Last night DH and I were

here until 10:30 pm; we got home and heard this ... the whole effect made it seem like we heard a whole fiddle concert while Rome burned.

Right now the WaMu failure is a bit of a non-starter; the downtown Seattle street vibe during the lunch hour was flat. I walked past the WaMu center. Inside and around the sidewalk that vibe was a bit like the last day of college when your dad would show up. Not quite sad, not quite happy ... just transition-y.

I want to take the time here to say that I will really miss WaMu. I lived in Seattle between 1985-1992 and now 1999 - present and had banked with WaMu since 1986. WaMu was close by U Washington (convenient for a grad student), charged no fees if you didn't overspend, their ATMs didn't charge on other bank cards, the tellers were friendly, and their math was right on your account ... at least it was on mine.

I remember when the WaMu Tower was finished in 1988. I wondered a bit even then how a bank could afford to build it when they didn't rip their clients off, still, WaMu generated a certain amount of civic pride.

I came back in 1999 to a bit of a juiced up WaMu...but then again, during the dot.com era everybody was juiced up. Still, the staff and tellers were friendly in less of that you-have-money-I must-be-friendly and I was happy that my neighborhood WaMu was about 10 blocks from the house while WaMu Tower was 6 blocks from work. There were some fees for the careless; by 2001 or so WaMu would charge non-WaMu cards $1.50, in line with everyone else. I seriously looked at starting a DRP when their stock was at about 23$. In '06, I was kicking myself that I hadn't. "Overweight" the stock analysts said.

But in '06, when I got my first bits of the inheritance I started to notice the harder selling - if you can fund a 30K CD for 6 months, think about buying a house. Real estate only goes up! (yeah, maybe later). On the other hand, they were flawless when the WaMu ATM ate my card.

In other words, still useful for the basics. They flew too high, their profits got juiced up with the returns of evil and crappy mortgages, their shareholders expected that the good times would always roll. However, with return there is risk; with continuous return, continuous risk. A bit like always hearing "heckuva job!" without hearing the "Brownie" at the end of it.

I chatted with a co worker this morning, who was originally from the east coast. He sighed and said, "Sucks. I escaped being a Chase Bank customer."

I hear you, brother.

Saving log - $2 tip box
Spending log - $10 lunch + $1.85 Financial Times + $3 apple, bagette

Its the collection of the small today.

Well this week my little T-bill will generate $1.09 in interest, a slight improvement over last.

I got a .35 check from Capital One. Better than a .35 charge.

$2 in the tip box, along with 2 cents I found on the sidewalk.

During this financial, now economic, crisis, I've been picking up the Financial Times, as sort of a European version of the Wall Street Journal. Its perspective seems somehow more objective. At least it is from a distance.

So part of the grand plan is to temporarily stop the short selling of 799 stocks. And actually its not just the US that is regulating it; several other European exchanges have also temporarily stopped it, while China doesn't allow it in the first place.

Probably that alone caused my financial stock to nearly double from its low last month (11.10$ low/ 29.50$ yesterday).

Shorting a stock is reversing the order buying, owning and selling a stock. When you are long, you try to buy shares for a low price, hold it for a bit, then sell for a higher price. When you are short, you borrow the shares from a broker at a higher price, then arrange a time for when you will actually buy and deliver the stock. You hope that the stock will be lower by the time you have to buy it.

Shorting is useful - the main use is to add liquidity. Short sellers, like long sellers, actually have to buy the stock (at the end, not at the beginning), which means more buyers. Liquidity is a fancy way of describing that with those extra buyers stocks get traded more often and at more price points.

Another use is that short sellers are good markers for risk. Short selling is much more risky. A stock can only go down to zero, but can theoretically go up to any price. And if the stock goes up (to any price), the short seller has to buy it, losing much, much moolah. Stocks that attract short sellers should tip everybody off that something risky is happening.

Without the short sellers and only the long sellers, stocks of course can rise higher - only the optimists are allowed to trade. But what if the risks aren't quite as well defined and there are no optimists to be had? Stocks then drop in a much more sickening fashion - you can find an optimist if the price is low enough. Without liquidity, sometimes it has to be very, very low.

We'll see over the next few weeks what happens. Offhand it sounds like the "cure" is worse than the disease.

Savings log - $3 tip box + $7.18 dividend
Spending log - $3 coffee, scone

Big down
Little up
Big down
Big up
(tomorrow)?

At least in Las Vegas, when you go bust, the dealer says, "Ladies and gentlemen, thank you for playing."

And we should be thanked, even if we aren't explicitly in the stock market. After all, all of us as taxpayers will be playing.

And paying.

And taking risks that a 300x-paycheck CEO apparently will foist off.

Where's my free cocktail?

Monday
Saving log - $4 tip box
Spending log - $11 lunch + $2 Wall Street Journal + $13 groceries + $11 coffee

Tuesday
Saving log - $4 tip box
Spending log - $9 lunch + $4 contribution

I have some of my EF in 4 week T-bills, split into fours and recurring, so every week something matures or if necessary, I have a month of EF coming up for use every week. I looked at the auction rate for this week's 4 week T-bill. Wait for it...

0.3%

It means I make 93 cents in interest on that T-bill. I've found more sidewalk change most months than that. This flight to safety means my little boat is getting swamped by Wall Street cannon balls. Ah well, better luck next month.

Here's an another article near and dear to my heart -

backyard gleaning. I live next to a male cherry tree - the flowers are right with a few cherries in it. I've seen its girl friend - that tree lives about 7 blocks away. Across the street lay an apple tree (decent sized apples). In grad school I also lived with a plum tree and a cherry tree, with a neighbor that had a productive pear tree. And then all the blackberry brambles within 3 blocks of my house. In Tucson in November, I used to pick the raw green, purple, and black purple olives on Olive Way at the U of A, and cured them in salt. In Tucson in April in another part of the U of A campus, I used to pick loquats and can them in a sugar syrup. In other words, I think this is a fantastic idea. It would be great to map out all the fruit trees and bushes of Seattle all quietly making a little produce stand.

Oh yes, the collection. In the end I advertised once, did a little once around, collected triple digits, and added a bit more to get the gift card to end in a "0". I passed the collection to the person buying the gift card. Project finished.

Friday
Saving log - $0 tip box
Spending log - $4.50 groceries + $40 weekend money

Saturday
Saving log - $0 tip box + $100 Drp
Spending log - $5 latte & 3 tea cookies + $15 groceries

Yesterday I along with several other co workers went on a volunteer project - painting hallways. Those of you who are budding gym rats will appreciate that painting walls with a roller is all lats. Because I was stiff and sore from yesterday (not to mention was working out lungfuls of paint fumes), I took it easy this afternoon, walked a little bit, and spent a nice 40 minute break with a green tea latte and a couple of cookies.

Lately I've noticed other symptoms of recession - several local businesses that I frequent now promote coupons and have punch cards. I use punch cards as much as the next person - religious with a few, not so religious with most. My only tip on how to use punch cards (and their cousins, gift cards) is to store them in

a business card carrier, rather than busting your wallet. And when you fill your business card carrier, its time to clean it out of the punch cards you don't use. Anybody trade cards?

The final thing that I've really noticed is the proliferation of water-filled dog bowls in front of businesses on Greenwood Ave. Dog bowls started first with some of the coffee shops around, signaling a dog-friendly business. Today I saw a dog treat dispenser beside the dog bowl in front of one coffee shop (okay the one I stopped at), a high end silvery dog bowl in front of a sidewalk ad listing spa services, and a large tupperware bowl full of water in front of a hair salon. No dog bowl in front of the business you'd expect a dog bowl in front of - a pet food store.

So what gives with all the dog bowls? I can kind of see it if you are setting a dog bowl in front of an in and out service. Tie up your dog and give him something to drink while he waits for you. But the one in front of the spa? Hmmm. That could be a long wait. Maybe its smart - the dog stops for the water, forcing its owner (the tail) to stop and read the signs about what the business does.

The dog treat dispenser definitely picks up the game. Its a modified bubble gum machine. Treats are .25 apiece, with a sign that plaintively tells the owner not to hide this fact from the dog.

Well, if the dog had its own allowance...

Saving log - $4 tip box
Spending log - $8 lunch + $7 clif bars & apple

Another odd effect of slow times - thrift store inventory is being squeezed from both sides. More people are shopping there, but fewer are donating.

http://www.nytimes.com/2008/09/10/business/10thrift.html?_r=...

I really haven't stepped into any thrift stores lately. If the regular retail store has a 60-80% off sale, we're starting to get to thrift store territory.

Put 5K into the farmette and called sister and made her promise that she will mail me the paper grocery bag THAT I KNOW she's put the farmette bills in.

After that, only the irksome. Why does it take so long for some people to get money out of an ATM? I stood in front of the WaMu ATM inside Uwajimaya, waiting... It takes me thirty seconds, probably because I know how much I want and I know I have the money before I approach.

Saving log - $4 tip box
Spending log - $8 lunch (from supermarket) + $5 groceries

A couple more observations about the recession.

1. I passed some Starbucks advertising as I was cutting through the Wells Fargo Building. What was being sold in its large, primo poster spot as if it was a hip summer iced latte? Oatmeal!

2. At the chiropractor, I listened as all the rest of his patients, one by one, told him that they could only see him x# times because they couldn't afford it. In years and months past they didn't mention it or did so in a quiet voice because the rooms aren't really rooms - they are bays with benches. Now? Said straight out.

3. Sitting in a window seat on the bus (what you get if you walk backward far enough along the bus route), I heard a couple of bottle clanks. As I gave my seat mate the Spock eyebrow, I saw him sheepishly look down and shift his budweiser bag. Next time cans, chief.

Yesterday I walked for 6 miles, today I took it easy, and just went for 3. And I caught a couple of football games. So darn lazy.

This weekend, I have been noticing several effects of the current recession.

1. More restaurants are taking cash only, no credit cards. Along with gas stations, a couple of other restaurants are offering different prices for cash vs credit card.

2. (this during the week) Seattle buses are now filling up so much that they have to pass stops.

http://seattletimes.nwsource.com/html/nationworld/2008163633...

My 5 bus had an increase of 9% ridership.
My 28 bus had an increase of 15% ridership.
My 15 bus had an increase of 5% ridership.

Advanced bus rider tip: If you see a large group waiting for the bus at your stop, walk backward along the route to the previous stop.

3. This is very funny in a mean sort of way.
http://www.youtube.com/watch?v=MuKYP2cBvBA

4. One WaMu banker went out the window, metaphorically.
http://seattletimes.nwsource.com/html/businesstechnology/200...

Saving log - $0 tip box
Spending log - $3 coffee, bagel + $9 lunch

This weekend, I did my gym laundry. Note: I do it every second or third week... not just on holiday weekends. But I bet if I did my gym laundry less often I wouldn't have an issue with machines.

Normally I bring my gym clothes back on Sunday and then walk, but since Monday's a holiday and Monday's when I'm thinking of going, well, waiting until Monday and hitting the gym beforehand was hitting two birds with one stone. So I hit the gym today and did an upper body routine from November. It still whipped my butt. Definitely a labor-ed day.

Afterwards I had lunch at a pho place near Macy's (didn't go in), and wandered a bit.

Last Saturday, DH and I went over to visit our friends in Duvall. They confided to us that they could not, for love or money, get a HELOC from any Seattle bank (tried WellsFargo (WF) first) to fix their roof. They were asking for 12K. It was suggested to them, in all seriousness by WF, to collect 6 credit cards. Yikes. But it is very telling - the friend tell us they have credit scores in the 700 range, and have converted their loan from an ARM to fixed rate.

SillyOleMe blogged about this in her life, I want to mention it here to let her know that no one is loaning anyone anything. Don't take it personally. Its the recession talking, and its saying, "cash is king."

Saving log - $2 tip box
Spending log - $9 lunch + $15 groceries

Noticed two good things tonight

1. More 10 for $10 deals on things I actually eat - fruit, salad, baby carrots.

2. CD rates in ING and my other brick and mortar bank are going up. Not talking about a lot of going up, more like .3 or .4% of a percent. Still, better it goes up than goes down.

Noticed one good thing (maybe) last night.

1. At the present rate of CPI-U inflation, my I-bonds should be bearing interest in 8% range this November. We'll see in October.

http://www.savings-bond-advisor.com/cpi-inflation-update/

Saving log - $5 tip box
Spending log - $13 lunch

One of the other innovations we tried out at the cabin was using two combo press pot commuter mugs, one I got for DH and the other DH spotted for $10 at Fred Meyer.

Mine is clear plastic, instead of stainless steel. We weren't into firing up the wood stove and percolating coffee to bits - instead we heated up water, poured the water over the course ground coffee, gave the grounds a quick stir and added creamer, then pressed. It worked fantastically.

So I bought decent coffee, 1/2 and 1/2 for the work reefer and brought the press pot to work. Tried it out for the first time this morning and it worked like a champ. I figure that if the decent coffee lasts about 15 business days, that my cost per cup will be about 66 cents/day, a bit more if I factor in the 1/2 and 1/2.

Noticed a near record number of yard sales being advertised last weekend on one pole. Four in one view, 1 behind. What was the yard sale plus characture drawing like (top ad)?

Saturday
Saving log - $0 tip box + $35 drp
Spending log - $15 brunch/coffee + $12 produce

Sunday
Saving log - $0 tip box
Spending log - $3.25 coffee & bagel + $4 latte & cookie

This morning we stopped into our local Sunday coffeehouse, expecting a fairly quiet coffee and Sunday newspaper reading. People were swinging from the rafters! We asked what was up ...

Owner: We got refugees from the Tully's Coffee across the street (87th/Greenwood). They closed.

Us: Huh? That was quick.

And it was quick - Wednesday nothing was amiss. The notice went up on Thursday. By Saturday they were closed. By Sunday, you can see the newspaper shroud along all the windows. About as fast as the Alaska Deli downtown...although at Tully's least there was a note.

There seems to be a spectra of closure styles.

You have the never-ending closure style of the Oriental rug stores in Pioneer Square. It wouldn't surprise me if those stores have only two signs - an Everything Must Go Sign and a Grand Opening sign - and the owner flips a coin to determine which one they put up for the month.

You have the political statement closure: a news-worthy proprietor who is retiring or the rent's going up. I call it a political closure because it usually takes several months with some local ain't-it-a-shame or shed-a-light-on-other-issues press. I lump the Starbucks closures in that category. Anybody go to that Starbucks on Dexter and Aurora? Its on the list.

You have the clear must get out by the end of the month sale and closure. My CD place was one of those. Burn off as much inventory in that last month as you can, with the goal of leaving only dirty carpet on the first.

To me, the oddballs are the really quick closures. Last year, the Denny's in Ballard closed with incredible speed and no particular warning. One Saturday we ate there, the next Saturday that Denny's sign was down, and the place was boarded up. Now this Tully's. Perhaps it makes a little bit of sense when a multi-branch company does it - they move the inventory out within a few hours, leaving cricket chirps behind.

But the Alaska Deli? Still a mystery - it was in the midst of construction, but it had been in the midst for a month or two, it was clearly marked Open with clear sidewalks. Frankly, with all the construction guys swarming around it should have been doing the business of its life. May 30, it was selling coffee; June 2 the door was locked. The extra mystery is that the Alaska Deli's stock is still mostly there even now. (this pic was taken in early July)


I'm probably reading too much into these quick closures. But a business has some sort of relationship with its neighborhood, and its customers. Do these quick closures tell us that we don't care or that we might care too much?

Saving log - $3 tip box
Spending log - $1.50 coffee + $11 lunch

No bankers falling out of the sky...


(WaMu Tower on the left; WaMu Center on the right. I took this snap in December when it was nice and gloomy)

Just a little service in these troubled times - I've put FDIC in list of Sites I Enjoy. Easy to search for, and feel free if you need to check your bank out.

Oh yes. Banks tend to "fail", or rather, get taken over by the FDIC on a Friday. Makes it much easier to control a bank run that way. Sleep tight.

Happened today. For the financial diary part, I spent only $1.00 at it. The recession and $4 gas has hit here a bit also - in past years, the car show sprawled from 87th to 66th or so. This year, it "only" extended to 71st. But there were some very fun and frugal things at it.

For Ima Saver - a 60s red corvette. I think its a '62. There also was a '67 there.


My favorite exhibit - MEHVA (Metro Employees Historic Vehicle Association) always brings one of these babies out at the car show. If you were trying to get to downtown Seattle from Greenwood 40 years ago, your 5 bus looked like this.


The other reason why these old buses are great is that the MEHVA run historic Seattle tours on these old buses - 4 hours for $5. I wanted to get a schedule and remind myself to try it out. Much better cost to time than a Duck (1.5 hrs for 25$) - although no intentional water trips.

http://mehva.org/schedule.php

Many more solar and electric cars and trucks than in years past. This is a solar truck. Battery storage underneath the truck bed.


Perhaps a Boeing engineer had a tad too much time on his hands? The driver's cockpit of blue velour looks comfy, but there is a jet engine about 6 feet behind you.


Finally, high tech to a much lower tech: the leather car. I thought when I came up to it the leather was a case for the car underneath, but the door handle was attached into it, and in places you can see the metal frame underneath where the cow hide stretched over it. This car was made in Czechoslovakia in 1962. Only 10 exist in the US.

Saving log - $2 tip box
Spending log - $1.25 coffee + $10 lunch and snack

Laptop is still in the shop. I guess I'll have to suck it up, because you all are bored and there are others worse off than me (good luck Carolina Bound).

Got on my usual bus to get to work this morning. In the good old days, I could get a quick window seat on the front half of the bus. In the last few weeks, I could get the last, next to last, or next to next to last window seat in the back half of the bus. Today?

Half the bus was full, no window seat to be had, not even the seat in the articulated area (usually the last to go). I sat with another old timer.

I used my guile to get a window seat. I knew that several people got off at the next stop. Luckily one of them opened up a window seat which I pounced on.

Watching for Mad Max on the motorcycle riding over the Aurora Bridge. Now that's a good recession sign.

Still no laptop, so DH took me to the laptop shop...

Me: So how's my laptop repair coming along?
Guy at the Shop: What is your last name?
Me: (told him)
Guy at Shop types a bit, then says: We told you that it can take anywhere between 1 and 2 weeks... (and then blinked at me blankly)

Good gravy, I know that! Could it have killed anyone to say that "we are in the midst of fixing, and we are so very glad you showed up but it will take awhile because we want to do a good job?" Bueller...Bueller?

But then I remembered the stereotype. No social skills. No wonder why computer networking and its multiple components often don't work well together. Their creators don't work well together so they make stuff that doesn't work well together.

But DH and I had some success - we bought 3 very large tomato plants for 10$. I'll put them in tomorrow. Today I walked another 6 miles, tomorrow it will be digging and weeding for a little upper body workout.

More recession-y observations: along my walk I saw at least 30 placards and sandwich boards advertising condos; the ice cream shop is advertising that they are open until 7 (okay that might be weather); at every bus stop along my way I saw at least one person waiting for it, and as the bus passed me, most had a very decent load of passengers (and this was Saturday during a holiday!)

Pulled the trigger on two of my decisions from the last entry. Started the new drip (IP) by filling out the application, and I added $500 to my bank Drip.

I have no idea when my stimulus check is going to hit my account - I filed electronically, but I paid by check. I'll either be 2 weeks from now or 5 weeks from now.

Found out that sister gave her notice to her job last Friday. Her last day is the 9th. Her plan is to take six months off and work on the farmette.

Still on my vacation and kicked around town again today. Went to the Tully's downtown to catch up with three people from tinfoil-hat set . They've always been there kvetching, watching CNN and CNBC, waiting for the recession. Actually, except for the fact that I don't own gold or silver, I apparently fit right in. During the conversation, I found out that only one of us had a car, two of us rented, and none of us changed our food buying habits. So we are all carless cranks throwing our money away on rent.

Kicked around West Seattle, then came back to downtown Seattle and did the $6.70 mini-vacation - I took the ferry to Bremerton and back. I managed to get back before it got too windy and before the storm clouds in the west hit Seattle.

Saving log - $0 tip box
Spending log - $1.19 coffee + $6 lunch (foot long sub for 2 days).

There is one downside to having a day off on Monday: Tuesday becomes Monday. On my Monday, everyone else's Tuesday, I worked through:

1. missing pledges that the fundraising staff assumed were with us. Ha ha, we received them in the mail all right, but we sent them back to the fundraising staff to sort and batch. Where did we find the pledges? - in the fundraiser's safe.

Guys, its a safe, not a wastebasket with a lock! If they make safes with a clear, bulletproof plastic panel...well, they could sure use that.

2. I returned sister's call at work. Turns out that she did her own taxes, and she's wondering why she's not paying nearly as much as I am. Where does the Schedule K-1 fit into it? For me, the Schedule K-1 fit into actual professional help. !

Oh yes, sister mentioned that she might have quit her job. She got tired of her $13/hr job, she got yelled at one too many times, she said she had a headache felt sick and was going home. Sister's partner thought that sister should take off six months, work on the farmette, then go back and find another job.

"Well, if you did quit, you did it at the right time," I said. "It will look like it happened because of the recession, and not because of anything you did."

I can relate, I'm actually a bit surprised she lasted this long. I've had similar emotions - a fair amount of cash so quickly has its own pull. You hear all the pettiness at work, you look at your bank account, note the fact that it will last a good ten years even with careless spending, and you think - well, what for?

Dad, mom, grandma and grandpa put up with a lot of what for to build up what they gave to us. Seems like I should put up with just a little more "what for". My bank account still feels like its not completely mine. My own safe is full, locked, and also needs a clear plastic panel.

Saving log - $2 tip box
Spending log - $1.19 coffee + $8 lunch + $.50 apple

(Yippie - finally a decent apple price - $1.19/lb.)

Speaking of the devil in "What a recession can teach you about money...". The Federal Deposit Insurance Corporation (FDIC) is watching your bank too, and they are making plans so that they don't get caught short.

http://money.cnn.com/2008/03/25/news/economy/bc.na.fin.us.ba...

To better watch the FDIC. If your bank fails they're not shy about announcing it and who has bought your bank out.

http://www.fdic.gov/index.html

Check out the quality of your bank.
http://bankrate.com/brm/safesound/ss_home.asp

Laugh all you want, gaming's probably recession proof.


And spring has sprung in the Fred Meyer parking lot...

The last official recession was in ‘01 or so, blink and you missed it, but there have been more severe ones – ’91-’92, the ’83 one, and the ’81 one, not to mention the ’79 one and Whip Inflation Now one during the 70s. Of course when I was a teenager in the 70s, the whole decade was a recession – my parents wouldn’t buy me anything. As a public service here are a few pointers for all you recession newbies.

Cash is king. Have some saved. By cash, I mean the paper stuff or its variant, a government savings bond or t-bill. And some of your own – unemployment only goes so far. Even if you hold gold (admirable), you still need cash – at $1,000/ounce your grocer isn’t able make change. Have a HELOC or credit card, which two years ago was touted by financial writers as being your safety net? Ha ha. Not if the line or your card is being shut down because your lender is undergoing a credit crisis. Cash: accept no substitutes.

If your culture is a shopping culture, you’re going to be in a world of hurt. Especially if you’ve missed pointer one. The malls will sport plenty of sales at first as businesses try to burn off their old inventory, but everyone will be buying cautiously, including inventory buyers – they buy fewer items for the store during a recession to take a “wait and see” attitude. Advertising gets more pointed - not many commercials in the aspirational or the arty style. No “buy this and be cool”, its “buy this or we go under”. Be especially careful who you buy things from. Frauds and scams are rampant during a recession.

Don’t be afraid to be frugal – this is your moment. “Saving” is fashionable in a recession. Spending isn’t. You’re not spending money and your friends aren’t either. I put savings in quotes because “saving” is not really saving, it’s spending less. Not that spending less is bad, but it’s not saving. Saving is when you take some of the paper stuff skating out of your wallet and belting goalies, to put it in the penalty box, otherwise known as a savings account. Don’t be afraid to do that too.

Watch your bank. Bank deposits are insured by the FDIC for 100K, credit union deposits are insured by the NCUA for 100K. In any recession, the weakest businesses fail. If your financial institution fails, it usually gets bought by another or by the FDIC to prevent a “run”. In a recession, it never hurts to have your emergency cash in a couple of places, including a small amount in the Bank of Seely (money at home in the mattress), and to check bank ratings often. I bank with WaMu. Believe me, I’m watching that one.

There’s more to life than money. During boom times it seems that the only important relationships are the ones where money changes hands. During a recession people relationships become more important than money relationships. The finest qualities in people are the cheapest – friendship, generosity (when appropriate), creativity, humility, optimism. Of those, show humility the most. Not wise to let a desperate brother-in-law know about your savings; best to be sympathetic and share only your fiscal troubles.

You’ll find out what your friends are made of. Normally hang out with Joneses’ and the shopping culture and run into tough times? Good luck with them during a recession. It’s a rare spendthrift who can be generous – if he is just keeping up appearances during the boom, how will he do during the bust?

You’ll find out what your friends think of you. A business has one asset that it will hold onto upon the pain of bankruptcy – its good name. Its ability to borrow is directly dependent on its fiscal reputation. So it is with people. In a recession, the reaction frugal friends will give you should you ask for a loan will tell you what they think of your fiscal skills. Would they think: an opportunity to help, or money down a rathole?

Recessions create frugal people. Recessions – the proverbial “rainy day” – are a wake up call. They remind us that the economy runs in cycles, sometimes up, sometimes down. Not everyone takes the wake up call to heart during a recession, but the sharper ones do to be better prepared for the next one. Take the history of a frugal person and you will find many learned their fiscal ways because they or a close relative experienced that rainy day firsthand.

Recessions are nothing to be afraid of for the prepared. Are you prepared?

Saving log - $0 tip box
Spending log - $1.50 coffee (got the next largest size today) + $13 lunch + $7 groceries

Through out the day today I felt bombarded with headlines - how to save $2500, what you can do to save, how Oprah saves, get out of debt, how to invest during the coming recession. As I stood in line at the grocery store and read the magazine covers every one had the message "hunker down the recession's coming" all over them.

Hunkering down is a comforting position for me, but being contrarian has worked even better for me in the past. I think its planning time for how to invest for better times to come. What companies are going to survive and thrive in the years to come? If I wanted to buy a house in say, 2010 or 2011, what would I want and how much would I be willing to pay?

When the whole world is zigging, time to plan for the zag.

Saving log - $7 tip box
Spending log - $1.91 large coffee + $9 lunch

Today was the downside of working for a large non-profit. We were very busy today, the last day of the year, charging the credit cards of the procrastinators who want a tax substantiation for 2007. When I left for my hour of gym, a donor was actually waiting in the lobby, tapping his card on the bullet proof glass in the lobby. Sigh. I have to admit that today's a lot easier when it falls on a weekend.

It feels like the recession is coming, even here in supposedly "bullet proof" Seattle. Other years we would have 3-4 unchargable credit cards/ week; this year 18!

Saving log - $3 tip box
Spending log - $1.30 coffee + $7 lunch

We've been told that Seattle is a bright spot in national real estate, immune to the credit meltdown. 2 short stories in the last couple of weeks tells me it ain't so.

1. Talked with a local bank about grandma's inheritance. I let slip by saying, "I just didn't want to do something stupid with my money."

"Like buy real estate?" the banker said.

2. Part of my job at the non-profit I work at means I handle corporate matches. One of the accounts was a mortgage lender, and they wanted to alter this year's corporate match. They let slip that they are stopping their 401Ks for a few months, and they wanted to halt their corporate match for those same few months.

Needed a haircut, a couple of grocery items, and I had to write a check to copay the chiropractor, so I broke down and transferred $100 from the brick and mortar bank savings account - a little buffer against an overdraft fee.

Got a letter from Capital One. They're going to shift my billing cycle backward a few days back to the 16th. No matter, I now don't have any recurring charges on it anyway. I moved the newspaper subscription to the new, WaMu credit card. Sweet justice. I would have had to write a .35 check, but I bought a spare set of bedsheets from Overstock.com. The bill turned into a semi-respectable 50.34$, which I'll pay next week when the paycheck comes in.

Last week I talked with lawyer friend about 403Bs. It turns out that we made similar money moves with our 403B, but for different reasons. I trimmed my stock portfolio a bit and went for cash and bonds because I wanted a bit of safety. 90% stocks is pretty aggressive even during the best of times. I believe that a recession is on its way and I want a bit of ballast for awhile.

Lawyer friend nearly took all of his stocks and put them in the cash money market fund for a different reason. His favorite fund in the 403B, an international one, was eliminated in favor of a different one, which he hated, because of the fee structure. Yeah, so what about that 1.5% fee, lawyer friend ranted, my favorite posted great returns!

My thoughts drifted a bit, and I'm a bit ashamed that I didn't have the heart to explain it to him. Fees are important, and can be in some cases and conditions even more important because fees are inexorable. That fund manager will charge that fee whether that fund has a good year or not. The fee is fine if you're making in the rare instance a 15-20% return (although it means you are making 13.5-18-5% return), not so fine if you are only making 7-8% because you are barely keeping up with inflation, and it just becomes worse and worse - most actively managed accounts don't do as well as an index fund, and you pay for that privilege. Imagine if you lost 20% of your 403B, which often happened right after the dot.com bust. You'd still be charged that fee with the excuse that "imagine if we weren't your manager - your returns would be even worse!"

Fees are so important that there is a story about them. An investor met with a stockbroker to perhaps give him his business. The stockbroker gave him the grand tour, showed the investor how properous the firm was, tried to impress the investor even to the point of going to the slip and showing off the stockbrokers' boats. The investor wondered, "where are the investors' boats?" Fees, of course.

Anyway, by that time lawyer friend concluded, "I wish we had more choices." It turns out that lawyer friend's partner could choose up to 650 funds. Hear, hear. At least for me - I figure I could handle it.