she rides a Harley-Davidson). Neither of them are of the "oh, I was just a housewife while my husband brought home a well-above-average salary" type either so I think this is really doable.

It seems so far away from where I am: five years ago we started out with $175,000. I know the principal is incremented with each passing month, but only by $2.63 with no prepayment. Just three weeks away from getting to the magic $140K. And that seems still very large to me. I don't know how my friends with larger mortgages manage -- they must have greater patience.

Princeton professor Paul Krugman has won the Nobel Prize for Economics.

On occasion I like to read Dr. Krugman's online column; sometimes I read Dean Baker and look into Laurence Kotlikoff's papers too.

What economists do you read?

October 10
$37.43 Chinese takeout:hubby slammed at work on-call

October 11
$34.03 GreaseMonkey oil change/inspection
$16.23 Cash + eggs, yoghurt and cookies
$1.40 Postage for Japan
$1.08 Envelope for Japan
$10.05 Espresso break w/family
$0.10 New York Times Crossword
$15.16 Pasta, basil, crushed peppers, garlic

Our playlist this evening:
We Faw Down and Go Boom -- Eddie Cantor
Makin' Whoopee! -- Eddie Cantor
Let's Have Another Cup of Coffee and Let's Have Another Piece of Pie -- Fred Waring and his Pennsylvanians
Cheer up! Smile! Nertz -- Eddie Cantor
Happy Days Are Here Again -- Annette Hanshaw
I Gotta Get Up and Go to Work -- Irving Aaronson and his Commanders

I should ferret for my Fred Allen, Ruth Etting, early Crosby and George Jessel...

From my routine five-block walk from the bus stop to home, I encounter in this order:

What used to be Washington Mutual but really is now JP Morgan Chase;

closed former Washington Mutual Home Loan Center;

closed Tony Roma's;

vacant drugstore space formerly leased by Longs Drugs (fantastic drugstore).

Do you have a routine walk that takes you past a number of abandoned commercial buildings and lots?

October 6:
$10 Chinese food going away lunch
$12 field trip fee for 10/31

October 7:
$10 Photocopied materials for C# course
$57.60 half of last-minute pricey Italian dinner when Cdn friend flew up from SFO and was waiting for her bus to take her back to YVR. Called me at last minute in hopes of having a dinner companion downtown.
$40.21 escapist reading material for the family: Willful Creatures, I Love You Beth Cooper, Monster at the End of this Book.
$38.15 10.44 gallons fuel for car.
$10.22 Pizza ordered while I was away at class and at dinner
$2.55 Cappuccino.

your brother e-mails you from an ocean away with the subject header "What's going on over there?!?!!!?"

My brother asked me if people were throwing themselves out of buildings like 1929, and how we were doing.

This morning's index numbers have crashed below my 'comfort plateaus': Dow now four digits, NASDAQ below my birth year. Just like 2001!

Gotta find and implement cost-saving moves. Not the ones where one invests 'only' $20300 for insulated siding for a big 2% reduction in heating costs (10% reduction in the gas you use, but not enough to offset the increase in the delivery costs or new taxes), but the ones where we can whack our basic budget down by 5%. Friends have been laid off, people can't even afford movies (what about DVD rentals?). What do I do? Take the kid out for food, and a play, and food again. Well, it's a birthday.

Why aren't foreigners and investment bankers throwing themselves at my feet in gratitude for bailing them out? I want my feet massaged and kissed.

How can you tell when someone approaches you for money that they're in sincere need, rather than hustlin' up tax-free income? Their acceptance of offered food? When they do it? Where they do it? I ask as I've seen people walk their wheelchairs in the early morning to downtown street corners and have read articles about people getting hundreds of dollars a day. In the summer on one block I have seen three people panhandling. I give only to local hunger agencies, the local Catholic charity and Real Change vendors but I'm wondering why more people don't sell Real Change.

Spending October 5:
$83.44 -- birthday celeb.
$5.00 -- parking

Incensed to read an article in the newspaper in which a woman who bought a $680K house last year was interviewed on the economy. She upgraded from a house whose $420K sale she grossed $46K in profit with her husband. Tell me I shouldn't be beating myself up for buying and holding a property we could comfortably manage living in on one person's salary for a few years. Tell me I don't have to have rich grandparents or generous parents or stock options or a six-digit individual income to live in Seattle. Or do you too feel like a suckah for believing in the index funds-go passive-buy-and-hold, buy-low talk not once but twice like me...

October 4 expenditures:
$30.95 -- food for party
$77.80 -- groceries for week
$5.20 -- postage stamps
$1.50 -- French Women Don't Get Fat recipes photocopies
$0.30 -- Sat NYT crossword/Sunday Xword & acrostic
$8.00 -- 2.2 gallons for motorscooter

I love good food. I used to think my grandmother made good food, but really she made Polish-Hungarian-Ukrainian-Saskatchewan comfort food: cabbage rolls, perogies, spaetzli. I used to think my mom made fantastic food, and she did, but much of it she didn't get to use on us -- I didn't like cheese (but I would eat it with delight in homemade lasagna and in French Onion Soup), my brother didn't like fish (why does he live in the Pacific Rim/Japan if he doesn't like fish????). Now I make fantastic food 93% of the time and it doesn't even have to be complicated. The best food is simply prepared and excellently matched. Food is the big budget challenge. I would live gladly without cell phones, run my 12-year-old car until the 2010 electric vehicles come along, wear consignment clothes, weed and go slug-killin' in the rain at midnight, but please don't ask me to head back to cheap, mass-produced, genetically modified edibles spiked with neurotoxins and carcinogens and preservatives. I simply don't have as much money as the rest of you -- what's the average American net worth at these days: $670,000? $1,325,571?

So what's on the stove now? Hungarian comfort food! I cheated and went to (*gasp!*) a supermarket for fish -- fresh halibut, sole and salmon were on special, so yes, I weakened.

I have been told that I'm in one of the safest positions in one of the safest groups in a cash-rich company that has over one year salary and infrastructure costs in an emergency fund. The work I do ensures the emergency fund remains with the company and not in the hands of litigators.

Holds off my plans for an immediate exodus though. On the other hand I will get my kitchen paid for! Landscaping! Maybe a new hybrid car! Or some big soundproofing system to drown out the noise the suffering neighbor dogs make. Gold! Doubloons!

Oct. 3
$10 -- Japanese study book
$2.78 -- Starbucks cappuccino

Oct. 1
$60 -- prescription
$5.44 -- Consumer Reports ShopSmart special publication
$1640 -- mortgage

Oct. 2
$89 -- Chess Club for tot
$6.49 -- Katsu Chicken
$1.25 -- Dasani Water
$100 -- partisan contribution response to an appeal

Another month, a shorter amortization period. 19.66% of the principal has been paid over five years. Yeesh.

Assessment is 10% higher than last year's. I understand that assessments are about 18 months behind home values. I won't challenge the assessment for two reasons: the county needs my tax dollars as lots of greedyguts here are defaulting on their 'separate properties' they couldn't flip, and the tax dollars go to keep our water clean, emergency road vehicles on the road, public health centers for those who didn't win lotto and came down with diseases; and my credit union looks to County assessments to determine a responsible amount to lend me. Maybe I've undervalued my property, in which case I can go back and redo my net worth statements and then refute the evidence I'm closer to broke now than I was in January. I have worked for my County government, so I do have an informed idea where the money goes. Also, my house has a lower value than 64% of the houses north of the ship canal, and the tax is about 1/45 of our income: shrug.

Seriously considering landscaping. Even if I don't make it across the border next year, landscaping now would be good so that next year, when the dogs owned by irresponsible homeowners come out and bark out their loneliness and frustration, I can put the house up for a quick sale. Or maybe I won't have to, because my tax dollars will have kept Animal Control in business!