Still making Kiva loans after all these years. I made my first loan back in 2006. Seems so long ago.
Here is my current portfolio:
- Mwanamisi Kinono, Kenya, Food: Fruits & Vegetables
- Maria De La Concepcion Ruiz Madrigal, Nicaragua, Food: Grocery Store
- Teddy Babinje, Uganda, Retail: Charcoal Sales
- Violeta Servas, Philippines, Services
- Nelly, Peru, Retail: Snacks
- Luz Marina Rojano Escorcia, Colombia, Retail: Accessories
- Saul Morinigo, Paraguay, Retail: General Store
- Gansuh Byambaa, Mongolia, Retail: Spare Parts
Here’s are my stats:
| Statistic Name | Me | Avg. Kiva User |
|---|---|---|
| Total Amount Loaned | $1,300.00 | $220.29 |
| Total Amount Repaid | $1,147.31 | $175.25 |
| Total Amount Lost | $5.00 | $1.74 |
| Total Amount Refunded and Expired | $0.00 | $2.81 |
| Outstanding Portfolio | $147.69 | $41.94 |
| Default Rate | 0.45% | 1.04% |
| Delinquency Rate | 0.00% | 2.11% |
You can compare these stats to where I was back in May 2008.
Kiva is currently funding a loan every 8 seconds, which is remarkable. They are changing lives all over the world, even in my neighborhood. Do yourself a favor and create a Kiva account and start loaning to some folks who really need the $$$$.
This Frontline documentary on the credit card and banking industries is disturbing on so many levels, it’s hard to know where to start.
I know I’m not my credit company’s best customer, and that’s fine with me. Not only do I never carry a balance, I make several payments a month, because I want to hold their credit for as little time as possible to limit whatever penalties from fees and interest might accrue in case something happens and I don’t make my payment.
But for people who have balances, either from circumstance or conspicuous consumption, the system is really stacked against them. The penalties are harshest for those least able to pay, which makes sense in terms of bank profits, but not in terms of anything else.
What they don’t want is customers like me who pay in full or people who don’t pay at all. So people get wrapped up in a debt straightjacket and can’t get out, which is exactly what banks want. Those are their best customers, namely people who can’t pay off their balances but continue to pay.
Meanwhile, even though the economy is crashing around us, banks couldn’t care less as long as profits continue to rise. The regulators won’t or can’t do anything to change the system because, as Dick Durbin said earlier this year, the banks own Congress.
Until our system of legalized bribery that is the campaign finance mess gets fixed, we will never solve this problem. When elected officials worry more about where their next fundraising dollar is coming from rather than doing the right thing for the American people, we’re all screwed.
You can watch the entire program online at the PBS website.
This video is amazing. It really brings home the whole process of how the loans and why they are so important to make. If you were sitting on the fence about whether or not to get involved, watch the video and you’ll want to jump right in and lend.
To find out more or to make, go to a loan, kiva.org
Here’s my personal update for my Kiva loans:
| Statistic Name | Me | Avg. Kiva User |
|---|---|---|
| Total Amount Loaned | $800 | $134 |
| Total Amount Repaid | $714 | $75 |
| Amount of Ended Loans Not Repaid In Full | $5.00 | $1.30 |
| Amount of Ended Loans | $550.00 | $45.79 |
| Default Rate | 0.91% | 2.85% |
| Delinquency Rate | 0.00% | 2.21% |
Lately I’ve been watching and doing some trading of the Exchange Traded Fund (ETF) called FXP.
This ETF is one of many that is sold by Proshares that seeks to represent twice the movement in the markets:
UltraShort FTSE/Xinhua China 25 ProShares seeks daily investment results, before fees and expenses, that correspond to twice (200%) the inverse (opposite) of the daily performance of the FTSE/Xinhua China 25 Index.
It’s a very powerful instrument. Not only does it give you access to scores of Chinese stocks in one security, but if you are bullish on the market, as I am, you have incredible inverse leverage. However, this is very much like playing with fire.
Earlier this month, bought 100 shares of FXP for 111 dollars and sold it a few days later for 128 bucks for a tidy 10% profit. Then FXP shot up to 183.99 and I felt like and idiot. That was on the 27th, a mere five days after I dumped my shares. If I held on and was able to sell at the peak, which is unlikely, I would have made and additional $5500. Oops.
Well, then FXP started to plummet, and plummet fast. The very next day, the DOW soared almost 900 points and FXP got absolutely hammered. Today, it is trading below 100. Simply amazing.
This is not for the weak of heart.
While I was contributing to my 401K with my old employee, I had no problems holding on when the market went down because I was buying on the cheap. However, as I had left the company and was no longer contributing to the account, I didn’t want to limit my options to the handful of crappy mutual funds selected for me by the no-nothings in our benefits department, so I rolled it over. It was already down 23% for the year and headed further south. I had the money in cash out of the market for the last few weeks, which was extremely lucky.
I don’t think we’ve seen the bottom of this market. Not even close. I think there are many other shoes to drop. Bank failures around the world (Iceland is Melting?). Massive sell offs in the major markets and all the minor ones. The coming shopping disaster this Christmas that is going to cripple the US economy. Plus god knows what else.
Is this where we’re headed (again)?
It’s hard to imagine that even if the 700 billion dollar bail out passed that this country (and much of the world) would not be headed towards something of a financial armageddon. I’ve said this before, but despite what John McCain has said, the fundamentals of our economy are not strong.
The Debt
The US government (and by extension you and me) owes almost 10 trillion dollars. Amazingly, we’re in the midst of a presidential and this simple fact never gets mentioned. We’d have to raise taxes to even start thinking about paying it off. Raising taxes has become politically unpalatable that this will never happen. The debt will never be paid off. Eventually China, Japan Saudi Arabia and all the others will stop lending us money. Already we pay about 250 billion dollars a year to service the debt. We won”t default on the debt obligations. We’ll just print more money. This will deflate the dollar, force interest rates and cause massive inflation a al Argentina. What fun.
Savings Rate
American’s can’t save money. The live paycheck to paycheck and if they have an emergency or want something they can’t afford, they finance it with credit card debt or home equity. We now credit cards are maxxed out and home equity is non existent. Now that no one can ignore horrors of a recession, people might start to save a little which will only make the problem worse, since our economy is based on consumer spending. A tiny increase in saving, say 1-2% will decrease spending about 150-200 billion which is about 1.5-2% of GDP. That will wipe out any increase in the economy and put us into a recession alone.
Manufacturing
We don’t make anything any in this country. We sell services. This includes financial services like packaging mortgages that didn’t casue the problem we have now, but pushed our over the edge. China, the country that does manufacture anything won’t lose any sleep over losing the US as their main market. They have a huge market at home that’s almost ready to step up and buy just about everything they make.
The Dollar
The dollar will soon lose its status as the world’s reserve currency. In essence, it really isn’t anymore which is a large reason for the staggering increase in the price of oil. It’s still priced against the dollar, while it probably should be pegged to the Euro. A weaker dollar means cheaper exports, which on one hand is good for the economy. But it also means that American assets are really cheap and our overseas creditors are going to swoop in like Japan in the 80s, buy up our properties and companies and take the profits back to the their countries.
Wall Street
Today the DOW shed more than 750 points. Estimates are that $1.1 trillion in wealth vanished. What’s going to happen tomorrow? More panic selling? Hard to say, but it’s possible. I’m not a psychologist, but I suspect many people are going to want to stop the bleeding, are going to liquidate mutual funds which is going to cause a massive sell off and hammer the market. Wall Street will soon be surpassed as the world’s financial capital by Shanghai.
That’s just the major stuff. When you add infrastructure, human capital, deregulation, banking problems, home equity, we’re, what’s the phrase I’m looking for? Oh, right, We’re fucked.
DOW January 19, 2001: 10,587.59
DOW September 29, 2008: 10,365.45
NASDAQ Jan 19, 2001 = 2770.38
NASDAQ September 29, 2008 = 1983.73
CPI, January 19, 2001: 175
CPI, September 29, 2008: 219
Dollar exchange with Euro, January 19, 2001: 1.068
Dollar exchange with Euro, September 29, 2008: .695
Add in the price of a gallon of gas and a cost of a barrel of oil and I’d say that’s a unqualified “No”.
I woke us this morning to find* that my bank Washington Mutual was broke and was sold off to JP Mortgan after briefly being held in receivership for a few hours by the federal government.
WaMu becomes biggest bank to fail in US history
NEW YORK (AP) — As the debate over a $700 billion bank bailout rages on in Washington, one of the nation’s largest banks — Washington Mutual Inc. — has collapsed under the weight of its enormous bad bets on the mortgage market.
The Federal Deposit Insurance Corp. seized WaMu on Thursday, and then sold the thrift’s banking assets to JPMorgan Chase & Co. for $1.9 billion.
Seattle-based WaMu, which was founded in 1889, is the largest bank to fail by far in the country’s history. Its $307 billion in assets eclipse those of Continental Illinois National Bank, which failed in 1984 with $40 billion in assets; adjusted for 2008 dollars, its assets totaled $67.7 billion. IndyMac, seized in July, had $32 billion in assets.
One positive is that the sale of WaMu’s assets to JPMorgan Chase prevents the thrift’s collapse from depleting the FDIC’s insurance fund. But that detail is likely to give only marginal solace to Americans facing tighter lending and watching their stock portfolios plunge in the wake of the nation’s most momentous financial crisis since the Great Depression.
Rumors of WaMu’s demise have been around for weeks. I was never really worried since my deposits are well below the FDIC insurance level, but I contemplated moving my savings to my other account at Wells Fargo. I’m bummed about this whole thing since I’ve really liked WaMu. I like their style, their service, their lack of fees for anything and their website. I wanted to stick with them. We’ll see what happens with the merger, but I suspect WaMu’s stick-in-the-eye of traditional bank marketing will mean an end to the brand. Sad.
How did this happen? Sure WaMu made bad bets in the sub-prime mortgage backed securities game. Who didn’t? But it was exacerbated by a classic run on the bank:
The fate of Washington Mutual was sealed by a run on deposits as customers lost faith in the bank, federal regulators said Thursday in seizing the nation’s biggest thrift.
WaMu had continued to assert in recent weeks that it had adequate capital to keep going, despite heavy losses this year on defaulted mortgages.
But the Office of Thrift Supervision said “significant deposit outflows” began on Sept. 15. “During the next eight business days, WaMu deposit outflows totaled $16.7 billion,” the OTS said in a statement.
WaMu had total deposits of $188 billion as of June 30.
“With insufficient liquidity to meet its obligations, WaMu was in an unsafe and unsound condition to transact business,” the OTS said.
Of course, this shit always warms my heart:
Washington Mutual Chief Executive Alan Fishman could walk away with more than $18 million in salary, bonuses and severance after less than three weeks on the job, according to the terms of his employment agreement.
These are ugly financial times—except for people like Mr. Fishman who should come out of this arlight. The market is all over the place. Many 401(k)s have been crushed. It’s ugly and it could get a whole lot worse.
The United States economy is a flimsy house of cards propped up by consumer spending fueled in the last few years by credit card debt and home equity. With credit max’ed out, no home equity and people freaking out, who is going to spend money to prop up the economy? Certainly not Americans. It’s going to be an ugly holiday season while the dollar goes into slow-motion freefall. I wish I was getting paid in fucking Euros.
*actually I knew it was going to happed last night and, though I feel sorta silly about it I went down to my local branch to take out some cash just in case.
I’ve kept up my association with Kiva, making loans to small businesses around the world. Right now, I’ve got $400 in loans in various states of being repaid. There’s still $243 outstanding, but payment notices coming on a weekly basis which is deeply satisfying. The latest, this morning, is from a general store in Iraq. My other loans right now are to Vietnam, Kenya, Mozambique, Cambodia, Bolivia, Pakistan, Indonesia and Nepal.
Everyone’s favorite day is here. It’s tax day in America. I’m getting slammed. Mostly, well, almost all, because of capital gains on a particularly inefficient mutual fund. It doesn’t help that I have virtually nothing to deduct: no kids, no business, no mortgage. So I had to cough up about 1600 bucks.
The fund has gone up, which is always good, but the captial gains are really high and since the gains were paid out at the end of last year and the fund has subsequently gone down, it feels like I’m paying tax on phantom income. Sorta sucks, but the fund will come back. It’s very volitale but mostly heading in the right direction.
There’s a strange psychology in this country. People get really happy when they’re expecting a refund and bummed as all hell when they have to make a payment to the IRS. I can understand the second one, but the first one is really nonsensical. Sure, people like getting a check. No getting around that. But the truth is that when you get a refund, all it really means is you’ve provided an interest free loan to the federal government. I don’t get the feeling that many people would be excited about that.
The ideal situation is where on April 15th, you owe nothing and pay nothing. The way to do this is to adjust your withholding amount on your paycheck. If you’re getting a refund, simply withhold less. You won’t get a refund check anymore, but you’ll get a de facto raise and you’ll stop being a creditor to Uncle Sam. If you’re having to pay, withhold more. That way you spread your tax liability over the course of many months instead of having to write a huge check to the fed and the state. Not that this is anything you don’t already know.