30 Day Challenge – Gym – Day 20

August 1, 2011 Leave a comment
Day 20

Day 20

I ran into my newest coworker today at the gym. He was signing up for a free personal training session. Of course, that’s how they get you at the gym. The trainers are very “in your face” and can be very persuasive.

I was talking to him when the personal trainer that was helping him sign up showed up and started yabbering at me. She pretty much blocked me from conversation from my coworker, which is rude but understandable. She didn’t want me to talk him out of it or something.

So, it looks like I may have dropped a few more pounds. I’ll wait until the end of the week to confirm. :D

Categories: Lifestyle, TD Challenge

Possible Deal in Washington

July 31, 2011 Leave a comment
Possible Deal in Washington

"White House" by Damian Brandon on freedigitalphotos.net

Hooray!

It seems as though there might be a compromise in Washington if the leaders of both parties invoke their silver tongues and persuade their colleagues that this compromise is the right thing to do.

I am monitoring the asian markets and the U.S. futures right now and it looks like peopel are scrambling to cover their shorts. That is the only action that makes sense at this point. The debt ceiling hasn’t been raised and there is absolutely no reason to buy stocks at this point. There is reason to cover a negative bet because the odds for a compromise just went up. If someone has well positioned enough to take on a long position on Friday, I would sell into the rally on Monday. I am willing to bet that some negative news will come out and allow you to buy those shares back lower if you absolutely believe a deal will be done.

First Half GDP

We saw some extremely weak first half GDP numbers last week. What’s the deal here? Was the end of stimulus a brick wall? The stock market is telling us either no or it doesn’t care. What do I mean by that? Well, we are about 6% from the 52 week high in the S&P. What this tels me is that the market either believes that GDP will rise in the second half, or another round of stimulus is coming. Lets look at a few sector ETFs to get a better idea of how those sectors have performed lately. The Retail HOLDRS Trust (RTH) is around 5.4% from its 52 week high. The Oil Service HOLDRS Trust (OIH) is around 6% from its 52 week high. The Vanguard REIT ETF (VNQ) is around 3.7% of its 52 week high. The SPDR Select Sector Technology ETF (XLK) is around 5% from its 52 week high. The PowerShares Dynamic Food and Beverage ETF (PBJ) is around 4.3% from its 52 week high.

This isn’t an exhaustive list, but it gives a pretty good snapshot of the big picture. There are no signs that we should panic at this point. People are shopping, the oil complex is fine, commercial real estate is fine, technology is fine, and people are going out to eat. I am keeping an eye on many of the major sector ETFs for lower highs and lower lows. Until those trends show themselves, I won’t worry too much about the GDP numbers.

Hope

Lets keep hope alive. Please raise the debt ceiling and avoid an unprecedented default by this great country.

Categories: Investing

30 Day Challenge – Gym – Day 19

July 31, 2011 Leave a comment
Day 19

Day 19

Another late day workout that will probably cause me to toss and turn in bed. I love how the gym is so dead on Sundays, especially at night.

Ahh, iTunes just froze on my computer…

Two more days until 3 weeks!

Categories: Lifestyle, TD Challenge

30 Day Challenge – Gym – Day 18

July 30, 2011 Leave a comment
Day 18

Day 18

Ahh, I’m 18 again! Fresh out of high school and ready for college life.

I felt my left knee popping towards the end of my workout. Perhaps this is my body telling me to slow it down? I went on a walk around the neighborhood after my workout just to make sure my knee was okay. No problems there.

I’m 3 days away from 3 weeks, yay!

Categories: Lifestyle, TD Challenge

I’m Just a Number at Chase Bank

July 30, 2011 Leave a comment
I'm Just a Number at Chase Bank

'Upset Business Man" by nuttakit on freedigitalphotos.net

I am was just a number at Chase bank.

For about 9 years I banked with Washington Mutual and had no problems whatsoever. For the last 3 or so years I’ve been banking with Chase and had no problems, until this year.

The Beginning

I walked into my local Chase branch today with high hopes that they would understand my plight. The checking account that I held with them was an emergency checking account with about $900 in it. The truth is, I had attempted to close my account in 2010, but the banker that I spoke to at this location was pleasant and they talked me into keeping the account open with some emergency money in it “just in case.” They’re big pitch was that they had branches all over the United States and that there were no maintenance charges or minimums. I happily kept that account open.

Since that account was an emergency account, I didn’t keep up with it. After a few months Chase locked me out of my own online account due to inactivity. I didn’t think twice about this since I had no reason to log in to my emergency checking account. I was smart enough to set up text messaging so that I would be alerted to any transactions in case there were unauthorized charges. A few days ago I was alerted to a charge and immediately called Chase to regain access to my online account.

After logging in, I was surprised to see 3 months worth of maintenance charges. I knew about the debit card limitations that the politicians had enacted into law and I knew that banks were trying to find new ways to maintain their profitability. I figured the 12 years that this account had been open would amount for something and I would be able to get those maintenance charges back. Boy, was I wrong!

At the Bank

I sat down with one of the banking representatives. He was very professional and curteous and told me that he had a $35 limit to the amount that he could credit back. I told him I was fine with this since the charges amounted to a total of $36. I joked that the $1 difference would be the penalty I paid for not reading all the documentation that was sent about my account being changed. I admitted that it was my mistake, but I hoped they would understand my situation. He went to talk to his manager because the last maintenance charge was more than 60 months old and he needed authorization to refund it. I wrote out a check for $1,000 in front of him and signed it since I needed to get my account above the minimum to avoid the maintenance charge.

No Trust

Unfortunately he came back with bad news. The manager was unwilling to refund the last $11 worth of maintenance charges because it was more than 60 days old. I told the representative that I was willing to split up my direct deposit as I had done in late 2010, but I felt like I was buying a car at this point. All I wanted was my hard earned $35 back. The manager did not trust that I would do what I said and I was told that they wanted to see the direct deposit go through first. I entertained this thought. I asked them if they could offer a signed letter stating the conditions and the representative said they could not. At this point I am furious and starting to shake.

I was willing to do what the manager said, but I wanted to be assured that they would give me back my $35. They couldn’t even provide me with any assurance! This was getting a bit personal since they didn’t want to trust me and I couldn’t trust them. They had started off by saying they could give me back $35 and then they took that back. There was no way I could trust them after that.

In the end I closed my account and destroyed the check that I had written and endorsed for $1,000. They can keep my $36, but not my $900.

Summary

  • I laid out my situation, told him this was an emergency checking account, and that I had tried to close it once before but was talked into keeping it open by an employee at that branch
  • I wrote and endorsed a check after I was told that $35 out of $36 was refundable
  • The manager changed her mind in the middle of it all
  • I offered to split up my direct deposit as an incentive so I wouldn’t have to close the account
  • They did not trust that I would do so
  • I couldn’t trust them after they got my hopes up and changed their mind
  • My account was closed

Risk/Reward Analysis

There’s a risk/reward lesson here that I wanted to outline. I’m perplexed at the fact that the manager was willing to let me go as a customer over $36. This decision cost her branch about $900 instead of $36. I understand that she didn’t want to trust me, but lets do a bit of risk/reward analysis here.

Worst Case for Chase

Here’s the worst case for the bank. I get my $35 back and deposit $1000. I turn around and close the account after everything has cleared. They’re out $1000 + $35 + 900 = $1935.

What Happened

This is what happened. I didn’t get my $35 back and I didn’t deposit $1000. I closed my account right there and then. I consider the $1000 a lost opportunity cost. They’re out $1000 + 900 = $1900.

What Would Have Happened

If they would have trusted me, I would have been able to get my $35 back and deposited $1000. For the sake of keeping the math simple, I am going to leave out the direct deposit numbers. They gain $1000 + direct deposit.

  • Risk:  $1935 – $1900 = $35 + unsatisfied customer
  • Reward:  $1000 + direct deposit + satisfied customer
  • What Happened:  They lost $900 and I am hesitant to ever do business with Chase or recommend Chase again

The numbers can be tweaked to be more accurate, I know. The fact of the matter is, no matter how you tweak the numbers, the decision that this particular branch manager made was a bad business decision. I would think that keeping customers is more important than giving back three month’s worth of maintenance fees.

Categories: Banking, Personal Finance

LendingClub Trading Platform Reflections – July 2011

July 29, 2011 Leave a comment
LendingClub Reflections - July 2011

"Jump" by frederico stevanin on freedigitalphotos.net

Look before you leap!

That’s my main reflection at this point in time. The LendingClub Trading Platform is nothing like the basic LendingClub Platform. You aren’t able to get in at the ground level and lend money directly. You are only able to trade notes that are listed on the trading platform, which is a secondary platform. Let me brain-dump some pros and cons.

Pros

  • At least I get to participate in peer to peer lending through a secondary market
  • I get to see the payment history of existing notes before I invest
  • I get to see the credit history graph of a borrower before I invest
  • I am able to go back and review the original listing
  • Notes that are bought are seamlessly transferred from the Folio platform to the LendingClub platform

Cons

  • New notes being sold at par are rare finds
  • Notes that are at a discount usually have payment issues
  • You end up paying more than the remaining principal on notes most, if not all, of the time
  • The same threat of default is there
  • You will probably get less percentage yield than someone who was in at the ground level of the same loan
  • There aren’t as many high quality notes available on the secondary market since most people want to sell their riskier notes

I wouldn’t hesitate this to someone who is already familiar with buying and trading bonds. There are similarities and if someone knows how to trade bonds, then they can figure out how to invest in the LendingClub secondary market. For those who have experience in the stock market, that experience is not enough. There is a lot more math involved here and people misprice their notes left and right. I can’t tell if they’re shady or just uneducated. I’ve seen prices as high as double the remaining principal. Why in the world would you buy a note that will never pay you back 100% of your principal?

Verdict So Far

I haven’t had any defaults so I still have a positive outlook on this income stream. So far I have received the first payment from 13 of 27 notes. The rest are upcoming and I am hopeful that there won’t be any missed payments. I’ll write a more detailed article later on about how everything has gone in the month of July. The fact of the matter is, I still haven’t broken even with my what I spend on buying the notes. I am probably a month or so away from breaking even. I’ll elaborate on what I mean later for those who have no clue what I am talking about.

I maintain that the LendingClub Trading Platform should be looked into by those who are knowledgable about investing in bonds. For everyone else, I would suggest that you hold off and learn as much as you can through my articles.

Categories: Investing, LendingClub

30 Day Challenge – Gym – Day 17

July 29, 2011 Leave a comment
Day 17

Day 17

Day 17 is OVER! I wanted to work out at lunch, but then a coworker suggested that we go to Christian’s Tailgate for lunch. I can’t pass up their burgers or their onion rings. If you live in Houston and you love burgers, go to Christian’s Tailgate and get their Country Fried Bacon Burger. You will not be disappointed.

I will have to kick my workout up another notch in a week or so. I may start going to a Thursday class that the gym has called “Total Conditioning.” The class combines heavy cardio with multiple repetitions of weights. If nothing else, I’m thinking about going just to support Julie the instructor. The success and failure of their classes depends on attendance.

Categories: Lifestyle, TD Challenge
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