Happy weekend everybody! Here are a few things to keep you busy…
- Don’t forget about the Citi Preferred Card and its 5% on gas / grocery / drugstore purchases. Yours truly dug up a new link after the old one expired. It’s technically an old link that Citi has forgotten about, so make sure you take a screen shot before you apply.
- Chase has a 70,000 point offer on its Marriott card (the regular offer is 50,000). Chase has so many great cards right now that this one probably isn’t worth your time, but if you’re a Marriott brand loyalist, have an interest in a particular Marriott hotel, or have already taken up Chase on all the other card offers, then go for it. (H/T: MMS)
- This isn’t a particularly useful deal, but it is an interesting and potentially rewarding glitch on Amex’s part: apparently Amex is randomly awarding triple reward points on certain purchases from Amazon, Best Buy, and Paypal. Here’s the original Flyertalk thread if you want more info.
- There’s a new book out called “Pound Foolish: Exposing the Dark Side of the Personal Finance Industry.” It sounds like a promising premise, and here’s some of the review from My Money Blog:
The problem with our money gurus. Personal finance itself is very simple. Spend less, earn more, invest for the long-term. It’s also boring. Therefore, you need people with charisma, salesmanship, and usually a gimmick to draw people in. Suze Orman is new-agey “people first, then money”. Kiyosaki and his fictional Rich Dad is “buy assets, not liabilities”. Bach is “automatic savings + latte factor”. Ramsey is “pay cash, debt is evil”. The book investigates and indeed bashes each of these gurus. The most important point to remember is that these people got rich by selling you books on how to be rich, not by actually getting rich themselves first! Dave Ramsey declared bankruptcy before becoming a money guru, even though now he tells people to not be a deadbeat and pay their bills.
- Do S&P and Moody’s deserve the death penalty? Barry Ritholtz thinks so–here’s what the “Bailout Nation” author had to say:
…Let me simplify this for you: In an ultra low rate environment, Fixed income managers were under tremendous pressure to find yield. Their solution was to buy paper that was rated investment grade by the major credit ratings agencies EVEN THOUGH THEY KNEW OR SHOULD HAVE KNOWN IT WAS NOT. The agencies rated junk paper as AAA not because they believed it, but because they were paid to do so.
Had they not engaged in this sort of fraud, an enormous amount of securitizations of junk paper COULD NOT HAVE HAPPENED. There was no market for non-investment grade subprime paper. That many less CMOs means that many less RMBS means that many less junk mortgages underwritten.
I do not want to excuse the bad purchase decisions made by the buyers of this junk — they clearly violated one of the first rules of investments: Know what you own. However, the complexity of these products required they use third party analysts and agencies to facilitate the purchase decision. That is why the bad pourchases is merely lousy investing but the payola-like ratings are actual fraud.
It started with the Greenspan Fed, but the next group in our Calvacade of Blame are the rating agencies.
If Arthur Anderson received the ultimate penalty for their part in the Enron and other fraud, I see no reason why Moody’s and S&P don’t suffer the same fate — plus criminal prosecution for senior management.
Its time to re-establish the rule of law in this country.