A lot of people get antsy leaving their money in savings accounts. They act as if there is some kind of moral imperative to seek out higher returns. Just remember though, you would have done better leaving your money in a good savings account over the last 10 years then you would have done by investing that money in the stock market. From a comment on Calculated Risk from Average Joe……

10 years ago today the S&P500 was at 1157

Today it’s at 1263.

That my friends is a .87% return. If you add in dividends, you’re up to a 2.7% average annual return.

This is before we even get into the bubble years of 99 and 2000. The ten year window of positive returns in closing fast.

(Note: this is lump sum, all-in investing returns…not the horrendous dollar-cost-averaging returns you get by buying through the dotcom era and last summer as the stocks stayed significantly above the trendline for much longer than it was below during this decade)

Never invest any money in the stock market that you think you will need in the foreseeable future. And never invest in anything that you don’t understand for yourself. If you can’t explain why you think a stock might have a good return using actual numbers, don’t buy.

Now that the stock market has officially turned into a bear market, a lot of people are starting to get excited. But that is premature. There will be no real excitement as long at the US government can sell bonds at will without effecting the interest rates. As Brad Setser reminds us….

The scale of growth in central bank foreign assets is hard to overstate, as is the extent to which central banks are now central to the financing of the US deficit. The US capital flows data significantly understate official purchases of US assets.

From the New York Times….

A simple change to the design of the gallon milk jug, adopted by Wal-Mart and Costco, seems made for the times. The jugs are cheaper to ship and better for the environment, the milk is fresher when it arrives in stores, and it costs less.

What’s not to like? Plenty, as it turns out.

The jugs have no real spout, and their unorthodox shape makes consumers feel like novices at the simple task of pouring a glass of milk.

Regardless if people like this new design or not, I think all stores are going to be using it soon if oil prices stay high. The old design is just to inefficient to keep.

I guess this just goes to show that it could always be worse. From the Telegraph (h/t Calculated Risk)…..

British households are now more indebted than those of any other major country in recorded history, it has emerged.

Families in the UK now owe a record 173pc of their incomes in debts, official figures have shown. The ratio of debt to income is higher than any other country in the Group of Seven leading industrialised economies, and is sharply higher than the 129pc of incomes it was five years ago.

The figures, published by the Office for National Statistics as part of its National Accounts, underline the scale of the coming slowdown facing the UK, economists warned yesterday.

Michael Saunders of Citigroup warned that – at 173pc of household incomes – the debt burden is higher even than Japan’s when it peaked in 1990, before more than a decade of deflation.

“Not only are we the highest in the G7, we are the highest a G7 country has ever seen,” he said.

From MarketWatch.…

Crude-oil futures climbed to unprecedented levels Thursday, as weakness in the U.S. dollar, influenced by the U.S. Federal Reserve’s decision to stand pat on interest rates, sent prices to a peak above $140 a barrel.

I don’t think that raising rates are going to cure all the economic problems we face. I don’t think there is a quick cure for all the economic problems we face. But when you depend on the rest of the world for financing, I really think that ignoring the value of your currency is a big mistake.

Sadly, I score about 80% on the faint-of-heart quiz.
The last job I had was basically self-managed and I didn’t start to relax in that one until they brought on someone who functioned as my manager (even though he technically wasn’t). My manager in my new job is based several states away. He’s done a good Click Here to continue reading.

From Farm Show….

“I have to grow 500 acres of 100 bu. per acre milo to net enough money to buy all the fuel I need for my farm. But it takes only 100 acres of sunflowers to grow all the fuel I need for my farm – about 11,000 gal. of oil.

“I paid a total of $6,000 for the press and engine. It doesn’t take many gallons of fuel to pay that back.”

According to McAmoil, growing your own biodiesel fuel is far more practical than using cooking or vegetable oil. “There isn’t enough restaurant oil within a 100-mile radius of my farm to operate my diesel-powered equipment for even two days. A lot of farmers in the High Plains are starting to buy presses so they can grow their own fuel. One farmer is looking at buying several presses so he can operate five different irrigation engines, using 50,000 to 60,000 gal. of biodiesel fuel per year. He’ll hire someone to operate them full-time all year long.

This almost sounds to good to be true. But it is common knowledge that you can run a diesel engine off of vegetable oil. So why not off of oil that you press at your farm?

If you read the full article, you will see that the guy adds some gasoline to the mixture so it is not 100% homegrown. Still, this could be the wave of the future.

Admittedly, it is still turning food into fuel, but it does so in a manner that is a lot more practical then ethanols. For one thing there is no fermenting. The oil is being pressed out of the crops and being used in the tractors will only a little gasoline being added. Moreover, the left over mash is being feed to cattle.

Most importantly, this process is not being driven by government mandates. The guy did a straight up cost comparison between how much acreage he would have to plant to pay for diesel fuel and much acreage he would have to plant to grow his own fuel. The amount he would have to plant to grow his own fuel was less the amount of acreage he would have to plant to buy it.

From an AP story about gas station owners who are refusing to accept credit cards (h/t Crunchy Con)….

His complaints target the so-called interchange fee — a percentage of the sale price paid to credit card companies on every transaction. The percentage is fixed — usually at just under 2 percent — but the dollar amount of the fee rises with the price of the goods or services.

As gas tops $4 a gallon, that pushes fees toward 10 cents a gallon. Now stations, which typically mark up gasoline by 11 to 12 cents a gallon, are seeing profits shrink or even reverse.

I don’t understand why credit card companies charge a percentage of all sales instead of a flat fee. Does it really cost them more money to process a transaction for $4 then $100?

There are real benefits to both the gas station owners and the customers to be able to pay at the pump. When you pay at the pump the gas station has less labor costs because you never have to deal with a live person. Furthermore, they don’t have to face the risk that you will drive off with out paying for your gas. For customer the benefits are even more numerous.

So I think gas stations should band to together and mandate the use of their own card instead of refusing to accept them all together. The bigger convenience store chains already have their own card so it should not be too hard for them to tell the credit card companies to shove it.

From the New York Times….

At a moment when corn should be almost waist-high here in Iowa, the country’s top-producing corn state, more than a million acres have been washed out and destroyed.

Beyond that, agriculture experts estimate that 2 million acres of soy beans have been lost to water, putting the state’s total grain loss at 20 percent so far, with the threat of more rain to come.