Author: CameronDaniels

Payday Lending and Short-Term Liquidity

Personal finance experts frequently tout the advantages of having a six month emergency fund, if not a more conservative twelve month fund. There are many reasons that a citizen would need to dip into their emergency savings: family illness, death, severe medical expenses, unplanned pregnancy or job loss to name a few. Many reports however, indicate that many (>25% or >50% depending on your definition) Americans still are not prepared for a downturn scenario.

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Taxing Fat Citizens and the Health Care Bill

The multi-payer system sets up the incentive for those without their own insurance to be unhealthier. Car accident deaths increased after the seatbelt law was instituted. When I finally have to foot some of the bill, do I still want to see Americans wolfing down their Wendy’s?

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Is Inflation Good? Why There are Positive Effects of Inflation

Media and fellow bloggers alike enjoy bemoaning the hazardous plague of inflation. I will show that not only is this argument not grounded in reality, but that it also ignores many ancillary benefits of an inflationary rate: spending encouragement, debtor relief and avoidance of a deflationary spiral.

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Mortgage Interest Deduction A Good Idea?

It has been mentioned here and elsewhere that the mortgage interest deduction in the tax code is a roundabout way of subsidizing banks. If interest rates are determined by supply and demand then the demand for interest rates is only dependent on what a taxpayer's "effective interest expense is". A new study suggests that most of the benefits fall into the hands of lenders.

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Home Price Recovery and the Federal Reserve

We have dealt a lot recently with historically low interest rates and their implications on not only the cost of housing and mortgages, but also implications for consumer credit and inflation. Although we have explained home price affordability in the San Francisco Bay Area before, we haven’t discussed the large variance in regional real estate prices.

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The Psychology of Passive Investing

Personal finance bloggers and personal finance connoisseurs (such as me) often feel that they have ultimate control over their actions. The belief is that if one is aware of their goals, the can reach them with the greatest of ease.

  • Do you want to create an emergency fund? Spend four months building one.
  • Do you want to retire at age forty? Control spending now and begin investing in tax-sheltered investment vehicles.
  • Do you want to reduce your money spent on gas? Simply hypermile!
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Live Sports Gambling Markets: A New System to Beat

Is sports gambling beatable?

Casinos, over the years, have traditionally thought of sportsbooks as an amenity to offer to their customers as opposed to a real way to make money. They cap the bets made on traditional over/unders and to people who consistently win in sports gambling (known as 'sharps'). The casinos believe that sports gambling is beatable by a select few and just hope that the losses of the masses can wash out the gains of the few. But, the obvious question is: if it is beatable, how does one stay ahead of the market/line-setters?

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The European Debt Crisis and You

A lot of recent financial news has focused around the spreading European sovereign debt crisis. The big question many Americans now try to answer is what this means for them on a day-to-day basis. At the same time as this is happening, the Fed has declared that they will endorse a policy of more transparency, opening up their forecasts to scrutiny and understanding.

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Gambler's Fallacy: Zodiac Signs and Coin Flips

The Economist posted a not-so-interesting graph relating a year’s stock market returns to it’s Chinese Zodiac sign. I would imagine that a random number generator making up returns for clusters of numbers of years since 1900 and ranking the outcomes would produce a similar outcome... but let’s play devil’s advocate and see if there is something to be said from these numbers.

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How To Define 'Savings'

The issue of the declining savings rate in America has been mentioned as one of the ways in which the younger generations are falling behind economically. The credit crisis caused massive deleveraging in America which increased the savings rate, but most of it was due to consumers reducing debts and liabilities as opposed to building assets. There could be many causes of this, but to name one: in times of uncertainty, consumer tend to brace themselves for a more hazy future by building net worth as quickly as possible. A decrease in stock prices and home prices eliminated much of the buildup of household assets which needed to be counteracted by an increase in savings. Also, credit standards have tightened, which has further compounded the problem and increased the deleveraging among American households.

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