Connecting the Dots

While many of you are outraged over anything that might control guns in the United States—and anger over criminal behaviors like the Boston bombing, armed robberies and physical crimes—hardly anyone is getting mad over the global financial industries who are rigging the game against ALL OF US.

I know most people don’t read the newspaper, watch TV news or read more than a headline or couple of paragraphs in an article. Maybe that’s why there is no outrage. Or perhaps it’s just a bit too complex for Joe SixPack to grasp. My gut tells me that people not paying attention is why the global financial industry is getting away with rigging the financial game while the masses get all pissed off about Obama, gun control, the Boston bombing or other things that distract us from paying attention to the real crimes.

Just over one year ago the Libor scandal broke. Turns out traders were in direct communication with bankers before the rates were set, thus allowing them an advantage in predicting that day’s fixing. According to this article at Wikipedia (my emphasis), “Libor underpins approximately $350 trillion in derivatives. One trader’s messages indicated that for each basis point (0.01%) that Libor was moved, those involved could net “about a couple of million dollars”.”

Matt Taibbi

Now comes this article by Matt Taibbi of Rolling Stone and still there is no outrage: “Everything Is Rigged: The Biggest Price-Fixing Scandal Ever The Illuminati were amateurs. The second huge financial scandal of the year reveals the real international conspiracy: There’s no price the big banks can’t fix.”

Taibbi points out how huge scandal #2 is as he describes the manipulation of interest-rate swaps (again, my emphasis), “Interest-rate swaps are a tool used by big cities, major corporations and sovereign governments to manage their debt, and the scale of their use is almost unimaginably massive. It’s about a $379 trillion market, meaning that any manipulation would affect a pile of assets about 100 times the size of the United States federal budget.” Now the banks are manipulating THAT market too. (Sigh…)

We all know the ‘players’ in the stock market have enormous advantages. In Las Vegas I don’t mind 1-2 percentage points going to the ‘house’, but when my 401K, home value and business revenue drops like a rock because the big banks, hedge funds and brokerage houses are rigging the game, you bet I’m pissed.

If you do nothing else, read Taibbi’s article and think about it. If you start to feel anger welling up inside of you, go and read a few of Taibbi’s blog posts and other articles here. He’s one of the few consistent voices who call out the financial industry’s hucksterism. Taibbi wonders out loud why, for example, NO banker has had so much as a token fine or any jail time after the biggest fraud perpetrated on the global financial system in history that caused the 2008 crash.

Global warming. Peak oil. America is dependent upon foreign oil, but demand is weakening here and prices might fall. So what is the right choice I should make when buying a new car?

Today I drive a 2009 Toyota Prius (see my 2008 post here) and now I’m torn about what to buy next. Another Prius that gets 50MPG? A plugin hybrid Prius that gets 99MPGe? A Chevy Volt that, like my neighbor who has driven over 12,000 miles and still has 25% of his first tank of gasoline, uses electricity for most driving?

We know climate change is happening and that total oil production by the big producers has fallen 25% since 2004 while global energy demand is expected to double by 2050 (see 2013 World Energy Issue Monitor (PDF)), so the obvious choice is to buy the most efficient vehicle I can afford (and fit in to).

But it’s not so simple. Since CAFE standards are focusing car manufacturers on ensuring the average mileage of their fleets increase fairly dramatically to 2025, if prices fall and mileage rises isn’t the net impact of a larger vehicle justifiable? 

I thought so until this past week when I was behind a woman driving a Lincoln Navigator at the gas pumps. She asked me what kind of mileage I got in the winter and what it cost to fill my tank. “42-44 mpg and a full tank is about $38,” I replied. “How about you?“

“Um…I asked because my husband and I measured it over the last few months and it’s supposed to get 14 in the city and 20 on the highway but we were getting about 8mpg driving around town and 12mpg when we drove up to Duluth to see my mother.” She went on, “…and it costs about $115 to fill the tank.”

Well, that’s what happens in the winter when we run our heaters, electric seats and it’s harder to efficiently burn fuel. What she and I DIDN’T talk about was an ugly truth I discovered later: That $115 would fill her 33.5 gallon tank and take her about 396 highway miles. My Prius (at the 44mpg highway amount) would go 462 miles for filling my 11 gallon fuel tank for only $38! A savings of $77 and for not using 22 gallons of gasoline.

I know, I know…it’s a helluva lot better to drive a Lincoln behemoth vs. a tiny little Prius. But what a waste of fuel—not to mention the extra carbon I’d be spewing in to the atmosphere—when I’m just hauling my own ass around. Do I really need something like that Lincoln Navigator? Nope. Regardless whether gas prices fall to $2/gallon since it’s just an inefficient waste of energy.

So now the questions: regular or plugin Prius or Chevy Volt?