We’re not surprised to see a product like health insurance insurance emerge in this environment, when evryone is freaked out about whether they’ll have a job in six months. For $50 per month, United Health promises to quiet at least one of your worst fears.
Of course, there would’ve been little market here six months ago, when things were going better, jobs felt secure, and the idea of spending on insurance just to be able to buy insurance might’ve seemed like a big waste.
Mike Masnick reminds us that back in May, Chrylser offered a promotion to consumer to lock-in a price of $2.99 at the pump. Now, fortunately this wasn’t a true lock-in in the sense that consumers today are compelled to pay $2.99. But still:
With fuel prices continuing to rise, consumers asked for help. Chrysler answered the call by creating “Let’s Refuel America,” the innovative gas guarantee program for buyers of Chrysler vehicles.
Program participants, simply use a special card linked to their MasterCard® or Visa® credit card account. The card may be used to purchase enough fuel at $2.99 per gallon to travel up to 12,000 miles per year for 3 years. So no matter what the price at the pump says, you’ll never have to pay more than $2.99 per gallon for qualifying fuel.
But really, now that gas is at levels that seem downright affordable, is there any appetite to hedge at these levels? Why isn’t Chrysler running a screaming promotion that says: PEAK OIL IS STILL COMING! LOCK In $2 GAS! Because drivers would want to wait longer.
But it’s not just consumers, companies did it too, and often worse. As oil rose faster and faster, more airlines got the hedging bug, all trying to be like Southwest. But when oil collapsed, several had to take big (non cash) writeoffs on these positions. Are any rushing out to buy jetfuel hedges now that oil is below $50?
One of the problems was that the airlines thought they were hedging, but they really weren’t. They were speculating. They were hedges in name only, but the only made sense if oil moved in one direction: up. A true hedge can reduce risk of a major swing, but shouldn’t kill you if the underlying price doesn’t go in your direction.
In a sense, the old Chrylser scheme was a really good hedge — it had the potential to save consumers money if gas went to $5/gallon, but it’s not killing anyone now that the price has dropped below $2.