Roll of coins Sep 18, 2009
One of my co-workers had a roll of coins in his hand, so I asked him, "Why do you have a roll of quarters?"  He said, "It's not a roll of quarters."  Realizing he was playing that game, I asked him, "Why do you have a roll of coins?"  He answered, "They're dollar coins.  It's easier than carrying paper money."  I can say with a fair amount of certainty that carrying around $25 worth of dollar coins is absolutely not easier than carrying paper money.  I've never heard something so unbelievably false. #money
Blame for the financial collapse Jun 22, 2009
A recent episode of This American Life attempted to assign blame for the recent financial collapse.  The different financial institutions who were cheating at their own game are somewhat to blame, as are the government regulators who didn't want to lose income from the companies they were supposed to be regulating.  Perhaps the biggest amount of blame was placed on the credit rating agencies who also didn't want to lose income from the companies whose assets they were rating.  This conversation with Tom Warrick from Standard and Poor's stood out to me: 
This American Life:  There are people who would say, you know, these were loans being [lent] out to people who didn't even have to prove they had jobs.  We had no data on how these loans were gonna perform.  How could you rate these things? 
Tom Warrick:  It's important to understand the riskier we believed the loan was, the more loss reserves needed to be incorporated into the transaction for us to rate a transaction triple-A. 
This American Life:  But there are people who would say you had no data to know what the real risk of those people defaulting was.  How could you go and rate something when you didn't have any data on how these loans were gonna perform. 
Tom Warrick:  Well we had lots of data.  We had years worth of data as to how borrowers perform over time. 
This American Life:  For these loans?  For people who didn't have to prove they had a job?  You had lots of data for that? 
Tom Warrick:  We are able to, through our analytical process, develop assumptions around what we believe the future will be like for these particular borrowers.
So there you have it.  Extremely powerful people who deal with more money than you can fathom tried to predict the future with their silly little equations.  And they were wrong.  I can't help but think it's kind of like a nuclear scientist accidentally creating and detonating an atomic bomb.  Whoops.  These guys lost at their own game.  It would be one thing if they were playing with Monopoly money or even the money belonging to high-stakes investors who could afford to lose it.  But no, they were using everyone's money.  And they f---ed up.  That's the end of it. 

The thing is, I'm not even really affected by this whole financial mess.  I still have a job (thank God), I still pay my mortgage, I still buy things.  Nothing has really changed.  But the whole thing kind of gets to me, and I think it's largely because (1) nobody wants to (or is able to) take the blame, and (2) it looks like the exact same thing will happen again sometime in the future unless we completely overhaul our entire financial system, which likely won't happen, which means we'll continue pushing it off so the next generation has to deal with it. #money
Recent money news Jun 15, 2009
Some recent money-related news and thoughts (ok, some of them aren't recent per se, but they're recent for me): 
  • Six Flags declared bankruptcy over the weekend.  Declaring bankruptcy doesn't mean going out of business.  It means getting rid of debt and reorganizing in order to become a financially successful company again.
  • Back in March, it was announced that pharmaceutical companies Merck and Schering-Plough are merging, and they'll be keeping the Merck name and ditching S-P.  I used to work for Schering.  Good money, boring paperwork.
  • As of right now, Twitter doesn't have a business model.  Even though everyone talks about them and they get tons of traffic, they don't actually make any money aside from the venture capital money they raised from investors.  If anything, like pretty much every technology company, all they do is spend money on things like engineers and web servers, while they try to figure out how to actually earn some income.
That is all.  Carry on. #money
More money than God Jun 10, 2009
I hear the term "more money than God" on a fairly regular basis, as in "Mel Gibson doesn't care about paying some DUI fines because he's got more money than God."  I wonder how much money a person would need to make before they earned that distinction?  Under $10 million is sort of chump change.  Certainly more change than I have, but still not enough to compete with God.  You can buy a nice house, a boat, and send your kids to a good college, but it's not even enough to buy a jet, which is the de facto symbol of disgusting mega-wealth.  I would say $50 million is almost there but not quite.  You could still be affected by big swings in the stock market, and you probably wouldn't even have enough to win be elected to public office.  Triple digit millions seems to be where it's at.  That's when you can afford the biggest toys, you can make people listen to you by buying TV shows, and you can purchase islands and still have money left over to build skyscrapers on said islands. #money
AIG bonuses (3) Mar 26, 2009
AIG paid its employees $165 million in bonuses after receiving $170 billion in charity from the government.  As xkcd pointed out, that's a misleading way to look at it.  It's more accurately $165,000,000 of $170,000,000,000, or a little under 0.1%.  That's like lending your friend $10 and then getting mad because he gave someone else a penny.  And then when he tried to "recoup" that penny, he only managed to get half a penny, but that still made you happy. #money
Recession vs. depression Jan 3, 2009
About.com says a recession is when there's a decline in the Gross Domestic Product (GDP) for two or more consecutive quarters.  A depression is when the GDP declines by more than 10 percent. 

Both definitions are up for debate, but one rule of thumb is that people can't decide when we're in a recession or not, but nobody questions when it's a depression.  In other words, if you're eating meals at food kitchens, we're probably in a depression.  If not, it's probably a recession. #money
Social Security Ponzi scheme Dec 30, 2008
A Ponzi scheme is a type of pyramid scheme where investors are paid returns from the enlistment of new investors, instead of from profits.  Bernard Madoff, former chairman of the NASDAQ, just got in trouble for this.  Neatorama makes the case that Social Security is essentially a Ponzi scheme as well because it provides investors (retirees) returns from the enlistment of new investors (taxpayers).  But those returns also include a little bit of profit because they're invested in government bonds.  However, the number of retirees will likely eventually outgrow the number of taxpayers, which will make the whole system implode.  Don't worry; I'm sure somebody will fix it eventually. #money
Price vs. cost of gas Oct 15, 2008
The Consumerist has a great article about all the stuff that goes into the cost of gas.  The price of gas often has nothing to do with the cost of gas.  Oh, and remember when we all thought we were being gouged by $5/gallon gas?  The gouging actually happens as the price goes down, which is now.  "[Price] gouging occurs when dealers keep prices artificially high in order to gain a little extra profit or recoup costs..."  Isn't that nice? #money
New pennies Sep 24, 2008
Hooray!  We're gittin' new pinnies! 

So not only has our entire economic system eaten itself, leaving our government in charge of several of our nation's (and the world's) largest financial institutions, but we're getting new currency that's still a complete waste of time and space and is still worth less than the material used to make it (but it's actually not that bad).  The only thing we can hope for is that our fine government spends less than $30 million teaching us yokels how to use it.  God bless America. #money
Library financials Aug 1, 2008
I've been getting some books from the library recently, and I've even watched a few movies.  The thing that doesn't make sense to me is, how is this not considered stealing?  Yes, I realize the library buys the books and movies they have in their possession, and yes I realize my tax dollars fund the purchase of said items.  But if I buy a book from Amazon, I pay $10-$20, and I know that at least some of that money goes directly to the writer.  By borrowing it from the library, I'm using a copy that was only paid for once, which means the writer is losing out on the money I would've paid if I bought it myself.  By reading it and not paying, I'm essentially stealing.  Do libraries have some sort of licensing agreement with writers and publishers? #money