Current Events

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What is the big deal? All of the local affiliates have been leading their broadcasts this week with news of the price hike to gasoline. You know, interviewing ordinary folks while they’re pumping gas — then zooming in on the total. All very predictable.

Obviously I’m one who keeps track of my spending. And so far, even with the price rising, it’s not affecting my budget at all. It’d have to raise atleast another $2/gallon before I’d even have to reconsider my driving habits.

When I started driving, I think the price per gallon was around $1.23. Great deal — even then while on minimum wage. Now, nearly 15 years later, the price I can see here from the office is $3.19 — which is apparently up nearly 26 cents over the past few weeks.

Still, that’s hardly a deal breaker.

For simplicity sake, let’s say you fill up your 10 gallon tank 3 times during the span of a month. At $3.16, your monthly gas expense would be just shy of $95. Now, just a few weeks ago, when no one was complaining about the price of gas — say the price per gallon was $2.89 — the monthly cost would have been around $87.

Is $9 per month, or less than $3 per week, a budget breaker? C’mon…

And their ignorance is even more insulting when you see the people being interviewed sip from their Dunkin Donuts or Starbucks cup as they watch the numbers fly by. Wonder if they know their monthly coffee budget likely rivals their total gas budget on a month-to-month basis? I doubt it.

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The real problem with the price of gas are the taxes the individual states ninja in there. My home state uses a “percentage” rather than a flat gas tax. So, as the oil companies raise the price of gas, they also line the pockets of the state governments. That’s messed up.

A flat tax would make perfect sense (though I’m not sure why gas should be taxed exclusively in the first place — just another revenue stream for the government that somehow made it through) — the state legislature sets a budget, the Governor approves it and we go from there.

But the way it is now, the recent increase isn’t really due just to the oil companies — the government just quietly raised taxes at the same time creating a totally unexpected surplus on their end. A surplus that they’ll undoubtedly spend.

The percentage based tax is what the masses should be upset about.

That, and the ridiculous price of coffee.

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Headlines all over the place are touting yesterday’s surge that put the DJIA over 13,000. And then, just a few lines into the articles, every one of them taken from the AP wire, they drop the line, “But appearances can be deceiving, and there may be more reason to worry than rejoice about Wall Street’s latest accomplishment.”

I disagree. While it is odd that it’s taken less than 7 months to go from 12k to 13k (it took like 7 years to go from 11k to 12k), I don’t think it’s realistic to call this a repeat of the dot com era.

Last night, CNBC was essentially calling this bittersweet, dropping in references to the rising energy costs (I still think gas is very affordable), the slumping housing market (it’s not slumping, people are just overpricing their homes), and the sub-prime mortgage issues in the news lately. On those, hey, if you fell for a 5-1 ARM mortgage, it’s not like you didn’t see the day coming when the rate would go up. You gambled and you lost. I like to think the number of people out there with this problem are greatly exaggerated in the media.

I’m also not one to get excited because the Dow hit a nice round number. Honestly, 13k is no more exciting than 12.5k for me. I love how they drop stats like it was the “35th record close since the start of October.” Talk about meaningless filler!? Did you know I just reached a new record for breaths taken since birth? Yep, I just raised it again. One more. And again.

Don’t get me wrong, any day that has a 1% gain is huge — my net worth for next month, should the pattern hold steady, will show that. The number 13k, though, is meaningless. Love it — a meaningless headline.

My real point though is that this is *nothing* like the dot com era. I made a lot of money before it came tumbling down, but I lost my shirt on stocks like Pets.com (what was I thinking?). The past 6 months or so of gains haven’t come from the Amazons, Googles, or Yahoos. It’s been the staples, Boeing, Pepsi, Corning, etc… That’s a big difference. Those aren’t volatile stocks.

And this talk of the economy tanking just doesn’t hold any weight in my wallet. Things are cruising along just fine. And no, the price of gas hasn’t changed the way I live my life. Not one bit.

Neither has this latest milestone.

Can You Dig It?

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