James Buchanan played a killer flute

You heard it here first: Martin O’Malley, the guitar player, will be the 2016 Democrat nominee for President (assuming there’s still a Republic.)

Why? It’s easy:

1. To be the nominee, you almost certainly have to be a sitting governor or senator (or Vice President).
2. The current Democrat governors and senators are overwhelmingly ancient, physically unattractive, mired in scandal, or female. The current Vice President is the ridiculous Joe Biden. Besides, he’d be 74 on the day of a 2017 inauguration.

That leaves Maryland governor O’Malley, and almost no one else, even though 5 years ago he wiped his feet with the Constitution. No idea who the Republican nominee will be. The GOP has a habit of giving the nomination to the guy who finished 2nd the previous time, which would mean Rick Santorum.

Oh my God! Look at all those submissions! We couldn’t believe how many we received this week, after filibustering our way through the previous Carnival of Wealth.

Carnival of Wealth, you say? Yes. Personal finance blog posts from across the globe, organized into a cohesive if not coherent whole. Our prolog finished, let’s get started:

Andrew at 101 Centavos goes first, because his post made our blood boil the quickest. This post is so good it doesn’t deserve to be truncated into a synopsis, but here goes:

All you idiots who insist on not only going to college, but financing your education via Sallie Mae, take heed. And think about whom you’re enriching with each loan. Andrew’s post is about Sallie Mae’s investment potential, but he couldn’t help but pull back the curtain to see how the student loan company’s executives manage to make do when their customer base is a bunch of impoverished students. Exceedingly well, it turns out. Andrew includes a link to a Baltimore Sun story about the private golf course the company’s chairman is building:

[CEO Albert] Lord, 62, is steering $15 million toward Anne Arundel Manor, a 7,100-yard, par-72 course for him and up to 100 members in Harwood. During the past three years, the Annapolis resident has assembled about 335 acres with the goal of playing golf his way.

“I hate rules,” he said.

…

Wealthy enthusiasts across the country are putting up millions to build private sanctuaries. Few, though, are spending more than Lord…

What he has not liked is the hassle of waiting for several county and state approvals, although he understands the intentions of the inspectors. As in business, he said, instead of becoming frustrated, “I learned that I just have other people who interact with them.”

He has people. It gets even more detached and imperious from there. Read the article, in addition to Andrew’s piece. If you were to substitute “Mitt Romney” for “Albert Lord” in the narrative, the not-quite-Rhodes scholars at Money After Graduation would be assembling a lynch mob. Assuming any of them are handy enough to tie a hangman’s knot.

We’ll be the first to poke fun at bad English here at CYC, but only if the post comes from a native anglophone. Dutchman Stefan of Skuzet gets a pass. Stefan is in the middle of a series about the lives and philosophies of some of history’s greatest investors. This week his subject is Benjamin Graham, author of the indispensable Security Analysis and The Intelligent Investor, and mentor of Warren Buffett.

From J.P. at Novel Investor, the interest rate paradox. To simplify, bonds (and bond funds) have enjoyed decades of rising prices. The Fed now keeps rates artificially low, thus encouraging people to put even more money into bonds. Investors seeking returns thus look into lower- and lower-rated bonds, pushing their prices higher, and…your bond fund might not be as safe as you think.

Few things are as depressing as a rhetorical question from PKamp3 at DQYDJ.net. This week he asks what a rental meltdown would look like. Remember collateralized debt obligations, the financial derivatives that caused the housing market to bubble and then burst? Imagine the same concept applied to rental payments made on foreclosed homes. And watch the fun were rents to do what home prices spent the last 5 years doing.

Some (hopeless) people think that presidential campaigns should be funded by taxpayers. Don’t like a candidate? Disagree with every plank of his platform? Under such a scheme, you can give him your money anyway! Until we reach that point, Odysseas Papadimitriou at Wallet Blog recounts the absurd amounts of money spent by the Obama and Romney campaigns to win a job that pays $400,000 a year. Treat your own funds a little more conservatively than the various political action committees and SuperPACs, and you’ll be on your way to greater self-determination and peace of mind.

New submitter Aussie Investor explains how a dividend reinvestment plan works.

JT at ETF Base looks at options, specifically the ratio of calls to puts in the market. If more people are buying options that allow them to sell a stock at a fixed price than are buying options that allow them to buy a stock at a fixed price, we’ll have one exceedingly unwieldy sentence. Seriously, the option ratio is a way to quantify investor sentiment. When people are loading up on puts, it’s a (stock) buyer’s market.

Zero. Teacher Man at My University Money asks how much you should borrow in student loans.

Sponge off family members, work, go to a trade school. There are so many college graduates, and such a tiny fraction of them with the capacity to understand that for the average one, that degree is a losing financial proposition. Stop reciting the mantra about how “college graduates earn x more over their careers than high school dropouts do.” Instead, compare yourself to the kids who graduate high school without going to college. Next, measure the median rather than the average. Which is to say, stop relying on each heart surgeon and chemical engineer who’s pulling up the value of x, and instead look at the corresponding dozens of retail salespeople and preschool teachers whose net worths are firmly in the red.

Of course, no one’s going to listen to this advice. Teacher Man himself even does the rhetorical trick of saying, “I don’t nominally approve of a certain thing, but here’s a way to take advantage of its existence.” In this case, it’s taxpayers covering debtor students’ losses. There’s a Canadian province that forgives student debt over $26,000. If you’re going to fail, fail big.

If someone owes you money that you formally lent them, the civil servants at the Consumer Financial Protection Bureau will see to it that receiving said money will be as hard as possible. That’s the news from Liana Arnold at Card Hub who tells us, long story short, that large debt collectors (that’s debt collectors that are large, not necessarily collectors of large debts) will now have to prove that they’re playing nice when contacting debtors. Keep records, etc. More work mandated by the federal government, only this time it’s redundant. After all, every state has similar consumer protection laws on its books. Freedom from tyranny doesn’t mean freedom from bureaucracy.

Speaking of artificial manipulation of interest rates (it was a few paragraphs ago. How short is your memory, anyway?), some needed advice from our philosophical sibling Ken Faulkenberry at AAAMP Blog. What do you do when the President, his lieutenants, the Fed chairman and complicit senators decide it’s time for taxpayers to own car companies and borrow money at rates divorced from supply and demand? This post is every bit as bleak, and as critical, at J.P.’s.

From our friends at Becoming Your Own Bank, a YouTube clip! It’s about what to do now that President Obama has won a 2nd term. We already did you the favor of adding a time code that incorporates the Wadsworth Constant to the video. It has 12 views as of this morning, so do them a favor and watch it.

Nelson at Financial Uproar has deigned to grace us with a submission this week. Even though he’s a lifelong bachelor (Ed. note: Not a euphemism for homosexual, as far as we know. He’s just never married), Nelson has decided to offer advice regarding prenuptial (or as they say in British Columbia, “prenupital”) agreements. It’s more education than advice, really. Don’t think that you can stash assets going into a relationship and assume they’ll be there once your marriage fails, which it probably will. Marriage as a “partnership” means exactly that. You all remember how Juanita Jordan won 3 NBA titles with the Chicago Bulls, right? And how Heather Mills wrote half of “Hey Jude”? (Well, one quarter, along with McCartney, Lennon and Ono.) The courts seem to think they did.

How do you find out about junior oil producers before the investing public does? The best place to start is by reading Mich at Beating the Index, a man who knows more about the Canadian energy industry than anyone alive (or at least, any of our submitters.) This week, Aroway Energy, a company trading at a miniscule 40¢ per BTU per day. If Aroway can continue drilling and striking oil throughout the winter, that price could rise.

Dividend Growth Investor tells us why he’s obsessed with dividend stocks. He checks his accounts daily, which isn’t something we’d normally recommend but in his case, it’s to free him from the inanity of a regular day job.

Our Extremely Tangential Submission of the Week? None other than this one from Harry Campbell at Your PF Pro, who reviews kitchen knives. That’s a personal finance topic, isn’t it? After all, knives are goods that can be exchanged for money. Not only does Harry have fascinating things to say about his new cutlery:

The set included: an 8-inch chef’s knife, an 8-inch slicer, a 7-inch santoku knife, a 5-1/2-inch boning knife, a 5-inch utility knife, a 3-1/2-inch paring knife, and six 4-1/2-inch steak knives, plus a pair of shears. Now the only knives I really use out of that set are the steak knives and the slicer(bread knife)

So do his commenters:

Due to allergies and a desire to not eat anything processed I cook 2-3 meals per day for my family.

So if you thought you knew everything there was to know about the physical constitution and eating habits of commenter thestarvingartistcanada, you didn’t.

We’re on ProBlogger this week, and Investopedia every day it seems. Join us back here next Monday. Well, join us here every day. You can’t stop the new content, because the new content never stops.

“Ah, I remember taking that photo. I still had use of my legs back then.” -Troy Polamalu, 2032

Is it Monday already? Then that means it’s time for another Carnival of Wealth. Personal finance blog posts from around the world. Are you ready? We’re ready. Read away:

Don’t just skim this post from Paula Pant at Afford Anything. Read the mouseover text on her comely picture that graces the header. Paula reasons that making assumptions about passersby, based on just their appearances and their possessions, is stupid. Not just in that you might be wrong, but that it’s a stunning waste of time. People’s Lexuses and Louis Vuitton accessories are, by definition, conspicuous. Their lease agreements and credit card balances are not.

Free Money Finance lists 10 ways to network. Listen to podcasts, join LinkedIn etc.

Starting with data accumulated over the last 85 years, Michael at Financial Ramblings used standard regression analysis to examine what happens when you create an investment portfolio consisting entirely of bonds, then turn it into stocks in 10% increments. If you think having a higher concentration in bonds means unequivocally less risk, you’d be wrong.

Things you could spend the next 24 minutes doing:

• Listening to side 2 of The Darkness’s Permission to Land 
• Yoga
• Watching the most recent DVRed episode of whatever sitcom, assuming you have that thing that eliminates commercials
• Foreplay (Editor’s note: If you’re doing it right, that is)
• Preheating an oven
• Listening to the Wealthonomics podcast, from the folks at Becoming Your Own Bank.

(See? They turned “wealth” and “economics” into a portmanteau. Isn’t that rich? Get it? “Rich”? Do we have to spell everything out for you?) The Becoming Your Own Bank posse has now submitted to the CoW for 5 consecutive self-unaware weeks. Every time they do we goof on their core (awful) business of whole life insurance, and every week they keep coming back for more. Time to raise the stakes. If they submit again next week, then what? Do we start accusing them of sexual crimes against nature? Poke fun at photographs of their kids?

This week, the Becoming Your Own Bank crew gave us an audio submission. Speaking of which…

Are we the only ones to notice that podcasts are almost all unlistenable? The very concept of a podcast is a loathsome thing. Yes, it’s great that in 2012 anyone who wants to can broadcast his opinion (“to a potential audience of billions!”) However, very few us can play the part of a radio host. You can’t just press “record” and expect people to care what you have to say. Most podcast hosts couldn’t keep a show moving to save their lives. Droning, uncomfortable silences, monotonal delivery…it’s as if getting people enthused isn’t just an afterthought, it’s something most podcast hosts are actively trying to avoid. Listening to 3 guys (who know each other, no less) awkwardly hemming and hawing their way through what’s supposed to be an enthralling conversation is difficult.

Tips for aspiring podcasters:

1. Fewer cooks spoiling the broth. Two voices, max. If you’re worried about having dead air to fill, see tip #4
2. Edit. This isn’t going live.
3. At least have an outline, some notes or something.
4. Don’t.

No one will listen to this podcast, not even the hosts’ significant others. The hosts could have announced the exact latitude and longitude of the Lost Dutchman’s Mine at the 23:46 mark and no one will ever hear. Which is a shame, because we like their topic. They tear into that pop-finance hoyden Suze Orman, who has as much business dispensing personal finance advice as she does telling her readers how to find a man. Except we already crucified Ms. Orman several months ago for her brazen attitude and love of misinformation. The Becoming Your Own Bank hosts play endless clips of Ms. Orman’s show, and deconstruct it. Suze’s voice is no day at the beach, either.

W at Off-Road Finance teaches you how to select a broker.

No, of course they aren’t all the same. Some brokers can access only the NYSE and NASDAQ: if you want to trade stock options on the Chicago Board of Trade, you’d be out of luck. And if you think E*Trade offers fantastic deals to its customers…well, you really need to read W’s post.

Even when the world around him is falling apart, Andrew at 101 Centavos manages to make us laugh and, more importantly, not want to slash our wrists. This week, Part II of his defensive strategies on how to be damaged as little as possible by the seeming inevitability of ObamaCare. Also, you’d never believe which $20 billion company’s executives had multiple hands in writing the ObamaCare bill. Andrew’s post is worth reading just for that.

Editorial: At Control Your Cash, we try to write about stuff that no one else has written about in detail. If we were being repetitive, echoing the same tripe everyone else has to say, we wouldn’t expect you to stick around. That’s one of the reasons we like 101 Centavos so much, because Andrew uncovers truths that the populace at large either consciously or unconsciously ignores. What we’re saying is, How did it take 3 years for someone to explain which corporate suits are responsible for writing the impenetrable ObamaCare law, and why did the answer come just from some guy we know who happens to submit to the CoW every week? CNBC and The Wall Street Journal have no interest in this? A rhetorical question, but you folks who’ve convinced yourselves that Mitt Romney can’t be president because he’s committed only to his rich friends in big business, keep believing that.

(sigh) Time for a drink.

And we’re back. Four more and then we crawl into that bottle and close the shades. Harry Campbell at Your PF Pro says to improve someone’s credit rating (other than yourself, that is), you should add that person to your credit card accounts as an authorized user. Whether you should give them the keys to your house is a different question. Harry added his girlfriend to his credit card account, her TransUnion score improved by 4 points, and most impressively they’re still together a month later.

(Shades of a serial marrier from CYC’s immediate family. Outgoing Husband #3, to Incoming Husband #4: “She’ll ruin your credit, too!” Which she did.)

Now, our weekly trifecta from the Evolution Finance crew. First, Louis at Wallet Hub explains secured credit cards and how they work. Just remember that secured cards are a stepping stone, like marijuana.

It’s bad enough that you chose to live in the New York/New Jersey area. If you did, and if you’re draining water from your basement as we speak…well, we admire your devotion. Bet you hadn’t thought about your credit card bills in the last few days, did you? From Liana at Card Hub, what each of the major banks are doing to accommodate everyone who didn’t/couldn’t make their minimum payments on time.

Finally, John Kiernan at Wallet Blog thinks the housing market is about to recover. (Well, Hurricane Sandy did reduce supply.) Seriously, though. Prices and mortgage rates remain historically low. The combined nadir is a buying opportunity if there ever was one. Gaining access to the capital to take advantage of it? Well, that’s your problem.

Wednesday’s post will be cheerier, we swear. Yes, Wednesday’s post. There’s a new one every Friday, too. Anti-Tips daily, a new CoW Monday, and sporadic goodness on Investopedia. Thanks for coming.

“The business of America is…business.”

First, an apology. We ran a paid post last week. It was garbage, but again, they threw money at us. We don’t normally run paid posts, not just because they’re awful but because they’re so dissimilar from the rest of our posts. Still, they’re called “paid” for a reason. Diminish the integrity of the site for a day so we can cash in? Absolutely. The problem is that this one turned out to be an unpaid post. Halifax Bank never squared up with us, so we yanked their post and will never acknowledge their existence again. They and the rest of Bank of Scotland’s subsidiaries can all go to hell.

Oh yeah, our topic: He rendered unto the states what was the states’, and disagreed with international alliances on principle. For our money, he was America’s greatest president. He didn’t serve all that long ago, either – within the lifetime of several people reading this.

Nor was he a plutocrat. Under his administration, almost all income taxes in the nation were paid by the richest 2% of the citizenry. Those taxes were modest, too. The remaining 98% paid nothing. He retired one-quarter of the federal debt, an idea so preposterous in 2012 that neither candidate even makes an offhand promise to do it. He had about as tiny an ego as you can have and still be President. He would have hated the idea of his face being turned into iconography. Most impressively, he stood down in 1928 even though he almost certainly would have won. Yes, there was a time in American history when substance alone could get a man elected President. How ironic, especially in this, the Age of Irony.

Alas, Calvin Coolidge isn’t on the ballot this time. Nor is anyone similar. Fortunately, we have another edition of the Carnival of Wealth to tide you over until it happens again. Personal finance blog posts from tout le monde. Enjoy:

John Kiernan at Card Hub gets top billing this week for banging the same drum that we’ve been banging since Day 1 here at CYC: financial education for college students. Every year our institutes of higher learning crank out graduates who can analyze ecosystems, read poetry, and diagnose schizophrenia. Yet balancing a checkbook and negotiating a car purchase don’t fit in the curriculum, for some reason. John shows us several schools (Texas Tech, Duke etc.) that are teaching kids something eminently practical. And if this isn’t an appropriate place to place a link to The Greatest Personal Finance Book Ever Written, nowhere is.

You mean there’s yet another woman who blogs about how she’s planning to spend far more time paying off her student loans than she did incurring them? We thought we’d already seen all 349,221,270 of said bloggers, but apparently one slipped through the cracks. Kerry Lambeth at Frugal City Girl “works in money journalism” and loves to give monthly updates on her debt. She also talks about her expensive purchases – a $700 camera here, a $40 dress there (“to bridge the gap between home wear and pyjamas”), and oh God how to readers continue to digest this stuff? Perhaps it’s the same reason why every drama on television is about lawyers, cops, or lawyers and cops. People say they crave originality. People are freaking liars. The more repetitive and unchallenging something is, the more popular it is. Personal finance blogs are no exception.

Oh yeah, her submission. Ms. Lambeth went to Hampton Court Palace and saw how Henry VIII lived when he wasn’t decapitating his wives or his Catholic advisors. She also took pictures. This has nothing to do with personal finance, but she attempted to tie things together at the end when she pointed out that unhappy people who have the wherewithal to do so (like the King, presumably) spend a lot of money. So do happy rich people, but that doesn’t reinforce Ms. Lambeth’s point. A couple of pieces of self-justification, some sympathetic comments from like-minded debtors, and there’s your blog post. So easy a child can do it.

Help! Andrew at 101 Centavos to the rescue, with a fantastic title: Investing In Fatties, Or: How I Learned to Stop Worrying and Love Obamacare (Part 1). Andrew agrees that ordering citizens to buy a service – and punishing them if they don’t – is what totalitarian governments do. The United States of the 21st century is such an animal, like it or not. Andrew’s making lemonade of the situation, figuring that at the very least he should be able to profit off the companies who will now be receiving the business of fat people who’d otherwise have been deemed uninsurable.

Try not to read the comments on this post, most of which repeat the old canards about how fat people are that way because the American “food system” (whatever that means) denies them healthy food and forces them to buy cheap, fattening food. We’ve proven that that’s a stinking lie, but most people don’t like even entertaining the notion of having their assumptions challenged and their minds changed. Just like most people aren’t, or don’t want to be, financially successful.

The relentless zealots at Becoming Your Own Bank have submitted 4 consecutive weeks now, even though we poke fun at their core business of whole life insurance every single time (and panned a book they wrote on the same topic.) It’s good to know that some of our submitters are too busy charging people for a noxious financial product to read our site. This week, BYOB confuses investing with insuring, yet again. Shall we pencil them in for next week, too? We have a feeling we’ll need to.

It seems that several collection agencies were making debtors feel bad. From Odysseas Papadimitriou at Wallet Blog, news that the Consumer Financial Protection Bureau is now enforcing politeness. Now, the collection agency that got involved because you refused to pay your credit card bill on time has to be nice to you while trying to collect what you owe. How long before a particularly sensitive debtor ends up suing a collection agency for shattering her self-esteem, and winning? Folks, whatever you do, don’t pay your bills on time. Keep ringing up purchases you can’t afford. It’s the sellers’ fault for making you want it so much.

You don’t have to live in the UK to appreciate this tip from TaxFix. You merely need to have done business there. Get your paperwork in by the end of the month to avoid penalties, and try to ignore that the hammer and open-end wrench (or as the Brits say, “spanner”) in TaxFix’s logo looks like it belongs on the Soviet flag.

Nobody knows the Canadian energy sector like Mich at Beating the Index. This week he avails us of Argent Energy Trust, a trust which though based in Canada operates oil fields in Texas and Oklahoma.

Something called Trading Academy debuts this week. This is one of those blog posts that illustrates the Wadsworth Constant. Here’s the entire post, reduced to 2 sentences: A lot of mutual funds’ fiscal years are ending right about now, therefore so is the annual practice of selling off to mitigate tax losses. Thus the S&P 500 usually rises this time of year.

From Ken Faulkenberry at AAAMP Blog, a breakdown of tactical asset allocation. Oh, relax. It’s more interesting than it sounds. What Ken espouses is that you should use despondency and other seemingly negative emotions to your advantage. Ride the trough of the wave, not the crest. Or as Ken puts it,

[L]ook for opportunities in assets that are experiencing extreme pessimism, and look to take profits in assets that are experiencing a buying euphoria.

What’s better than a 30-year obligation to a lending institution that can take your house if you don’t make your payments on time? 2 of them! From Charles Davis at Wallet Hub, what to watch for before getting a straight-up 2nd mortgage or a home equity line of credit. If you don’t know what the difference is, you need to read this.

(Sophomoric post about debt. We would have lambasted it, but the submitter is a retired United States Marine. So we’ll do him the courtesy of just not running it.)

The mysterious Dividend Growth Investor makes his weekly appearance, this time entertaining the argument that dividends might be worthless. Why? Because on the ex dividend date, the stock usually falls in value by some amount approaching the size of the dividend. But of course, a dividend is tied to a company’s fundamentals. A stock price is just the consensus of a bunch of wildly divergent opinions that can have little to do with reality. See an argument created, rebutted and destroyed all in one post.

Free Money Finance says it makes sense to think of annuities as insurance. Which they are, if you’re worried about living to 110 and exhausting all your other assets. The author also links (in a non-reciprocal manner) to a website that sells annuities and looks like it was designed in 1998. We mention the site because it goes to great lengths not to disclose the interest rates it pays out at. Folks, if you’re doing business with someone and don’t know the terms, you deserve to lose everything.

John P. Schmoll runs Frugal Rules. Schmoll is German for “pouting”, and you should have seen the email he sent us after we ran his inaugural CoW post with commentary. This week John P. gives 4 tips for saving money on taxes. Cut your stock losses, give to charity, etc. Which is good advice all around. Now if we could only get him to hire an editor. (3 instances of “needs” as a noun, egregious use of the passive voice, and a glaring example of RAS Syndrome [IRA account]. Aside from that, great post.)

Thanks for coming. Check us out on Investopedia, too. We update this site daily, with new long posts every Wednesday and Friday. And a new CoW Monday. Take care.