Thursday, February 24, 2011

Time to get your Schwinn out of the garage?

Oil has stabilized briefly this morning after spiking overnight. The Saudi's have assured the world that they can make up for any lost supply from Libya. This assumes that the March 20th revolution in Saudi Arabia doesn't come to pass and that their people will be happy with the $37billion gift to citizens announced yesterday :)

My biggest concern about the oil complex is not necessarily total supplies but rather the increased levels of speculation that could take place in the oil markets. As money chases oil, the price could continue to escalate despite improvements in supply.

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Good news:

The American Trucking Associations’ advance seasonally adjusted (SA) For-Hire Truck Tonnage Index increased 3.8 percent in January. The latest jump put the SA index at 117.1 (2000=100) in January, which was the highest level since January 2008.

Initial Unemployment Claims dipped to 391k.

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LA couple living the American dream

Lisa and Stephen Furry have hit financial rock bottom, even though they're not acting like it.

The couple filed for bankruptcy a little more than a year ago, wiping out $50,000 in credit card debt, yet their household spending outstrips their income. They shop at Whole Foods, spend freely on beauty products and splurged on a wedding anniversary getaway to Santa Barbara — at a four-star hotel.

They haven't paid the mortgage on their North Hollywood home since September, and a default notice could come at any time.

So, how did the Furrys get to this point?

Stephen, 32, earned $62,000 last year working as a grip and lighting technician on film and TV crews, but the work is sporadic. It came to a near-halt during the 2007-08 writers' strike, not long after the Furrys bought the house with a high-risk mortgage.

Currently, the Furrys have just $900 in checking and savings accounts and $4,300 in retirement savings. They have a $440,000 mortgage, a $40,000 home equity line and a $3,000 car loan.

The house, purchased in 2005 for $575,000, was a financial stretch, to say the least. The Furrys took out a negative-amortization loan that had an initial low monthly mortgage payment. The payment rose over time, and deferred interest was tacked on to the principal.

"I don't quite understand why they bought the house," Hartman said.

Yep, earn $62k = buy a $575k house. Sounds about right.

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