That’s not quite true. I don’t trade oil, but oil does have a substantial but indirect impact on the electricity market that I’m in. I also don’t believe that rising oil prices can be squarely blamed on financial speculators.  This is not to say that traders do not affect or profit from rising oil prices. However, it’s simplistic to think traders can make oil go from $60 to $120 and keep it there all on their own.

When an oil trader bids up oil by buying oil futures in the “shadow” financial economy, there is still a day of reckoning in the real economy. There’s no question that a speculator can raise the price of futures by merely buying.  Futures are contracts to buy or sell at a future date.  If I sold a one year future contract for $100/barrel, I’m obligated in one year to deliver oil for $100/barrel.  For instance let’s say I wanted to raise oil prices, I could buy future contracts settling a year out for $200 when oil is only trading $100 today in the spot market.  The spot market is the real world actual time economy.  The spot market and the futures market however do move together.  If someone is willing to buy oil for $200 in year, but oil is only $100 today, there’s a clear profit opportunity. I can buy oil today, store it for something less than $100/barrel, and sell the future contract.  Instant profit of a $100.  As a result spot markets and futures markets tend to track.

However for the same reason that speculators can affect the real world spot market, the real world spot market has impact of the shadow economy.  If speculators are willing to buy $200 oil in on year’s time, but inherent supply and demand implies oil should be $100 today and tomorrow, then there should be other traders who would gladly take the other side of that trade.  That trader knows he or she should be able to procure oil for less than $200/barrel.  Ultimately what really prevents speculators from affecting actual prices in the long term is that for every deal there is someone just as canny on the other side.

I’m not naive enough to believer that speculators have not had an impact on oil prices. They have, and were the movement in oil prices short lived, I would put more blame on speculators. However, high oil prices have been sustained and for that I believe there have been actual supply and demand changes. Speculators can only keep prices high only for so long as it takes ever more capital to keep prices high.  For example let’s say I’ve brought $200 oil last year, I’m out $200 already, and if I were want to keep prices high I need to come up with more capital to buy more without raising capital by selling.  It certainly wouldn’t be the first time that speculators have tried to corner the market.

Sadly enough, rising oil prices if they persist are being caused by long term change.  Rising demand in developing nations such as China and diminishing supplies have fueled the rise in oil.  I don’t believe necessarily that we will run out of oil in the next decade, but it is a matter of time.  Oil and other fossil fuels are a limited resources.  It’s not a question if we’ll run out, but when.  In this regard, high prices are the answer to the long term problem. Higher prices will force us to rethink where we get our energy and how we use it.

I’m personally perplexed at the state of the Consumerist Americana. I had been very hopeful that with the current housing downturn that Americans were finally ready to learn a lesson. I commented as much a few months ago.  I spoke too soon, and have been proven wrong.  Consumers are turning to plastic now that they’ve drained their home equity/piggy bank.  There’s no question that many Americans are suffering hard times.  Just as there’s also no question that too many Americans have also lived beyond their means.

I’m not against debt. I think debt can be a useful tool. I’ve got quite a bit of debt. Student loans and mortgages.  Properly managed debt has it’s place. The problem with debt under which I include dipping into home equity, is that it allows too many people to achieve instant gratification. If there’s a skill that modern man has forgotten, it’s the ability to delay gratification. In the old days, you had to save money if you wanted to buy something. Some people still do, but too many buy first and ask questions later.

So what does this all mean? Not sure. Though I’ll join the Greek chorus of Cassandras, and simply state the bill will come due at some point.  Hopefully soon.  I feel it’s much better to learn our lessons, endure some pain, and emerge a stronger economy of prudent consumers.  The longer we put it off, the greater the crisis.

I eat out a lot, too much really. Given my eating habits, I feel like should be adding something else other than inches to my waistline. Yelp seems like a good community and has effectively leveraged itself as social network and not just a user review site. I also have accounts on Facebook and Linkedin, but I don’t really use them. Yelp seems like a good place for me to make a more active foray into social networking given it’s centered on something I love, food. Of course the beauty of Yelp! is that it’s not just about food like Chowhound. Yelp wants to fry bigger fish.

So what was my first review of? The new Orinoco in Brookline Village. Orinoco is a Venezuelan restaurant and fantastic value. Everything is under $20, and most entrees hover between $13 and $17. It’s hip place, though I hear the South End location is much hipper.

I recently got accepted to a Non ABA certified Law School. Given the nature of the beast. What are your thoughts on such an endeavor, as there are pros and cons to the affair?

I’m certainly no expert on education. I have but one degree, and nary a desire for another. I’m done with school. That said, I believe it’s generally in everyones’ best interest to attend the best school that he or she can. This does not mean the most expensive as there are many affordable public institutions that outclass expensive private schools.  However, all else things being equal, ABA accredited school is by definition superior to a non accredited one.

To practice law, one must pass the bar exam. To take the bar exam, one must attend an ABA accredited school. In that light, it would seem that attending a non-accredited school is not worthwhile. Of course it’s not that simple as different states have their own individual bar associations that may allow graduates of non-accredited schools to take the bar. By passing the Bar in one state, and then practicing law for a few years, it’s often possible to take the Bar in any state. Of course with ABA accredited degree, you can take the Bar anywhere.

The more interesting question is not if you can take the Bar or not, but rather what doors an ABA accredited school would open versus a non accredited school. My initial read into the matter, is “a lot.” The ABA has gotten criticized and justly so for being a elitist institution that is in the business of exclusion. From what little I can gather, this seems to be true. Ironically because this is true, it’s better to member of the club than excluded.

So why would anyone want to attend a non accredited school? They are cheaper, and often easier to get into. The former is a good reason and the latter is a good reason only for those who can’t get into another school.  I don’t believe my reader is such an individual.  He’s clearly a smart guy if he’s reading AskDong.  It’s important to attend the best school that you can get into, and not just the best school that you know is easier to get into. Shoot for the moon, I say. Even when it comes to cost, I think the extra money can be well worth it if more doors are open because of it.
My attitude towards education is biased. I don’t believe that a diploma is a necessary prerequisite of learning. I don’t believe the ultimate value of education is not what’s learned, but what doors that diploma can open. A diploma is a key, and it’s clear from what little I know about the ABA and law jobs a degree from ABA accredited school is a much better key. Is it fair? No, I don’t think it is, but it’s how the world works.

I am finally up for the year. Almost all of that can be attributed to the calls on AAPL that continue to race onward an upward. Last month AAPL shot past $150. The stock is up above $180 now….

Now that I have a few months of data for my historical performance chart, it’s actually beginning to look like something.

While fortunate in those transactions, my losses also highlight the biggest trap of investing/trading - Falling in love with your stocks. I fell in love with AHM and WM when I should have sold much earlier. I only take solace in that in the end I realized the relationship could not work because the love was not returned. As with relationships, it’s better to cut your losses than try to make an untenable relationship work.

So what do I own today that I need to think seriously about selling? Mylan Pharmaceuticals (MYL) and United Health (UNH). MYL is a company I’ve owned at some point another in some account or another for over 12 years. It’s loved me in the past, but it no longer loves me today. Fundamentally, I should own neither MYL or UNH. I don’t know the first thing about the pharmaceutical or health care industry. I’m not much of a consumer or connoisseur of either.

While my jury is still out on the gender difference, I agree on the latter. I believe it’s better regardless of gender to share information amongst your friends. While access to salary information is much better now with websites such as Salary.com, and Payscale. None of these online tool provide the nuance that you can get from a friend. I can find out exactly what my friends do when I ask and how much they earn for doing so. I can know exactly how much responsibility they have. Telling me what Financial Analyst Level IV in 100-400 person company earns is informative but less so than a five minute conversation with good friend who has a real job in a real company.

The salary conversation is most easily had right out of school when everyone is effectively starting at the same level. Envy and boastful pride generally don’t have the opportunity to rear their ugly heads when most people after college start roughly in the same levels. Sure, the Investment Bankers and Consultants make more, but they work those crazy hours. Few people take it personally that their friend might make more, at least not straight of school. The differences are small, and most people at that time acknowledge the trade off that’s often made to do something more personally rewarding.

As we get older, we do become more sensitive rightly and wrongly so. Some of us feel under compensated, and others hate to hear the braggadocio that might accompany salary gossip. I don’t disagree. As we get older the differences in pay become wider, and seemingly more arbitrary. However, we should all check our ego. Talking about money should not be ego or envy, but career advancement. There’s a time and place for sharing the information. Talk amongst coworkers is especially tricky and I have never had an explicit conversation on salary with a coworker. However, plenty of information can still be shared in the most general of terms with a coworker. Nadira Hira at Fortune.com points out the traps that might come with salary discussions at work. However, amongst friends outside of work when the conversation turns to careers, I firmly believe that information should flow freely.  How is someone to know they are underpaid unless they have friends who give them the dish? Networking isn’t about getting the next job through a friend or acquaintances, but knowing the opportunities that are out there.  Salary information is a big part of that.

Mazda has now decided to destroy all the cars to prevent them from making it onto the gray market as new cars. Mazda has originally intended to sell some as new given that many of the cars are likely undamaged. Financially, it doesn’t matter to Mazda. They had insured their cargo, and as result are probably better off destroying the cars rather than risk their reputation if the cars turned out to be faulty. Interestingly enough, casualty and property insurance developed for exactly this type of event.

While I understand Mazda’s intentions, and the Insurance company’s reluctance to enter the car salvage business, it seems like such an awful waste. While I would be weary of Mazda if they had attempted to sell these cars as new, I would think that these cars can be at least salvaged for parts. I can’t imagine there’s much if anything wrong with the body panels. Instead these cars are being shredded. Such a waste.

I’m probably going to pick up a copy of Bottomfeeder: How to Eat Ethically in a World of Vanishing Seafood. Taras Grescoe the author was recently interviewed on Salon.  I like food books even when they’re an attack on the things I love.

I’m never going to be utmost environmentally conscience consumer.  Vegetarianism is probably the way to go, but I like I meat more than quite a bit. Seafood, however, represents a unique ethical problem.  Seafood as the name implies is harvested from the seas. But who sows and tends these crop? Hardly anyone.  The oceans as they rightly should be, belong to everyone and as result nobody actually takes any ownership. The Oceans are the ultimate commons.  Fishing boats from around the world fish the same seafood thousands of miles from home shores.

As with most commonly shared resource, an ethical crisis tends to arise - Tradgedy of Commons.  Simply stated Tragedy of the Commons is that individuals in this particular case the fishing industry from a multitude of nations act logically in their own self  interest to overuse the common resource of the oceans.  All food production has an environmental impact, but oceanic fishing is one of the few that takes place free from national borders.  It’s a difficult industry to regulate, and as result it’s even more critical how we as consumers behave. The burden is upon all of us to collectively demand environmentally sustainable fishing by adjusting what we eat. The Salon interview highlighted a fantastic tool from the Monterey Aquarium on what to buy and eat.  As a result I had mussels instead of the Atlantic Halibut last night.  It was cheaper to boot.

In my haste I missed that penalty rate is actually the short term fed rate plus 3%. The total penalty is 6% according to IRS.. So today I made my first estimated tax payment. Even if the penalty rate was the lower rate that I believed it to be, I think I might have still changed my mind and made a payment.

I’m no tax lawyer, and am confused somewhat exactly on how the penalty is assessed. In my original post about filing taxes, I stated that a safe way to determine what the safest minimum payment required by the IRS is 110% of the previous year’s taxes. That’s what I’ve chosen to do. However, if I choose not to make any estimated tax payments at all, do I have to pay the penalty on the full amount that I owe? For example let’s say my taxes last year were $1000, and this year I’m required to make estimated tax payments. I can make pay $1100 in estimated taxes even though I know I’ll owe $2000 in taxes. I pay the remaining balance of $900 on April 15th, and still avoid paying a penalty because made payments that were 110% of my last year’s taxes during the course of the year. However, had I chosen not make any estimated tax payments do I owe a penalty on the full $2000 or the $1100 that I was suppose to make? Since I know I’ll actually owe more taxes than my required estimated taxes, I’ve decided not to find out.