September CPI-U numbers released: October 2010 I Bonds not terribly enticing

The U.S. Bureau of Labor Statistics released the September 2010 Consumer Price Index (CPI-U) inflation data this morning, which increased by 0.06% last month.

As I have mentioned many times before, now is one of the best times to consider purchasing I Bonds. The reason for this is that we now know what the rate of return for October 2010 I Bonds will be for both the first and second six month periods, which is important since I Bonds must be held for 12 months before they can be redeemed.

Using the CPI-U data from March 2010 (217.631) and September 2010 (218.439) (courtesy of inflationdata.com), we can calculate the variable rate for the second 6 month period for October 2010 issue I Bonds:


That would mean these bonds would earn a rate of 1.74% (using 0.20% fixed & 1.54% variable) for the first 6 months and 0.94% (combined 0.20% fixed & 0.74% variable) for the second 6 months. With a lowly 0.20% fixed portion, this is a lukewarm investment when compared to the 1 year CD @ 1.75% APY currently being offered by Connexus Credit Union.

With the low period of inflation we're currently experiencing (with no 2011 cost-of-living increase for Social Security recipients), buying October 2010 I Bonds is not a no-brainer at this time. With no large increase in the fixed portion expected in November, I personally will be waiting until late April 2011 before considering an I Bond purchase.

October 2010 Financial Asset Roundup

Here are my current financial assets as of the market close on October 8th, 2010:

Asset	Sep 2010	Oct 2010	Change
Checking	175	506	331
Money Market	32,346	60,838	28,492
Savings Bonds	36,283	36,384	101
Treasury Bills	0	0	0
CDs	116,852	82,985	-33,867
Brokerage	84,767	92,125	7,358
401k	86,831	93,115	6,284
Roth IRA	40,220	42,379	2,159
SEP IRA	218,768	230,075	11,307
529 Savings	45,966	48,538	2,572
Total Assets	$662,208	$686,945	$24,737
			(3.74%)

It's been a nice run for the S&P 500 as it has risen has risen 5.01% since the last update:

(chart courtesy of msn.com)

The unemployment rate for September stayed flat at 9.6% as job growth continues to flounder, while oil prices have perked up to around $83 per barrel.

On the financial front my asset levels have once again surpassed my all time high from September 2010 in lockstep with the rising stock market despite the $5000 I spent getting my yard repaired and re-sodded after the flood-related damage caused in March. Now that the final cleanup is done, I figure I spent close to $10,000 this year on basement water removal and cleanup, sump pump installation, and landscaping stump removal, fill, and sod installation. With regard to more pure financial moves, I'm also saw a Penfed 6% APY 4 year CD, a HSBC 2.00% APY 12 month CD and a ING Direct 2.10% APY 12 month CD mature since the last update. I am planning on putting some of that cash in a 5% APY CD reservation at Penfed in January 2011, but I will probably stay liquid with the remainder of that cash due to the lack of decent places to put it. I'm also trying to get myself into the Navy Federal Credit Union through a loophole of sorts, but my membership status there is still in limbo at this point.

Not much else of note to report on though. I'm just trying to fight the good fight and keep my financial situation afloat.

Former MBNA Bill Pay Choice finally getting the axe

When I predicted the death of the great MBNA billpay functionality when it was integrated into to the Bank of America family in 2006, I had no idea that my prediction would finally be correct four long years later.

I unfortunately received this letter from Bank of America last week:



So it looks like I will have to actually pay my mortgage and credit cards with actual cash from my bank accounts now. Thank you MBNA/Bank of America, it's been a great ride. Heck, I may even toss back a Schlitz Tall Boy in honor of Matthew Schlitz! :)