Mr Mortgage Was Robbed This Weekend – You’re Next

Posted on May 19th, 2008 in Mr Mortgage's Personal Opinions/Research

My family and I were retuning from the lower Sierra Nevada foothills today after enjoying a beautiful weekend at our favorite lake. The water was great, skiing wonderful and fishing fantastic. We didn’t want to leave…it was one of ‘those’ weekends.

On the way home, I stopped at the local Chevron to fill up, as I have done dozens of times in the past. I pull up to the pump, swipe my card and quickly jump back into the truck while the innocent looking device rips into my wallet like a beaver does a tree limb.

I sit back inside the car and watch the truck’s gas gauge rise, as I hear the pump in the background clunking along. I actually counted the clunks…every 18 times it made that sound, it cost me $7.22. Then, to my surprise the pump clunks and all noise stops much sooner than I expected.

Hey, but the 25 gallon tank on my GMC DuraMax diesel truck was just over 3/4 full! I figured my debit card gas authorization limit, set by the gas station, had been reached so I got out of the car to re-swipe and complete the fill-up.

I looked at the pump and sure enough, I was correct. The authorization limit had been reached alright…BUT AT $100 FREAKING DOLLARS! I looked again in amazement, then told my wife to check it out. I grabbed my camera and snapped the photo below. As you can see in the photo below, I only used a little more than 20 gallons of diesel. This very same fill-up cost around $80 just two weeks ago. And this a fairly large Chevron on a well-traveled highway, near Sacramento. Not some one-pump repair shop in the sticks!

“Thank you Mr Bernanke is all that I could say.” Who else is there at which to point the finger?

We can talk about Asian and Indian growth, weak refining capacity in the US and geopolitical risk premiums all day long, but I am rate of change kind of guy. The massive rate of change in crude and gas prices are perfectly in-line with the dramatic cut in the Fed Funds Rate, weakening dollar etc. Some will say we have artificially low prices for years and now are catching up to reality. Perhaps, but again the rate of change over such a short period of time is what is significant to me and likely most consumers.

To this mortgage insider and Wall Street outsider the following are what I have noticed have had the biggest rate of change since Bernanke started to ratchet down rates at the fastest pace in history after spending months in 2007, along with Hank Paulsen, denying the problem even existed.

-dollar crashing
-crude oil and gasoline rising
-food costs rising
-mortgage loan, credit card and auto loan defaults rising
-foreclosures rising
-banks Level 2 ‘assets’, Level 3 ‘assets’ and leverage rising
-stock holder equity shrinking
-the Fed’s balance sheet shrinking
-mortgage rates rising
-home values falling

and finally, since the last shock and awe move on the day Bear Stearns collapsed…-stock prices rising of the very same handful of banks who invented the recent manifestation of structured finance that has blown up in the world’s face and that are now being rallied around by the financial press and Wall Street.

On the surface it sure looks like 300 million Americans and God knows how many billions of people globally, have been thrown under the bus to save a handful of alchemist banks who got us into this mess in the first place.

After seeing the $100 price tag for a partial fill, I actually joked about calling AAA, as whatever cost I incurred over the free towing that comes with my premium subscription maybe cheaper than the next fill-up.

Perhaps $5 is not that shocking to some, but it sure caught my attention. Different folks will have different price trigger points but I think that the $5 price tag is psychologically significant. I spent the next hour after filling up talking about how what we need to do to reduce our personal gas consumption. -Best, Mr Mortgage




64 Responses to “Mr Mortgage Was Robbed This Weekend – You’re Next”

  1. Hi, Mr Mortgage

    A GMC DuraMax is indeed a 6.6 liter Diesel Monster. A real survival truck.

    How many miles do you drive with 1 Gallon.

    The 2007 version looks “by the way” great.
    You can always convert it to a PPO Truck. Driving on Pure Planting Oil as a last resort when conventional GAZ has gone… But you’re not alone then.

    Wim from the Netherlands where diesel costs 1.46 euro a liter. Thats 5.52 euro a gallon. This converted in usd will cost me a lousy 8.66 usd a gallon
    So if prices in the USA double you still have cheap GAZ
    They only way to stall prices is consume less….

  2. For all of you on the “Religious Left”…than you Woodstock Hippies for no drilling, no nuclear, no refineries, no nothing except “Organic Cum-Bai-Yah”! Not in my back yard. Well at least they can travel in their VW Bus, smoke dope, and live of of daddies…aka…Professor at one of America’s Academies. Let’s all become hunter-gatheries and go Green.

  3. I totally sympathize about the rude awakening at the pump. I had a shocker too when I last filled up my Camry. I’m used to it costing $45 every 2.5 weeks, but this time it cost me $57. I was doubly concerned, because:
    1)my husband and I have a definite gas monthly gas budget that we keep to
    2)it was only mid month
    3) we didn’t have enough left for the rest of the month to completely fill even my husband’s small gas-stingy car
    4)We do most of our travel in my husband’s car
    5)My husband bikes to work 2/5 days of the week
    5)I’m off of school right now so I haven’t driven as much

    We have started looking quite seriously at motorscooters.
    In the meantime, I’m trying to combine a lot more errands and I’m getting really reluctant to drive distances.

    I also suspect that the current inflation of gas prices can be attributed to the mortgage crisis. When our whole nation (or a higher number than ever before) starts defaulting on loans, it would be perfectly understandable if other nations didn’t want to loan to us as much and wouldn’t trust our money. If they don’t trust our money, then it isn’t worth as much. If it isn’t worth as much, it takes more of it to buy products from other nations.
    Furthermore, I really wonder just how smart it really it is for banks to tap into the fed all the time. It seems like it is only a matter of time before the fed goes bust too.

    I remember about five years ago when there were a number of news stories making the case that Americans were borrowing to support their lifestyle and living beyond their means. It is beginning to seem to me as if the banks are doing the same. The insolvency is moving from the individual level further up the organizational level. If it isn’t stopped somewhere, it will continue to spread higher.

  4. Consume less. That’s unamerican ! 🙂

  5. T. Boone Pickins sees 150$ oil.

    Here we come with nasty nasty nasty stagflation. US PPI is exploding too. 0,6% in one single month. Not good for GM, not good for GMAC, not good for all these suckers in 5 and 10 year bonds, and not good for real estate.

  6. Get used to it Mr. Mortgage.

    This morning the futures contrats on oil 2016 !!!!!!!!!
    was quoted at 140$ !!!!!!!!!!!!!

    The market is expecting high prices for the next 8 years !
    8 years !

    Not good for McManshions. Not good for anything that sucks a lot of energy for heating or air condionning.
    Not good for US treasuries. Not good for the dollar.

  7. Index data delayed 15 min.
    DJIA 12828.7 -199.48
    NASDAQ 2492.26 -23.83
    NIKKEI 13,926.30 -233.79
    RUSSELL 735.64 -2.81
    NYSE 9536.01 -66.77
    TSX 15047.3 63.14
    USD 72.04 -0.42
    Crude Oil 130.10 +1.12

    And what would happen if Hugo Chavez or Amahijihzad coordonate a smallish cut of let’s say 2 million barrels ?
    Or Nigeria blows up. Or Irak ? Sell your big cars.

    The big McManshions that cost 5,000$ per year to heat or cool are not finished crashing. It’s finished. Learn to be a little bit more japaneese and european. The same goes for us in Canada. We are real energy hogs too. We have a lot oil, but it’s killing us.

  8. Mr. Morgage, that wouldnt be lake Tahoe would it?
    What’s your take on the recreation RE market around Tahoe or CA in general?
    I’d guess people will give up their cabin before their primary house…

    – Anders

    BTW: $10/g in Norway, and we produce 2m barrels/day!

  9. […] Mr Mortgage Was Robbed ($4.949/gal) This Weekend – You’re Next  […]

  10. Here is a Suadi Arabian joke for you.

    Oil Price average nect 5 years $100/Bl, $125/Bl, $150/Bl, $65/Bl, $100 Bl.

    The truth in the humor is that OPEC will keep prices high and when consumers and businesses cut back and conserve they cut the price where conservation costs $$ then slowly inflate the price.

    I do not think the real threat to world stabilty is peak oil but I do think that there is a real threat to the world petro economy if there is a tech break through with battery technology and solar power tech and oil marketes collapse due to lack of demand in the next 20 years.

  11. that wasnt Lake tahoe, it was a lake near Grass Valley/Nevada City. I knew gas was going up but this jump was insane.

  12. By the way, hurricane season has not even arrived.
    I remenber Katrina. If you were China and had all this stupid overprinted US funny money in your reserves, what would you do if you are really intelligent ?

    Buy some gold, buy some copper, zinc, lead, corn, soja, and yes buy some oil etc… If you were a foreigner investing in US treasuries, or the “wonderful” US racket-market, you would have been robbed repeatedly. It’s not my case. The only thing I am doing in the US markets is shorting your corrupt and wrotten banks.

  13. If you are headed up HWY 49, it is generally cheaper to fill up at the Flyers in Auburn, or at the Arco station when leaving Auburn headed towards GV/NC. If you are towing a boat, the Arco would likely be the easier to deal with. Those are my usual filling holes.

  14. […] It has been two weeks since I got hit upside the head with a whopping $100 partial diesel full-up and quite frankly forgot about the whole incident.  Link to 5/19 Post. […]

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