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Taking Advantage of High Oil

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July 23, 2008 – Comments (13)

I have taken steps to retire the 89 Honda Prelude and get a newer vehicle.  I am in the process of purchasing a 2002 Toyota Sequoia (sp?).  So, I am going from a smaller, reasonable on gas vehicle to one of the SUVs that I hate.  The price, $12,000.  It has 154,000 km, or getting close to 100,000 miles.  Most of those miles are highway miles.  It is in very nice shape to look at so it looks very well taken care of.

One thing about being up north is the roads are such that a higher vehicle is a good thing, less rock damage. I can't believe how pitted the car got in a single year.

I also don't drive much.  Seriously, my battery would go dead between taking the car for a drive and the battery was new this year.  I suppose I will drive about 400 km, or 240 miles per month.  That's a return trip to town.  In the Hamlet I am living in, well, the whole thing is about 3 km, or 2 miles and I live centrally so I mostly walk every where.  I do have friends that are a 30 minute brisk walk away so for an evening visit I drive, but for an afternoon visit I walk.

I'll also do the roughly 2,000 km or 1,200 mile drive to Vancouver.  I did the trip twice for the last school calendar year and I suspect that I will do it twice per year.  It really depends on how much the airlines turn me off.  The schedule for flying out of the north is terrible.  It should be a 1-2 hour flight.  I had a 4 day weekend in November and I couldn't get out until about 2:30 the first day off, had a 6 hour stop over and I could have left after teaching all day the day before and driven and gotten into Vancouver a couple hours before I got in from flying.  Going back north the flights are much better.  And they charge you $1200 for that.  At Christmas they lost my luggage to boot and I had to pay to get it picked up.  For the first week I had all this fun stuff planned that I had supplies for in my luggage and I didn't have my luggage until the second week. I flew three times this last year and I don't have nice things to say about any of the flights.  They lost my luggage twice and I ended up paying both times to get it back, costs which they are supposed to cover.  And I didn't fight them on it.  It really turned my off, but it wasn't worth fighting over.  They get passive loss of business instead.  I avoided a 4th flight by driving.

I load the car up with supplies from Vancouver when I head north.  I can save 20-25% on any staples I buy in Vancouver before heading up.  I can pay for the difference in gas, or even more, with being able to buy up to a year's supply of some things. And there are some things I want to move that I just can't move with the car.  Heck, the ellipical trainer I am bringing north would cost over $200 to ship and I think that is the cost of gas difference.

So, at this point in time a pig vehicle works for me.

13 Comments – Post Your Own

#1) On July 23, 2008 at 10:55 AM, dwot (97.58) wrote:

Mish still remains one of the best for the depth of analysis or just making finding out what's not being reported very easy to find.

I think his piece on financials and their ability to raise capital is a worthwhile read, especially if you are considering investing in them.

In particular, it looks like there are clauses that protect recent investors from share price drops ...

"If WaMu is sold for less than $8.75 a share or is forced to raise more than $500 million in equity, it must compensate TPG for the difference, according to filings with the U.S. Securities and Exchange Commission."

Anyone who thinks financials are an ok investment right now is nuts, imho.  The big players are going to get deals that you have no opportunity to get and you will be screwed worse and before they are, plain and simple.

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#2) On July 23, 2008 at 11:03 AM, dwot (97.58) wrote:

Here's another one that is of interest to me.  A year or so ago when I was thinking through what I thought had to happen, well, increasing borrowing rates was one of my conclusions.  If you are fool enough to be in a short term renewable mortgage I would strongly suggest this is the wrong market for taking that kind of risk.  A return to 10% mortgages would not surprise me, not even a little bit.

Anyway, CR has a post about increases to mortgage rates.  I forget how much the fed has reduced rates, but I think mortgage rates are about the same or even a bit higher then they were before the reductions.  The riskier mortgages are starting to price the risk back in, with jumbos up to 7.84%.  I think the rest will soon follow.

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#3) On July 23, 2008 at 11:11 AM, dwot (97.58) wrote:

Here's a good one... I think yesterday I linked a posted estimating the tax payer bailout for fannie and freddie to be $25 billion, which is crazy low.  Well, now it appears that esimate is for short term losses only, until 2009.  So, what does that mean, $25 billion per year?

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#4) On July 23, 2008 at 11:14 AM, dwot (97.58) wrote:

Cherished myths fall victim to economic reality.

Add to that what your pension says it is going to pay you...

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#5) On July 23, 2008 at 11:19 AM, dwot (97.58) wrote:

Hmmm, this is the first I've seen of Bush I've actually liked...

http://bigpicture.typepad.com/comments/2008/07/wall-street-got.html

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#6) On July 23, 2008 at 11:28 AM, dwot (97.58) wrote:

Market Ticker seems a little concerned here...

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#7) On July 23, 2008 at 11:31 AM, dwot (97.58) wrote:

An after thought here, $800 billion for fannie and freddie?  That seems so much more realistic than that $25 billion figure.

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#8) On July 23, 2008 at 11:36 AM, Imperial1964 (97.92) wrote:

Sounds like you and I are kind-of in the same boat (though I'd never drive a Toyota and the only Honda I've owned is my motorcycle)

I drive a full-size pickup and a full-size car.  I have an hour-long drive to work, but I only go into the office one day a week and I run all my errands on the way home. 

For the last 4 years I've been renovating my house and the nearest Lowes is a half-hour away.  The big truck saves me a lot of gas because I can stop by Lowes on the way home from work and bring home a truckload of materials every week.  This week I drove the car and filled it with 2x4s, paint, and a new microwave.

Because of my large vehicles I can drive less while riding in comfort.  I only drive about 200 miles per week.  I'd like to ride the motorcycle more often, but whenever I go out of town I run errands on the way and I can't carry much on a motorcycle.

I guess a minivan doesn't give you the ground clearance you need in your area?  In a minivan you get better gas mileage in a roomier, more comfortable vehicle (and they're not quite so ugly).

$12k sounds like a lot of money for a 6 year old Toyota (at least in my area), but what do I know?  I'm still driving cars from the 80's.  But think of how much stock you could buy with that when this market bottoms out!!

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#9) On July 23, 2008 at 11:43 AM, FleaBagger (29.47) wrote:

The "cherished myths" article calls for a balance of regulation and freedom that we've always had, and that it strawmans as "total market freedom." That is, we've always had some regulation to "minimize risk" and those regulations don't work, leading to crises, leading to emergency action taken by the government, leading to prolonged economic hardship, e.g. the Great Depression. Free markets have never been tried.

Just think about it: it's ludicrous to look at one of the richest countries on earth, find a problem, and blame that problem on the country not being enough like any number of poorer countries (i.e. "balanced regulation" of the financial markets). Isn't the problem more likely caused by something else? Perhaps the rich country already having too much in common with poorer countries?

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#10) On July 23, 2008 at 11:58 AM, devoish (99.06) wrote:

Dwot,

My first thought was "thats a lot of money for a 150k mile car".

Especially that in my experience (25 years independent mechanic) imports cost more to fix at above 125k mileage than domestics. Parts cost more and become discontinued more quickly. You can get a 60,000 mile suburban for 12k on Long Island. If you want cheep, high ground clearance and not a lot of nicetys I would suggest a jeep. It might break more often but still cost less.

Also if you click over to the "automotive" then "buying and maintaining a car" discussion boards on the Motley Fool there are some car salesman and insurance folks that respond pretty often with some good advice.

Devoish

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#11) On July 23, 2008 at 6:04 PM, dwot (97.58) wrote:

Interesting comments.  I mentioned it to people up north before I left and that the asking price was $15,500.  They thought is was steal at that price. 

Well, I get my long term mechanic to check it out for me.  I guess the other thing that I like about it is that it has seating for 8 which is probably really good for a teacher in a small community.  Means I can take 7 kids.  We have no school bus and it is so important to get these kids out of their community a bit because their world is sooooo small.  I found it amusing their surprise that everyone doesn't get water delivered to their home with a water truck...

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#12) On July 23, 2008 at 9:12 PM, lquadland10 (< 20) wrote:

Can you buy on the other side of the boader? Check out car max. An after thought here, $800 billion for fannie and freddie?  That seems so much more realistic than that $25 billion figure.

5139 Barry St.

4 br/2 ba  1,279 sf

$455,000  SP 10/04

$444,085  BTB 1/08

$234,900  LP 4/08

YB: 1986  6,200 sf lot

2 days on market

Fannie Mae foreclosed on this one - I guess they haven't got the memo that lenders should reduce their opening bid at the trustee sale to see if they can dump them there. Most of the foreclosures I've seen by Fannie have had a high BTB number.There is a better-than-even chance that the emergency measures will not be needed, meaning there will be no cost to taxpayers. If the lifeline is required, the Congressional Budget Office said, there is a 5 percent chance that the companies may need $100 billion but more likely would need $25 billion.    The bill would increase the federal debt limit by $800 billion to $10.6 trillion.

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#13) On July 24, 2008 at 12:21 PM, dwot (97.58) wrote:

Yeah, I am with you on the $800 million being more realistic.  I noticed Pimco was saying a trillion in the news since.  Those estimates are both in the range that I'd be thinking.

There are significant barriers to buying a US vehicle in Canada and numerous costs and conditions that have to be met.  I am not interested in the hassle.  Besides, this vehicle is owned by someone I know and I know it has been well cared for.

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