Free Playdoh or Crayola crayons at Toys R Us: 10/18 - 10/19

Toys R Us is offering an in-store deal for a free 4 pack of Playdoh or 24 Pack of Crayola crayons while supplies last through Friday, October 19th, 2007.

To claim your free toy, print out the online coupon at the toysrus.com and redeem it to your local Toys R Us store by Friday.

September CPI-U numbers released: Pass on October 2007 I Bonds

The U.S. Bureau of Labor Statistics released the September 2007 Consumer Price Index (CPI-U) inflation data this morning, which increased by 0.28% last month.

As I have mentioned 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 2007 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 2007 (205.4) and September 2007 (208.5) (courtesy of inflationdata.com), we can calculate the variable rate for the second 6 month period for October 2007 issue I Bonds:


That would mean these bonds would earn a rate 3.74% (combined 1.30% fixed portion & 2.42% variable) for the first 6 months and 4.36% (combined 1.30% fixed & 3.02% variable) for the second 6 months. This is obviously not an attractive rate considering that several online savings accounts continue to offer a return approaching 5% and Countrywide Bank is offering a 1 year CD @ 5.65% APY.

Based on that, I don't think it makes sense to purchase October 2007 I Bonds. It is worth re-evaluating I Bonds in late November 2007 though, since it is possible that the Treasury will set an attractive fixed rate for November 2007 issue I Bonds. I personally will be waiting until late April 2008 before considering an I Bond purchase.

Read the Wall Street Journal Online today for FREE

The entire Wall Street Journal Online web site can be read for free today courtesy of Dell Computer. Head over to online.wsj.com to take advantage of this freebie.

Baseball, hot dogs, apple pie, and free furniture???

Regional furniture chain Jordan's Furniture, (in)famous for television commercial parodies, came up with an unusual (and controversial) sales promotion earlier this year. The details according to jordans.com:

Consumers purchasing a mattress, dining table, sofa, or bed at a Jordan's store location between March 7,2007 and April 16, 2007 will receive a rebate of the purchase price paid for the Deal Merchandise if (but only if) the Boston Red Sox® win the 2007 Major League Baseball World Series®.

The Red Sox have currently advanced to the ALCS against the Cleveland Indians, and are 7 wins away from requiring Jordan's to make good on their promise and reimburse an estimated $20 million to 30,000 customers.

Jordan's CEO Eliot Tatelman has dismissed the potential financial impact of this promotion due to insurance that the company has taken out to cover this promotion. Even so, I imagine that the bean counters at Jordan's are sweating over the MLB playoffs even more than the participants themselves.

As a side note, considering that Jordan's is a subsidiary of Berkshire Hathaway, I'm guessing that Warren Buffet is pulling for the Colorado Rockies to win the World Series. :)

Free toy at Toys R Us: 10/11 - 10/13

Toys R Us is offering an in-store deal for a free Littlest Pet Shop Animal or Hot Wheels Basic Car while supplies last through Saturday, October 13th, 2007.

To claim your free toy, print out the online coupon at the toysrus.com and redeem it to your local Toys R Us store by Saturday.

October 2007 Financial Asset Roundup

Here are my current financial assets as of the market close on October 10th, 2007:

Asset	September 2007	October 2007	Change
Checking	376	564	188
Money Market	52,393	30,445	-21,948
Savings Bonds	4,591	4,607	16
Treasury Bills	0	0	0
CDs	68,840	91,336	22,496
Brokerage	106,272	115,367	9,095
401k	100,389	109,939	9,550
Roth IRA	33,141	35,486	2,345
SEP IRA	176,087	187,738	11,651
529 Savings	35,479	37,858	2,379
Credit Card 0% Balance Transfers	-18,875	-18,675	200
Total Assets	$558,693	$594,665	$35,972 (6.4%)

Wow, what a difference a month makes! The stock market has been on a nice run fueled by the FOMC rate cut on September 18th, with the S&P 500 index up 6.18% since my last update:

(chart courtesy of msn.com)

My only moves of note were locking up some short term cash in a 3 month E-Loan CD @5.55% APY while that deal was still available while also jumping in on the latest and greatest Penfed CD offer by putting some more cash in a 4 year Penfed CD @6.00% APY.

Grocery price inflation update

A recent CBS news story: Bulging Grocery Bills Fed By Global Forces, motivated me to do a little detective work and post an update to the increase in grocery prices that I discussed in January.

After examining the spending data that I track, I was surprised to see that our grocery spending through August 2007 has increased by 14.2% over the same period last year, which will equal approximately $800 more spent on groceries for the entire year if that trend continues. I have been noticing an overall decrease in aggressive sale prices, promotions, and "good" coupons out there, so an increase in spending wasn't completely unexpected. However, I was surprised to see that my 14.2% increase far exceeds the 4% "food inflation" claimed in the CBS news article.

The article also notes that wheat prices have increased by nearly 90% since the beginning of the year, and specifically mentions that General Mills shrunk cereal box sizes to effectively increase prices. Keeping that in mind, I headed out to do a little grocery shopping.

Donning my detective's cap, I found that the 14oz box of General Mills Honey Nut Cheerios at my local market had been replaced by a 12.5oz box for the same $2.99 price. That works out to a 8.9% price increase, which is a bit larger than the "small single-digit price" claimed in this Reuters article.
(note: the Reuters link above replaces one to a New York Times article circa 1995. Apologies for the bad data).

To add insult to injury, General Mills designed the 12.5oz box (below right) so that it appears to be larger on the shelf than the old 14oz box since the new packaging is taller and thinner than its predecessor:



So here we are in what is considered to be a period of low inflation, yet my costs for things like groceries, gasoline, heating oil, and medical care increase by double digit percentage points year over year. I think it's time that we re-evaluate our methods for measuring inflation, particularly when food and energy costs are disregarded because of their alleged volatility.

Free Dunkin Donuts coffee sample

A friend was kind enough to point me to a freebie sample to try Dunkin Donuts coffee at home.

To claim your free sample, head over to this link and fill in the online form to get a free coffee sample mailed to you.

(FYI, the page this link sends you to freaks out when I run it in Mozilla Firefox, but it works fine in Microsoft Internet Explorer)

Mortgage purgatory: Home loans for the self-employed

While the subprime lending market troubles have continued to grab headlines, a USA Today article about the impact of the mortgage mess on home loans for the self-employed struck a chord with me.

After mortgage rates began to fall in 2002 (and cavalier lending practices were getting ramped up), I called a loan officer recommended to me by a family member and looked into refinancing my mortgage. I explained that I was self-employed and inquired about low documentation loan programs. After a bit of discussion about my S-Corp and my personal income, the loan officer assured me that I would have no problems qualifying for a conventional loan.

I put the $400 application fee on my credit card to lock in a 5.625% rate for a 15 year loan and filled out and returned the packet of information that arrived at my doorstep a couple of days later. I didn't think to do so at the time, but I wish I had made copies of these documents before I returned them to the loan officer.

The process was going well until one day when I received an unexpected call from the loan officer asking to speak to a representative of my company to verify my employment. I was confused by this because I had made it quite clear in prior conversations that I was self employed and was the only employee of my S-Corp. I called the loan officer later that day and was accused of misrepresenting myself and omitting information from my mortgage application. As a well-qualified borrower with a good income and credit score, I maintained that I had been upfront and honest about my situation from the beginning and expressed my displeasure at being misled. In the end, I did get the loan officer to refund my application fee, although not without some whining about it coming out of her pocket.

I had put my refinancing plans on the back burner until one day when I happened to mention my mortgage application experience to my CPA. He recommended that I contact a loan officer at a small regional bank that that he has worked with in the past. I kept an eye on the mortgage rates at the bank's web site and gave the loan officer a call when the rate on a 30 year fixed mortgage rate had dropped to 6%. We spoke about my situation and he followed up with a call to my CPA, after which he said that I shouldn't have any problem qualifying for the loan. Apparently, the bank plugged my information into their Fannie Mae qualification software, and the only thing that they were required to do was to verify that my S-Corp was a real company. The loan officer asked for a copy of my business card to satisfy that requirement, and after dealing with underwriting and a home inspection, the attorney came to our house for the closing about one month later.

Considering the difficulties that I had qualifying for a mortgage with a profitable S-Corp, a pristine credit report, and a good salary during the housing boom, I can only imagine what that process is like for self-employed borrowers in the current lending environment. Good thing I was smart enough to refinance with that regional bank for a second time in 2003 to get my current 30 year fixed loan at 5.375%. :)