This week’s Carnival of Personal Finance includes my post on converting your traditional IRA into a Roth. There’s also some other good stuff there, so click and enjoy!
Carnivals | Frank Curmudgeon | 
March 9, 2009 2:09 pm | 
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It seems that when journalists can’t think of anything else to say about the latest slaughter on Wall Street they point out that the stock market is now back to where it was X years ago. It’s not a meaningless comparison.
On Friday the S&P 500 closed at 683.38, up 0.12% over the close the day 
before. Prior to Thursday, the last time the S&P closed at that level was September 20, 1996. Old guys like me think that was just yesterday, but it was actually rather a while ago. Clinton (the husband) was running for reelection. The internet stock craze was just beginning. Steve Jobs hadn’t returned to Apple yet and Amazon and eBay were both still privately held.
Does it make sense that the 500 largest companies in America are now worth what they were 12 1/2 years ago?
Of course, simple price level is not the only way to judge what stocks cost. Consider price earnings ratio (PE), what you pay per dollar of corporate profits. What the S&P 500 companies will probably earn in 2009 turns out to be roughly comparable to what they earned in 1996. But that’s not apples to apples, because in 1996 the economy was humming along in a boom and today the economy is in recession. (We hope.) To normalize the cyclicality out and get a handle on the gross earnings power of the S&P 500, Yale’s Robert Shiller has popularized PE10, which is the ratio of price to the average earnings over the previous ten years. Plug in Friday’s close to his spreadsheet and you get a value of 11.8. The last time we saw 11.8 was in January 1986.
Investing, Robert Shiller | Frank Curmudgeon | 6:00 am | Comments (13)
Lots of good tips from the frugalosphere this week.
But first, I need to mention that I have just this morning read the 166th edition of the Festival of Frugality, which came out February 24th. Of the five “Editors Choice” links featured at the top, three were featured here in previous editions of Frugal Friday. My first thought was, of course, that I was a victim of plagiarism, until I realized that the festival came out first. I then realized that this is just the inevitable result of thoughtful people searching for the best and most practical frugal hints.
As a follow-up to last week, Heather at The Greenest Dollar continued her series on transport-themed alternative housing, this time discussing living in railroad cars rather than shipping containers. But once again, she loses me when she discusses buying rather than finding the cars. That’s just not in keeping with the latest trend in frugal-land, the Substance Abuser Lifestyle, or SAL.
Speaking of which, Queercents brings us news of the latest SAL development, gold parties. It’s like a Tupperware party, only instead of the participants buying plastic containers, they all bring gold items they “own” to sell for cash. This is especially important in suburban areas that often lack access to services city dwellers take for granted, like pawnshops and fences.
Frugal Friday, Frugality | Frank Curmudgeon | March 6, 2009 10:25 am | Comments (46)
If this is the only personal finance blog you read (which means you are either my wife [Hi Honey] or my buddy Rick [Yo Ricky!]) you may not have seen this video yet.
The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.
Amongst the many thousands of blogs that have embedded this admittedly very clever bit of multimedia are some personal finance blogs:
Some Christian PF blogs:
Some non-PF blogs with cool names:
And at least one blog sponsored a major clothing designer:
Kenneth Cole’s Awearness Blog.
The video also has it’s own homepage, with a counter reading over 325,000 hits. They accept donations and sell T-shirts “to deal with a ridiculous bandwidth bill.”
Now, obviously, I would never even think of presuming to dispute the details contained in what is now our nation’s definitive account of the credit crisis. But I do have a few little comments.
Economics, Housing | Frank Curmudgeon | March 5, 2009 12:49 pm | Comments (1,620)
The AP has a story today about how January home sales were down 7.7%. This from yesterday’s press release from the National Association of Realtors. According to them, the number of existing house sale contracts signed in January, i.e. the number of agreements made to sell a house, was down 7.7% from December. (That’s a seasonally adjusted number, something you’d have to read the footnotes to their release carefully to discover. In raw terms January sales were up 18.1% from December.)
What does this mean to you? That depends. Are you a Realtor? Then it is bad. Business is really slow. Are you an ordinary non-Realtor, perhaps a home owner concerned about the value of your largest asset or somebody interested in house prices as an important economic indicator? Then this means nothing.
Economics, Housing, Robert Shiller | Frank Curmudgeon | March 4, 2009 9:55 am | Comments (10)
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