Freezing in NH

I’m tired of hearing about gas prices, and I bet you all are too.  But it’s one of those “necessities” or at least a “perceived necessity” and the price is obvious from the street.  When the price of TVs goes up it’s hard to tell unless you’re in the store every day.  But when gas goes up you can see it just driving to work, and it gives you something to talk about. 

Anyway, it’s not clear where gas prices are going to go, although I think we’re going to be above $3/gallon for the foreseable future.  From an article:

Friday’s price uncertainty reflected a ongoing battle in the oil market between investors who feel prices have risen too far, and those who think global demand and tight supplies justify prices in the $130s - or higher.

[…]

Andy Lebow, senior vice president at MF Global LLC in New York, said investors are uncertain whether the past week’s nearly $10 price decline is a correction in a bull market, or a sign that the bull market has run its course.

[…]

If oil prices fall, gas prices will eventually follow, analysts say. At the moment, there may be too much momentum left over from oil’s sharp rise in recent weeks to stop gas prices from hitting $4.

Gas stations around here have yet to break the $4 barrier on unleaded gas.  It’s coming soon though, the station nearest my house is $3.98 today. 

So I just accepted a position requiring a longer commute.  I did calculate gas into my minimum acceptable salary, but figured it at $4/gallon.  Luckily we negotiated a salary above my minimum so I should be able to handle $6/gallon gas no problem. 

Just in time for my job search to be nearing conclusion (with the high probability of adding some miles to my commute) we hear that while oil is through the roof, the sky’s the limit. 

The NYTimes has an article about a Mr. Murti, an analyst at Goldman Sachs. 

A few years ago, rivals scoffed when he predicted oil would breach $100 a barrel. Few are laughing now. Oil shattered yet another record on Tuesday, touching $129.60 on the New York Merchantile Exchange. 

Ah, I remember the good old days when we freaked out when gas approached $3/gallon after Katrina.  A price I’d view fondly now, since we’re around $3.80 and might hit $4 by the end of the weekend. 

Mr. Murti, 39, argues that the world’s seemingly unquenchable thirst for oil means prices will keep rising from here and stay above $100 into 2011. Others disagree, arguing that prices could abruptly tumble if speculators in the market rush for the exits. But the grim calculus of Mr. Murti’s prediction, issued in March and reconfirmed two weeks ago, is enough to give anyone pause: in an America of $200 oil, gasoline could cost more than $6 a gallon.

And apparently he’s not alone.

Boone Pickens, the oilman turned corporate raider, said Tuesday that crude would hit $150 this year. But many analysts are no longer so sure where oil is going, at least in the short term. Some say prices will fall as low as $70 a barrel by year-end, according to Thomson Financial.

Yet another nostalgic moment: 

In the 1990s, oil research was a sleepy area at banks. Many analysts assumed oil prices would hover near $15 to $20 a barrel forever. If prices rose much above those levels, they figured, consumers would start conserving, suppliers would raise production, or both, causing prices to decline.

I need (ha, what a word) a scanner.  With the current price of gas and needing to be able to photocopy important things before they go in the mail, a scanner seemed like a good idea.  I had a $25 off of $75+ coupon from Staples for being a Business Rewards customer (we used to do a bunch of printing there) so I looked at their website.  Scanners run $80 and up, but multifunction machines (scanner, printer, copier, fax) start as low as $60.  I guess all that color ink will subsidize the cost.

Anyway, I ordered the cheapest machine over the weekend (got the free shipping on orders over $50 and discovered a $20 rebate during checkout, so it should come to about $40 total).  It arrived on Tuesday and I just went to set it up to scan something.  Plugged it in, beep, beep, beep.  You can’t do anything until you insert four ink cartridges (black, yellow, cyan, magenta).  Literally nothing can be done, I tried holding down the power button but it won’t power off, just beeps.

Okay, I dig those out of the box.  Insert all four, and it goes into some sort of ink setup process.  I check the manual…that will last four minutes!  Four whole minutes!  Plenty of time to write this post.

I’m happy to report that the olive bread turned out quite tasty.  It was in general a bit on the dense side, but I had trouble moving the loaves from the flour covered cloth to the pan without deflating them.  If I hadn’t run out of time, I would have let them rise a bit on the pan to overcome this.

My overall impression is tasty but time consuming.  I certainly would bake bread more if I had more time on my hands. 

King Arthur flour is a local staple, though they’re in VT not NH.  Fresh flour and mixes, high quality ingredients, good food.  (No, this is not a sponsored post.)  Anyway, they had a recent post about olive bread, and I think I’m going to get the starter going and try it out tomorrow.  The photo on the actual recipe looks pretty tasty.

Buy vs. Bake
BUY: Artisan bakery 20-ounce olive bread: $4.50, 23¢/ounce
BAKE: Homemade olive rolls (ingredients cost): $2.24, 11¢/ounce

I’d been skeptical about people’s claims that they were going to save their rebate or pay off debt with it.  While that might be true for PF bloggers, I suspect it’s not that true for the general public.  Oh sure, it goes in the savings account or off to the credit card company right away, but in the back of your head you’re thinking “it’s a free 600 dollars, I can treat myself to dinner out just this one time”.  And eventually you’ve spent a good chunk of it.  Everyone who pays down credit cards this month is going to spend them up a bit more next month. 

But mostly this was idle speculation and pessimism.  Until I read a Freakonomics blog post today.  They linked to three studies of the 2001 rebate.  The first said basically what you’d expect.  Some people planned to spend it (1/4 of respondents) and the rest were going to pay down debt or save.  They seem surprised that the richest folks were most likely to spend it, but those are the folks who have their savings and debt all planned out and know they have it to spend. 

But the third had the most interesting information.  Here’s the recap from the Freakonomics blog:

This paper begins with one particularly compelling observation: credit card companies know our social security numbers (and hence who got their rebates when), and they also know a lot about our spending and saving patterns.

And so once the authors were able to get a large credit card company to share with them (anonymized) data, their research project was made.

Recall that paper #1 had found that nearly half of all respondents expected to use the rebate to pay down their debt. It turns out that this was the initial response of many, but then over the ensuing nine months, spending rose by enough to account for around two-fifths of the average rebate. And for those who were liquidity constrained, spending rose even further.

Yup, they paid it down and then spend at least 2/5 of it later.  Actually a lower percentage than I thought, so maybe I’m too pessimistic.