The Savvy Boomer

Canadian political system starting to look good considering the US budget mess

The look on House Speaker's Harry Reid's face and his body language say it all.  I find it hard to believe that the US is on the brink of financial default.  The largest economy in the world is about to go under?  Really?  I don't even pretend to understand why or how things could have possibly become this screwed up but the Democrat's and the Republican's finger-pointing speaks volumes about the fact that the US political system is broken and the resulting disconnect must be truly embarrasing for all Americans regardless of their political bent.

Fortunately, because of our parliamentary system in Canada, something like this could never happen.  That's because the existing government holds a majority of seats in parliament and have the power to pass anything they want.  If they didn't hold a majority, the other parties could bring the government down on any money bill and force an election at any time ie: no waiting for 2 or 4 years. 

I know, I know, I'm being very simplistic here but given that I always felt the US system of government was better than ours, I humbly admit my mistake.  Now if Obama and Boehner would just admit theirs, but in the meantime back to selling stocks and buying gold and silver.

 

You know you have too much money when.......

I live in Richmond B.C., a suburb of Vancouver, which is a mecca for Chinese who immigrate to Canada because they now represent about 50% of our population.  I was told by a Chinese immigrant that moving to Richmond is "fashionable" among the Chinese elite.  It's amazing to see the $100k+ cars and $2mil+ homes they buy but I'm all in favour of what they add to Canada both financially and culturally. 

However, none of them can top the Chinese lady (I guess rich bitch might be awkwardly appropriate) who recently bought a dog for $600,000.  It is a Tibetan Mastiff that typically sells for a couple of grand in North America.  For that price, I hope it came with a vet which would actually make it a good deal considering that a trip to a vet these days is usually about $200 just for walking through the door and easily a thousand if god forbid, it is actually sick.  No wonder there are so many homeless animals. Who can afford to maintain them?-unless you are from China it seems.

CNN Money doesn't acknowledge you if you are over 60

There are all kinds of quack sites offering to determine your financial health on the internet so I usually ignore them.  I felt better when I saw that CNN Money had a calculator, so I thought I'd try it.  But when I entered my age as 62, I was informed as per the screen below that I had to enter a positive number between 25 and 60 for my age.  AHHH, never mind the $200k I entered for income, I was just trying to see if there was any point it would acknowledge me.  Apparently not.  Guess I'm too old for CNN Money.  Geez, does that mean CNN is ageist?

Is MINT's release of data more than just a PR grab?

In September 2007, I commented on a new service called MINT that allows users to keep all their financial information on-line.  My biggest concern was giving personal financial information to a 3rd party that isn't a recognized financial institution.  I felt that the remote possibility of a security breach, no matter how minuscule, (they use the word "Paranoia" when addressing the concern) meant that you should only keep such information on your own system.  Internet fraud and hacking are at an all time high now and if someone managed to get into their servers-well, I don't even want to imagine the chaos but more importantly, what recourse could you have?  This is simply an internet company, not a bank or some other kind of financial institution.  I never questioned the integrity of the folks at MINT and while I still don't, I wonder why they have chosen to release aggregate data about their clients' spending and saving habits.

The article on TechCrunch which received the data from MINT shows spending and other financial trends that support the fact that the U.S. economy is in a recession.  This bothers me for a number of different reasons:

• What are their users' demographics, incomes, ages etc?  How relevant is this data to the total population?

• While the data is the aggregate of their 900,000 users, you might wonder what other data they are releasing to whomever?

• Why don't other financial institutions reveal this level of data?  

BECAUSE IT's PRIVATE-THAT's WHY

So again, I caution you to think long and hard before you release your bank account numbers, credit card numbers and pins (yes they really ask you for that.)  It says on their site they have no access to any of this information but if their security is really that great why don't they have any testimonial statements from known financial institutions that it's OK to let 3rd party financial service companies have access to this information?

If you're a regular reader you know I love technology and new applications on the internet that make our lives easier.  In the last year we have learned that no financial institution, government official, financial advisor or Fortune 100 company is invincible to security breaches and/or fraud.  I'm sure the intentions of the folks at MINT are honorable, but in my opinion, this type of online application could be a disaster waiting to happen.  I can't say it enough-Think long and hard before you put any personal financial information on-line. If you are really interested in beginning to use personal finance software, it would be of my opinion that the safer bet would be to purchase the software yourself instead of utilizing online money tracking programs link Mint.com.

 

UPDATE: I wrote this article after I read the TechCrunch post but decided not to post it until after I contacted my banker for her comments.  She returned my call today and I asked her what would happen if I gave my account and PIN to a 3rd party to access my account online.   Her comment?  "You can't be serious.  Why would you ever do that?  Anyway, we'd put a lock on your account, then contact you because we'd know it wasn't you."  When I asked how, she just chuckled and said "This is (name of bank deleted because I won't even tell you where I bank let alone give you my account and pin #.)  We know how to protect our customers."  Of course, Canadian banks are much more conservative than U.S. banks but Canadian banks were declared the soundest in the world in the World Economic Report in 2008.  But that made me feel better that this application probably can't be used by Canadian bank customers.

Buying insurance through AARP may not always be the best deal

Take a look at this article on Bloomberg.  This will give you an idea of its content:

Fatting the Coffers

“At the end of the day, it’s all about fattening the coffers of the organization,” says Thomas Orecchio, who was chairman of the Arlington Heights, Illinois-based National Association of Personal Financial Advisors until September. AARP, he says, is sponsoring insurance for its members at inflated prices.

“It’s the dirty little secret,” he says.

Thanks to Consumerist.

How to convert US gas prices into Canadian gas prices

With the great fluctuations in gas prices and the bouncing Canadian $, many Canadians who live near the border often wonder if it's worthwhile going to the U.S. to fill up. 

Here is the formula you need to apply:

$CDN per litre =   ($US per gallon)
 /   3.7853285   X  (US $ in Cdn $)

If you want to know what gas costs in the nearest U.S. state, look at Gas Buddy.

For example, gas today in Bellingham WA. is about $2.15 a gallon and a US buck is worth about $1.20 Cdn.

So the formula would be (2.15)/3.7853285X(1.2)=.68

Price of gas in Vancouver today is about 98 cents a litre, so a trip to the US saves you 30 cents a litre (.98-.68) or about $20 for a fill up for an average car.  Considering time, border lineups and gas you are going to use,  probably not worth it unless you have other things to do there or drive something with a big gas tank.

Explanation why Cdn$ has lost ground against US$

While reasons for so much of this financial crisis can be understood by most laypeople, something all Canadians are mystified about is why our dollar is losing ground against the US $ since we are the only G7 nation with a surplus right now and our economy is still in better shape than the U.S.  Indeed, as a Vancouver hotelier said "It's great that the US $ is worth more again because that means a Canadian vacation is now cheaper for an American.  The only problem is that many Americans aren't in a position to take a vacation anymore."

The video below from the Financial Post  gives a reasonably good, if incredulous explanation of the panic situation that is in play with the current exchange dilemma.

The video doesn't seem to work from time to time so if that's the case go to this link

So what caused this mess?

This slide show from Frank Ahren's of the Washington Post is probably the best and simplest explanation I have come across so far.