Finding and managing your credit score

In the 'before time' if you had a pulse you could get credit. Those easy times are long gone and bankers seem to have dusted off their old credit analysis textbooks and are taking risk analysis a little more seriously. One's credit score (FICO) has always seemed to be shrouded in mystery and until recently it was somewhat difficult to find out your credit score.

For a good primer on your credit score I suggest you read this article by the Wall Street Journal (September 9, 2009)

Recently several paid services have popped up which will provide your credit score as well as report on any discrepancies in your credit. Why pay for it when you can get it all for free?

A few years ago congress mandated all three credit reporting agencies provide you one free credit report a year. You can get this free annual credit report at annualcreditreport.com All three credit reporting agencies make you go through several hoops in order to get the free report, and don't be suckered into paying for your credit score or a credit analysis. (Transunion requires you set up an account with them. It's free but annoying.) Eventually you'll get a copy of your credit report. I run mine every couple of years just to make sure everything is correct and have discovered discrepancies once or twice that I was able to resolve without too much pain or suffering.

Finding your credit score is a bit easier. Go to creditkarma.com and sign up. Creditkarma intends to make money pitching you various credit card and loan offers based upon your credit information. Creditkarma provides a very readable estimate of your credit score and breaks down how your credit behaviour affects your score. The credit score provided by Creditkarma is from just one of the 3 credit reporting agencies so it is not perfect, but it will be close.
In a later blog entry I'll go through each credit factor and how you can over time improve your score.

So far, no hurricanes this year

Sometimes it is what doesn't happen that can make news. While todays action in the oil market is due to rising fuel inventories [zerohedge] I'd like to point out what those on the Gulf of Mexico already know: so far there has not been a major hurricane strike the continental US.

As I have mentioned previously (Aug 13, 2009) a significant percentage of the pumping and refining capacity for America is in the Gulf of Mexico. Not having a hurricane stomping around will keep the oil and natural gas flowing.

Let's see if we can make it through the entire hurricane season without any damage. Look for solid bids on reinsurance stocks and debt if this happens.

Verleger on oil

Philip Verleger has some interesting things to say on why we had a spike in oil prices last year and when it could possibly happen again.

Philip Verleger, February 19,2009 at UCSD 59min 25sec

While it is an hour long presentation I strongly suggest watching it if you are interested in the energy markets.

The gist of his talk is how environmental regulation changes regarding low sulpher diesel excacerbated energy prices in 2008. The upcoming cleaner requirements for low sulpher shipping fuel may possibly create a simliar situation by 2020.

Consumer credit continuing to fall

Data published yesterday shows the continued retrenchment of the U.S. consumer.

I extended the graph's time period so you can see the last time consumer credit outstanding has consistantly been negative is before 1950.

Until the U.S. Consumer starts to borrow again any recovery will be very tepid.

Oil as a financial or physical asset?

The recent news of Deutche Bank shutting down their their Oil Fund elucidates the interplay between the financial and physical.

Here's an interesting article from Philip Verleger in late 2007 on the interplay of oil as both a physical asset used and consumed by the entire world as well as a financial asset. His prediction of $90 oil by 2010 was not extreme enough price or time wise!

Hugh Hendry and Eclectica fund August 2009 commentary

I ran across Hugh Hendry a several weeks ago and enjoy his irreverant style.








The Great Debate right now is inflation versus deflation and Mr. Hendry falls in the deflation camp.

Here's the August 2009 Eclectica commentary which he manages.

Hugh Hendry is also very bearish on China.





Mr. Hendry's positions are quite contrary. How many of his predictions come true will be interesting to observe.

Looking for that inventory bounce

I drive though the Port of Tacoma, which is a major import hub for several Asian car manufacturers, on my way to work every day.

From the freeway spur you can see acres and acres of cars, waiting for distribution to local and regional suppliers. During the panic you could see the inventory stacking up in all sorts of locations not usually used for storing cars. Parking lots for businesses, spare lots, etc. were full of row after row of brand new cars right off the boat.

Some of that excess inventory appears to have been worked off as the fields of cars are only located in their 'normal' staging areas.

Except this spot. This is a brand new warehouse just completed . Google maps' satellite photos don't even show the building yet. It does not contain a business but is completely full, and surrounded by new car inventory.

Driving around the building you can peer inside some of the garage doors and see the entire inside of the warehouse is full of cars as well. This is a 500,000 sq foot warehouse which is absolutely HUGE. Take the time to examine some of the photos below and look at the how many garage doors are along the long side of the building.

At least one real estate management firm is getting inventive on how to lease space.
(Photos were taken August 19th, 2009)












If you are looking for a brand new 500,00 sq foot warehouse right next to a rail hub in Tacoma, you might want to give them a ring.