Tell It To Al

You wouldn’t know we were in a five-year economic slump from the loot kids are spending on their high school proms.

Prom spending spiked for the second year in a row to an average of $1,139 per family in 2013, according to a survey released today by Visa Inc. That’s up 5% over last year. ( Click here for links to the survey and a handy app that helps people budget for the big night.)

“Prom has devolved into a competition to crown the victor of high school society, but teens shouldn’t be trying to keep up with the Kardashians,” said Nat Sillin Visa’s head of US Financial Education.

Some highlights from the survey:

* Northeastern families will spend an average of $1,528;  Southern families, $1,203; Western families, $1,079; and Midwestern families will spend an average of $722.

* Families with less than $50,000 in annual income plan to spend more than the national average, $1,245. Those with more than $50,000 will spend a little less, $1,129.

* Families with single parents plan to spend $1,563, almost double what married parents plan to spend, $770.

* Of the total costs, parents plan to pay for 59% with kids covering the rest.

Kids these days. Whatever happened to just stealing a bottle of liquor and a pack of cigarettes from your parents and calling it a great night?

One reason why our national debt is on track to eclipse $20 trillion is because The National Commission on Fiscal Responsibility and Reform, created by President Obama, could not come to an agreement about cutting spending and raising taxes.

The frustrated chairs of the commission – former Republican U.S. Sen. Alan Simpson and former Clinton administration official Erskine Bowles – then decided to make a proposal of their own, which has since gone no where, as well.

One of the leaders President Obama appointed to the commission was Honeywell International CEO David Cote. While he was looking for ways to cut government spending, Honeywell was sucking up a $25 million green-energy grant for a biofuels demonstration project in Hawaii.

Justin Danhof, general counsel of the National Center of Public Policy Research, went to Honeywell’s annual meeting in New Jersey this week to point this out.

Click here to read my column on MarketWatch.

What’s the worse job you can think of for 2013?

Actuary? Dental hygienist? Occupational therapist? No, those are some of the best jobs.

The worse job is newspaper reporter, according to the latest Jobs Rated report from CareerCast.com.

Man, I thought working as a bus boy at Topp’s Big Boy restaurant was my worst job. Then there was the time I worked as a commercial painter and had to strip, stain and refinish all the pews in a Catholic church. But, no, newspaper reporter, they tell me, was worse. I guess times have changed since I began my career at the Amarillo Globe-News.

Newspaper reporter fared worse than even lumberjack, roofer and meter reader.

“Ranked at job number 126 when the first Jobs Rated Report was published in 1988, newspaper reporters have fared poorly in the report for years due to the job’s high stress and tight deadlines, low pay and requirement to work in all conditions to get the story,” CareerCast explained in a press release.

“Ever-shrinking newsrooms, dwindling budgets and competition from Internet businesses have created a very difficult environment, finally driving the position to dead last on this year’s Jobs Rated Report. Ad revenues are 60% of what they were a decade ago and papers have continued to reduce traditional newsroom staff, which has declined about 30% since its peak in 2000, says a new report from the Pew Research Center.”

Click here to read more about why newspaper reporter is such a horrible job from CareerCast.com. The site projects the profession will shrink by another 6% this year.

For all it’s stated drawbacks, though, it still beats scrubbing other people’s teeth.

For the first time in a quarter century, central bankers from around the world will meet in Jackson Hole, Wyo., without the head of America’s own central bank, Reuters reports.

Federal Reserve Chairman Ben Bernanke says he got some sort of personal conflict when the annual retreat goes down in August. Click here to read more from Reuters. This meeting has happened every year since 1978 and this will be the first time our own Fed head won’t be there.

In these times of unprecedented monetary accommodation – a.k.a. money printing – what could be more important than  getting together with the world’s most powerful central bankers in a genuine, ride ‘em cowboy town?

Maybe Jackson Hole reminds Uncle Ben way to much about the hole he’s digging, ratcheting up the Fed’s balance sheet to the tune of more than $3 trillion as the Fed continues purchased $85 billion wirth of Treasurys and mortgage-back securities every month.

Or maybe we can already guess what Uncle Ben would announce if he attended:  We haven’t quite corralled our economic problems yet. So we’ll just keep printing money until the cows come home! Yippie-yi-yo-yippie-kai-yea!

Click here to read more from Bloomberg.

Last week’s Senate vote proved there’s not a thing lawmakers can do to regulate guns. Click here to watch me about it with Cynthia Hessin, host of Colorado State of Mind, and the Denver Post’s Alicia Caldwell, on Rocky Mountain PBS.

Then, one day after the show, someone lets lose with a gun at a marijuana rally. Two were shot. The rally was ended.  Click here to read about that in The Denver Post.

SeaWorld rode the waves with an  initial public stock offering on Friday that soared about 25% in it’s first day of trading.

One of the lead underwriters was none other than Goldman Sachs, also known as the great vampire squid. Goldman is also going to redeem some of the debt instruments it has issued SeaWorld as part of the deal.

Buyout firm Blackstone Group purchased SeaWorld from Anheuser Busch in 2009, flooding the theme park operator with debt. Friday’s IPO valued the company at $2.5 billion and the company has $1.8 billion in long-term debt.

Investors looked beyond the bloated balance sheet, though, lured by a promised 3% annual dividend.

Click here to read my column in The Sunday Wall Street Journal. And click here to watch me talk about this and other stories with Will Ripley of Denver’s NBC affiliate, 9News.

Mark these words that U.S. Treasury Department official Mary Miller delivered today:

“No financial institution, regardless of its size, will be bailed out by taxpayers again.”

“Shareholders of failed companies will be wiped out,”  she said in prepared remarks at a conference in New York City. “Creditors will absorb losses; culpable management will not be retained and may have their compensation clawed back; and any remaining costs associated with liquidating the company must be recovered from disposition of the company’s assets and, if necessary, from assessments on the financial sector, not taxpayers.” Click here for the full content of her speech.

This is precisely what did not happen in the great financial collapse of 2008. But Ms. Miller swears the laws, and the times, have changed.

Given the mad scramble to save everything from giant Wall Street investment banks, Chrysler and General Motors, money market funds and even garden variety companies that were dependent on trading commercial paper for their short-term financing needs, the market has every reason to be skeptical of these claims.

It won’t matter what the Dodd-Frank financial overhaul act says if the whole system begins to fail again. Someone will lock our leaders in a room and tell them that if they don’t come up with the bailout money our ATMs won’t work and Martial law will rule the lands – which is what Treasury Secretary Hank Paulson did when it happened on his watch.

We can only hope it doesn’t happen again. And if it does, it will be of little comfort to recall these words and see whether Ms. Miller was right.

For real estate investor Bill Marvel of Grand Junction, Colo., this was a pathway into an alleged Ponzi scheme.

As a pilot Mr. Marvel says he would never yield control of his plane to someone else, yet he did it with $3.5 million he invested through a company called DBSI Inc. in Meridian, Utah.

Mr. Marvel is a former astronautical engineer and has been investing in apartment buildings for 30 years. He says he took every precaution before investing in DBSI. He hopes his story will serve as a lesson to others: When it comes to investing, never take your hands off the stick.

“DBSI essentially operated like a Ponzi scheme … almost entirely dependent on funds from new investors to pay old investors,” according to an indictment from a federal grand jury in Boise, Idaho, last week.

Click here to read my column on MarketWatch. And click here to read more details about the case against DBSI from the Associated Press.

Is it cheaper to prepare meals at home rather than eat out?

A new report from GoBankingRates.com concludes it is not. “With fast food restaurants continuously adding value menus and grocery costs rising, dining out for many families has become the financial preference,” the website writes.

Click here to read the report. Basically, we’ve got grocery prices rising at a time when restaurants are still holding down prices to compete. In many cases, eating out can indeed be cheaper than eating at home.

Of course, it all depends on what you eat.

There’s no way, for instance, that Whole Foods can compete on price with $1 double cheeseburgers from McDonald’s. But is this a fair comparison? And if you throw in the mounting medical costs from America’s obesity crisis – largely due to the ubiquity of fast food – the comparison breaks down further.

It still cheaper to prepare a box of macaroni and cheese at home than to buy it at Noodles & Co. – if that’s all your going to eat.

Lunch at home could mean a hastily prepared bologna sandwich versus an $8 burrito at the Chipotle Mexican Grill down the street. So I usually go with the burrito.

Like a lot of people, I eat out almost every day. Sometimes twice a day. Many people I know eat out a lot more than they did just 10 years ago. We are all pressed for time and we get hungry.

This is why America is just bursting with restaurants, and a sluggish economy hasn’t halted their growth. Nor has it slowed the growth of our collective waistlines.

Ron Johnson’s spectacular flame-out as CEO of J.C. Penney will likely make for yet another Harvard case study on how not to run a company.

Critics can point to a long list of gaffes from alienating the customers to poor execution.

Harvard business professor Rob Kaplan tells me the retailer simply did not have the cash on hand to take the kind of risks Mr. Johnson’s plans imposed on the enterprise. It’s a common mistake.

Mr. Johnson came into J.C. Penney as the lauded turnaround artists. He’d achieved amazing success at Target and then at Apple at a time when it was rolling out iPods, iPads and iPhones.

Mr Kaplan has also authored a book I think Mr. Johnson might want to read now that he’s got some time on his hands after stepping down from his post. It’s called “What you’re really meant to do: A Road map for reaching your unique potential.”

It’s a good read for anyone who has achieved success only to lose their way.

Click here to ready my column on MarketWatch.