ACF Family Cash Flow

25 ways to waste money - by Erin Burt, Contributing Editor

2011-03-02T18:02:00.000-08:00

From finace.yahoo.com web site, written by Erin Burt. Good summary and reminder.

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1. Carrying a balance. Debt is a shackle that holds you back. For instance, if you have a $1,000 balance on a credit card that charges an 18% rate, you blow $180 every year on interest. Get in the habit of paying off your balance in full each month.

2. Overspending on gas and oil for your car. There's no need to spring for premium fuel if the manufacturer says regular is just fine. You should also check to make sure your tires are optimally inflated to get the best gas mileage. And are you still paying for an oil change every 3,000 miles? Many models nowadays can last 5,000 to 7,000 miles between changes, and some even have built-in sensors to tell you when it's time to change the oil. Check your manual to find the best time for your car's routine maintenance.

[Click here to check savings products and rates in your area.]

3. Keeping unhealthy habits. Smoking costs a lot more than just what you pay for a pack of cigarettes. It significantly increases the cost of life and health insurance. And you'll pay more for homeowners and auto insurance. Add in various other expenses, and the true cost of smoking adds up dramatically over a lifetime -- $86,000 for a 24-year-old woman over a lifetime and $183,000 for a 24-year-old man over a lifetime, according to "The Price of Smoking" (The MIT Press).

Another habit to quit: indoor tanning. There is now a 10% tax on indoor tanning services. As with cigarettes, the true cost of tanning -- which the World Health Organization lists among the worst-known carcinogens -- is higher than just the price you pay each time you go to the salon.

4. Using a cell phone that doesn't fit. How many people do you know who have spent hundreds of dollars on fancy phones, and then pay hundreds of dollars every month for the privilege of using them? Your phone is not a status symbol. It is a way to communicate. Many people pay too much for cell phone contracts and don't use all their minutes. Go to BillShrink.com or Validas.com to evaluate your usage and see if you can find a plan that fits you better. Or consider a prepaid cell phone. Compare rates at MyRatePlan.com.

5. Buying brand-name instead of generic. From groceries to clothing to prescription drugs, you could save money by choosing the off-brand over the fancy label. And in many cases, you won't sacrifice much in quality. Clever advertising and fancy packaging don't make brand-name products better than lesser-known brands.

6. Keeping your mouth shut. No one wants to be a nuisance. But by simply asking, you may be able to snag a lower rate on your credit card.

When shopping, watch for price discrepancies at the cash register, and make a habit of asking, "Do you have a coupon for this?" You might even be able to haggle for a lower price, especially on seasonal or perishable items, floor models or big-ticket purchases. Many stores will also match or beat their competitors' prices if you speak up. And try asking for a discount if you pay cash or debit -- this saves the store the cut it has to pay the credit-card company, so it may be willing to give you a deal. It doesn't hurt to ask.

[How You Can Get Richer This Year]

7. Buying beverages one at a time. If you're in the habit of buying bottled water, coffee-by-the-cup or vending-machine soda, your budget has sprung a leak. Instead, drink tap water or use a water filter. Brew a homemade cuppa joe. Buy your soda in bulk and bring it to work. (Better yet, skip the soda in favor of something healthier.)

8. Paying for something you can get for free. There's a boatload of freebies for the taking, if you know where to look. Some of our favorites include restaurant meals for kids, credit reports, software programs, prescription drugs and tech support. You can also help yourself to all the books, music and movies your heart desires at your local library for free (or dirt cheap).

9. Stashing your money with Uncle Sam rather than in an interest-earning account. If you get a tax refund each April, you let the government take too much money in taxes from your paycheck all year long. Get that money back in your pocket this year -- and put it to work for you -- by adjusting your tax withholding. You can file a new Form W-4 with your employer at any time.

10. Being disorganized. It pays to get your financial house in order. Lost bills and receipts, forgotten tax deductions, and clueless spending can cost you hundreds of dollars each year. Start by setting up automatic bill payment online for your monthly bills to eliminate late fees and postage costs. Then get a handful of files to organize important receipts, insurance policies, tax documents and other statements.

Finally, consider using free budgeting software such as Mint.com to see exactly where your money goes, making it much harder for you to lose track of it.

11. Letting your money wallow in a low-interest account. You work hard for your money. Shouldn't it work hard for you too? If you're stashing your cash in a traditional savings account earning next-to-nothing, you're wasting it. Make sure you're getting the best return on your money. Search for the highest yields on CDs and money-market savings accounts. And consider using a free online checking account that pays interest, such as ones offered by Everbank and ING Direct.

Your stocks and mutual funds should be working hard for you, too. If they've been lagging behind their peers for too long, it could be time to say goodbye. Learn how to spot a wallowing fund or stock.

12. Paying late fees and missing deadlines. Return those library books and movie rentals on time. Mail in those rebates. Submit expense reports on time for reimbursement. And if you make a bad purchase, don't just stuff it in the back of the closet and hope it goes away. Get off your duff, return it and get your money back before you lose the receipt.

13. Paying ATM fees. Expect to throw away nearly $4 every time you use an ATM that isn't in your bank's network. That's because you'll pay an ATM surcharge, and your own bank will hit you with a non-network fee. Consider switching to a bank, such as Ally Bank, that doesn't charge ATM fees and reimburses you for fees other banks charge. Another way to avoid fees if there's not an ATM in your bank's network nearby is to get cash back when you make a purchase at the grocery store or drugstore.

14. Shopping at the grocery store without a calculator. Check how much an item costs per ounce, pound or other unit of measurement. When you comparison-shop by unit price, you save. For example, if a pack of 40 diapers costs $13, that's 33 cents per diaper. But if you buy a box of 144 diapers for $35, that's 24 cents per diaper. You save 27%! (Of course, buying more of something only saves money if you use it all. If you end up throwing much out, you wasted money.)

[6 Costs You Should Always Negotiate]

15. Paying for things you don't use. Do you watch all those cable channels? Do you need those extra features on your phone? Are you getting your money's worth out of your gym membership? Are you taking full advantage of your Netflix, TiVo and magazine subscriptions? Take a look at what your family actually uses, then trim accordingly.

16. Not reading the fine print. Thought you were being smart by transferring the balance on a high-rate credit card to a low-rate one? Did you read the fine print, though? Some credit-card companies now charge up to 5% for balance transfers. Also watch out for free checking accounts that aren't so free. Some banks are starting to charge fees unless you meet certain criteria.

17. Mismanaging your flexible spending account. For some people, that means failing to take advantage of their workplace FSA, which lets employees set aside pre-tax dollars for out-of-pocket medical costs. Other people fail to submit receipts on time. And the average worker leaves $86 behind in his or her use-it-or-lose-it FSA account each year, according to WageWorks, an employee benefits provider.

18. Being an inflexible traveler. You'll save a lot of money on travel if you're willing to be flexible. Consider traveling before or after peak season when prices are lower. Or search for flights over a range of dates to find the lowest fare. Booking at the last minute also can save you money because hotels and airlines slash prices to fill rooms and planes. And flexibility pays off at blind-booking sites, such as Priceline or Hotwire, which offer deep discounts if you're willing to book a room or flight without knowing which hotel or airline (or other details about the flight) you're getting until you pay.

19. Sticking with the same service plans and the same service providers year after year. Hey, we're all for loyalty to trusted service providers, such as your bank, insurer, credit-card company, mutual fund, phone plan or cable plan. But over time, as prices and your circumstances change, the status-quo may not be the best deal any more. Smart consumers are always on the lookout for bargains.

20. Making impulse purchases. When you buy before you think, you don't give yourself time to shop around for the best price. Take the time to compare prices online, read product reviews and look for coupons when appropriate.

Make it a policy to give yourself a cooling-off period in case you're ever tempted to make an impulse purchase. Go home and sleep on the decision. More often than not, you'll decide you don't need the item after all.

[14 Ways to Save Money on Groceries]

21. Dining out frequently. Spending $10, $20, $30 per person for dinner can be a huge drain on your wallet. Throw in a $6 sandwich for lunch every day and you've got quite a leak. Learning to cook and bringing your lunch from home can save a couple hundred bucks each month. When you do go out, consider getting carry-out instead of dining in (you'll save on the tip and drink), skip the overpriced appetizer and dessert, and search the Web for coupons ahead of time.

22. Trying to time the stock market. In trying to buy low and sell high, many people actually do the opposite. Instead, employ the simple strategy of "dollar-cost-averaging." By investing a fixed dollar amount at regular intervals, you smooth out the ups and downs of the market over time. If you take out the emotion and guesswork, investing can become less stressful, less wasteful and more successful.

23. Buying insurance you don't need. You only need life insurance if someone is financially dependent upon you, such as a child. That means most singles, seniors or kids don't need a policy. Other policies you can probably do without include credit-card insurance (better to use the premium to pay down your debt in the first place), rental-car insurance (most auto policies and credit cards carry some coverage), mortgage life insurance and accidental-death insurance (a regular term-life insurance policy will do the trick).

24. Buying new instead of used. Talk about a spending leak -- or, rather, a gush. Cars lose 20% of their value the moment they're driven off the lot and 65% in the first five years. Used models can be a real value because you can get a car that's still in fine working order for a fraction of the new-car price. And you'll pay less in collision insurance and taxes, too.

Cars aren't the only things worth buying used. Consider the savings on pre-owned books, toys, exercise equipment, children's clothing and furniture. (Of course, there are some things you're better off buying new, including mattresses, laptops, linens, shoes and safety equipment, such as car seats and bike helmets.)

25. Procrastinating. Time is an asset money can't buy. Start investing for retirement as soon as possible. For instance, if a 40-year-old saves $300 a month with an 8% return per year, he'll have $287,000 by age 65. If he had started saving 15 years earlier at age 25, he'd have more than $1 million.

Lessons From the Recession: 10 Things We Learned in 2010

2010-12-29T00:02:00.000-08:00

http://www.walletpop.com/2010/12/28/lessons-from-the-recession-10-we-learned-in-2010/

Excellent article, all good common sense.

I'd add "Eat at home often", and "Maintain good health".

Unemployment rate remains unchanged

2010-08-20T08:30:00.000-07:00

As of July 2010, nation-wide unemployment rate remains at 9.5%. Consumer Price Index (CPI) increased 0.3%.

Warranty Direct Top 100 Most Reliable Used Cars Of The Past Decade

2010-03-10T13:44:00.000-08:00

1 Honda Accord 2 Subaru Forester 3 Mazda MX-5 4 Mitsubishi Carisma 5 Toyota Yaris
6 Honda Civic 7 Nissan Almera 8 Honda CR-V 9 Toyota RAV4 10 Nissan Micra

11 Lexus IS 200 12 Mazda 626 13 Jaguar X-Type 14 Toyota Landcruiser 15 Volvo S/V40
16 MINI (BMW) 17 Suzuki Vitara 18 Mazda 323 19 Toyota Carina E 20 Saab 9-5

21 Lexus LS400 22 Ford Ka 23 Rover 45 24 Hyundai Lantra 25 Mercedes SLK
26 Citroen Xsara 27 Ford Cougar 28 Subaru Impreza 29 Skoda Octavia 30 Audi A4

31 Nissan Primera 32 Toyota Avensis 33 Volvo 850 34 Vauxhall Corsa 35 Seat Toledo
36 Volkswagen Golf 37 Daewoo Lanos 38 Fiat Brava 39 Hyundai Coupe 40 Mitsubishi Shogun

41 Rover 25 42 Mercedes CLK 43 Fiat Marea 44 Ford Focus 45 Peugeot 106
46 MG MG TF 47 BMW Z3 48 Hyundai Accent 49 Volkswagen Polo 50 Fiat Punto

51 Vauxhall Zafira 52 Mercedes C-class 53 Volvo S60 54 Toyota MR2 55 Mazda Xedos 6
56 Ford Puma 57 Vauxhall Astra 58 Vauxhall Omega 59 Chrysler Neon 60 Audi A2

61 Ford Fiesta 62 Ford Mondeo 63 Vauxhall Corsa 64 Citroen Saxo 65 BMW 3 Series
66 Vauxhall Vectra 67 Isuzu Trooper 68 Mercedes M-Class 69 Subaru Legacy 70 Rover 400

71 Fiat Ulysse 72 Mercedes E-Class 73 Renault Clio 74 Toyota Celica 75 Peugeot 306
76 Peugeot 406 77 Volvo S70 78 Rover 75 79 Daewoo Matiz 80 Peugeot 206

81 Mazda MX-3 82 Vauxhall Tigra 83 Seat Ibiza 84 Peugeot 106 85 Renault Megane
86 Peugeot 406 87 Saab 9-3 88 Audi A3 89 BMW X5 90 Mercedes S-class

91 Toyota Corolla 92 Seat Alhambra 93 BMW 5-series 94 Daewoo Nubira 95 Alfa Romeo 145
96 Saab 900 97 Mazda MX-6 98 Jaguar S-Type 99 Daewoo Leganza 100 Porsche Boxster

Haggling for used car buying - repost

2010-03-09T00:05:00.000-08:00

Thanks to Tech Support Guy site, and Angelize56 for the posting - article dated back to 2002.

Negotiating for a Used Car

Negotiating.

The very word makes most people cringe. Add the words used cars, and some people run in terror. But negotiating doesn't have to be a grueling experience. With the right preparation and a few simple rules, negotiating can be fun and exciting. And if you make a good deal, it gives you a great sense of satisfaction.

There are different negotiating styles for different personalities. And if you use Edmunds.com True Market Value pricing, you can avoid much of the haggling. We'll address this point in more detail later.

Here are three simple rules that should carry you safely through the negotiating process:

Know the numbers before you begin negotiating
Always be ready to walk away from a deal you don't like
Make a low offer and sweeten the deal by small increments

Let's look at each step in more detail.

Rule 1: Know the Numbers

By now, you should know the approximate value of the used car you're considering. Just knowing this value will make you a better negotiator. After all, if you know the car is worth only $12,000 and the dealer is insisting it's worth $14,000, it will be difficult for him to convince you to buy it.

Rest assured that the dealer will give you all kinds of reasons to justify his price. The dealership's overhead is expensive, they had to clean or repair the car, your Internet figures are "way off," and the like. But if you have looked up the TMV of the car on Edmunds.com (and included all options and allowed for the mileage) you should be very close to the right price.

Before you leave for the car lot, you should print out Edmunds.com True Market Value page for the used car you want to buy. If you have been shopping for some time, you will have also gained first-hand knowledge of car prices in your area. Then when you spot the right car, at a good price, you can make a competitive offer.

Rule 2: Always Be Ready to Walk

If a dealer knows you are in love with the car you just test-drove, you will be in a weak position to negotiate. But if he thinks you might walk away without buying, he will treat you carefully. Open negotiations by saying, "I'm ready to buy today if we can reach an agreement on the price." With this phrase, you are striking just the right balance. Why? You are letting the dealer know that you're serious about buying a car, not just "kicking tires." A dealer is more apt to give you his best price if he feels he might have a solid sale right then and there, as opposed to throwing a higher price out to someone whom he feels is just wasting the dealership's time.

There are people who say that the best way to get a good deal on a used car is to walk out three times. We don't believe the process has to be that drawn out. And it doesn't have to be confrontational either. But you do need to let the dealer know that you will walk out if you don't get the price you want.

Jumping ahead a little, here's a simple tip. After you've made your offer to the salesperson, and he's taking your offer to his manager, get up and leave the sales room. It shows that you don't feel under obligation to remain under their control. Go look at the cars in the show room. Or go to the restroom. Or tell them you need to get something out of your car. It's a little show of force that will help you make a good deal.

Rule 3: Make a Low Offer and Sweeten the Deal Slowly

The best way to explain this rule is to use some real numbers. Let's return to the car-buying exploits of Edmunds.com editors John DiPietro and Phil Reed.

John and Phil had located a 2000 Mazda 626 LX for $12,595. When Phil's financing was delayed, they continued shopping and spotted a newspaper ad for a 2000 Mitsubishi Galant ES, with 19,000 miles for $12,500. They were curious to see if they could get the Mitsubishi for a substantially lower price than the Mazda.

Phil called the number listed in the ad and learned the Mitsubishi was at an Acura dealership in Southern California. Although the price was listed as $12,500 he asked the dealer what it was selling for. "We have it listed for $12,995," the dealer said. When Phil said it was listed in the newspaper at $12,500, the dealer corrected himself. "We haven't got the new listings yet," he explained. "Anyway, it's the end of the month. And the car's been on the lot a long time. So come on down and take advantage of me."

Using "CarFax"

A valuable resource when used car shopping is the service known as CarFax. If you enter a car's Vehicle Identification Number (VIN number) you can obtain a report of the car's history. Most significantly, you will find if it has a "salvage title." This means an insurance company, probably because of an accident, considered it a total loss. But you may also learn if there were any recalls and how many owners the car has had.

The CarFax service costs $14.95 for a single car. But you can get an unlimited number of reports during a two-month period for $19.95. Our recommendation is that you initiate this service at the beginning of your car buying process and check every car before you seriously consider buying it.

Phil and John drove to the Acura dealership and test-drove the Mitsubishi. Together, they inspected the car as carefully as possible without taking it to a mechanic. (In part two, we explained that if a car is still under factory warranty, has been well-maintained and has a solid reliability record, it isn't essential to take it to a mechanic before buying it. However, if you have doubts about the car's mechanical condition or don't feel confident evaluating this yourself, have it inspected by a mechanic.)

Making an Opening Offer

When the salesman was out of earshot, Phil and John decided they would try to get the car for $11,800 and open by offering $11,500. When the salesman returned Phil told him he was ready to make an offer on the car. He explained that they had already made a deal on a Mazda 626 LX at another lot. The deal on the Mazda was for $12,595, and he really liked that car. But he said he also liked the Mitsubishi and would buy it if the price were an improvement over the Mazda. Therefore, he said, he was willing to pay $11,500.

The salesman received the offer with a puzzled frown. He asked if the offer was "out the door." Or was it before tax and license? "Before tax and license fees," Phil said. The salesman invited them inside, and they went into a sales room. The salesman pulled out a "four square" worksheet (used by car salesmen to negotiate) and asked a series of questions. Phil had already stated that he was a cash buyer, with no trade-in, so this step was simple.

The salesman began searching for a way to make the deal more attractive to the sales manager. Did Phil want to buy Lo Jack or an extended service warranty? He declined both of these offers.

Finally, John said, "We know this is below your asking price. But take it in to your boss and see what happens."

The salesman left. While he was gone John, a rabid car enthusiast, busily inspected the new models on the showroom floor. Phil went to his car to get his cellular phone.

The salesman returned moments later with the four square worksheet. Phil's offer of $11,500 was circled with a large question mark beside it. Apparently, this was the manager's way of saying that it was just too low to consider. The salesman once again began explaining that their initial asking price was $12,995. So for them to consider such a low offer was out of the question.

Phil countered by reminding the salesman that they were there because of the advertised price of $12,500. Furthermore, he said, the Mazda really was a great car at $12,595 and he was tempted to return and buy it. However, Phil admitted that the $11,500 offer on the Mitsubishi might have been low so he increased his offer to $11,800. The salesman left to take this new offer to his sales manager.

Don't Be Distracted When Negotiating

Moments later the salesman returned with the news that they would consider selling the car for $12,295 if Phil bought a Lo Jack contract or an extended service warranty. Phil said he wasn't interested in either of these extras and his offer was still $11,800. The salesman said without the extras, they wouldn't be making enough money on the deal to make it worthwhile to sell the Mitsubishi at that price.

So far, Phil and John had been in the salesroom for about 45 minutes. Phil began feeling that they weren't making enough progress on this deal. He said, "I think $11,800 is a realistic price for this car, but apparently I'm wrong. I want to apologize for wasting your time. I guess I'll have to go back and buy that Mazda."

The salesman said he felt they were actually very close to making a deal. They just needed to make the transaction more profitable for the dealership. He once again talked about the service warranty and the Lo Jack. Again, Phil said he didn't want either but he would make a final offer of $12,000. John, tiring of these tactics, nudged the salesman to take the offer to his boss by saying, "Try it out and see what he says."

Be Ready for the Closer

In some dealerships, a closer is brought in when the salesperson can't make a deal. Usually, the closer tries for a few hundred dollars extra in the deal. Or, he tries to get the customer to agree to the last offer by the dealership.

While the name "closer" sounds frightening, closers are often personable, skilled sales people. While some may apply pressure, most will attempt to make a deal by reasoning with a customer or cajoling them. In this case, the closer brought in a Kelley Blue Book print out showing how much the car was worth. He also explained that they wouldn't make much money if they sold the car for $12,000.

Phil was ready to come up another $200 but, unexpectedly, the closer agreed to the offer. Using a blue marker, he wrote on the four square, "My children will go shoeless and hungry, but you can have the car for $12,000." He added, "Sometimes I even draw in little tear drops."

Closing the Deal

At this point the salesperson will probably extend his or her hand and say, "Congratulations! We have a deal!" Shake hands and agree to the deal. But keep in mind that nothing is binding until you sign the contract.

Several things need to happen before the deal is finished. First, depending on your state laws, you may need to show proof of insurance. This can often be arranged in advance or on the spot, by calling your insurance agent (bring the number with you to the dealership). Then, you need to review and sign the contract and several related documents. Finally, you may have to deal with last-minute attempts to sell you extra services.

Some people like the peace of mind that an extended warranty provides. However, many used cars still have the factory warranty in effect. In the case of Phil's Mitsubishi, there was still a year and a half on the bumper-to-bumper warranty. Furthermore, a drivetrain warranty is in effect for an additional period. He felt there was no reason to buy an expensive extended warranty.

While Phil and John were waiting for the contracts to be prepared, the general manager of the dealership appeared. "So this is the John and Phil team," she said, laughing. "I just wanted to thank you for helping me lose money on this deal." This comment, and others, showed that the sales staff had negotiated in good humor and with a sense of fair play.

Finally, the paperwork was ready. Phil signed an agreement to furnish an insurance policy and a "Due Bill." The Due Bill would state what repairs, if any, the dealership had agreed to perform to the car during the negotiation process. In Phil's cases, no promises for further repairs were made.

Then Phil signed the actual sales contract. Here is a breakdown of the fees:

Sale price of the car $12,000.00
Documentation Fee $ 45.00
Smog Fee Paid to Seller $ 41.75
Smog Fee Certification $ 8.25
Sales Tax $ 966.94
License Fees $ 216.00

Total $13,277.94

Comparing the Real Market to Edmunds and Kelley Blue Book

How does the purchase price of $12,000 compare to the Edmunds.com TMV price? Edmunds' says the car could be sold by a dealer for a TMV price of $13,100 (clean condition) to $13,706 (outstanding condition). Why the disparity? First, we shopped around for two weeks and jumped on this car as soon as the ad ran. Second, the dealership was located near an affluent area -- not the kind of place a Mitsubishi Galant would be in high demand. And finally, it was late in January when many consumers are dealing with the aftershock of Christmas buying.

However, the Edmunds TMV was much closer to the mark than the Kelley Blue Book. The Blue Book dealer price was listed on their Web site as $16,005. If they tried to sell cars at those prices, Phil felt the salesman's children really would starve.

Use TMV to Avoid Negotiating

Many car buyers might not want to negotiate as actively as the Edmunds editors. In those cases, the process could be simplified by offering a dealer several hundred dollars below Edmunds TMV price. If the dealer refuses the offer, raise your price to the TMV and show the salesperson a printout of the TMV figure. Dealers have indicated that TMV is a fair price for both parties.

Truthfully, Phil would have paid the dealer's starting price of $12,500 for the Mitsubishi Galant, knowing that Edmunds' TMV price was $13,100. But with two hours' worth of negotiating, he saved $500 -- well worth the time invested.

Reviewing the Process

In retrospect, John and Phil were helped by several factors. In addition to the advice already offered, they felt it is important to give car shoppers the following tips:

Take a friend when you go car shopping. This not only gives you moral support in negotiating, but your friend might stop you from doing something stupid -- like paying too much or getting switched to a vehicle that isn't right for you.

Choose a good dealership. John and Phil wound up at the Acura dealership because when they called ahead and chatted with the sales manager, they felt comfortable with him. When it came time to negotiate, they felt they would be treated fairly, with no high-pressure tactics.

Have a back-up vehicle. Phil knew he could walk away from the Mitsubishi at any time and still have a good deal with the Mazda. Referring to this other car, at another dealership, helped him take a strong stance in negotiating. It also kept him from becoming emotionally dependent on making a deal on the Mitsubishi.

Buying Used Saves Money -- Big Time

Phil's Mitsubishi Galant was originally purchased in early 2000 for over $17,000. About 14 months later, Phil bought the car for $12,000 with 19,983 miles on it. The wear and tear to the car was almost imperceptible. True, there was no new car smell, but it looked and drove like a new car. And Phil was able to save roughly $5,000 -- that's nearly a 30 percent savings off the new car price.

For a small sacrifice in terms of "new car magic," a smart used car purchase will save you a lot of money. And, possibly, it will let you step up to a higher class of car than you could buy new. The next time you get the urge for a new car, consider buying used instead

CA unemployment rate grew to 12.5% in 01/2010

2010-03-05T14:19:00.000-08:00

SACRAMENTO, Calif. – California's unemployment rate grew slightly to 12.5 percent in January, the state Employment Development Department reported Friday. But the state also revised its December job numbers to show that about 300,000 additional jobs were lost last month.

The state's unemployment rate in December was 12.3 percent. Officials had previously reported December's unemployment rate at 12.4 percent, but revised that figure Friday.

2010 tax law changes

2010-01-13T19:23:00.000-08:00

New vehicle sales tax - Effective January 1, 2010, individuals will no longer be able to take the itemized deduction or increase in standard deduction for sales tax on the purchase of a new motor vehicle.

Sales tax – Individuals will no longer be able to take an itemized deduction for state and local sales tax.

Educator expenses – Teachers will no longer be allowed to deduct out of pocket expenses incurred for school supplies. In the past, a deduction from adjusted gross income of up to $250 was allowed.

Roth IRA conversion – There are no income limits in 2010 for individuals that would like to convert a traditional IRA to a Roth IRA. Also, for any conversions in 2010, the tax will be paid in 2011 and 2012.

Phase outs - In 2010, there will be no phase out of itemized deductions or personal exemptions. This change will greatly benefit high income earners.

Unemployment income – In 2009, those receiving unemployment benefits can exclude up to $2,400 from their taxable income. This tax benefit will no longer be available in 2010.

Charitable distributions / contributions – Charitable distributions made directly from an IRA account to a qualified charity will no longer be excluded from your income

Home buyers credit – If you got on the home buyers tax credit gravy train back in 2008, you are required to start paying the credit back in 2010.

Alternative Minimum Tax – The AMT exemption is scheduled to decrease to $33,750 for single filers and to $45,000 for those filing a married joint return.

Retirement contributions - There is no change in the maximum contribution and individual can make to a 401(k) plan in 2010. This remains at $16,500. The catch up contribution of $5,500 for individuals age 50 + also remains the same.

Mileage reimbursement rates – The updated mileage reimbursement rates effective for January 1, 2010 are $0.50, $0.165 and $0.14 for miles incurred for business purposes, medical purposes and charitable purposes, respectively.

2009 tax law changes - excluding uncommon items

2010-01-13T19:12:00.000-08:00

Common changes are listed. More are at IRS web site.

Tax Credit of Up to $8,000 for First-time Home Buyers. If you purchased a primary residence in 2009 before December 1, 2009 and are a "first-time" home buyer, you can qualify for a tax credit equal to 10% of up to $80,000 of the purchase price. To be eligible, you must not have owned a residence in the U.S. in the previous three years. The credit phases out between $150,000 and $170,000 of adjusted gross income for joint filers and $75,000 to $95,000 for single filers.

Payroll Tax Credit.

For 2009 and 2010, Congress gave workers a credit of 6.2% of their earned income, capped at $400 for single filers and $800 for joint filers. For single filers, it starts phasing out at $75,000 of adjusted gross income and dries up at $95,000. The phaseout zone for couples is $150,000 to $190,000. Employees will get the credit in advance via lower income tax withholding in each paycheck, not as a rebate check.

Sales Tax Deduction for New Vehicles. Buyers of new vehicles can deduct the sales tax paid on the purchase, even if they don’t claim sales taxes as itemized deductions. They can add the tax they pay to their standard deduction. This break applies to new cars, motor homes, light trucks and motorcycles purchased after February 16, 2009 and before January 1, 2010. Sales tax paid on the first $49,500 of cost qualifies. The benefit begins phasing out for married couples with AGIs over $250,000 and singles with adjusted gross incomes over $125,000, and is completely gone for single filers with adjusted gross income of $135,000 or more or joint filers with AGI of at least $260,000.

Indexed Tax Brackets. Thanks to higher inflation in the past year, the 10%, 15%, 25%, 28%, 33% and 35% tax brackets all kick in at approximately 5% higher levels of income than in 2008.

Larger Personal Exemptions. For 2009, each personal exemption you can claim is worth $3,650, up by $150 from 2008.

Higher Standard Deductions. For 2009, the standard deduction for married couples filing a joint return rises to $11,400, up by $500 from 2008. For single filers, the amount increases to $5,700 in 2009, up by $250 over 2008. And heads of household can claim $8,350 in 2009, a jump of $350 from 2008. Non-itemizers who pay real estate taxes can claim even larger standard deductions. Joint filers can add in up to $1,000 of property taxes paid. Singles can add in up to $500 of real estate tax payments. Non-itemizers can also add any casualty losses that occurred in presidentially declared disaster areas.

Tax Credit for College Tuition. For 2009 and 2010, the Hope credit is replaced by a new credit of up to $2,500 per student a year for four years of college, not just the first two years. It now also covers the cost of books and begins to phase out at $80,000 of adjusted gross income for single filers and $160,000 for joint filers. If the credit is more than your income tax liability, 40% of it is refundable. Also, the full credit is allowed against the alternative minimum tax.

Child Tax Credit. If the credit exceeds the filer’s tax liability, all or part of the credit will be refunded if the filer earns more than $3,000 in 2009 and 2010, down from $12,550.

Earned Income Tax Credit. For families with three or more children, the maximum earned income tax credit for 2009 and 2010 rises by $628.50. And the phaseout of the credit for joint filers starts at higher income levels in 2009 and 2010, allowing more of them to claim the credit.

Unemployment income – In 2009, those receiving unemployment benefits can exclude up to $2,400 from their taxable income.

Oct unemployment rate, and Obama signed jobless benefit extension

2009-11-06T12:58:00.000-08:00

President Obama said he signed into law Friday a bill to provide up to 20 additional weeks of jobless benefits to unemployed Americans and extend the $8,000 tax credit for new homebuyers into the middle of next year.

The signing came after the Labor Department reported that the unemployment rate spiked to a 26-year high of 10.2% in October, with 190,000 jobs lost in the month.

CCFSettlement Nov 2009 status

2009-11-06T11:17:00.000-08:00

The Court has entered a Memorandum and Order, dated October 22, 2009, granting final approval of the settlement.

Q2 2009, number of problem banks reach 400

2009-08-29T22:06:00.000-07:00

The number of institutions on the government's so-called "problem bank" list surpassed 400 in the latest quarter, climbing to its highest level in 15 years, according to a government report published Thursday.

July unemployment rate

2009-08-16T21:30:00.000-07:00

U.S. July unemployment rate is 9.4%.

Job growth and decline

2009-07-24T23:04:00.000-07:00

Construction lost 110,000 jobs in January 2009, which put industry losses at over one million jobs since early 2007
Manufacturing lost 207,000 jobs this past January, the largest one-month decline since 1982
Retail lost 45,000 jobs,
warehousing lost 44,000,
and temporary work dropped nearly 80,000 positions, all in January
Even finance lost 42,000 jobs

Two notable industries saw continued growth this past January:

Health care employment rose by 19,000 jobs, slowing a little from it's 2008 average of 30,000 jobs a month
Private education also saw a jump in employment of over 33,000 jobs

Source: Karl Fendelander's article on Yahoo education

Cash for clunkers

2009-06-19T12:07:00.000-07:00

Congress passed the "cash for clunkers" measure late Thursday night as part of the $106 billion war spending bill. President Barack Obama plans to sign the bill into law.

Meanwhile, car dealers may honor rebates starting July 1. The federal agency needs the 30-day window to implement regulations to safeguard the program from fraud and abuse, Tyson said.

Among the issues regulators might address: Does the consumer hold a valid legal title to the car he is seeking to trade in? Will the clunker be appropriately disposed of so that it can't be cashed-in again?

The agency on Friday was scrambling to launch a Web site, www.cars.gov, to provide consumers with information about the program.

============================================

Find more detail: http://nhtsa.gov/staticfiles/DOT/NHTSA/Rulemaking/Rules/Associated%20Files/CARS_1stDayNotice_06262009.pdf

Unemployment rate update, May 2009

2009-06-19T12:02:00.000-07:00

The national unemployment rate rose to a 26-year high of 9.4% in May, up from 8.9% in April.

Top 5:

. Michigan: 14.1%
. Oregon: 12.4%
. South Carolina: 12.1%
. Rhode Island: 12.1%
. California: 11.5%

Buying your own health insurance

2009-06-19T11:46:00.000-07:00

Source: CNN

People who don't have health insurance pay about $2, 260 in out of pocket costs per year -- that's twice as much as someone who is covered under an employer's plan according to Consumer Reports.

First, check out insurance comparison Web sites like eHealthinsurance.com. Use it to get a range of individual health insurance policies and to compare prices and benefit levels.

Next, go to your state insurance department's Web site. Here you may find companies selling individual coverage in your state. And the insurance department may also provide complaint records on individual insurance companies.

Finally, consider using a health care broker who knows your local market. Brokers can help you shop for price. They'll also know what company is more liable to accept you based on your health conditions. The best part is that you won't pay a dime out of pocket says Amir Mostafie at eHealthinsurance.com. They get a commission paid by the insurance company that you sign up with.

===

You don't automatically qualify for Medicaid just because you have a low income. It also depends on your family status -- if you have kids etc.

To find out what eligibility requirements of health care programs like S-Chip or programs for the elderly, go to coverageforall.org.

Jobless rate: 9.4%, job cut rate slows down

2009-06-05T11:30:00.000-07:00

Naitonwide jobless rate is at 9.4%.

In May/09, the number of job cuts is 345K, fewest since November 2008. In April/09, the number is at 600K.

Unemployment update

2009-05-22T08:37:00.000-07:00

The unemployment rate declined in 21 states in April, compared with the month before, while 11 states had no rate change, according to federal data released Friday.

Still worst unemployment states are:
Michigan: 12.9%
Oregon: 12%
South Carolina: 11.5%
Rhode Island: 11.1%
California: 11%

IRS says audits will focus on wealthy

2009-05-20T16:33:00.000-07:00

The average taxpayer has a 1% chance of being audited compared with a 5.5% chance among millionaires.

Auto repo

2009-05-18T19:42:00.000-07:00

Auto repo law is by state.

First you are late for your payment. You'd receive a late payment warning by mail; (but not always as there is no law that requires this. Only if the credit contract says so, is the lender required to notify you in writing)
You receive a follow up call to the above warning;
You pass some predetermined grace period (look in your credit disclosure statement for the appropriate number of days)
You may receive one more warning (usually by mail)
The car is taken away. If you hide or move your car away, the finance company can get court order to ask you to turn in the car.

You receive a notice that your car has been repossessed and what your rights are including how to get it back.
If you can figure out a way to pay, you'll have to pay the repossession fees, towing charges, impound charges, storage fees and various other fees incurred by the company that repossessed the car. This can easily run several hundred dollars.
If you cannot pay the repo fees, you'll lose the car completely! It's sold at auction and the proceeds are applied to the balance of your auto loan and the fees mentioned above. If the balance is not paid off you'll be informed of the balance and that you are still responsible for paying it off. If there is money left over after the car loan balance and all repossession fees are paid, don't expect to get any of the profit; the company can legally keep it.
Your credit report is updated to reflect the account as a "repossession"

55K homeowners received loan modification

2009-05-15T13:09:00.000-07:00

More than 55,000 troubled homeowners have received loan modification offers under President Obama's foreclosure prevention program, officials said Thursday.

Chrysler closes 789, GM closes 1100 dealers

2009-05-15T13:04:00.000-07:00

GM will cut another 900-1300 dealers. Total cut will be 40% of current 6,000 dealers.

Bernanke: Economy should grow again later in 2009

2009-05-05T09:51:00.000-07:00

"We continue to expect economic activity to bottom out, then to turn up later this year," he told lawmakers. "We expect that the recovery will only gradually gain momentum."

Layoff records

2009-04-24T21:45:00.000-07:00

4/23/2009 Embarq 51 Telecommunications
4/22/2009 Philip Morris 1,100 Tobacco
4/22/2009 T. Rowe Price 288 Financials
4/22/2009 Capital One Financial 60 Financials
4/22/2009 Brown-Forman 250 Food
4/21/2009 Yahoo! 675 Software
4/20/2009 Nordstrom 72 Retailing
4/18/2009 Weyerhaeuser 814 Materials
4/15/2009 Emerson Electric 14,200 Conglomerates
4/14/2009 Discover Financial Services 500 Business Services
4/14/2009 Deere & Co.1,387 Capital Goods
4/13/2009 General Electric 3,235 Conglomerates
4/9/2009 Johnson & Johnson 900 Pharmaceuticals
4/8/2009 Procter & Gamble 410 Household
4/6/2009 Eastman Chemical 300 Chemicals
4/6/2009 Navistar International 350 Durables
4/3/2009 FedEx 1,900 Transportation
4/3/2009 Walt Disney 3,100 Media
4/2/2009 Rite Aid 297 Retailing
4/01/2009 3M 3,500 Conglomerates
3/31/2009 Cardinal Health 800 Health Care
3/30/2009 KLA-Tencor 500 Semiconductors
3/27/2009 Wal-Mart Stores 1,850 Retailing
3/26/2009 Agilent Technologies 3,300 Technology
3/26/2009 Google 300 Software
3/25/2009 Berkshire Hathaway 945 Finance
3/25/2009 Constellation Brands 400 Food
3/25/2009 IBM 7,800 Software
3/24/2009 Legg Mason 320 Financials
3/24/2009 Synovus Financial 200 Banking
3/24/2009 Cummins 1,427 Capital Goods
3/22/2009 Freeport-McMoRan 2,800 Materials
3/19/2009 Lam Research 375 Semiconductors
3/17/2009 Caterpillar 27,378 Capital Goods
3/17/2009 Corning 200 Technology
3/16/2009 TRW Automotive Holdings 417 Consumer Durables
3/13/2009 Baker Hughes 3,000 Oil & Gas
3/13/2009 PPG Industries 2,500 Chemicals
3/13/2009 Sunoco 750 Oil & Gas
3/11/2009 AMR 323 Transportation
3/10/2009 Lowe's 82 Retailing
3/10/2009 Principal Financial 60 Financials
3/10/2009 United Technologies 11,600 Conglomerates
3/4/2009 Northrop Grumman 750 Aerospace
3/4/2009 Dover 180 Conglomerates
3/4/2009 General Dynamics 1,379 Aerospace
3/3/2009 U.S. Steel 6,705 Materials
3/3/2009 FirstEnergy 335 Utilities
2/26/2009 Chesapeake Energy 215 Oil & Gas Operations
2/26/2009 JPMorgan Chase 14,000 Banking
2/25/2009 Dow Chemical, Corning 800 Joint Venture
2/25/2009 Coach 150 Household
2/24/2009 Micron Technology 2,000 Semiconductors
2/19/2009 Avon Products 3,000 Household
2/19/2009 Forturne Brands 236 Consumer Durables
2/18/2009 Chevron 230 Oil and gas
2/18/2009 Delta Air Lines 2,100 Transportation
2/18/2009 Best Buy 540 Retailing
2/18/2009 Goodyear 5,000 Consumer Durables
2/17/2009 MDU Resources 130 Utilities
2/17/2009 General Motors 66,758 Consumer Durables
2/17/2009 Johnson Controls 205 Consumer Durables
2/17/2009 Smithfield Foods 1,800 Food
2/16/2009 Delphi 800 Consumer Durables
2/11/2009 United Technologies 1,350 Conglomerates
2/11/2009 W.W. Grainger 400 Capital Goods
2/11/2009 Terex 5,000 Capital Goods
2/10/2009 News Corp. 90 Media
2/10/2009 U.S. Airways Group 233 Transportation
2/10/2009 Nike 1,400 Products
2/5/2009 Estée Lauder 2,000 Personal Products
2/5/2009 Allergan 460 Pharmaceuticals
2/4/2009 Time Warner 2,750 Media
2/4/2009 Cisco Systems 2,000 Technology
2/3/2009 Bancshares 500 Banking
2/3/2009 Electronic Arts 1,100 Software
2/3/2009 PNC Financial Services 5,800 Banking
2/3/2009 Comcast 50 Media
2/2/2009 Goodrich 35 Aerospace
2/2/2009 Macy's 7,000 Retailing
1/30/2009 Sears Holdings 300 Retailing
1/29/2009 Broadcom 200 Semiconductors
1/29/2009 International Gaming Technology 200 Leisure
1/29/2009 Textron 4,665 Conglomerates
1/29/2009 Ford 3,800 Durables
1/29/2009 Eastman Kodak 4,500 Household
1/29/2009 Black and Decker 1,200 Household
1/28/2009 Starbucks 6,700 Restaurants
1/28/2009 Boeing 10,000 Aerospace
1/27/2009 Target 1,000 Retailing
1/27/2009 Masco 600 Construction
1/26/2009 Texas Instruments 3,400 Semiconductors
1/26/2009 Lincoln National 540 Insurance
1/26/2009 Home Depot 7,000 Retailing
1/26/2009 Pfizer 19,800 Pharmaceuticals
1/26/2009 Sprint Nextel 8,000 Telecommunications
1/23/2009 Abercrombie & Fitch 50 Retailing
1/23/2009 Harley-Davidson 1,100 Consumer Durables
1/22/2009 Microsoft 5,000 Software
1/22/2009 Huntsman 1,665 Chemicals
1/21/2009 Burlington Santa Fe 2,500 Transportation
1/21/2009 UAL 1,000 Transportation
1/21/2009 SPX 400 Conglomerates
1/21/2009 Intel 5,000 Semiconductors
1/21/2009 Wynn Resorts 53 Leisure
1/21/2009 Eaton 5,609 Capital Goods
1/20/2009 Clear Channel 1,850 Media
1/16/2009 ConocoPhillips 1,300 Oil & Gas
1/16/2009 Hertz Global Holdings 4,000 Business Services
1/16/2009 WellPoint 600 Health Care
1/16/2009 Advanced Micro Devices 1,700 Semiconductors
1/15/2009 Xerox 275 Business Services
1/15/2009 MeadWestvaco 2,000 Materials
1/15/2009 Autodesk 750 Software
1/15/2009 Marshall & Ilsley 830 Banking
1/14/2009 Ecolab 1,000 Chemicals
1/14/2009 Motorola 4,000 Technology
1/13/2009 KeyCorp 200 Banking
1/13/2009 Newell Rubbermaid 75 Household
1/12/2009 Mosaic 1,000 Chemicals
1/12/2009 Precision Castparts 40 Defense
1/9/2009 Oracle 500 Software
1/9/2009 Smithfield Foods 75 Food
1/8/2009 Union Pacific 230 Transportation
1/7/2009 Walgreen 1,000 Retailing
1/7/2009 EMC 2,400 Technology
1/6/2009 Alcoa 13,500 Materials
1/5/2009 Cigna 1,100 Health Care
12/31/2008 Mohawk Industries 160 Consumer Durables
12/31/2008 Tyson Foods 120 Food
12/31/2008 Target 132 Retailing
12/30/2008 Allegheny Technologies 323 Materials
12/30/2008 Motorola 400 Technology
12/23/2008 ULA (Boeing, Lockheed Martin) 172 Joint Venture
12/23/2008 Las Vegas Sands 11,500 Leisure
12/22/2008 Parker-Hannifin 405 Capital Goods
12/19/2008 Genworth Financial 1,000 Insurance
12/19/2008 Sovereign Bancorp 1,000 Banking
12/18/2008 Omnicom Group 3,145 Media
12/17/2008 Ryder System 3,100 Services
12/17/2008 Western Digital 2,500 Technology
12/17/2008 Aetna 1,000 Health Care
12/17/2008 Parker-Hannifin 46 Capital Goods
12/17/2008 Bristol-Myers Squibb 3,700 Pharmaceuticals
12/16/2008 CBS 30 Media
12/15/2008 Merrill Lynch 400 Financials
12/15/2008 Charles Schwab 100 Financials
12/12/2008 International Paper 2,050 Materials
12/11/2008 Bank of America 35,000 Banking
12/11/2008 Whirlpool 250 Durables
12/10/2008 Mohawk Industries 105 Durables
12/09/2008 Praxair 1,600 Chemicals
12/08/2008 Anheuser-Busch Co. 1,400 Food
12/08/2008 Wyndham Worldwide 4,000 Leisure
12/08/2008 Dow Chemical 5,000 Chemicals
12/05/2008 Cablevision 100 Media
12/05/2008 Staples 140 Retailing
12/04/2008 Steel Dynamics 65 Materials
12/04/2008 Windstream 170 Telecommunications
12/04/2008 E.I. du Pont de Nemours 2,500 Chemicals
12/04/2008 AT&T 12,000 Telecommunications
12/03/2008 Gannett 2,000 Media
12/03/2008 Adobe Systems 600 Software
12/03/2008 Jefferies Group 300 Financials
12/03/2008 Viacom 850 Media
12/01/2008 PepsiCo 87 Food
11/25/2008 Dana Holding 50 Durables
11/24/2008 BlackRock 10 Financials
11/21/2008 Western Union 200 Business Services
11/20/2008 Bank of New York Mellon 1,800 Banking
11/20/2008 Boeing 800 Aerospace
11/17/2008 Citigroup 52,000 Banking
11/14/2008 Sun Microsystems 6,000 Technology
11/12/2008 Applied Materials 1,800 Technology
11/12/2008 Morgan Stanley 2,000 Finance
11/12/2008 Liberty Media 910 Retailing
11/11/2008 AK Steel Holding 800 Materials
11/6/2008 Mattel 1,000 Household
11/6/2008 MGM Mirage 400 Leisure
11/4/2008 Hartford Financial Services Group 500 Finance

Watch out for bank fees

2009-04-23T12:17:00.000-07:00

According to the latest bankrate.com study, ATM fees average $1.97. That's 11 percent higher than the prior year.

Another common culprit: overdraft fees. Overdraft fees kick in when you don't have enough money in your account to cover a transaction.

If you can't maintain daily minimum of your account, there is penalty charged.

Some banks also charge for online payment services.

==============================================================================
Download Agilelandlord Landlord Software

Fed sees no economic recovery this year

2009-04-08T22:20:00.000-07:00

Source: cnnfn.com written by Veronica Smith (AFP)

WASHINGTON (AFP) – The Federal Reserve no longer sees signs of recovery this year from a prolonged recession and only weak growth in 2010, minutes of a policy-setting meeting said.

Despite massive interventions by the Fed and other government bodies to jumpstart the moribund economy and unblock tight credit, policymakers at a March meeting viewed grimmer projections than those made two months earlier.

The United States, among the earliest to enter recession after financial turmoil stemming from a home mortgage meltdown, could begin to grow again "slowly" next year despite numerous constraints, according to Fed projections.

"Real GDP (is) expected to flatten out gradually over the second half of this year and then to expand slowly next year," the minutes of the Federal Open Market Committee (FOMC)'s March 17-18 meeting said.

The central bank anticipated the recovery "as the stresses in financial markets ease, the effects of fiscal stimulus take hold, inventory adjustments are worked through, and the correction in housing activity comes to an end."

The United States plunged into recession in December 2007 after a home mortgage meltdown triggered a financial crisis that spread around the world, slashing economic growth.

FOMC chairman Ben Bernanke and his policymakers at the March meeting stared down grim staff-prepared forecasts that were sharply lower than the outlook prepared for the January FOMC meeting.

In January, the economy was expected to recover "gradually" during the second half of 2009 albeit shrinking between 0.5 percent and 1.3 percent for the full year.

The central bank had also predicted growth would accelerate to between 2.5 percent and 3.3 percent for 2010. Critics at the time had said the forecasts were overly optimistic.

"Nearly all meeting participants said that conditions had deteriorated relative to their expectations at the time of the January meeting," the latest FOMC minutes said.

The slowdown was broad, across sectors, and included large declines in equity prices, a further drop in house prices, mounting job losses that threatened to further depress consumer spending and weakening business capital spending.

Policymakers noted "the apparent sharp fall" in foreign economies that was hitting US exports, reducing their supporting role for the US economy in the near term.

They also highlighted significant uncertainty about the prospects for the economy, which slid into recession in December 2007.

Most meeting participants saw "predominating" downside risks in the near term, mainly due to potential "adverse feedback effects" from rising unemployment weighing on consumer spending and mounting losses at financial institutions further tightening credit conditions.

"All told, this suggests that third-quarter and fourth-quarter GDP results aren't likely to show any sort of recovery, while the unemployment rate could breach the upper range of the FOMC's projections of 9.2 percent, and perhaps reach double-digits," said Terri Belkas at Forex Capital Markets.

In a speech in Tokyo Wednesday, Dallas Federal Reserve chief Richard Fisher said that the economy probably contracted in the first three months of the year at an annual pace "very similar" to the previous quarter, when GDP shrank 6.3 percent.

Policymakers in March voted to unanimously hold the Fed's base interest rate at a historically low range of zero to 0.25 percent, where it has been since mid-December.

They also announced a 1.15-trillion-dollar initiative to unblock frozen credit, including ramped-up purchases of mortgage-backed securities and the launch of program to buy long-term Treasury bonds.

Brian Bethune, chief US financial economist at IHS Global Insight, suggested the Fed should try to encourage demand for its new Term Asset-Backed Securities Loan Facility (TALF), intended to unlock credit flows for auto loans and credit cards.

"The Fed needs to work with Congress to iron out some of the wrinkles that are impeding a more rapid uptake of investors and borrowers within this program. This clearly needs to be a short-term priority," Bethune said.

Five scams on the rise

2009-03-18T12:14:00.001-07:00

Source: 3/16/2009 cnnfn

- Stimulus grant scams. Since the $787 billion stimulus bill became law in February, dozens of websites have popped up offering advice for a fee on how to get government grants on everything from small business initiatives to paying off student loan debt. The BBB has received hundreds of complaints about sites like federalgrantsolutions.com, which billed consumers $70 a month on their credit cards for info they thought was free. First, know that the government doesn’t hand out grants for paying off personal debt and grants are usually given to non-profits. If you want to know how to apply for a government grant for a non-profit or small business initiative, that info is readily available for free at grants.gov and sba.gov.

- Mortgage foreclosure consultants. Foreclosure rescue scams are proliferating as the number of home foreclosures rises. The FTC has filed lawsuits or shut down a number of foreclosure rescue companies but scammers keep popping up. While some scammers trick you into signing over the title of your home, others promise to negotiate with your lender for an upfront fee, then pocket the money and disappear. Beware of cold-callers or anyone showing up at your doorstep offering to help stop a foreclosure. Only work with a HUD-certified housing counselor if you run into trouble paying your mortgage.

- Auto repair fraud. According to the Maryland Office of Consumer Protection, auto repair fraud is sharply rising at dealerships around the U.S. Since car dealerships aren’t selling many cars these days, some less than reputable dealers are trying to bill customers who go in for routine maintenance for repairs that in many cases are just unnecessary. Get a written estimate of any proposed repairs and a second opinion before any work is done.

- Property tax reassessment fraud. Though home prices are still falling in many parts of the country, cash strapped cities and towns are much slower to decrease property taxes. Homeowners around the U.S. are being inundated with offers from companies promising to get property taxes lowered in exchange for a steep fee or cut of whatever is recovered. You don’t need to pay a lawyer or third-party to fight your assessment. Homeowners can file an appeal on property taxes at no cost themselves.

- Retail closeout scams. As the number of retailers going out of business rises, complaints about retail fraud are growing. In addition to phony sale prices and low quality merchandise found in “going out of business” sales, some retailers on shaky financial ground are taking consumer deposits on big ticket items like furniture, shutting down and then reopening a few days later or weeks later for business under another name, all without returning a consumer’s deposit.

If you or someone you know gets tangled up in a scam, file a complaint with your state consumer protection bureau. Unlike the FTC, a state or county agency can investigate individual complaints and advocate on your behalf. And if enough people complain, they’ll get law enforcement to fine or shut down the scammers. For other tips on outsmarting scammers, check out the Consumer Action Handbook.

- Donna Rosato

==============================================================================
Download Agilelandlord Landlord Software

Consumer bankruptcies will rise to > 1.4M in 2009

2009-03-05T18:14:00.000-08:00

The ABI, a non-partisan research group, also expects bankruptcies in 2009 to surpass last year's 1.06 million filings. "We expect at least 1.4 million bankruptcies this year," said ABI Executive Director Samuel Gerdano in a written statement.

31.8 million Americans received food stamps

2009-03-05T17:55:00.000-08:00

A record 31.8 million Americans received food stamps at the latest count, an increase of 700,000 people in one month with the United States in recession, government figures showed Thursday.

The Labor Department will release its latest jobs report Friday. Economists surveyed by Briefing.com forecast that the unemployment rate rose to 7.9% in February and that 650,000 jobs were lost.

Microsoft to create 2000 to 3000 jobs

2009-03-03T21:48:00.001-08:00

Microsoft may create up to 3,000 jobs as it raises investment in research and development by $1 billion this year amid a financial crisis that has also taken its toll on the software giant.

"Realignment of the company will help us reassign people and could allow us to create some 2,000 to 3,000 new jobs," Kevin Turner, chief operating officer, said on Tuesday at CeBit, Europe's biggest technology trade fair.

Google CEO sees economy situation "pretty dire"

2009-03-03T21:46:00.001-08:00

Google Inc. (GOOG) Chief Executive Eric Schmidt said Tuesday the economic situation is "pretty dire," adding that he does not expect to see improvement until 2010.

2009 stimulus package, car buying

2009-02-22T15:55:00.000-08:00

This deduction is only applicable to new foreign or domestic cars less than $49,500 and weigh less no more than 8,500 pounds (some SUV and trucks also qualify for this). The deduction is only available to families making less than $260,000 (or $135,000 for single filers).

Stimulus: How it may affect your wallet

2009-02-13T14:56:00.000-08:00

By Jeanne Sahadi, CNNMoney.com senior writer
Last Updated: February 13, 2009: 12:50 PM ET

NEW YORK (CNNMoney.com) -- Key lawmakers in the Senate and House have reached a compromise on a final economic recovery package.

The new stated topline price tag: $787 billion. That's below both the $820 billion House-passed version and the $838 billion Senate-passed version.

The compromises that the House, Senate and White House made have changed the scope of a number of provisions, including those affecting individuals directly. In some cases, they either reduced or expanded a benefit relative to what appeared in the Senate or House versions of the bill.

Here's a look at some of the provisions that will have a direct effect on individuals in their paychecks, on their tax returns, and with regard to their unemployment benefits and health insurance if they've lost a job.

The information below is based on materials put out by the key committees in the House and Senate as well as House Speaker Nancy Pelosi, D-Calif.

Making Work Pay Credit: The bill provides a $400 credit per worker and a $800 credit per dual-earner couple. The full credit would be paid to people making $75,000 or less ($150,000 per dual-earner couple). A partial credit would be paid to those making above those amounts but no more than $100,000 ($200,000 for couples).

The credit would also be refundable, which means that even very low-income families who don't make enough to owe income tax would be able to claim it.

For most working individuals, the credit will be paid over time at roughly $15 per period, assuming 26 pay periods in a year. Estimated cost: $116 billion.

One-time payments to those who don't work: For retirees, disabled individuals and others who don't work, the bill provides a one-time $250 payment. Estimated cost: $14.2 billion.

Break for higher income families: The bill includes a one-year provision to protect middle- and upper-middle-income families from having to pay the Alternative Minimum Tax. The AMT was intended primarily for high-income taxpayers but has in recent years threatened to engulf those lower down the income scale. Estimated cost: $70 billion.

Temporary deduction for car buyers: The bill would let those who buy a new car, light vehicle, recreational vehicle or motorcycle in 2009 deduct state and local sales taxes as well as any excise tax charged in the purchase. The deduction would be available to those earning less than $125,000 ($250,000 for joint filers). It will be an above-the-line deduction, meaning even taxpayers who don't itemize may take it in addition to the standard deduction. Estimated cost:$1.7 billion.

Temporary credit for home buyers: The bill increases the size of an existing temporary and refundable first-time home buyer credit to $8,000, up from $7,500. It also removes the requirement under current law that the credit be paid back if the buyer stays in the home for at least three years. And it would extend the credit's expiration date to Dec. 1, 2009, from July 1. Those eligible for this credit must have purchased a home after Jan. 1, 2009, and before Dec. 1, 2009.

The full credit is available to those making $75,000 or less ($150,000 for joint filers). Estimated cost: $6.6 billion.

New temporary college credit: The bill introduces the American Opportunity Tax Credit, which would be in effect for 2009 and 2010. It expands the existing Hope Scholarship tax credit and would be worth as much as $2,500 for higher education expenses, up from $1,800 currently.

The full credit would be available to those making less than $80,000 ($160,000 for joint filers). Those making between those amounts and $90,000 ($180,000 for joint filers) would get a partial credit. And the break would also be partially refundable, meaning lower income families with little or no tax liability could now claim some of the credit. Estimated cost: $13.9 billion.

Temporary Pell Grant increase: The bill increases the maximum Pell Grant by $500 to $5,350 in 2009 and $5,550 in 2010. Estimated cost: $15.6 billion.

Temporary expansion of child tax credit: The bill increases eligibility for the child tax credit by lowering the income threshold that must be met for the credit to be refundable. The threshold would be lowered to$3,000 for this year and next. That will allow lower income families to claim more of the credit than under current law. Estimated cost: $14.8 billion.

Temporary increase in earned income tax credit: The credit will be temporarily increased to 45% from 40% of qualifying earnings for low-income families with three or more children. It also includes a marriage penalty relief provision for couples who qualify for at least a portion of the credit. Estimated cost: $4.6 billion.
Direct lifeline benefits

Health insurance help for the jobless: The bill includes provisions to help eligible jobless workers pay for health insurance under Cobra. Cobra coverage allows newly unemployed workers to keep health insurance provided by their former employers for a period of time.

For workers who have been laid off between Sept. 1, 2008, and Dec. 31, 2009, the government will subsidize 65% of their premiums under Cobra for up to 9 months.

Those people laid off between Sept. 1, 2008, and the day the stimulus law goes into effect, and who did not sign up for Cobra, will get an additional 60 days to do so and receive the subsidy.

The subsidy will be limited to those whose income for the year is $125,000 or less ($250,000 for couples filing jointly). Estimated cost: $24.7 billion.

Another provision provides states funding to help pay for expanded Medicaid rolls for workers who've lost their jobs and can't afford health care on their own or can't get Cobra coverage because their former employer doesn't offer a health care plan. Estimated cost: $87 billion.

Unemployment benefits: The bill provides jobless workers with an additional 20 weeks in unemployment benefits, and 13 weeks on top of that if they live in what's deemed a high unemployment state, of which there are now about 30. Estimated cost: $27 billion.

In addition, the weekly unemployment benefit will temporarily increase by $25 on top of the roughly $300 jobless workers currently receive. Estimated cost: $8.8 billion.

Plus, the first $2,400 of benefits in 2009 would be exempt from federal income taxes. Estimated cost: $4.7 billion.

Food stamp payments: The bill includes a provision would increase food stamp payments by 13.6%, so a family of four would see an additional $80 on top of the $588 per month they receive currently. Estimated cost: $19.9 billion.

The bill also provides assistance to help local groups providing food and shelter, elderly nutrition services such as Meals on Wheels, and a program to help food banks re-stock their shelves. Estimated cost: $350 million.

Other help for needy families: The bill provides funding to states to create a contingency fund through 2010 for the welfare program called Temporary Assistance for Needy Families, which provides cash assistance to the needy. Estimated cost: $2.4 billion. To top of page

Prevent identity theft

2009-02-09T20:35:00.000-08:00

Experts say consumers can reduce the risk of fraud by: (1) not sharing personal data with unknown emailers and callers, or on social networking sites and chat rooms; (2) keeping sensitive documents secure; (3) destroying unnecessary data; (4) choosing hard-to-guess passwords and PINs and (5) notifying financial services providers and the Equifax, Experian and TransUnion credit bureaus if fraud is suspected.

2/2009 car deals

2009-02-06T20:42:00.000-08:00

Feb 2009 new car deals:

Carmaker	Car Deal	Expires
BMW	2.9% APR financing (up to 60 months) on most 2009 models	3/2/09
Buick, GMC, Cadillac,Chevrolet, HUMMER, Pontiac, Saturn, Saab	President's Day Sale - 0% APR financing for up to 60 months, plus up to $2,000 cash back on most models	3/2/09
Chrysler, Dodge, Jeep	Employee Pricing Plus Plus sale - 0 % APR financing for 36 months, plus employee pricing discounts, plus cash back offers varying by model	3/2/09
Ford	0% APR financing for up to 60 months, up to $3,500 cash back many 2009s	3/31/09
Toyota	Cash back rebates varying by model	3/2/09
Mazda	0 - 0.9% APR financing for up to 60 months, up to $3,000 cash back, no payments for 90 days on many models	3/2/09
Mercedes-Benz	3.9% APR financing (36 months) on some models	3/2/09
Volkswagen	0% APR financing (60 months) on 2009 Passat and Routan, 3.9% APR financing on most models	3/2/09
Volvo	0.9% APR financing on 2008 models, up to $1,000 cash back on 2008 and 2009 models	3/31/09

Wal-Mart CEO sees no quick rebound for U.S. economy

2009-01-12T08:56:00.000-08:00

The chief executive of Wal-Mart Stores said on Monday that he expects the U.S. economy to remain extraordinarily challenging in the first half of the year and he was not expecting a quick turnaround.

Lee Scott said the U.S. government's efforts to stimulate the economy should have "some impact," but he added: "I don't see anything that tells me it's going to turn around quickly."

"The second half of the year, you would hope, would be better," he said. "We all hope by next Christmas it certainly isn't any worse."

Wal-Mart, the discount giant, has been gaining market share in the past year as consumers seek out its low prices on items such as food and medicine to stretch limited budgets.

But a year-long recession, mounting job losses and tighter access to credit combined to produce the worst holiday sales season in nearly four decades, according to the International Council of Shopping Centers.

Wal-Mart was not immune to the harsh climate and last week posted lower-than-expected December sales and cut its fourth-quarter profit forecast.

Scott said this downturn may fundamentally change people's spending habits.

"I'm not necessarily convinced that just when all this liquidity and things hit, if you're going to have the same immediate desire to go back to consumption and debt," he said, referring to a potential U.S. government stimulus plan.

=========================================

Update 2/13/2009:

Wal-Mart Stores announced Tuesday that it is eliminating as many as 800 positions at its headquarters in an effort to reduce costs.

Most of nonfarm jobs lost in CA are housing related

2009-01-10T21:31:00.000-08:00

In the year ending in November, 71 percent of the nonfarm jobs lost in California were housing-related.

Many of the nation's leading mortgage lenders -- Countrywide Financial, New Century Financial, IndyMac Bancorp, and Fremont General Corp. -- were based in California and have since been bought by larger banks or gone bankrupt.

Unemployment rate rose to 7.2% in December

2009-01-09T09:46:00.000-08:00

NEW YORK (CNNMoney.com) -- The unemployment rate rose to 7.2% in December, the highest it has been since 1993.

The government also does report a so-called underemployment rate, which includes some part-time workers as well as people who have given up looking for work during the past year. That figure is now 13.5%.

Prior to 1994, all people who were "discouraged workers" were counted in the unemployment survey. But that's no longer the case. So he believes his number is more of an apples-to-apples comparison to some of the numbers cited about the peak level of unemployment during the Great Depression, which was around 25%.

==============================
2/6/2009 update:

Nationwide: 7.6%
==============================
3/6/2009:

Nationwide: 8.1%
==============================
5/8/2009

Nationwide: 8.9%

U.S. consumer bankruptcy rose to 1.06M in 2008

2009-01-06T12:00:00.000-08:00

The American Bankruptcy Institute said overall consumer filings rose to 1.06 million in 2008, compared with 801,840 during 2007. The ABI based its study on data from the National Bankruptcy Research Center.

2008 car sales

2009-01-05T18:19:00.001-08:00

For the full year, GM's sales fell 23% to 2.95 million vehicles, Ford's declined 21% to 1.98 million and Toyota's U.S. sales declined 15% to 2.22 million vehicles. Chrysler was the No. 4 manufacturer in 2008, with sales of 1.45 million vehicles, down 30%.

12/2008 car sales down near 30%

2009-01-05T18:14:00.000-08:00

The nation's six largest automakers all reported December sales declines of more than 30% Monday, capping the industry's worst year since 1992.

Chrysler -53% (from a year ago)
GM -31%
Toyota -37%
Ford -32%
Honda -35%
Nissan -31%
Mazda -27%

=====================================
Update: 2/13/2009

Last week, Toyota lowered its sales forecast for the current fiscal year to 7.08 million vehicles from an earlier projection of 8.87 million. It also said it expects to suffer a net loss this year for the first time since 1950.

In January, Toyota's U.S. sales fell 32%, compared with a 49% sales plunge for General Motors (GM, Fortune 500) and Ford's (F, Fortune 500) 40% decline. To top of page

SEC completes distribution of $42M fair fund for improper mutual fund practice

2009-01-01T13:57:00.000-08:00

The SEC continued its recent string of Fair Funds distributions on Thursday, announcing the completion of a nearly $32 million Fair Fund distribution to current and former customers of Ameriprise Financial Services, Inc. (formerly known as American Express Financial Advisors Inc.) The SEC stated that approximately 575,000 investors were affected by what it alleged were improper mutual fund practices. On April 9, 2008, the SEC approved a distribution plan, and appointed Nelson S. Kibler as the fund administrator responsible for distributing the Fair Fund.

Since June 2008, the SEC has announced Fair Funds distributions in seven other settlements: Franklin-Templeton Investments ($49 million); Banc of America Capital Management ($103 million); Banc of America Securities ($26 million); Spear & Jackson ($5.6 million); Vivendi Universal ($48 million); Janus Capital Management ($18 million); and Putnam Investment Management ($40 million).

Old car trade-in value

2008-12-28T13:55:00.000-08:00

When bring a car to a Dealer to trade-in, the Dealer is going to get online to check the prices actually paid for that particular vehicle during the last few days at the Dealer auctions. He won't pay more than he could buy one for at the auction. Dealer lingo for this number is "MMR".

Get values from Kelley Blue Book, NADAGuides and Edmunds.com. Discuss these valuations with the Dealer if his offer looks out of whack. How can he explain his low offer? These pricing guides can be off by thousands of dollars depending on the condition of your car, the location, and time of year.

No change of status on Currency Conversion Fee Antitrust Litigation (MDL 1409)

2008-12-27T14:41:00.000-08:00

Last update was in 2/2009, and no new status.
========================================================
12/2009:
There has been no change of status to the case.

Honda Toyota new and used car price

2008-12-25T23:15:00.000-08:00

With current global economy situation where there are high unemployment rate, falling real estate value, and negative stock market performance, etc., Toyota announced will lose money this year; and Honda has lowered its profit estimates.

Would anyone who is familiar with the U.S. car retail business comment on how this will be reflected on Honda and Toyota new and used car price?

I would imagine for new car, there will be higher incentive or rebate to customers. For used car, the price would probably go lower.

================
2009 Honda CRV:
1/6/2009 - 2/2/2009 - $500 cash to dealer (marketing support)

2009 Toyota Matrix:
1/8/2009 - 2/2/2009 - $1000 cash to customer

2009 Toyota RAV4:
1/8/2009 - 2/2/2009 - $1500 cash to dealer (marketing support)

=================
1/24/2009 update:

All 2008 and 2009 Chrysler, Dodge and Jeep vehicles will be available at prices similar to those Chrysler employees pay -- typically thousands of dollars below the sticker price.

In addition, customers will receive discounts of up to $3,500 on 2009 vehicles and $6,000 on 2008 models.

=================

Unemployment rate continue rising

2008-12-20T12:22:00.000-08:00

Nonfarm payroll employment rates rose in 9 states and fell in 41 states and D.C., the department said.

Unemployment:

Michigan: 9.6%
California: 8.4%
Oregon: 8.1%

Unemployment rates continue to rise for about a year after a recession ends.

===================
1/24/2009 update:

California: 9.3%

===================
2/6/2009 update:

Nationwide: 7.6%

===================
2/27/2009 update:

California: 10.1%

===================
3/5/2009 update

Santa Clara County in CA: 9.4% (where Intel, Google, Yahoo, Cisco are.)

Simple ways to save money now

2008-12-20T11:00:00.000-08:00

. Save gas money. In the past five months gasoline prices have dropped 56%, from an average price of $4.11 to $1.80 a gallon. Also, combine multiple errand trips to one trip, and don't drive your big 4x4 SUV unless necessary.

. If a couple dines out four times in a month the expense is close to $300 in low-cost areas and $600 in higher-cost regions. Cut back on dinning-out to fewer times will save money.

. Get lower cost phone services. Cancel landline long distance service and use phone card or Skype. Reduce cable bill costs by choosing cheaper program package.

. Better insulate your home to reduce winter energy costs.

. Shop smart by doing comparative shopping online, by looking for coupon, by looking for free shipping or lower cost shipping, etc.

. Keep receipt for returning the merchandise, or to get the lower price if the store lower the price further.

Simple case study of nest egg change from 12 months ago

2008-12-19T11:59:00.000-08:00

This is a made up case study in considering a household's assets, for 12 months change. This is to compare with the stats published in the news of 4.7% change in a quarter. I found using the numbers in my case study the asset is down 18.3% for the year and is comparable with the 4.7%/quarter number.

12 months ago:

100,000 cash savings
100,000 stock/bond investment
80,000 IRA (baby boomer average)
207,000 home, no outstanding mortgage (U.S. median price), or consider this as home equity
--------------
487,000 Total nest egg

12/2008:
104,000 cash savings
62,000 stock/bond investment
50,000 IRA
182,000 home (U.S. median price change, down 12.1% from 12 months ago)
---------------
398,000 Total nest egg (or down 18.3% from 12 months ago)

U.S. car makers bail out

2008-12-19T11:57:00.000-08:00

NEW YORK (CNNMoney.com) -- President Bush announced a rescue plan for General Motors and Chrysler LLC Friday morning that will make $13.4 billion in federal loans available almost immediately.

The money will come from the $700 billion fund set aside to bail out Wall Street firms and banks in October.

Madoff scandal and Ponzi scheme

2008-12-17T12:42:00.000-08:00

Bernard Madoff, founder and president of Bernard Madoff Investment Securities, a market-maker for hedge funds and banks, was charged by federal prosecutors in a $50 billion fraud at his advisory business.

Madoff, 70, was arrested today at 8:30 a.m. by the FBI and appeared before U.S. Magistrate Judge Douglas Eaton in Manhattan federal court. Charged in a criminal complaint with a single count of securities fraud, he was granted release on a $10 million bond guaranteed by his wife and secured by his apartment. Madoff’s wife was present in the courtroom.

"It’s all just one big lie," Madoff told his employees on Dec. 10, according to a statement by prosecutors. The firm, Madoff allegedly said, is "basically, a giant Ponzi scheme." He was also sued by the Securities and Exchange Commission.

====

Ponzi scheme

A Ponzi scheme is a fraudulent investment operation that involves paying abnormally high returns to investors out of the money paid in by subsequent investors, rather than from the profit from any real business. It is named after Charles Ponzi. The term "Ponzi scheme" is used primarily in the United States, while other English-speaking countries do not distinguish in colloquial speech between this scheme and other forms of pyramid scheme.

A snapshot of the layoffs - 11/2008 and follow up

2008-12-17T12:17:00.000-08:00

Circuit City	7,300	11/3/2008	Retail
Hartford Financial	500	11/4/2008	Financial
GlaxoSmithKline	1,000	11/5/2008	Pharmaceuticals/Healthcare
Fidelity	1,300	11/6/2008	Financial
Mattel	1,000	11/6/2008	Toy
Borgata Hotel Casino	375	11/6/2008	Hotels Casinos Resorts
La-Z-Boy	850	11/6/2008	Retail
Avis	700	11/6/2008	Auto services
Ford	2,600	11/7/2008	Auto
General Motors	3,600	11/7/2008	Auto
DHL Express	9,500	11/10/2008	Logistics
Nortel	1,300	11/10/2008	Technology
Circuit City	700	11/10/2008	Retail
General Motors	1,900	11/10/2008	Auto
Altria	unspecified	11/10/2008	Tobacco
Horizon Lines	70	11/11/2008	Logistics
Marietta Corp	130	11/11/2008	Manufacturing
Yum Brands	several hundred	11/12/2008	Food Service
Morgan Stanley	8,360	11/12/2008	Financial
Cessna	665	11/13/2008	Aerospace
ADT	380	11/13/2008	Security
University of Texas	3,800	11/13/2008	Education
Sprint	unspecified	11/13/2008	Telecommunications
U.S. Steel	677	11/13/2008	Steel
OfficeMax	245	11/13/2008	Retail
Sun Microsystems	6,000	11/14/2008	Technology
Fidelity	1,700	11/14/2008	Financial
Citigroup	53,000	11/17/2008	Financial
Pepsi Bottling Group	3,000	11/18/2008	Beverages
Louisiana-Pacific	200	11/18/2008	Construction
Time Inc.	600	11/19/2008	Media
HSBC Mortgage	325	11/19/2008	Financial
Pilgrim's Pride	335	11/19/2008	Food Products
Boeing	800	11/19/2008	Aerospace
Rolls-Royce Group Plc	2,000	11/19/2008	Aerospace
Akamai Technologies	110	11/19/2008	Technology
Bank of New York Mellon	1,800	11/20/2008	Financial
Wendy's	59	11/20/2008	Food Service
The Associated Press	400	11/20/2008	Media
Washington Mutual	1,600	11/20/2008	Financial
Washington Mutual	7,600	12/1/2008	Financial
U.S. Steel	3,500	12/2/2008	Steel
City of Atlanta	222	12/2/2008	Government
State Street	1,800	12/3/2008	Financial
Jefferies Group	358	12/3/2008	Financial
Adobe Systems	600	12/3/2008	Technology
Carlyle Group	100	12/3/2008	Financial
Credit Suisse Group	5,300	12/4/2008	Financial
AT&T Inc.	12,000	12/4/2008	Financial
DuPont	2,500	12/4/2008	Chemicals
Viacom	850	12/4/2008	Media
NBC Universal	500	12/4/2008	Media
Avis Budget Group Inc.	2,200	12/4/2008	Auto services
Cummins	500	12/5/2008	Industrial Equipment
Newsday	100	12/5/2008	Media
General Motors	2,000	12/5/2008	Auto
Gentex	400	12/5/2008	Technology
Pratt & Whitney	350	12/5/2008	Aerospace
Paetec	222	12/5/2008	Technology
3M	1,800	12/8/2008	Miscellaneous
Dow Chemical	5,000	12/8/2008	Chemicals
Anheuser-Busch InBev	1,400	12/8/2008	Beverages
Sony Corp	8,000	12/9/2008	Technology
Danaher Corp.	1,700	12/9/2008	Scientific Equipment
Wyndham Worldwide	4,000	12/9/2008	Hotels Casinos Resorts
Novellus	367	12/9/2008	Scientific Equipment
National Football League	150	12/9/2008	Entertainment, Sports
Principal Financial Group	550	12/9/2008	Financial
Rio Tinto	14,000	12/10/2008	Mining
Electronic Arts	unspecified	12/10/2008	Technology
SKF	2,500	12/10/2008	Industrial Equipment
Office Depot	2,200	12/10/2008	Retail
National Public Radio	85	12/10/2008	Media
Stanley Works	2,000	12/11/2008	Household and Personal Products
Sara Lee	700	12/11/2008	Food Products
Total:	199,450

==========================================
Update: 2/10/2009

NEW YORK (CNNMoney.com) -- General Motors announced Tuesday it is cutting 10,000 workers, or 14% of its salaried jobs worldwide. A third of those job losses will be in the United States.

The troubled automaker also said it will cut the pay for its remaining U.S. salaried staff.

===========================================

Update: 2/13/2009

Hit by expectations of further financial losses, Pioneer Corp. has announced 10,000 job cuts, plant closings in the US and UK, and plans to leave the plasma display market. Job cuts will include 6,000 full-time salaried employees and 4,000 contract workers both in Japan and other countries.

In a move resulting in some 350 job layoffs, the company will shut down two overseas plasma display assembly plants, located in Pomona, California, and Castleford, Britain. Pioneer plans to exit the plasma display business entirely by March of this year, according to wire reports.

=========================

2/24/2009 update:

Employers cut nearly 600,000 jobs in January, the biggest loss since 1974. That sent the unemployment rate to 7.6 percent, the highest in 16 years. Since the recession began in December 2007, companies have cut a net total of nearly 3.6 million jobs. Home Depot Inc., Boeing Co., Pfizer Inc., Caterpillar Inc., Micro (2000), Spansion (3000) each announced job cut.

==========================

3/5/2009 update:

Northrop Grumman to cut 750 jobs.

Household worth drops by $2.8 trillion

2008-12-11T13:49:00.000-08:00

The government reported Thursday that household debt in the third quarter fell for the first time ever. Meanwhile, net worth dropped by the largest amount on record based on data going back to 1951.

Consumer debt fell an annualized $30 billion, or 0.8% in the third quarter to $13.91 trillion, according to the Federal Reserve's flow of funds report.

Americans holding less debt may sound like a positive, but it also means consumers are spending less, as debt has become more expensive and harder to come by.

Furthermore, the U.S. economy has shed 1.9 million jobs so far in 2008.

Consumers watched their net worth fall for the fourth quarter in a row as it dropped by $2.8 trillion, or 4.7%, to $56.5 trillion, dragged down by huge drops in home values and in the stock market. It was the largest decline in the 57-year history of the report.

When to start collecting social security benefits?

2008-12-09T12:30:00.000-08:00

Figuring out whether to take Social Security at 62 -- the earliest age you can collect -- or waiting until you're older has always been one of the most important questions retirees and wanna-be retirees face.

But making this call is even more critical today. The reason: working and saving a few extra years combined with the larger check you would receive by postponing Social Security can help you rebuild retirement accounts that have been devastated by the bear market.

Of course, some people may have no choice but to collect as soon as they can. If you're forced into early retirement by a layoff or health problems before you have a chance to build an adequate nest egg, taking Social Security benefits ASAP may be the only option you have.

But if you're approaching age 62 in good health and you're in reasonable financial shape as well, waiting a few years can significantly boost the size of your monthly check for the rest of your life, not to mention pass on a larger payment to your spouse, if he or she receives a survivor benefit based on your work record.

So the take-it-now-or-later question essentially comes down to this: Will you (and your spouse, if you're married) be financially better off collecting payments for more years even if they're smaller? Or will you come out ahead with payments that may be larger by 25% or more even if you don't start getting them until you're a bit older?

The answer largely depends on how long you expect to live. If you think you'll be around long enough so that the total amount you collect from the bigger but later payments will be larger, then you're better off postponing.

If, on the other hand, you don't think you'll live long enough to overcome the late start in collecting benefits, then you're better off claiming Social Security sooner.

You can get a rough sense what size benefit you would qualify for at three different ages -- 62, your full retirement age and age 70 -- by going to the Quick Benefit Calculator on the Social Security site. For a more accurate estimate that calculates the size of your check using your actual work history, you can check out Social Security's new Retirement Estimator.

By comparing the size of the total amount you would receive year by year by claiming benefits at different ages, you can see how long it would take for you to break even under different scenarios.

Or you can get a very quick and easy estimate of whether you're better off starting at age 62 or your full retirement age by going to Met Life's Social Security Decision Tool.

Just plug in your age, gender and your most recent annual salary, and a neat little graph will pop up that shows your break-even age (76 in the 62 vs. full retirement age scenario), your odds of reaching that age and how much more you'll receive in total benefits if you live until 85 or 92.

This tool doesn't factor in any investment value for your Social Security benefits, however. Why, you may ask, does that matter if you just plan on spending the money anyway? Well, think of it this way. If you receive, say, $1,000 a month in Social Security benefits, that's $1,000 you don't have to withdraw from your retirement investments. Which means that $1,000 can continue to earn a return. If you assume a conservative rate of return on your retirement savings -- say, 4% to 5% after taxes each year -- your break-even period increases by roughly three years. For most people, especially someone in decent health -- that still usually makes postponing a good deal.

Married couples

The analysis gets more complicated for married couples. The idea is to maximize the amount a couple will collect as long as at least one of them is living. Recent research shows that the best strategy for many couples is for the wife to take Social Security at 62 and the husband to wait until he's 66 or older.

The reasoning is that husbands usually earn more than their wives -- which gives them a larger check -- but they die sooner. By having the wife start at an earlier age, the couple can collect more of her benefits while they're both living. And by the husband holding off to a later age for a larger check, the wife can then qualify for a larger survivor's benefit after her husband dies.

The best age for a husband and wife to begin collecting their respective benefits depends on the difference in their ages and earnings. To see what the ideal ages would be in your situation, check out Table 4 in a Boston College Center For Retirement Research paper titled "Why Do Women Claim Social Security Benefits So Early?". Or you can crunch the numbers on your own by downloading the "Start Social Security at 62, 66 or 70" program at the Analyze Now! site.

One final note: Recent research by T. Rowe Price shows that working, saving more and collecting Social Security later can be an especially powerful combination for increasing your income in retirement. For example, if you retire at 65 instead of 62 and save 15% of salary during those three years, you may be able to increase your combined income from investments and Social Security by more than 20%.

Bottom line: If your retirement accounts have taken a big hit in this crisis, you've probably already begun taking a closer look at your investing strategy. That's fine. But since you have little control over the financial markets, you may be able to improve your retirement prospects a lot more by re-thinking when you plan to retire and at what age you'll begin collecting Social Security.

Record high foreclosure

2008-12-07T17:06:00.000-08:00

One in 10 borrowers in America are either delinquent or in foreclosure. 1.35 million homes were in foreclosure in the third quarter.

Many of those troubled borrowers are in California and Florida, which have among the highest delinquency rates in the nation.

Forbes 2008 Best and Worst performing cars

2008-12-04T21:32:00.000-08:00

Based on predicted reliability, recalls and rate of depreciation: (source: Forbes)

(not in particular order)

Best:
. Acura TSX
. Honda Civic
. Honda CRV
. Honda Accord
. Scion xD
. Toyota Camry Hybrid
. Toyota Rav-4
. Toyota Prius
. Toyota Yaris
. Lexus IS 250

Worst:
. GMC Acadia
. Hyundai Vera Cruz
. Saturn Vue
. Jeep Liberty
. Ford Explorer
. Hyundai Santa Fe
. Nissan Xterra
. Jeep Grand Cherokee
. Chrysler Sebring
. Dodge Avenger

========
from Consumer report:

Best
-------------------
Toyota Prius
Lexus LS
Toyota Highlander
Lexus IS
Toyota RAV4 (4-cyl.)
Honda Civic
Honda Accord (4-cyl.)
Toyota Corolla
Mazda MX-5 Miata
Honda CR-V

Worst
--------------------
Buick Terraza
Chevrolet Uplander
Saturn Relay
Land Rover Discovery & LR3
Volkswagen Touareg
Pontiac Aztek
Nissan Armada (4WD)
Chevrolet S-10 (4WD)
GMC S-15 (4WD)
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Regulators ignored warnings about risky mortgages, delayed regulations on the industry

2008-12-01T18:20:00.001-08:00

Who are responsible for the mortgage meltdown? U.S. economy, and so many peoples' investment/savings and jobs are ruined by a few greedy people again? When will the majority of the people be freed from hurting by a few rotten apple? The government and the congress who are elected by us the people can turn their back so easily, and they make compromise to the special interests...

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The Bush administration backed off proposed crackdowns on no-money-down, interest-only mortgages years before the economy collapsed, buckling to pressure from some of the same banks that have now failed. It ignored remarkably prescient warnings that foretold the financial meltdown, according to an Associated Press review of regulatory documents.

"Expect fallout, expect foreclosures, expect horror stories," California mortgage lender Paris Welch wrote to U.S. regulators in January 2006, about one year before the housing implosion cost her a job.

Bowing to aggressive lobbying -- along with assurances from banks that the troubled mortgages were OK -- regulators delayed action for nearly one year. By the time new rules were released late in 2006, the toughest of the proposed provisions were gone and the meltdown was under way.

"These mortgages have been considered more safe and sound for portfolio lenders than many fixed-rate mortgages," David Schneider, home loan president of Washington Mutual, told federal regulators in early 2006. Two years later, WaMu became the largest bank failure in U.S. history.

The administration's blind eye to the impending crisis is emblematic of its governing philosophy, which trusted market forces and discounted the value of government intervention in the economy. Its belief ironically has ushered in the most massive government intervention since the 1930s.

Many of the banks that fought to undermine the proposals by some regulators are now either out of business or accepting billions in federal aid to recover from a mortgage crisis they insisted would never come. Many executives remain in high-paying jobs, even after their assurances were proved false.

In 2005, faced with ominous signs the housing market was in jeopardy, bank regulators proposed new guidelines for banks writing risky loans. Today, in the midst of the worst housing recession in a generation, the proposal reads like a list of what-ifs:

--Regulators told bankers exotic mortgages were often inappropriate for buyers with bad credit.

--Banks would have been required to increase efforts to verify that buyers actually had jobs and could afford houses.

--Regulators proposed a cap on risky mortgages so a string of defaults wouldn't be crippling.

--Banks that bundled and sold mortgages were told to be sure investors knew exactly what they were buying.

--Regulators urged banks to help buyers make responsible decisions and clearly advise them that interest rates might skyrocket and huge payments might be due sooner than expected.

Those proposals all were stripped from the final rules. None required congressional approval or the president's signature.

"In hindsight, it was spot on," said Jeffrey Brown, a former top official at the Office of Comptroller of the Currency, one of the first agencies to raise concerns about risky lending.

Federal regulators were especially concerned about mortgages known as "option ARMs," which allow borrowers to make payments so low that mortgage debt actually increases every month. But banking executives accused the government of overreacting.

Bankers said such loans might be risky when approved with no money down or without ensuring buyers have jobs but such risk could be managed without government intervention.

"An open market will mean that different institutions will develop different methodologies for achieving this goal," Joseph Polizzotto, counsel to now-bankrupt Lehman Brothers, told U.S. regulators in a March 2006.

Countrywide Financial Corp., at the time the nation's largest mortgage lender, agreed. The proposal "appears excessive and will inhibit future innovation in the marketplace," said Mary Jane Seebach, managing director of public affairs.

One of the most contested rules said that before banks purchase mortgages from brokers, they should verify the process to ensure buyers could afford their homes. Some bankers now blame much of the housing crisis on brokers who wrote fraudulent, predatory loans. But in 2006, banks said they shouldn't have to double-check the brokers.

"It is not our role to be the regulator for the third-party lenders," wrote Ruthann Melbourne, chief risk officer of IndyMac Bank.

California-based IndyMac also criticized regulators for not recognizing the track record of interest-only loans and option ARMs, which accounted for 70% of IndyMac's 2005 mortgage portfolio. This summer, the government seized IndyMac and will pay an estimated $9 billion to ensure customers don't lose their deposits.

Last week, Downey Savings joined the growing list of failed banks. The problem: About 52% of its mortgage portfolio was tied up in risky option ARMs, which in 2006 Downey insisted were safe -- maybe even safer than traditional 30-year mortgages.

"To conclude that 'nontraditional' equates to higher risk does not appropriately balance risk and compensating factors of these products," said Lillian Gavin, the bank's chief credit officer.

At least some regulators didn't buy it. The comptroller of the currency, John C. Dugan, was among the first to sound the alarm in mid-2005. Speaking to a consumer advocacy group, Dugan painted a troublesome picture of option-ARM lending. Many buyers, particularly those with bad credit, would soon be unable to afford their payments, he said. And if housing prices declined, homeowners wouldn't even be able to sell their way out of the mess.

It sounded simple, but "people kind of looked at us regulators as old-fashioned," said Brown, the agency's former deputy comptroller.

Diane Casey-Landry, of the American Bankers Association, said the industry feared a two-tiered system in which banks had to follow rules that mortgage brokers did not. She said opposition was based on the banks' best information.

"You're looking at a decline in real estate values that was never contemplated," she said.

Some saw problems coming. Community groups and even some in the mortgage business, like Welch, warned regulators not to ease their rules.

"We expect to see a huge increase in defaults, delinquencies and foreclosures as a result of the over selling of these products," Kevin Stein, associate director of the California Reinvestment Coalition, wrote to regulators in 2006. The group advocates on housing and banking issues for low-income and minority residents.

The government's banking agencies spent nearly a year debating the rules, which required unanimous agreement among the OCC, Federal Deposit Insurance Corp., Federal Reserve, and the Office of Thrift Supervision -- agencies that sometimes don't agree.

The Fed, for instance, was reluctant under Alan Greenspan to heavily regulate lending. Similarly, the Office of Thrift Supervision, an arm of the Treasury Department that regulated many in the subprime mortgage market, worried that restricting certain mortgages would hurt banks and consumers.

Grovetta Gardineer, OTS managing director for corporate and international activities, said the 2005 proposal "attempted to send an alarm bell that these products are bad." After hearing from banks, she said, regulators were persuaded that the loans themselves were not problematic as long as banks managed the risk. She disputes the notion that the rules were weakened.

In the past year, with Congress scrambling to stanch the bleeding in the financial industry, regulators have tightened rules on risky mortgages.

Congress is considering further tightening, including some of the same proposals abandoned years ago.

U.S. Recession Started since 12/2007

2008-12-01T18:14:00.000-08:00

The National Bureau of Economic Research said Monday that the U.S. has been in a recession since December 2007, making official what most Americans have already believed about the state of the economy .

Schwarzenegger on Monday declared a fiscal emergency

2008-12-01T18:12:00.000-08:00

California Gov. Arnold Schwarzenegger on Monday declared a fiscal emergency, calling for fast legislative action to alleviate the state's $11.2 billion shortfall in revenue.

"Without immediate action our state is headed for a fiscal disaster and that is why with more than two dozen new legislators sworn in today - I am wasting no time in calling a fiscal emergency special session," Schwarzenegger said in a news release.

CA jobless benefits extended

2008-11-21T20:40:00.000-08:00

As of 11/21/08, CA unemployment rate is at 8.2%.

Federal legislation enacted in July provided up to 13 weeks of extended benefits for workers who exhausted their regular UI benefits in California and across the country. The new legislation adds up to seven weeks to the earlier extension, a total of up to 20 weeks of extended benefits. The new legislation also includes an additional extension of up to 13 weeks for high unemployment states. Workers in those states will be eligible for a total of up to 33 weeks of extended benefits.

If you are affected by the additional extended benefit weeks or the second extension, the EDD will notify you by mail.

WHO IS ELIGIBLE FOR THE FIRST EXTENSION

The first extension can be filed on or after July 6, 2008. You may be potentially eligible for the first extension if you:

Are fully or partially unemployed on or after July 6, 2008,
Have exhausted their entitlement to a regular UI claim,
Are not qualified to file a new regular claim,
Have had a valid claim that began on or after May 7, 2006, AND
Meet all eligibility criteria.

If you already have an extended benefit claim, refer to the “WHO IS ELIGIBLE FOR THE SECOND EXTENSION” section below for more information.

SECOND EXTENSION

Once you have collected all extended benefits on your first extension claim, you will be eligible to file a second extension claim. The Department will automatically file the second extension and send you additional continued claim forms. No action is required on your part.

WHO IS ELIGIBLE FOR THE SECOND EXTENSION

You may be eligible for a second extension if you:

Were eligible for the first extension,
Have no benefits remaining on the first extension,
Are not qualified to file a new regular claim, AND
Meet all eligibility criteria.

S&P sinks to 1997 low

2008-11-20T17:15:00.001-08:00

Wall Street slumped Thursday, with the S&P 500 plunging to an 11-1/2 year low as fears of a prolonged recession sparked a massive selloff.

Treasury prices rallied as investors sought the comparative safety of government debt. The dollar was mixed versus other major currencies. Oil prices plunged

The Standard & Poor's 500 (SPX) index lost 6.7% and closed at its lowest point sine April 14, 1997.

The Dow Jones industrial average tumbled (INDU) 5.6% and the Nasdaq composite (COMP) slumped 5.1%. Both the Dow and Nasdaq closed at their lowest points since March 12, 2003, which was just above the low of the last bear market.

11/20/2008 Congress Extends Unemployment Benefits

2008-11-20T17:10:00.000-08:00

The Senate voted to provide seven additional weeks of payments to people who have exhausted their benefits. Those in states where the unemployment rate is above 6% would be entitled to an additional 13 weeks above the 26 weeks of regular benefits. Benefit checks average about $300 a week nationwide.

Last week there were half million new jobless claims filed. Companies reporting layoffs in past week include Citigroup, which slashed 20% of its workforce, or 50,000 jobs, the biggest cut by a corporation in 15 years. Financial services firm Fidelity Investments announced that it will cut 1,700 jobs, and Sun Microsystems reported that it would lay off 6,000 people, or 18% of its work force.

2 more banks failed

2008-11-09T22:44:00.001-08:00

Franklin Bank, a Houston, Texas-based bank and Security Pacific Bank, a Los Angeles, Calif.-based bank were shut down by state regulators Friday, marking the 18th and 19th bank failures this year.

7 ways car dealers make you pay extra

2008-10-29T16:49:00.000-07:00

Narrated from Consumer Reports:

Your goal is to get the best car at the best price.

Mixing negotiation - Salespeople like to combine the vehicle price, trade-in, and/or financing negotiation, often asking you what you can afford to pay per month. This gives them more latitude to provide a favorable figure in one area while inflating figures in other areas. In the end, this could cost you more overall.

Avoid this trap by negotiating one thing at a time, starting with the price of the car. Approach this as if you were paying cash, with no trade-in. To get the best deal, you should go in with a starting price thats based not on the vehicles sticker price but on how much the dealer paid for it.

Make it clear to the salesperson that you want the lowest possible markup over your starting price, and that youll visit other dealerships selling the same vehicle and will buy from the one with the best price.

0 down, 0 interest, 0 payment for the first year - Be sure you know what the interest rate will be after the first year, and compare with rates that are currently available. Keep in mind that many buyers dont qualify for zero-percent loans and other low rates. Knowing the current rates can also help you avoid being talked into a rate thats higher than what you could get elsewhere.

Lease a car - Many leasing customers assume that the monthly payment the salesperson quotes is a nonnegotiable figure. Thats not true. The figure is often based on a vehicles sticker price with no discount, and can be negotiated just as if you were buying the car. In fact, to keep the transaction simple, you can negotiate the vehicle price before mentioning that you want to lease.

Other negotiable lease items include the down payment, annual mileage limit, and purchase-option price. Just as when buying, you can have dealers compete against each other, giving your business to the one that offers you the best deal.

Financing - Dealers like to arrange the financing for your vehicle because it gives them another source of profit. But the interest rate they offer may be higher than you could get elsewhere. Dont make financing a purchase-time decision. Before visiting the dealership, make sure you know how youll pay for the vehicle. Call ahead to find out what the dealers rate is, and compare it with what you could get from banks, credit unions, or other lending institutions. If you are preapproved for a loan, you can keep the financial arrangements out of the negotiations.

Knowing your credit score can also protect you if a disreputable dealer tries to give you a higher interest rate than you deserve. Any score over 700 should ensure you the lowest rates.

Add-ons and options - Salespeople will sometimes try to make up for a low price on a vehicle by talking you into a lot of optional equipment. Do your homework, so you know what options you want and which you can live without. Many options are available separately, but others can only be bought as part of a package. Consider these carefully. Option packages can make you pay for features you dont need to get a few you want. Its best to choose a vehicle trim level that gives you most of the options you want, then add other options separately. If a model doesnt have the features at the price you want, consider another.

Other extras gimmicks - fabric protection, rust protection, etc.

Extended Warranty - Consumer Reports does not recommend buying an extended warranty unless you plan on keeping a trouble-prone vehicle for an extended time after the original warranty runs out. Most manufacturer warranties are sufficient, with bumper-to-bumper coverage of at least three years or 36,000 miles and powertrain coverage thats often longer. If you want an extended warranty, ones offered by the auto manufacturer are typically better than those offered by third-party companies.

Mass layoffs at the highest level since 9/11

2008-10-22T17:19:00.000-07:00

NEW YORK (CNNMoney.com) -- The number of layoff announcements involving at least 50 workers rose in September to the highest level since the Sept. 11 terrorist attacks seven years ago, the government said Wednesday.

There were 2,269 mass layoff actions, up 497 from August, according to statistics released by the Labor Department. That was the most mass layoffs since the 2,407 in September 2001.

China's Exposure to Wall Street Financial Crisis

2008-10-15T00:06:00.000-07:00

NPR: Stephen Green, head of research at Standard Chartered Bank in Shanghai, speaks with host Liane Hansen about how the global financial crisis has hit China. China has close to $1.3 trillion invested in U.S. debt with up to $500 billion in agency securities.

According to web source, five banks: ICBC, BOC, CCB, CITIC, CMB invested USD $25B in Fannie Mai and Freddie Mac debt.

Repost "That Hissing Sound" by Paul Krugman

2008-10-13T19:54:00.000-07:00

Krugman has just won 2008 Nobel prize. He warned about housing bubble in 2005. See detail.

Krugman said Monday that the global financial crisis is "terrifying," but expressed cautious hope that a corner is being turned.

Dutch government pledges $273 billion to EU meltdown plan

2008-10-13T15:58:00.000-07:00

THE HAGUE, Netherlands (AP) -- Prime Minister Jan Peter Balkenende said Monday the Netherlands will guarantee 200 billion euros ($272.78 billion) in loans between banks to help ease the financial crisis.

The Dutch pledge is part of a raft of proposals to unblock frozen credit markets agreed on Sunday in Paris with other governments sharing the euro currency.

Individual packages already announced by the governments of Germany, France, Britain and others add up to well over 1 euro trillion.

Balkenende said the Dutch measure would be operational within days and should help the financial sector return to normal.

"Nearly all banks, however strong their position, are having trouble with liquidity," Balkenende said, blaming the problem on a lack of confidence.

"The government is prepared to guarantee a part of the loans between banks and between financial institutions and banks so that the money stream starts running again," he said.

The Dutch guarantee comes on top of a 20 billion euros fund the government set up last week to support financial institutions in the Netherlands.

Finance Minister Wouter Bos said last Thursday that money would be available to any "essentially healthy" company that requests it.

After the nationalization of the Dutch operations of Fortis NV and ABN Amro earlier this month, the only remaining large Dutch financial companies with stock market listings are bank and insurer ING Groep NV and insurer Aegon NV.

House GOP objects to spending in $150 billion stimulus package

2008-10-13T15:48:00.000-07:00

WASHINGTON (CNN) -- House Republicans on Monday objected to new spending measures that congressional Democrats are considering as they draft a $150 billion economic stimulus package.

n a letter to House Speaker Nancy Pelosi, Ohio Rep. John Boehner, the top Republican in the House, called the proposed spending "an irresponsible, business-as-usual approach that has earned this Congress the lowest approval ratings ever recorded."

A Democratic leadership aide said the stimulus package Democrats were drafting would include "a heavy emphasis on help to state and local governments."

But in their letter to Pelosi, Boehner wrote, "nothing currently being discussed by the majority as 'stimulus' will stabilize the economy long-term."

"Nothing being discussed will ease the uncompetitive nature of our nation's tax rates. Nothing being discussed will bring a single dollar of private capital into our markets, which would help stabilize and restore American families' savings and retirement accounts. And nothing being discussed will help small businesses compete and thrive," Boehner wrote.

Instead, House Republicans proposed a number of measures that, they say, will "turn the corner towards real economic growth," including:

Removing legal barriers to speed up new offshore oil drilling. A law banning offshore drilling expired October 1, but Republican lawmakers say lawsuits could block new offshore rigs and want judges to quickly rule on the cases.

Lowering taxes on income that U.S. corporations earn from their overseas subsidiaries.

Eliminating capital gains taxes on the sale of homes up to $500,000 for a couple.

Suspending capital gains taxes on securities purchased during the next two years.

Extending government deposit insurance to business transaction accounts.

Directing the government to guarantee inter-bank loans.

The GOP letter was released as Pelosi met Monday morning with a group of economists, including Larry Summers, a treasury secretary in the Clinton administration, and Nobel Prize-winning economist Joseph Stiglitz.

After meeting with the economists, Pelosi, a California Democrat, said the goals of the stimulus package would be "to provide relief for the middle class, to encourage consumer confidence and to have regulatory reform by re-writing the rules for financial institutions."

Congress passed a $170 billion stimulus package in February after the economy showed signs of weakening. That package included a measure that sent a stimulus check of up to $600 to taxpayers who made less than $75,000 a year. The checks were mailed out this summer.

The stimulus package the Democrats are now working on would work differently: It could provide states with funds to cover mandatory Medicaid spending, which would help state governments avoid cuts to education and other programs, Democratic leadership aides said.

The aides also said the stimulus package could provide funds to help states struggling with their own budgets, as well as infrastructure money, an extension of unemployment benefits, food stamps and more money for low-income energy assistance -- all measures that have passed the House before.

Rep. Barney Frank, D-Massachusetts and the chairman of the House Financial Services Committee, said government jobs were one of the few bright spots in the economy.

"The only good sign on jobs for the year has been that state and local governments have been adding jobs, which only mildly offset the great loss in the private sector," Frank said. "If we do not go to the aid of state and local governments now, they will now become an added factor to the job loss rather than something of a mitigating factor."

The stimulus package would be separate from the $700 billion bailout package passed by Congress this month to help solve the credit crisis in the financial sector that has disrupted credit markets worldwide.

A Senate Republican leadership aide on Friday said Senate Republicans are skeptical of a second stimulus but did not suggest there is outright opposition to one.

Dutch government injects cash

2008-10-10T09:40:00.000-07:00

AMSTERDAM, Oct 10 (Reuters) - Dutch banks and insurers on Friday welcomed the Dutch government's plan to set aside 20 billion euros ($27.5 billion) in capital to protect the country's financial sector, but reactions among them were mixed.

The following are the reactions from the nation's financials:

- ING said it welcomed the plans as "important and necessary steps to restore confidence and bring stability", adding that as a financially solid company it will assess the plan and the possible implications once more details are available.

- A spokesman for Aegon gave no comment on whether the insurer would tap into the Dutch government's funding, but said the group welcomed the measures. Aegon reiterated Thursday's statement that it is taking steps to enhance its capital position and reduce risk. The insurer had also said it expected to maintain a level of capital above AA requirements and a strong liquidity position.

- Mid-cap SNS Reaal said it did not need to use the government's funding. "Our bank does not have liquidity or solvency problems," spokeswoman Erna van der Neut said, adding that SNS can also obtain 500 million euros in capital from an independent foundation if necessary.

- Thierry Schaap, the chief executive of online brokerage BinckBank, said the company did not intend to use the cash, a comment echoed by Floris Deckers, chief executive of Dutch private bank Van Lanschot.

- Unlisted Dutch bank NIBC, whose merger plans with Kaupthing Bank were scrapped earlier this year, said it had solved its problems. "We were one of the first to take action and we solved our US problem quite definitely," an NIBC spokesman said. "NIBC is not the one they should be worried about at the moment."

Citi drops out; Wells wins battle for Wachovia

2008-10-10T09:21:00.000-07:00

Wells Fargo & Co. has won the battle for Wachovia Corp.

Citigroup Inc. has withdrawn from negotiations brokered by federal regulators that sought a compromise to the competing bids from Wells and Citigroup. Wachovia's brokerage business is in St. Louis and employs 4,800 people.

The issue is likely to go to court. But New York-based Citigroup (NYSE:C) says it will no longer seek to block Wells’ proposed $15.1 billion purchase of Wachovia.

Timeline of the finance crisis

2008-10-08T16:47:00.000-07:00

Friday September 12

6pm BST: With Lehman Brothers facing collapse, US officials struggle to find a buyer for the distressed investment bank.

Saturday September 13

2pm BST: Teams of bankers flood the New York Federal Reserve building for the weekend to explore options for Lehman. Bank of America and Barclays head list of potential purchasers.

Sunday September 14

2pm BST: Talks run into a third day. Traffic in New York snarls up under the sheer weight of backed-up, blacked-out limousines transporting the stressed-out bankers.

8pm BST: Barclays pulls out of the bidding and Bank of America turns its attention to Merrill Lynch.

Monday September 15

4am BST: Bank of America agrees a $50bn rescue bid for Merrill Lynch.

5.30am BST: Lehman files for bankruptcy.

7am BST: 4,500 Lehman staff at its Canary Wharf HQ are told it's all over.

9am BST: Shares in HBOS, Britain's biggest mortgage lender, crash 34% in early trading.

12pm BST: Shares plunge in a panicked morning on the London Stock Exchange, where the FTSE sheds almost 400 points.

2pm BST: Cardboxes are in demand at Canary Wharf as Lehman workers pack up and leave.

4.30pm BST: FTSE 100 closes almost 4% lower at 5,202.4, a 210 point drop, wiping out £50bn of value.

8pm BST: US authorities trying to put a rescue package together for insurance giant AIG agree a $20bn lifeline.

9pm BST: On Wall Street the Dow Jones industrial average plunges 504 points to close at 10917.51

Tuesday September 16

1am BST: Asian markets, which were closed yesterday, plummet in early trading.

7am BST: Japan's Nikkei index closes 570 points down at 11,609.

7.30am BST: Barclays confirms that it is still talking to Lehman about buying some assets.

8.30am BST: The FTSE plunged almost 100 points in early trading.

10am BST: HBOS shares halve in value to a low of 88p. Spokesman insists it is strong and well capitalised.

1pm BST: Wall Street titan Goldman Sachs reports 70% drop in profits.

1.50pm BST: FTSE 100 falls through the 5,000-point mark.

3pm BST: Pressure piles on HBOS, whose shares are still down 30%, with a downgrade from Standard & Poor's.

4.30pm BST: FTSE 100 slumps 178.6 points to close at 5025.6, wiping another £42bn off leading shares.

9pm BST: Dow finishes up 141.5 points at 11,059 after zig-zagging around all day.

10pm BST: Barclays seals deal for Lehman's US assets.

Wednesday September 17

7am BST: Nikkei rallies to 11,749, up 140 points.

2am BST: US government agrees to give AIG $85bn to keep afloat, in return for control of the company.

9am BST: Lloyds TSB and HBOS are locked in merger talks.

10am BST: Russia suspends stock market trading.

11am BST: More volatile trading on the FTSE, but silence from Lloyds and HBOS.

Noon BST: Libor - the borrowing rate banks charge each other - hits a seven-year high as the panic escalates.

1pm BST: Barclays hints that it might buy Lehman's UK assets too.

1.30pm BST: Lloyds finally confirms it is negotiations with HBOS.

3pm BST: Bank of England extends its special liquidity scheme, after pressure from banks.

4pm BST: Morgan Stanley shares fall 30%, as it become the latest bank under fire.

4.30pm BST: FTSE closes below 5,000 for first time since May 2005, down 113.2 points at 4912.4.

6.30pm BST: Merrill Lynch's John Thain defends $200m bonus pool for top brass.

7pm BST: Reports emerge that regulators are probing the practice of "naked" short sellers.

9pm BST: In fresh gloom on Wall Street, the Dow sheds 449 points to close at 10,609.

9.30pm BST: HBOS takeover is finalised.

Midnight BST: Morgan Stanley looks for salvation through a merger with Wachovia.

Thursday September 18

6am BST : Russian stock markets remain closed for a second day. More panic in Asia, where the Nikkei drops 260 points to 11,489.

7am BST: £12.2bn takeover of HBOS is announced to the City, amid fears of massive job cuts.

8.30am BST: As the FTSE keeps falling, the chancellor, Alistair Darling, insists we can ride out the storm.

9am BST: Gold is at a six-week high as investors flee shares and pile into commodities.

10am BST: Central banks around the world pump $180bn into the system in a concerted effort to end the crisis.

11am BST: India's stock market fluctuates wildly - with shares plunging before recovering after the government promises to help.

Noon BST: The Lloyds CEO, Eric Daniels: "This is a unique moment in time when we could make it happen."

1pm BST: Gordon Brown vows to end "irresponsible behaviour" in the City.

2pm BST: Christopher Cox, America's most senior financial markets regulator, takes aim at short sellers.

3pm BST: Goldman Sachs and Morgan Stanley shares fall sharply again on Wall Street.

4.30pm BST: London's relief rally does not last, as the FTSE 100 closes 32.4 points lower at 4880.0.

5pm BST: With £2bn wiped off the value of Lloyds, analysts question whether the deal makes sense.

6pm BST: UK's Financial Services Authority announces a ban on the short-selling of bank shares.

9pm BST: Wall Street closes 410 points higher as the US Federal Reserve starts briefing on an ambitious plan to create a federal "bad bank".

Friday September 19

7am BST: Asia starts the recovery, with the Nikkei closing up 431 points at 11,920.

8am BST: FSA names the 29 firms it hopes to save by banning short-selling.

9am BST: FTSE roars back, up 315 points in early trading to 5,195 thanks to the short-selling ban and the US "bad bank" plan.

10.30am BST: Russian stock markets bounce back after the government pledges 500bn roubles to fight the crisis.

Government rushes through increase in guarantees for British bank deposits to £50,000.

Wells Fargo scuppers Citigroup's takeover of Wachovia.

US jobs data are worse than expected.

9pm BST: On Wall Street, the DJIA closes at 11388.44, up 368.75 points.

Saturday September 20

The US treasury secretary, Henry Paulson, spends the weekend trying to thrash out his $700bn "bad bank" plan.

Sunday September 21

The Financial Services Authority holds crisis talks over a possible bail-out of Bradford & Bingley, which has seen its shares plunge 90% this year so far.

The administrator PWC battles to sell Lehman Brothers' UK operations.

Monday September 22

Morgan Stanley and Goldman Sachs give up their status as investment banks and become traditional commercial banks that accept deposits from ordinary people and businesses, marking a dramatic change in the make-up of Wall Street.

Japan's Nomura buys Lehman Brothers' Asian operations.

Robert Willumstad, the departing head of AIG, gives up his $22m (£12m) golden parachute.

Alistair Darling tells the Labour party conference that the City's bonus culture cannot continue.

Tuesday September 23

New figures show UK mortgage approvals hit a record low in August.

Political opposition to the $700bn bail-out plan grows in Washington, pushing shares prices lower.

Nomura buys Lehman Brothers' UK operations, saving 2,500 City jobs.

The FSA starts to name and shame the bank short-sellers.

Gordon Brown tells the Labour party conference this is a time for experience, not a novice in No 10.

Wednesday September 24

Warren Buffett invests $5bn (£2.7bn) in Goldman Sachs and warns that failure to agree a $700bn bailout could result in an "economic Pearl Harbour".

The FBI starts an investigation into Fannie Mae and Freddie Mac, AIG and Lehman Brothers over their role in the sub-prime mortgage crisis

CBI figures show high street sales continued to decline in August.

The Council of Mortgage Lenders admits that in the current turmoil it is "futile" trying to predict where house prices are headed.

Henry Paulson bows to intense pressure to include limits on what Wall Street bankers can be paid in his $700bn bail-out plan.

Gordon Brown tells world leaders in New York that an international regulator may be needed to stop the mess being repeated.

Thursday September 25

Dr Rowan Williams, the Archbishop of Canterbury, wades into the debate, calling for tighter regulation of a financial industry that has been allowed to run away with itself.

The owner of Canary Wharf sees the ongoing crisis knock a £500m hole in the value of its property portfolio, while Moss Bros predicts tough times ahead.

Ireland becomes the first state in the eurozone to fall into recession.

Jobless figures are up and orders are down in the US, signalling the dire state of the economy.

Even one of America's largest companies, GE, is not immune from the "unprecedented weakness and volatility" of the world's financial markets and profits slide

Bradford & Bingley axes 370 jobs, which adds to speculation that it is looking for a buyer.

HSBC adds to home owners' woes by raising its rates. Woolwich and First Direct follow suit.

Overnight the $700bn bail-out plan in the US appears to have stalled.

Friday September 26

America's biggest savings and loan company, Washington Mutual – or WaMu – is seized by federal regulators overnight and sold to JP Morgan for $1.9bn in a deal that sends shockwaves through Wall Street and main street alike.

In the UK, HSBC axes 500 investment banking jobs while home textiles retailer Rosebys calls in the administrators, putting 2,000 jobs at risk.

The Queen's dressmaker, Hardy Amies, teeters on the brink of collapse after its Icelandic backer stops funding it

In a speech at the UN, Gordon Brown calls for an end to the "age of irresponsibility".

Traders are worried about the possible failure of the $700bn bail-out plan and the FTSE 100 slides into the red again. The plan appears to be coming apart despite Paulson actually begging on one knee for the deal to be passed.

Saturday September 27

Desperate talks are held over the weekend between the FSA, Treasury and various banks to try and find a solution to the plight of Bradford & Bingley whose shares collapsed on Friday.

Sunday September 28

Spain's Santander buys Bradford & Bingley's 200 branches and £22bn savings book and the UK taxpayer gets lumbered with the mortgages.

MFI's managers ride to the rescue of the troubled furniture chain

In the US, the House speaker, Nancy Pelosi, pleads with representatives to pass the now 100-page plan to save Wall Street.

The Tory leader, David Cameron, tells the Conservative party faithful that Gordon Brown has "had your boom and now your reputation is bust".

Across the Channel, the storm clouds are growing over Belgian-Dutch financial group Fortis which is looking for a rescue partner.

Monday September 29

As news of the Bradford & Bingley rescue sinks in, the London stock market plummets in what will end up being one of the FTSE 100 index's worst ever trading days.

Banking shares plunge, putting the proposed rescue of HBOS by LloydsTSB in doubt.

Royal Bank of Scotland sees its shares lose a fifth of their value and remember: short selling is banned, this is not market spivs trying to make a packet but a growing realisation that no bank is safe.

As a result of the intense fear among bankers about which institution will be next to fold, the interbank lending rate goes through the roof despite desperate attempts by Central Banks to pump cash into the system.

New figures from the Bank of England show mortgage lending collapsed in August. Those people who do manage to sell are taking much lower prices for their homes.

In Iceland, the government is forced to take control of one of the nation's biggest banks.

The German government and other banks throw a €35bn (£28bn) lifeline to Hypo Real Estate, the second-largest commercial property lender in the country.

In the US, Citigroup snaps up troubled bank Wachovia.

Apple shares plummet as analysts worry about the lure of its gadgets at a time when consumers are facing home repossessions and fearing for the jobs.

George Bush takes the podium to urge the House of Representatives to pass the $700bn bail-out plan. His short speech falls on deaf ears and a few hours later the House of Representatives votes the bail-out down.

Wall Street has a fit. The Dow Jones plunges 777 points, its biggest ever fall in points terms.

Tuesday September 30

Asian stock markets are the first to react to the shock news that the $700bn Wall Street bailout has failed. When London opens it is carnage with banking shares clobbered.

The stock market's fall raises further questions about the LloydsTSB/HBOS deal.

The Irish government takes the unprecedented step of guaranteeing retail deposits for the next two years.

Dexia, the troubled Belgo-French municipal lender, has to be bailed out.

In the UK, the government's own statisticians admit that the economy has stalled, while a slew of banks slam the door shut on mortgage borrowers by pulling hundreds of packages.

It's worse in the US where July has reported the biggest ever fall in house prices.

Anyone who does have savings is trying desperately to find a safe haven with government-backed National Savings & Investments swamped by savers.

The banks themselves are finding it increasingly difficult to raise financing with the cost of inter-bank borrowing experiencing its biggest ever one-day rise.

Dominique Strauss-Kahn, the managing director of the IMF, believes a bail-out is the only option for the US economy.

Wednesday October 1

The FSA starts talks with the banks about raising its level of savings protection from £35,000 to £50,000 to stop the rot.

That may be too little too late for some people who are already moving their cash into gold.

Things are going from bad to worse at Fortis as the ailing Belgo-Dutch bank is forced to shelve the sale of around €3bn in shares because no one wants to buy them.

It's back to the 1970s in the UK as car manufacturers introduce reduced working hours and new data shows British manufacturing shrinking at the fastest rate since records began nearly 17 years ago.

Share traders are praying that a rescue package can still be put together in the US.

The high street fashion chain Miss Sixty goes under.

Reassuring words from Gordon Brown about the deal with LLoydsTSB help shares in HBOS recover.

Warren Buffett decides to snap up $3bn worth of General Electric as part of a $15bn fundraising by the industrial conglomerate.

Thursday October 2

The US Senate has voted in favor of the Wall Street bail-out.

European leaders are considering their own bail-out, which could cost up to €300bn (£237bn). The French president, Nicolas Sarkozy, leads the push.

Economists are certainly in favor of such a move.

Gordon Brown's imminent cabinet reshuffle is expected to create an emergency committee that will take charge of the government's response to the financial crisis.

Marks & Spencer becomes the latest retailer to feel the icy chill of the gloomy economic climate as it admits shoppers are going to cheaper rivals.

Hopes that the US deal may get through help shares prices recover somewhat in London.

But by the close of play, Wall Street still has the jitters.

Friday October 3

The government rushes through an increase to £50,000 of guarantees for British bank deposits.

Wells Fargo scuppers Citigroup's takeover of Wachovia.

US jobs data are worse than expected.

Saturday October 4

Brown attends an emergency summit in Paris to discuss the crisis with his French, German and Italian counterparts.

Sunday October 5

Angela Merkel, the German chancellor, says that deposits in German bank accounts will be secure.

Monday October 6

The FTSE sees its largest one-day points fall. Alistair Darling tells MPs he will do "whatever is necessary" to bring stability to the banking system, but does not announce specific new initiatives.

Tuesday October 7

Bank shares fall sharply. The Icelandic internet bank Icesave blocks savers from withdrawing money.

5pm BST: The prime minister, the chancellor, the governor of the Bank of England and the chairman of the Financial Services Authority hold talks at No 10. Darling says afterwards that he wants to "put the banks on a longer-term sound footing".

7.30pm BST: Darling confirms the government will make a historic announcement tomorrow on changes to the banking system. It is thought it will involve using £50bn of taxpayers' money to take a major stake in high street banks.

Wednesday October 8

7.30am BST: The Treasury announces what amounts to a £500bn bank rescue package to stop the country's financial system melting down. Most bank shares fall again.

8.30am BST: Darling confirms that the government will guarantee no retail depositor with the internet bank Icesave will lose their money.

12pm BST: The Bank of England, the US Federal Reserve and the European Central Bank all cut half a point off their key interest rates in the first unscheduled rate moves since the aftermath of 9/11.

12.15pm BST: Brown confirms at Commons question time that banks benefiting from the government's rescue package will be forced to accept strict conditions on bonuses.

Fed joins 5 central banks - cuts 1/2 point and cites 'intensification' of crisis

2008-10-08T15:45:00.000-07:00

NEW YORK (CNNMoney.com) -- The Federal Reserve, working in coordination with other central banks worldwide, enacted an emergency interest rate cut on Wednesday.

The Fed lowered its fed funds rate by a half percentage point to 1.5%. The central bank's statement said the move was necessary because of the worsening crisis in global financial markets.

key provisions of the financial rescue plan

2008-10-05T13:30:00.000-07:00

Source: money.cnn.com

Attacking credit crisis: The core of the plan the House voted on is the same as what it rejected on Monday: the Treasury's proposal to let financial institutions sell to the government their troubled assets, mostly mortgage-related. It will allow the Treasury access to the $700 billion in stages, with $250 billion being made available immediately.

Protecting taxpayers: The final law is also similar to the original House bill in that it includes a number of provisions that supporters say will protect taxpayers. One will direct the president to propose a bill requiring the financial industry to reimburse taxpayers for any net losses from the program after five years. And the Treasury will be allowed to take ownership stakes in participating companies.

In addition, over time, supporters say, taxpayers are likely to make back much if not all of the money the Treasury uses because it will be investing in assets with underlying value.

The law includes a stipulation that the Treasury set up an insurance program - to be funded with risk-based premiums paid by the industry - to guarantee companies' troubled assets, including mortgage-backed securities, purchased before March 14, 2008.

Curbing executive pay: The law will place curbs on executive pay for companies selling assets or buying insurance from Uncle Sam. For example, any bonus or incentive paid to a senior executive officer for targets met will have to be repaid if it's later proven that earnings or profit statements were inaccurate.

Oversight: The rescue plan will set up two oversight committees.

A Financial Stability Board will include the Federal Reserve chairman, the Securities and Exchange Commission chairman, the Federal Home Finance Agency director, the Housing and Urban Development secretary and the Treasury secretary.

A congressional oversight panel, to which the Financial Stability Board will report, will have five members appointed by House and Senate leadership from both parties.

Tax breaks: The Senate-version of the bill that the House passed on Friday included three key tax elements designed to attract House Republican votes.

It extends a number of renewable energy tax breaks for individuals and businesses, including a deduction for the purchase of solar panels.

The law also continues a host of other expiring tax breaks. Among them: the research and development credit for businesses and the credit that allows individuals to deduct state and local sales taxes on their federal returns.

In addition, the law includes relief for another year from the Alternative Minimum Tax, without which millions of Americans would have to pay the so-called "income tax for the wealthy."

New accounting rules: The bailout plan underlines the Securities and Exchange Commission's power to change accounting rules on how banks and Wall Street firms value securities, and directs the agency to study the issue.

Some observers argue that tight accounting rules are a major reason for the credit crisis in the first place. Others contend that changing the so-called mark-to-market rules will just bury problems lurking beneath the surface and could further shake investor confidence in the already battered financial sector.

Shielding bank deposits: The law temporarily raises the FDIC insurance cap to $250,000 from $100,000. It allows the FDIC to borrow from the Treasury to cover any losses that might occur as a result of the higher insurance limit.

Federal bank regulators, who first floated the idea to Congress late Tuesday, said that bumping up the insurance limits will help improve liquidity at banks across the country. It may also provide a much-needed dose of confidence for consumers who may be worried about the health of their bank. (More about FDIC rules.)

The plan will also temporarily increase the level of federal insurance for credit union savings to $250,000 (note: expires in December 2009).

Mitigating foreclosures: The new law calls on federal agencies to encourage loan servicers to modify mortgages by a number of means - including reducing the principal or interest rate. It also extends a temporary provision that exempts from federal income tax any debt forgiven by a bank to a borrower in a foreclosure.

Cost: The law's tax provisions - the bulk of which come from the addition of tax breaks from other legislation - may reduce federal tax revenue by $110 billion over 10 years, according to estimates from the Joint Committee on Taxation. More than half of that is due to the one-year extension of AMT relief.

The Congressional Budget Office said it cannot estimate the net budget effects of the troubled asset program because of the many unknowns about that piece of the bill. However, the agency noted in a letter to lawmakers on Wednesday, it expects the program "would entail some net budget cost" but that it would be "substantially smaller than $700 billion."

Overall, the CBO said, "the bill as a whole would increase the budget deficit over the next decade."

A cruel September for 5 bank CEOs

2008-10-01T11:44:00.000-07:00

WAMU: Alan Fishman; 18 days, signing bonus: $7.5M and $6M severance.
Wachovia: Robert Steel; 2.5 months so far.
AIG: Robert Willumstad; 3 months. Walked out and declined $22M severance.
Merrill Lynch: John Thain, 11 months. Bloomberg reported that Thain, the former head of the New York Stock Exchange and a Goldman Sachs veteran, and his top two deputies may exit with nearly $200 million.
Lehman Brothers: Richard Fuld, Jr., 15 years. Lehman gave him a $22 million bonus in March, and he pocketed about $500 million while leading the company

Source: money.cnn.com

JPMorgan buys WaMu

2008-09-25T22:48:00.000-07:00

JPMorgan Chase acquired the banking assets of Washington Mutual late Thursday after the troubled thrift was seized by federal regulators, marking the biggest bank failure in the nation's history and the latest stunning twist in the ongoing credit crisis.

Under the deal, JPMorgan Chase will acquire all the banking operations of WaMu, including $307 billion in assets and $188 billion in deposits.

In exchange, JPMorgan Chase (JPM, Fortune 500) will pay approximately $1.9 billion to the Federal Deposit Insurance Corporation. Separately, JPMorgan announced plans to raise $8 billion in additional capital through the sale of stock as part of the deal.

S&P cut WAMU credit rating

2008-09-24T10:05:00.000-07:00

SAN FRANCISCO (MarketWatch) -- Standard & Poor's Ratings Services on Wednesday lowered Washington Mutual Inc.'s counterparty credit rating to "poor quality" of CCC/C from BB-/B. "The downgrade was due to the increased likelihood that a potential sale of the company may not involve the whole company, which increases the risk of default for holding company creditors," said Victoria Wagner, an S&P credit analyst. S&P also lowered WaMu's preferred stock rating to "most speculative" grade of CC from B- to reflect the risk of default of these securities but affirmed Washington Mutual Bank's counterparty credit rating of BBB-/A-3. The outlook remains negative.

Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.

Saving Social Security and Medicare: The cost

2008-09-23T21:01:00.000-07:00

(Money Magazine) -- We'll go out on a limb and assume you've heard the rumor that Social Security and Medicare are headed for trouble.

You've seen alarming stats thrown around and maybe wondered what to make of them. (For example, the two programs are said to have a $43 trillion deficit payable over 75 years. Is that a lot? And if it's as big as it sounds, how is the government still running?)

Perhaps you've even slogged through one of the reform plans that politicians, academics and retired CEOs are always dreaming up. But what you really want to know is more basic: How am I supposed to plan for this?

Here's where politics meets your portfolio. And as tricky as it is to guess the direction of stocks, it's even harder to predict the long-run electoral fortunes of Republicans and Democrats or the compromises legislators will hammer out. That said, there are some things you can expect when you get to retirement:

You'll have a significant Social Security benefit, especially if you're a boomer. The system's problems are quite fixable.

Medicare, on the other hand, is headed for crisis. A total meltdown. And soon. For the health insurance program to survive, it will have to make huge changes, and you must start preparing for them.

Both programs will be fixed with a combination of benefit cuts and higher taxes. Many of the higher taxes will be levied on your paycheck. But it's also possible that higher taxes on income and investments will hit you in retirement.

Well-off retirees - and by that we mean people with pensions and biggish IRAs, not just former hedge fund managers - will increasingly pay stealth taxes on their benefits. And we're not talking about some far-off proposal here. This one's already a done deal.

No matter what happens, Social Security and Medicare (in some form) are still going to play a major role in your retirement. So even if your last day of work is 10, 20 or 30 years off, you need to have a basic grasp of the challenges these systems face and the price you'll be asked to pay to keep them alive and kicking. Getting ready is partly a matter of how much you save - but as you'll see, it also matters where you save it.

Social Security: How much trouble is it in?

Established back in 1935, when the U.S. was mired in the Great Depression, the Social Security program now replaces just under 40% of the average retiree's pre-retirement earnings.

Even for higher-paid workers, it represents a significant source of income: For people who currently earn $100,000 or more on the job, Social Security is expected to replace about 25% of their incomes, on average, in retirement. So it had better be there.

But thanks largely to the baby boom, there's a funding gap in the not-too-distant future. Social Security is a "pay as you go" retirement system - that is, the Social Security taxes that get deducted from your paycheck today are used to pay out benefits to today's retirees.

Right now the Social Security system is taking in more money in tax revenue than it is paying out in benefits, with the surplus being entered into the government's books as the system's "trust fund."

But with so many boomers headed into retirement, that situation is likely to reverse sometime around 2017. Benefits will exceed revenue, and Social Security will have to draw on that trust fund.

By 2041 the trust fund will be tapped out too. At that point Social Security payroll taxes will be enough to fund only about 78% of promised benefits. The oldest boomers will be 95 that year. The youngest will be 77, with perhaps another decade or two of retirement to fund.

The price you'll pay

As bad as this all sounds, Social Security could be brought into balance without extreme pain. None of the reform proposals that have gotten the slightest political traction, including President George W. Bush's effort, would touch benefits for anyone over 55 when enacted. Retirement ages could be increased, but with life expectancy rising, that may not be so terrible, at least in a white-collar job.

One well-regarded proposal, by economists Peter Diamond and Peter Orszag, would reduce promised benefits gradually, with today's twentysomethings losing just 8.6% of their benefit. Payroll taxes would rise from 6.2% to 7.1% by 2055. That's hardly earth-shattering. And once you were retired, of course, you'd be off the hook for those higher payroll taxes.

But you may not be off the hook for all Social Security taxes. You see, Social Security has been in bigger financial trouble before. And the last time it went in for repair, lawmakers put in place some obscure new taxes on affluent retirees to shore up the system. Those taxes are automatically going to snag more and more people.

To understand these stealth taxes, you have to look back to the early 1980s. Ronald Reagan appointed a commission, chaired by future Federal Reserve chief Alan Greenspan, to come up with ways to keep Social Security solvent. The commission's recommendation: Make the wealthiest retirees pay partial taxes on their Social Security benefits. In 1984 that recommendation became law.

This tax is confusing, to put it mildly. When half of your Social Security benefit, plus all your other income, exceeds $25,000, or $32,000 as a married couple, some of your Social Security benefit starts to count as taxable income. That "other" income includes withdrawals from regular 401(k) accounts and traditional IRAs, as well as payments from a traditional pension plan and any employment income.

It also includes dividends, interest and capital gains on investments - even the interest on tax-free municipal bonds is thrown into the calculation. For each dollar of income over that $25,000 threshold, 50¢ of Social Security counts as taxable income until 50% of your benefit is subject to taxes. (Told you it was confusing.)

There's more. In 1994 the Clinton administration upped the ante. Now when half of your Social Security plus other income tops $34,000, or $44,000 for a couple, you have to add 85¢ of your Social Security to taxable income for each additional dollar of earnings.

And the pain doesn't stop until 85% of your benefits have been tossed into your taxable income. At first these rules didn't affect a lot of people. But here's the catch: Like the dreaded alternative minimum tax, those crucial income thresholds weren't indexed to inflation.

As a result, a third of all retirees are now paying federal income tax on their Social Security benefits. In 10 years, 43% of retirees will be subject to at least some of this tax.

For those caught in it, the tax makes the shelter of 401(k)s and traditional IRAs less valuable than you might have assumed. Let's say you get $24,000 a year from Social Security and draw $22,000 from a pension. That's enough to start moving you into the 85% zone.

Every additional dollar you withdraw or earn will have you reporting an additional $1.85 in taxable income. Hit the 25% tax bracket and that adds up to a 46¢ levy on what surely must have seemed like, and spent like, only a buck of income. Presto: You have an effective marginal tax rate of 46%. Unless, that is, you get your income from somewhere else - but more on that in a moment.

This tax is sticking around, says Andrew Biggs, a Social Security expert at the American Enterprise Institute. "If the government dropped the tax, they'd have to come up with something to replace it, which they don't have," he says.

Medicare: How much trouble is it in?

Three decades after Social Security was established, the federal government created Medicare to fund health care for the elderly. Today the government spends $10,000 every year, on average, on each person enrolled. And with healthcare costs growing at 2.5 percentage points faster than the economy, that number will keep climbing.

The conservative National Center for Policy Analysis notes that by 2050 more than 75% of federal income tax revenue will be soaked up by Social Security and Medicare if benefits and today's tax rates remain in place. It's Medicare that really drives that giant shift.

The Medicare system is several programs. Medicare Part A, which covers hospital care, is funded by payroll taxes and has a trust fund similar to Social Security's. But this is expected to run out much earlier, in 2019. To fix that, the system would have to double its payroll tax today, cut benefits by 50% or some combination of the two.

Part B, which covers doctor visits, and the new Part D, which pays for drugs, are funded by retiree premiums and the government's general revenue. They can't technically go insolvent, but as their costs grow, they'll have to raise their premiums even as they place a mounting burden on taxpayers as a whole.

The price you'll pay

First things first: Even if nothing else changes, your out-of-pocket medical costs are going to be higher than those of today's retirees. Not only will those Medicare premiums go up, but the many costs Medicare doesn't cover will rise as well.

According to the Employee Benefit Research Institute, a new retiree in 2016 will need to have saved more than $200,000 to cover retirement medical costs, assuming he or she lives to 90 and uses an average amount of prescription drugs. And that's assuming Medicare benefits aren't cut - not a safe assumption.

"There are going to be some major benefit cuts to Medicare in the next 10 years," says EBRI analyst Paul Fronstin. "You can't incrementally work your way out of the insolvency issue."

Benefit cuts could take a lot of forms. Modern health-care delivery is so inefficient that it's theoretically possible to cut out a lot of costs while delivering the same - maybe better - care. But it's just as likely that the Medicare system will do what private insurers have: thrust even more out-of-pocket costs onto you.

On the tax side, meanwhile, Medicare is going to be reaching into a lot of pockets in the coming decades. Since outpatient and drug coverage are financed from general government revenue, simply raising the payroll tax wouldn't fix the problem.

Income taxes could rise. Or capital gains and dividend taxes. Or the estate tax. Any way you slice it, the low rates of the Bush years aren't long for this earth, no matter who wins the November election.

Finally, there's "means testing" - that is, taxing affluent retirees. This has already begun in a small way. Part of the tax on Social Security benefits goes to Medicare. And starting in 2007, high-income retirees have had to pay bigger Part B premiums.

Once the system is fully phased in, retirees earning about $84,000 (or $168,000 as a married couple) will pay an extra $470 a year in premiums. The richest would pay $2,500 more. (The thresholds are adjusted for inflation.)

In the scheme of things, these aren't big bucks - yet. According to the Congressional Budget Office, only about 4% of Medicare beneficiaries pay the higher rate. Still, critics of means testing say the current income threshold is just the beginning.

"To raise any significant amount of money for Medicare, that will have to come down to the $40,000 range," says Maria Freese of the National Committee to Preserve Social Security and Medicare, a liberal advocacy group.

3 ways to plan for it

1. Set yourself up for tax-free income.

Your best defense against the coming entitlement tax grab is to generate as much retirement income as possible from sources that don't trigger the tax on Social Security benefits, or throw you over the Medicare means-testing threshold.

One way to accomplish this is to put at least some of your retirement money into a Roth IRA or Roth 401(k). With a traditional IRA or 401(k) you invest pretax dollars and pay taxes when you withdraw your money; with the Roth versions, you pay taxes on what you put in but nothing on your withdrawals.

And once you're retired, Roth withdrawals do not count as income when it comes to determining whether you'll owe taxes on your Social Security or have to pay higher Medicare premiums. "The Roth takes that issue off the table," says Roseland, N.J. accountant and planner Howard Hook.

What's more, a Roth also immunizes you from a rise in income tax rates. Now this doesn't mean Roths will always be the best tax move - for instance, you might fall into a lower tax bracket when you retire. Read here for more on how to use a Roth.

Paying down your mortgage can help too. If you sell your house and spend the proceeds, the IRS won't consider that income for Social Security taxation or Medicare means testing. Likewise, if you pay off your home and borrow against the equity in retirement, that won't get counted as income either.

2. Hedge against higher interest rates.

Of course, raising taxes and cutting benefits aren't exactly popular moves for any politician. They may just try to borrow their way out of the problem, says Laurence Kotlikoff, a Boston University economist who specializes in entitlements research.

But major credit rating agencies have already warned that the federal government's credit rating is at risk of being downgraded if the national debt is not brought under control. Borrowing more to pay for Medicare and Social Security would make this threat even more real. That means the government would have to pay higher interest rates on its debt.

Rising interest rates can hammer your portfolio returns, especially on bonds. And that's an argument for keeping your portfolio tilted to equities, even if you're close to retirement.

For example, at 30 you might aim for 75% in stocks and 25% in bonds. At 45 you'd shift to 70% in stocks, and at 60 you'd reduce your stock allocation to 60% of the portfolio.

3. Be realistic about saving and working.

Conventional wisdom holds that you can count on spending only 70% to 80% of your pre-retirement income in your golden years. After all, many of the big-ticket costs you incur during your working life, like commuting, contributing to your 401(k) account and paying off your mortgage, will disappear.

But taxes on your Social Security benefits and Medicare, combined with the likelihood of rising medical costs and possible benefit cuts, could easily outstrip those other savings.

To increase your odds of retiring well, start by assuming that you'll need 100% of your pre-retirement income to get you through your later years. To figure out how much you'll need to stash aside every year to get there, use our Retirement Planner calculator.

And if saving more is impossible, you may have to reconsider your retirement date. Working just one additional year increases your annual retirement income by 9%, on average, according to Urban Institute research. No, it's not a silver bullet - there simply isn't one. But every bit of ammunition will help.

Sub-prime writedown

2008-09-21T21:47:00.000-07:00

May 12nd, 2008, according to BBC News:

Citigroup: $40.7bn

UBS: $38bn

Merrill Lynch: $31.7bn

HSBC: $15.6bn

Bank of America: $14.9bn

Morgan Stanley $12.6bn

Royal Bank of Scotland: $12bn

JP Morgan Chase: $9.7bn

Washington Mutual: $8.3bn

Deutsche Bank: $7.5bn

Wachovia: $7.3bn

Credit Agricole: $6.6bn

Credit Suisse: $6.3bn

Mizuho Financial $5.5bn

Bear Stearns: $3.2bn

Barclays: $3.2bn

=======================

Per "The City", May 19th, 2008:

Company . . . . . . Writedowns . . . . . . Losses Per Employee
1. Mizuho Financial Group - $5.5bn in writedowns, 2,000 wholesale banking employees, $2,750,000 per employee.

2. Wachovia - $7bn, 3,900, $1,794,872 per employee

3. UBS - $37bn, 22,000, $1,681,818 per employee

4. Citi - $40.9bn, 30,000, $1,363,333 per employee

5. Bank of America - $14.8bn, 20,000, $740,000 per employee

6. Merrill Lynch - $31.7bn, 48,100, $659,044 per employee

7. Dresdner Kleinwort - $3.3bn, 6,000, $550,000 per employee

8. Credit Agricole - $6.9bn, 13,000, $530,769 per employee

9. Barclays Bank / Barclays Capital - $7.7bn, 16,200, $475,309 per employee

10. JPMorgan Chase - $9.8bn, 25,000, $392,000 per employee

11. Deutsche Bank - $7.6bn, 20,000, $380,000 per employee

12. SG Corporate & Investment Banking - $3.9bn, 10,500, $371,429 per employee

13. Morgan Stanley - $12.6bn, 38,050, $331,143 per employee

14. Credit Suisse - $6.3bn, 20,000, $315,000 per employee

15. Lehman Brothers - $6.6bn, 30,000, $220,000 per employee

16. Goldman Sachs - $4.1bn, 30,000, $133,667 per employee

17. BNP Paribas - $1.7bn, 13,000, $130,769 per employee

===========================================================

Bloomberg

Posted: 3:23 am
July 25, 2008

Falling US home prices will force financial firms to write down $1 trillion from their balance sheets, crimping bank lending and sparking sales of assets, said Bill Gross, who manages the world's biggest bond fund.

A total of $5 trillion of mortgage loans belong to "risky asset categories," Gross of Pacific Investment Management Co., said yesterday.

"The problem with writing off $1 trillion from the finance industry's cumulative balance sheet is that if not matched by capital raising, it necessitates a sale of assets, a reduction in lending, or both, that in turn begins to affect economic growth," Gross wrote.

To date, firms worldwide have reported $467.9 billion in losses and writedowns tied to the US subprime mortgage market.

Banks earning results

2008-09-20T20:57:00.000-07:00

Bank of America 9/19/2008 share $35.90; Q2 results:

CHARLOTTE, N.C., July 21 /PRNewswire-FirstCall/ -- Bank of America Corporation today reported second-quarter 2008 net income of $3.41 billion, down from a record $5.76 billion a year earlier. Diluted earnings per share decreased 44 percent to $0.72 from $1.28 in the same period in 2007. Net revenue rose to a record $20.32 billion. Earnings available to common shareholders totaled $3.22 billion.

=============================================================
ING Q2 results:

Net profit was euro1.92 billion ($2.86 billion), from euro2.56 billion in the same period a year ago.

"We are, of course, not immune to the challenging environment around us, and the sustained weakness across financial markets put pressure on earnings," said chief executive Michel Tilmant in a statement.

"Combined with lower real estate and private equity valuations, lower investment results accounted for the vast majority of the profit decline."

Shares fell 1.1 percent to euro22.74 in early trading in Amsterdam.

The company said "underlying" insurance earnings _ a nonstandard measure _ fell 45 percent to euro1.15 billion ($1.71 billion) while underlying banking earnings were down 17 percent to euro1.10 billion ($1.64 billion).

At insurance, apart from smaller gains on investments, fewer clients were interested in investment-linked products, especially in Asia. Gross income from premiums fell 2.3 percent to euro11.2 billion ($16.7 billion).

...

The banking division wrote down real estate values and took higher provisions against potential bad loans.

Losses linked to the U.S. mortgage market were limited to euro39 million ($58 million) and a bright spot was ING's online retail banking arm, ING Direct, where profits rose 4.7 percent to euro179 million ($267 million).

Analyst Ton Gietman of Petercam said the results were in line with expectations.

"The good news was that the company reduced its equity exposure, again proved resiliant in the credit crisis...and the balance sheet remained strong," he wrote in a note on earnings.

"Worrrying, however is the strong increase in loan losses," which were euro234 million ($349 million), up from euro25 million a year ago.

======================================================

Wells Fargo Bank 9/19/2008 share $39.65; Q2 results:

Wells Fargo reported second-quarter earnings fell 21 percent, beating expectations and stirring a rally on Wall Street on Wednesday.

The bank also boosted its dividend 10 percent, triggering a 32 percent jump in the bank's stock . That gain gives the San Francisco bank (NYSE: WFC) more valuable currency if it wishes to go shopping at the bargain bin of American banking.

...

The bank set aside $3 billion, including $1.5 billion that was put in reserves for anticipated losses down the road. The bank charged off $1.5 billion in bad debts during the second quarter, or 1.55 percent of average loans, annualized. That compares to $1.5 billion, or 1.6 percent of average loans in the first quarter, and $720 million, or 0.87 percent, in last year's second quarter, before the current credit crisis kicked into high gear.

Total nonperforming loans were $5.23 billion, or 1.31 percent of total loans, at the end of June compared to $4.5 billion, or 1.16 percent, at the end of March. In April, the bank changed it policy on writing off defaulting loans, waiting 180 days instead of 120 days and postponing a possible hit to earnings.

"The increases in nonperforming assets continued to be centered in portfolios affected by residential real estate issues and the associated impact on the consumer," said Mike Louglin, the bank's chief credit officer.

==========================================================

ETrade share $3.91; Q2 results:

Etrade reported Q2 earnings of -.19/share after the bell today vs the average analyst estimate of -.14/share. Highlights of the earnings report included loan loss provisions of $319 million, substantially higher than the provisions of $234 million in Q1.

In addition, the company divulged that it was holding preferred stock postions in Fannie Mae and Freddie Mac that were valued at $330 million at the end of the second quarter. However, during the GSE crisis that occurred in early July, the company sold 65% of these holdings at a pre-tax loss of $83 million, an event that will effect Q3 earnings.

SEC bans short-selling of financial stocks

2008-09-19T09:03:00.000-07:00

NEW YORK (Reuters) - U.S. market regulators issued an emergency ban on the short-selling of financial stocks on Friday, igniting big rallies in the sector that has been targeted by sellers as the credit crisis gathered pace.

Fed fund rate

2008-09-18T11:53:00.000-07:00

08/2004: 1.5, then started increasing
08/2006 - 08/2007: 5.5, then started decreasing
05/2008 - 08/2008: 2
10/2008: 1.5 (10/08/2008 emergency rate cut)
12/2008: 0.25

Study links oil prices to investor speculation

2008-09-16T22:50:00.000-07:00

According to an article written by H. JOSEF HEBERT Associated Press Writer:

"Speculation by large investors - and not supply and demand for oil - were a primary reason for the surge in oil prices during the first half of the year and the more recent price declines, an independent study concluded Wednesday.

The report by Masters Capital Management said investors poured $60 billion into oil futures markets during the first five months of the year as oil prices soared from $95 a barrel in January to $145 a barrel by July."

In July, 2008, in an open letter, 12 U.S. airlines call on Congress to curb excessive speculation that they say drives up oil and fuel prices, slamming the airline industry.

On July 30th, a bill aimed at preventing excessive speculation in oil and other futures trading did not get enough votes to pass in the U.S. House of Representatives on Wednesday, as Republicans complained the measure did not also open more offshore areas to oil drilling.

Inflation data

2008-09-16T08:13:00.000-07:00

Over the past 12 months, overall inflation is up by 5.4 percent. That's a slight improvement from the 5.6 percent rise for the 12 months ending in July, which had been the largest year-over-year increase in 17 years. Core inflation is up 3.4 percent over the past 12 months.

Lehman, Merrill Lynch, and AIG

2008-09-16T07:58:00.000-07:00

NEW YORK (CNNMoney.com) -- Stocks tanked Monday, amid the largest financial crisis in years after Lehman Brothers filed for the biggest bankruptcy in history, Bank of America said it would buy Merrill Lynch and AIG slumped on fears that it can't raise cash.

=====================================================

NEW YORK (CNNMoney.com) -- Shares of American International Group tumbled Tuesday as the company scrambled to raise as much as $75 billion to keep itself afloat.

The pressure on the nation's largest insurer reached fevered pitch on Monday night as the troubled insurer was hit by a series of credit rating downgrades.

The cuts could prove deadly to AIG, forcing it to post more than $13 billion in additional collateral. Shares were down 42% in early morning trading, after falling more than 70% in early morning trading and losing 61% of their value the day before.

=====================================================

WASHINGTON - For the second time this month, the U.S. government put taxpayer money on the hook to rescue a private financial company, saying the failure of the huge insurer American International Group Inc. would further disrupt markets and threaten the already fragile economy.

The Federal Reserve said Tuesday it would provide up to $85 billion in an emergency, two-year loan to rescue AIG, which teetered on the edge of failure because of stresses caused by the collapse of the subprime mortgage market and the credit crunch that ensued. In return, the government will get a 79.9 percent stake in AIG and the right to remove senior management.

Currency Conversion Fee Antitrust Litigation (MDL 1409)

2008-09-14T14:25:00.000-07:00

Subject to final Court approval, a settlement has been reached in In re Foreign Currency Conversion Fee Antitrust Litigation (MDL 1409). This web site supplies information about the litigation and the settlement, and provides links to relevant documents for Members of the Settlement Classes and others interested in the settlement.

The lawsuit is about the price cardholders of Visa-, MasterCard-, or Diners Club-branded payment cards were charged to make transactions in a foreign currency, or with a foreign merchant, between February 1, 1996 and November 8, 2006. Plaintiffs challenge how the prices of credit and debit/ATM card foreign transactions were set and disclosed, including claims that Visa, MasterCard, their member banks, and Diners Club conspired to set and conceal fees, typically of 1-3% of foreign transactions, and that Visa and MasterCard inflated their base exchange rates before applying these fees. The Defendants include Visa, MasterCard, Diners Club, Bank of America, Bank One/First USA, Chase, Citibank, MBNA, HSBC/Household, and Washington Mutual/Providian. They deny the Plaintiffs' claims and say they have done nothing wrong, improper, or unlawful.

Current status: The current status of this class action settlement is that a decision to grant final approval of the settlement is pending before the Court. With the expiration of the claims submission period, on May 30, 2008, the Settlement Administrator has commenced the process of auditing and validating claims. Please be advised that any claims postmarked or faxed after May 30, 2008 will be considered late. Also, any changes to your address or contact information should be sent in writing to the Settlement Administrator. The issuance of refund checks for valid timely claims will not commence until after the Court enters an order granting final approval of the settlement, any potential appeals are resolved, and the Settlement Administrator has validated the claims. Please continue to check this website for additional information about the settlement and claims administration as it becomes available.

WAMU

2008-09-10T13:41:00.000-07:00

NEW YORK (Reuters) - Washington Mutual Inc (WM.N) stock sank as much as 30 percent to its lowest level in 17 years and the perceived risk of its debt soared on concern it won't find a buyer or raise enough capital to combat soaring mortgage losses.

Shares of the largest U.S. savings and loan were down 60 cents, or 18 percent, at $2.70 on Wednesday on the New York Stock Exchange after falling as low as $2.30, the lowest level since January 1991, according to Reuters data.

On Tuesday, Standard & Poor's lowered its outlook to "negative" for its "BBB-minus" credit rating, which is one notch above "junk" status.

Washington Mutual this week announced an agreement with its chief U.S. regulator, the Office of Thrift Supervision, requiring improved risk management and compliance. It said the agreement doesn't require it to raise capital.

Most expensive real estate markets in U.S.

2008-09-09T18:07:00.000-07:00

CAlifornia: La Jolla, Beverly Hills, Palo Alto, Santa Monica, Santa Barbara, Newport Beach, San Francisco and San Mateo

Connecticut: Greenwich

Massachusetts: Boston

Oil price, DOW, etc.

2008-09-08T19:45:00.000-07:00

09/08/2008: oil $106.34, government took over Fannie Mae and Freddie Mac
09/09/2008: oil $103.26; DOW: 11,203, was down 226 points
09/10/2008: oil $102.58; DOW: 11,268
09/15/2008: oil $95.71; DOW: 10,917, was down 503.99 points or 4.41%.

Lehman Brothers, burdened by $60 billion in soured real-estate holdings, filed for Chapter 11 bankruptcy early Monday morning after attempts to rescue the 158-year-old firm failed.

Also, Bank of America Corp. said it is snapping up Merrill Lynch & Co. Inc. in an $50 billion all-stock transaction.

09/16/2008: DOW: 11,059. Fed rescues AIG.
09/17/2008: DOW: 10,609
09/18/2008: oil: $100

09/25/2008: WAMU seized by Fed. Sold to JP Morgan Chase.

09/29/2008: DOW: 10,365; oil: $96.37. Congress did not pass $700B bailout plan. Citigroup will acquire the banking operations of Wachovia for $2.2 billion in an all-stock dea.

09/30/2008: DOW: 10,850; oil: $100.64
10/03/2008: DOW: 10,325; Bail-out is signed into law.
10/06/2008: DOW: 9,955;
10/08/2008: DOW: 9,258; oil: $88.95

10/27/2008: DOW: 9,065; oil: 62.73

Mortgage rates down slightly

2008-09-08T17:43:00.000-07:00

Rates for 30-year fixed-rate mortgages (FRMs) averaged 6.35% in the week ending Sept. 4, according to Freddie Mac (FRE, Fortune 500). That's down from last week, when it stood at 6.4%, and below a year ago, when the rate stood at 6.46%.

Five-year adjustable-rate mortgages (ARMs) averaged 5.97% this week, dropping from last week when it reported at 6.03% and from last year at this time when it was at 6.32%.

Failed banks since 2007

2008-08-26T14:14:00.000-07:00

Number of banks failed:

2009 year to date end of May: 34
2008: 25
2007: 3

=============================================================
The Columbian Bank and Trust, Topeka, KS August 22, 2008
First Priority Bank, Bradenton, FL August 1, 2008
First Heritage Bank, NA, Newport Beach, CA July 25, 2008
First National Bank of Nevada, Reno, NV July 25, 2008
IndyMac Bank, Pasadena, CA July 11, 2008
First Integrity Bank, NA, Staples, MN May 30, 2008
ANB Financial, NA, Bentonville, AR May 9, 2008
Hume Bank, Hume, MO March 7, 2008
Douglass National Bank, Kansas City, MO January 25, 2008
Miami Valley Bank, Lakeview, OH October 4, 2007
NetBank, Alpharetta, GA September 28, 2007
Metropolitan Savings Bank, Pittsburgh, PA February 2, 2007

*Source: FDIC

Buffett sees economy weak until 2009

2008-08-22T10:02:00.000-07:00

By Jonathan Stempel

Warren Buffett said the economy is still in a recession and unlikely to improve before 2009 but that stocks appear better valued than a year ago.

The billionaire investor also said there is a "reasonable chance" shareholders of Fannie Mae (FNM.N) and Freddie Mac (FRE.N) may be wiped out in any government bailout of the mortgage financiers.

Speaking on Friday on CNBC television, Buffett said some housing-related businesses in his Berkshire Hathaway Inc (BRKa.N)(BRKb.N) conglomerate are struggling as the economy works off past excess in making credit available.

"You always find out who's been swimming naked when the tide goes out. We found out that Wall Street has been kind of a nudist beach," said Buffett, who in March was called the world's richest person by Forbes magazine.

He also said Federal Reserve Chairman Ben Bernanke has no "magic wand" to boost an economy facing weak growth prospects, mounting inflation and deteriorating credit. "In my judgment it won't be any better five months from now," he said.

Buffett nevertheless said U.S. stocks are broadly "more attractive" than a year ago. He also said Berkshire has completely unwound a once $21 billion bet against the U.S. dollar, helping boost the greenback in Friday morning trade.

In May, Buffett said Berkshire still had a stake in one currency, the Brazilian real.

The Omaha, Nebraska-based company bought $3.98 billion of stock in other companies in the second quarter, and Buffett said it has added in recent months to its big stake in either American Express Co (AXP.N) or Wells Fargo & Co (WFC.N), but did not say which one.

Shares of both rose in early trading, as did major stock indexes.

Buffett reiterated his support for Barack Obama, the presumptive Democratic nominee, in November's U.S. presidential election, but admires Republican rival John McCain. "President Obama is going to have plenty on his plate in January," he said.

HOUSING EXPOSURE

Since 1965, Buffett has transformed Berkshire from a failing textile company into a $180 billion conglomerate.

Berkshire is best known for insurance holdings such as Geico and sells such products as ice cream and underwear.

But its 76 businesses also include housing-related units Acme bricks, Clayton manufactured homes, Shaw carpeting and the Home Services of America Inc real estate brokerage.

"What we're seeing in business, in our retail businesses, or anything having to do with housing, is even a further slowing down in June and July, both in terms of credit experience where people first got in trouble with house payments, and now credit card payments," Buffett said.

Some economists say a recession occurs when the economy contracts for two straight quarters. Buffett said it occurs when people are doing less well than before.

In morning trading on the New York Stock Exchange, Berkshire Class A shares rose $1,650 to $116,650, and its Class B shares rose $50 to $3,885. American Express shares rose $1.42 to $38.43, Wells Fargo rose 99 cents to $29.43.

The CNBC interview was tied to the national roll-out of the documentary "I.O.U.S.A.," which argues that the nation might face economic disaster if it doesn't curtail mounting debt.

Buffett is interviewed in the movie.

"THE GAME IS OVER"

Fannie and Freddie shares have plummeted as speculation grows about a government bailout of the companies, which own or guarantee almost half of U.S. mortgages. Shares of both have fallen more than 90 percent in the last year.

Buffett called them "too big to fail" and said "the game is over" for them as independent companies. "In a practical sense, as institutions, they don't have any net worth," he said.

Buffett said he has not been approached to assist in any bailout, which he said would be too big to come from the private sector. Though he said "nothing is going to happen" to investors in Fannie's and Freddie's insured mortgages or debt, but "the equity and preferred stock is another question."

Berkshire is trying to reduce the $31.16 billion of cash on its balance sheet, and Buffett said he is being approached by a growing number of "distressed" companies rather than viable takeover candidates.

Buffett said he recently tried to invest $500 million in a Chinese stock he declined to name, but was turned down.

He also said he erred in selling 61 percent of Berkshire's stake in Anheuser-Busch Cos (BUD.N) for $61 to $62 per share, ahead of the U.S. brewer's July agreement to be taken over by Belgium's InBev NV (INTB.BR) for $70 per share.

"It was about valuation and whether I thought the deal would go through," Buffett said. "In retrospect, I was wrong to decide to partially sell."

(Additional reporting by Euan Rocha and Vivianne Rodrigues; Editing by Steve Orlofsky/Jeffrey Benkoe/Daniel Trotta)

ABC News: list of troubled banks

2008-08-21T14:58:00.000-07:00

List of 10 banks disclosed:

By BRIAN ROSS, RHONDA SCHWARTZ, and JUSTIN ROOD
July 15, 2008

While the Federal Deposit Insurance Corporation (FDIC) is keeping secret its official list of 90 troubled banks, ABC News has obtained other lists prepared by several research groups and financial analysts.

The lists use versions of the so-called "Texas ratio" which compare a bank's assets and reserves to its non-performing loans, based on financial data made public by the FDIC in March.

Analysts say banks with a ratio over 100 per cent would be the most likely to fail, based on what happened to Texas savings and loans during the 1980's.

Bank	City	State	“Texas-ratio”
Colorado Federal Savings Bank	Greenwood Village	CO	244.8
Eastern Savings Bank, FSB	Hunt Valley	MD	222.7
Integrity Bank	Alpharetta	GA	191.6
Ameribank, Inc.	Welch	WV	153.7
First Priority Bank	Bradenton	FL	122.6
First Security National Bank	Norcross	GA	112.1
Magnet Bank	Salt Lake City	UT	110.4
Security Pacific Bank	Los Angeles	CA	102.8
First National Bank of Brookfield	Brookfield	IL	102.1
The State Bank of Lebo	Lebo	KS	100.6

Source: Research Associates of America

US foreclosure filings surge 55 percent

2008-08-13T21:51:00.000-07:00

US foreclosure filings surge 55 percent
Thursday August 14, 12:01 am ET
By Alan Zibel, AP Business Writer

Foreclosures in US rose 55 percent in July as housing market continued to sink WASHINGTON (AP) -- The number of homeowners stung by the dramatic decline in the U.S. housing market jumped last month as foreclosure filings grew by more than 50 percent compared with the same month a year ago, according to data released Thursday.

Nationwide, more than 272,000 homes received at least one foreclosure-related notice in July, up 55 percent from about 175,000 in the same month last year and up 8 percent from June, RealtyTrac Inc. said. That means one in every 464 U.S. households received a foreclosure filing last month.

Irvine, Calif.-based RealtyTrac monitors default notices, auction sale notices and bank repossessions. More than 77,000 properties were repossessed by lenders nationwide in July, the company said.

Nevada, California, Florida, Arizona, Ohio, Georgia and Michigan had the highest foreclosure rates. Foreclosure filings increased from a year earlier in all but eight states.

The combination of weak housing sales, falling home values, tighter mortgage lending criteria and a slowing U.S. economy has left financially strapped homeowners with few options to avoid foreclosure. Many can't find buyers or owe more than their home is worth and can't refinance into an affordable loan.

As foreclosures soar, banks and mortgage investors are also facing a pileup of foreclosed properties on their books and are cutting prices dramatically.

RealtyTrac noted that it had more than 750,000 foreclosed homes in its database of properties for sale, equal to about 17 percent of the 4.5 million U.S. homes that were up for sale in June.

To speed up the disposition of the 54,000 foreclosed properties it owns, Fannie Mae is opening offices in California and Florida and is considering selling those properties in bulk to investors. "I do not think this is a time to be holding onto (foreclosed properties) hoping for a better day," CEO Daniel Mudd said last week.

It remains to be seen how much the government's intervention will stem the housing crisis. President Bush last month signed sweeping housing legislation that aims to prevent foreclosures by allowing homeowners to swap their mortgages for more affordable loans, but only if their lender agrees to take a loss on the initial loan.

The bill is projected to help about 400,000 households.

The number of foreclosures "could start to stabilize as early as the first quarter of next year if the government program gains any traction," said Rick Sharga, RealtyTrac's vice president for marketing. "That's really the unknowable right now."

Even with government help, nearly 2.8 million U.S. households will either face foreclosure, turn over their homes to their lender or sell the properties for less than their mortgage's value by the end of next year, predicts Moody's Economy.com.

In the RealtyTrac report, the Cape Coral-Fort Myers area in Florida was the metro area with the highest rate of foreclosure, followed by three California cities: Merced, Stockton, and Modesto. Las Vegas ranked fifth.

America's Most Overpriced ZIP Codes - By Matt Woolsey, Forbes.com Aug 1st, 2008

2008-08-02T09:26:00.000-07:00

Ten spots where buyers pay a huge premium to own relative to how much it would cost to rent.

In San Jose, Calif., home to Silicon Valley and some of the highest home values in the country, a bumper sticker reads, "Dear God, one more bubble before I die."

Chances are the car's driver lives in Willow Glen, a neighborhood with a small-town feel, Spanish-style single family homes and a main street with sidewalk cafes and locally owned shops. To live there, residents are paying the city's highest prices relative to what they could pay to rent similar properties in the same area. When you compare mortgage payments to the value of a similar home on the rental market, the price to buy is 26.1 times higher, one of the biggest differences in the country.

Willow Glen 95125: 26.1

Dallas 75209: 26.7

San Francisco 94122: 28.5

San Diego 92103: 30

West Hollywood 90038: 30.2

Seattle 98104: 30.3

Boston 02111: 30.5

New York 10013: 36.3

======================

Comment: San Jose 95129 31.0; Palo Alto 31.25; Sammamish 20.1

CA unemployment rate as of May 2008

2008-07-17T10:27:00.000-07:00

California as a whole had an unadjusted unemployment rate of 6.5 percent in May, with a 5.2 percent for the nation during the same period.

Bankrate.com Safe & Sound CAEL Rating samples

2008-07-16T15:33:00.000-07:00

CAEL rating: 1 (best) to 5 (worst)

-----------------------------------

Charles Schwab Bank: N/A (Charles Schwab Bank is a federally chartered thrift institution and an affiliate of Charles Schwab Corporation, a financial holding company. All bank products and services are offered through Schwab Bank.)

ETrade Bank: 4

ING Bank FSB, Delaware: 3

Washington Mutual Bank FSB, Utah: 1. (Note: S&P cut its credit ratings on the largest U.S. savings and loan one notch to "BBB," the second lowest investment grade, from "BBB-plus.") Link to additional bank profile info: http://www.ibanknet.com/scripts/callreports/getbank.aspx?ibnid=usa_2187071

----------------------------------------------------------------------------------------------

The FDIC insures approximately 8,500 institutions; 79 of them are on the agency's secret list of problem banks as of Dec. 31, 2007.

How safe is your money in the bank?

2008-07-16T10:49:00.000-07:00

The FDIC, short for the Federal Deposit Insurance Corporation, fully insures individual accounts up to $100,000 per deposit per bank, and $250,000 for most retirement accounts.

The FDIC does not cover money invested in stocks, bonds, mutual funds, life-insurance policies, annuities or municipal securities.

The FDIC disclosed last month that it was closely watching 90 financial institutions on its "problem bank list." While that number is higher than it has been in the last few years, it is still relatively low, Williams-Dickerson said. In fact, there were 2,165 on the list in 1987. The FDIC does not publish the names of the trouble banks for fear of spurring a bank run.

To find out how safe your bank is, you can check out the Safe & Sound rating on Bankrate.com, which provides a sense of the relative financial strength and stability of commercial banks, savings institutions and credit unions.

*Source: CNN

Good news if your home owner insurance is with Allstate

2008-07-15T19:06:00.000-07:00

California insurance regulators have ordered Allstate Insurance Co. to cut rates for homeowners coverage by an average of 28.5 percent, representing a savings of $255 million for policyholders.

Allstate customers would save an average of $242 per policy per year, state Insurance Commissioner Steve Poizner said in a news release Thursday.

Digital TV Converter Box

2008-07-10T17:47:00.000-07:00

According to many posts and reviews by various web sites and organizations, so far I found two models are probably the best quality and cost-effective:

. Insignia NS-DXA1
. Zenith DTT900

But wait! Both models currently in store are lacking of one feature: analog signal pass-through. This means any analog signal from your antenna is blocked by the converter box.

Good news is that both are coming out with new model to address this issue. Insignia is releasing NS-DX1-APT model. Zenith is releasing DTT901 model. If you haven't spent your $40 government coupon yet, it may be better waiting until the new models are available in stores.

Federal Unemployment Insurance Extended Benefits

2008-07-09T11:35:00.000-07:00

ELIGIBILITY

These extensions can be filed on or after July 6, 2008. Workers potentially eligible for extended benefits:

Are fully or partially unemployed on or after July 6, 2008,
Have exhausted their entitlement to a regular UI claim,
Are not qualified to file a new regular claim,
Have had a valid claim that began on or after May 7, 2006, AND
Meet all eligibility criteria.