Syracuse Finance Class

Slides for the final exam

2009-12-09T09:24:00.001-08:00

Here is the link for the slides to chapter 16.

Chapter 10 slides

Chapter 15 slides

UCLA Students Running into Major Financial Trouble

2009-12-08T08:39:00.001-08:00

Watch this video, which describes the financial trauma for UCLA students as the result of a recent tuition hike.

The Curse of Executive Compensation

2009-12-07T00:09:00.000-08:00

By Mary Clare McGraw

Lockheed Martin, the world’s biggest military contractor, has released in an SEC filing, that as of January 1, 2010, it will no longer pay its executives’ annual fees for social clubs and country clubs. The firm has decided it will no longer pay for cars and drivers if they are used for personal reasons. Lockheed Martin will not provide tickets to sporting events and concerts, or financial advice and tax preparation for its top executives. These cutbacks do not come without monetary compensation for employees in the form of an extra $25,000-40,000 here and there.
This announcement to limit the future year’s benefits is a smart way to have the media focus on what Lockheed Martin is NOT giving out in the form of bonuses in the future as opposed to how the firm is compensating its top executives this year. Goldman Sachs, on the other hand, has been in the hot seat for paying its employees an outstanding $16.5 billion in compensation, which averages to approximately $623,418 for each and every employee.
While the uproar concerning executive compensation has been aflame for a second year now, Wall Street is attempting to help salvage this public relations nightmare with announcements that firms such as Morgan Stanley and Bank of America will not be holding in-house holiday parties this year. In a further attempt to salvage their public images they are insisting that they are planning on donating the money that would have been allocated for a party to a “yet-to-be-determined” charity. Let’s see if Wall Street can put its money where its mouth is.

Source 1, Source 2, Source 3

Loan scammers hide behind 405 area code

2009-12-06T19:05:00.000-08:00

South Carolina woman bilked out of $2,400 by Canadian con artists

Written BY VALLERY BROWN

Posted by Stefanie Marty

Bad credit? No credit?

Offers abound to help individuals get loans or credit cards, even with less-than-perfect credit history. A South Carolina woman learned the hard way that some deals are too good to be true.

Tyna Milcetich, of Charleston, S.C., had an opportunity in August to move out of her rental home and into a houseboat. She started looking for a loan to buy the $30,000 boat and found Birchmount Financial Services ofOklahoma City through a Google search.

Milcetich said the Web site and the loan application offering personal loans to consumers with poor credit looked like the real thing.

She filled out online forms requesting information about a loan.

The next day, she received a phone call.

"They contacted me back and sent me contracts,” Milcetich said. "Then they told me I’d been approved.”

A poor credit history made Milcetich ineligible for most bank loans. She said her common sense was overcome by the surprise and joy of being approved.

Milcetich filled out contracts, gathered documents and faxed everything back to the company at their 405 area code.

A representative instructed Milcetich she would need to pay $2,400 in collateral before the loan could be disbursed.

Thinking it the opportunity of a lifetime, Milcetich emptied her savings account and wired the money.

Click here to read more.

Black Friday or Cyber Monday?

2009-12-06T18:53:00.000-08:00

By Minjune Kim

Black Friday & Cyber Monday: Some Quick Facts

• Black Friday spending rose 0.5%, ($54 million), to $10.7 billion, this year from last year.
• Online sales up 17% (Thurs. to Sun.) over the same period last year.
• Cyber Monday up 11%, more than they did a year ago.
• Shoppers spent less per transaction: the average size of each sales ticket decreased nearly 14% from last year.
• Amazon.com and Walmart.com were the most visited online shopping sites.

This holiday season shoppers found deep discounts in a competitive Black Friday and Cyber Monday. Approximately 195 million shoppers, an increase from 172 million last year, either shopped at stores or online over the Black Friday weekend, typically the Friday, Saturday and Sunday after Thanksgiving. The National Retail Federation reports sales totaled $41.2 billion, up slightly from $41 billion reported during the four-day weekend last year

John Gerlach, a professor of Finance at Sacred Heart University, prefers cyber-shopping to walking the malls to purchase holiday gifts for friends and relatives.
"I prefer to do as much as I can online," Gerlach said. "I can shop that way on my schedule, even late at night. Online stores don't close. And, of course, there are no crowds. We're seeing more and more people doing their holiday shopping online."
Gerlach is part of a swelling crowd of online shoppers that have retailers catering to cyber-customers with special deals as well as reduced or no shipping charges. In fact, many online retailers have noticed a spike in sales on the Monday after Black Friday. The trend has grown to the point that online retailers typically refer to this day as "Cyber Monday."

You can't throw a rock without hitting an online retailer prognosticating about Internet holiday shopping trends. HauteLook, an online retailer that does limited-time sale events, said that from Nov. 26 to Nov. 30, sales rose 500 percent compared with the same period last year. According to a Shop.org survey, 96.5 million Americans said they'd shop on Cyber Monday this year, up from 85 million in 2008. But according to ComScore, those estimates are wildly high. It says that only 8.7 million people made online purchases on Cyber Monday and that retail e-commerce spending rose just 5 percent, to $887 million. Coremetrics painted a rosier picture of Cyber Monday: Compared with 2008, it said, sales were up 13.7 percent and the average amount consumers spent on each order was up 38.2 percent.

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Auto Insurance Premium Rate Drops

2009-12-06T18:22:00.001-08:00

By Shawn Gao

It is a good and bad news. Auto Insurance rate droped around three percent from 2007 nationwide;however; New York drivers are still paying the most expensive insurance in the country. New York drivers paid an average premium of $1,179 in 2007, the last year for which information was available, the National Association of Insurance Commissioners said in an annual report.

That was down 2.8% from $1,213 in 2006, slightly higher than the 2.6% national average decline. The national average is $912.

Not only NY state drivers, but also NJ drivers have to twice expensive auto insurance cost. The average Garden State resident paid 4 percent less in auto insurance premiums in 2007 than the previous year — and 9 percent less than the peak year of 2004, the National Association of Insurance Commissioners reported this week. Nationally, rates fell by only 5.6 percent between 2004 and 2007.

Unlike the drivers in North Dakota and Winsconsin, both NY and NJ drivers pay as twice expensive as the drivers in these states. Nevertheless, it is hopeful that the direction of droping auto insurance rate is right. A affordable insurance is a good idea for the drivers to buy.

Source:
http://www.nydailynews.com/ny_local/2009/12/04/2009-12-04_ny_drivers_insured_for_less.html
http://www.app.com/article/20091203/OPINION01/912040324/1029/OPINION/N.J.+auto+insurance+rates+still+highest++but+...
http://www.property-casualty.com/News/2009/12/Pages/Auto-Insurance-Premiums-Drop-Nationwide.aspx

House Committee Passes Federal Insurance Office Act

2009-12-06T18:20:00.000-08:00

Posted by Quang Nguyen

The U.S. House Financial Services Committee has passed a measure to create a scaled-back federal office that would be a national insurance information agency with some authority in the area of international insurance agreements.

The new federal office would not have any regulatory authority over the business of insurance and would not be able to override state insurance laws.

The key committee passed H.R. 2609, the Federal Insurance Office Act of 2009, by a voice vote today.

The bill would create the Federal Insurance Office (FIO) within the U.S. Treasury Department to address two major areas that have been the focus of criticisms of state insurance regulation. First is the lack of a knowledge base or informational source in Washington, D.C. (something especially evident following the 9/11 attacks and Hurricane Katrina). Second, is the challenge state insurance regulators occasionally face in representing the United States in multilateral insurance discussions or entering into binding international agreements.

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A look at 'White House Crasher's' Bankruptcy

2009-12-06T18:00:00.000-08:00

Posted by Andrew Lipsitz

Tareq and Michaele Salahi have catapulted themselves into the public spotlight with their "uninvited" appearance at a White House state dinner on Nov. 24. It was President Obama's first official state dinner and the gate crashers sadly showed how easy it is (or was that night) to walk in off the street and stand within steps of two world leaders (Obama and India Prime Minister Manmohan Singh).

In an interview with NBC's "Today Show" host Matt Lauer Tuesday morning, the Salahis insisted they weren't party crashers and said the truth will come out in the Secret Service investigation.

The couple also denied reports in some media that they were trying to sell the story of their escapades to media outlets. (Reports said they wanted upwards of $100,000.) Lauer attempted to put speculation to rest by asking the couple on air if they were paid to do the NBC interview. They said they weren't.

But from the state of their financial affairs revealed in public records, they may really need the money.

Bankruptcy papers show mounds of debtIn Chapter 7 bankruptcy documents filed earlier this year in the Eastern District of Virginia, Tareq Salahi's vineyard company, Oasis Enterprises Inc., claims $335,000 in assets but $965,000 in liabilities, including at least $81,000 in credit card debts. According to CNN.com, the couple faces numerous civil suits in the Virginia-D.C. area as well.

Maybe they were trying to get close to Obama to hit him up for a loan. But more likely they are a new breed of thrill seekers -- reality TV wannabes hoping to wrestle the spotlight for themselves. (They were trying out for "The Real Housewives of D.C.") Does the balloon boy stunt sound familiar here? Just like the Colorado family who falsely claimed their six-year-old son was launched into a homemade balloon, the Salahis have perhaps gotten more spotlight than they bargained for, with some members of Congress calling for an investigation of the White House security breach.

The bankruptcy filings paint a picture of a couple living the good life, funded in part by credit cards when their vineyard company started to, well, dry up. Business income of $1.7 million in 2007 dwindled to only $35,000 in 2008, according to bankruptcy records. Fancy boats and cars (including an Aston Martin) have been repossessed to pay creditors.

One creditor, Wells Fargo Bank, filed a court claim seeking $19,577.85 in credit card debt from Tareq Salahi. According to the bank's claim, Tareq Salahi, the vineyard president, had a $25,000 credit line on a business credit card with a 9.25 percent interest rate. As of May 18, 2009, when the claim was filed, Salahi's last payment on the account was $500 received July 22, 2008, making the account 330 days delinquent.

Wells Fargo lists a 475 FICO score for the account, which would put Salahi in the less-than-stellar bad credit risk category on FICO's scale of 350 to 850.

Click here to read more...

Supreme Court Weighs Bankruptcy Code Provisions

2009-12-06T17:59:00.001-08:00

Posted by Chris O'Sullivan

Article by Rachel Feintzeig (WSJ)

Bankruptcy got its moment in the Supreme Court spotlight yesterday when the justices heard oral arguments in two bankruptcy-related cases: one centered on the issue of discharging student loans in Chapter 13 and one challenging changes to the Bankruptcy Code.

The latter case could potentially have the biggest impact on bankruptcy attorneys, who are currently barred from encouraging clients who are considering filing for bankruptcy protection to take on more debt. That provision was added to the Bankruptcy Code during the 2005 revisions, along with a requirement that attorneys identify themselves as “debt-relief agencies.”

Minnesota law firm Milavetz, Gallop & Milavetz P.A. is challenging both provisions, arguing that they violate the first amendment. The firm’s attorney, G. Eric Brunstad of Dechert LLP, faced off against the U.S. Department of Justice yesterday on Capitol Hill.

The provision “basically proscribes or tells the lawyer you can’t give perfectly legitimate advice, and that’s wrong,” Brunstad said in an interview following the arguments. “The government has no compelling reason to prohibit that kind of advice.”

Click to read more...

Cyber Monday Outperforms Black Friday

2009-12-06T17:01:00.001-08:00

Posted by Ahmed Al-Salem

The last week of November is an especially important one for the U.S. economy. Following the Thanksgiving holiday on Thursday is Black Friday, traditionally the best sales day of the year for retailers as Americans rush to do their Christmas gift shopping. The name was coined because businesses count on the day's sales to bring their balance sheets into the black.

With the rise of the Internet, the term "Cyber Monday" was coined in 2005, referring to the Monday after the Thanksgiving weekend when online shopping surges. The two days are of great significance as they serve as a bellwether for the U.S. economy, indicating the level of consumer confidence and illuminating consumption trends.

Experts paid particularly close attention this year because a rise in consumption could signal a recovery of the U.S. economy, and the world economy in turn, from the financial crisis, which started last September. Many predicted that Black Friday would be bigger than Cyber Monday as usual, but the results were surprising.

According to market researcher Coremetrics, U.S. consumers spent 10 percent more on Cyber Monday than on Black Friday. Monday's sales were up 14 percent compared to last year and the number of items per order also climbed 30 percent.

In contrast, the average U.S. consumer bought US$343.31 worth of goods on Black Friday, down 7.9 percent from last year, the National Retail Federation said.

Experts say that recession-weary consumers used offline retailers for window shopping before turning to the Internet to make actual purchases at better prices.

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The 5 C's of Credit

2009-12-06T17:00:00.001-08:00

By Shawn Chandok

Regardless of your financial stability, there is a high possibility that you will require a loan at some point in your life. Whether this is a bank loan, student loan, or any other type of loan, the qualifications for your eligibility will most likely be the same. Below, I will be discussing the 5 C’s of credit and how each one differs significantly.
1. Capacity is by far the most important of all the factors determines your eligibility for the loan because if specifies how you intend to pay the loan back. Lenders will usually project your expected cash flows and determine an interest rate suitable for you. Furthermore, they will look at your credit history to make sure you confirm you are a worthy investment for them and do not contain any risk, such as multiple previous bankruptcies.
2. Capital refers to the amount of your personal money you have invested for the project. The purpose of capital is to reduce the risk for the lender. If the lender feels you have a lot of your own money invested as well, his/her risk decreases because if the investment sinks, you sink as well. Thus he/she will be more willing to lend you money if you share the risk.
3. Collateral refers to the form of security you provide to the lender in case you cannot repay him/her. Most people will usually put their home/mortgage as collateral for the lender. If you cannot repay the lender, he/she will usually put a lien on your home until foreclosure is inevitable. What you should know is that, banks do not like foreclosures because they have to auction the home for a less value, which means they lose money.
4. Conditions merely reflect the circumstances for the loan. For example, are you taking the loan out for a family emergency or collage? Each condition creates a level of importance and lets the lender aware of your situation.
5. Character refers to the type of person you are. Lenders want someone who they know will pay them back on time. They usually check your educational background and confirm with your attitude. Although this may seem unimportant, this can sometimes be one of the most important criteria’s for a lender.

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2009-12-06T15:05:00.001-08:00

By Lingxiao Li

Bankruptcy, this word sends chills up the spine. If you're facing the prospect of bankruptcy or in the middle of it right now, you know it's a living nightmare. It can devastate your job, destroy your marriage and steal your peace of mind. Do not file bankruptcy unless you really have to. Bankruptcy is listed in the top five life-altering negative events that we can go through, along with divorce, severe illness, disability, and loss of a loved one. I would never say that bankruptcy is as bad as losing a loved one, but it is life-altering and leaves deep wounds both to the psyche and the credit report. Most bankruptcy cases can be avoided with proper help, such as our certified counselors and the Total Money Makeover. Your Total Money Makeover may involve extensive amputation of stuff, which will be painful, but bankruptcy is much more painful. If you take the thoughtful step backward to get on solid ground instead of looking at the false allure of the quick fix that bankruptcy seems to offer, you will win more quickly and easily. I know from personal experience the pain of bankruptcy, foreclosure, and lawsuits. Been there, done that, got the t-shirt, and it is not worth it.

http://www.daveramsey.com/article/the-truth-about-bankruptcy/
http://www.daveramsey.com/article/the-basics-of-bankruptcy/lifeandmoney_bankruptcy/
http://www.daveramsey.com/article/is-bankruptcy-in-your-future/lifeandmoney_bankruptcy/

The Real Deal on Bankruptcy

2009-12-06T15:01:00.000-08:00

By: Zachary Pienkowski

Living in a society that has learned to lived completely swamped in debt, it is important to understand what really is involved in a bankruptcy proceeding. In many cases, people think that your house is off limits to the creditors. This is true in some situations, but bankruptcy law vary by region and it is critical to fully understand the laws in your area before you file. In some cases, the amount of equity you have in your home is protected, but in others that equity is not protected and you run the risk of losing your residence. Probably the most common myth about bankruptcy is that once you file all of your debts are gone you are get off free. That may be true with some debts like credit cards, but student loans, alimony, and support are not going away. Making the decision to file for bankruptcy should be carefully thought out because it will not leave you without any debts. In addition to not having control of any of those debts anymore, you unfortunately do not hold the rights to your assets anymore either. Another myth is that even though you declared bankruptcy that you will never be able to get a credit card or establish credit again. This is not entirely true, however, it is not something that will change over night. Most people typically are unsuccessful in repairing their credit within the first few years. Bankruptcy may also last longer than you think. Generally you are discharged after a period of time and can begin to rebuild your life. There are some people that can step in the way of that and keep you bankrupt for longer than you expected. This is rare however unless the bankruptcy was due to a case of fraud, in which the punishment in significantly more severe.

Sources:

http://ca.finance.yahoo.com/personal-finance/article/bankratecanada/1344/five-bankruptcy-myths

http://kclau.com/wealth-management/bankruptcy/

http://www.lawhandbook.sa.gov.au/ch03s03s01.php

Real Estate Market Trends Don’t Matter Anymore

2009-12-05T10:48:00.000-08:00

This has been “conference” month, and we have attended our share of the retrospectives/prospectives of the economy and the real estate market, both nationally and locally. Most prominent of those conclaves was the Urban Land Institute’s national conference in San Francisco, which was held in early November. It was followed by a local version, called the Trends event, focusing mostly on San Diego.

The idea that trends matter is wrong. These conclaves ought to be titled Apocalypse Now. The nature of the economic beast attacking us requires serious thinking about real change. Not enough of that is going around.

The general consensus from each of the events is that we are in the midst of a long, slow recovery period. So, the message is to attempt to Thrive in Turbulent Times, the subtitle of the local ULI Trends conference.

Not all agree that is possible. “Thriving might be too strong a term,” suggested development consultant David Malmuth. “Maybe the better approach is adapting or surviving.”

Malmuth is correct. There is no point in mincing words. The economy and the real estate market have been in descent for four years, and there is every sign this will last for a couple more. Job losses and unemployment remain high. Discretionary spending is weak.

Click here to read more.

Posted by: Kelsey Hoffman

Real Estate Market is Showing Positive Signs

2009-12-05T10:47:00.000-08:00

By: Sara Sindelar

The housing market hit a big increase for the month of October. National Association of Realtor's index increases 32%. There is a large factor of the first time buyers tax credit that home buyers are taking advantage of. There has been a straight nine month increase in signed contracts. The first home buyers tax credit can equal up to $8,000. The tax credit is worth 10% of the value of the home up to $8,000. It is only for first time home buyers who have not had a residence in three years and this must be their primary residence after purchase. The ending date was November 6, 2009 causing the major increase in October home sales.

Not only is there an increase in buying but a major decline in houses on the market for sale. Lawrence Yun, a National Realtor Association chief economist believes that real estate conditions will be back to normal by mid 2010. (CNN) Many areas are seeing this increase in home sales it is not just a positive country average. Central Ohio saw a 26% gain in October and Chicago area sales were up 33.3%. Along with the unemployment rate declining and real estate home sales increasing there is a lot more hope that there is an end to this recession. There is still a lot of work to be done and debt to be paid back but these signs give a positive that next Christmas may not be so dark.

http://money.cnn.com/2009/12/01/real_estate/October_sales_contracts/index.htm
http://www.dailystar.com.lb/article.asp?edition_id=10&categ_id=3&article_id=109092
http://www.housingzone.com/articleXml/LN1085165224.html

Dubai Debt Insurance Cost Falls

2009-11-30T13:17:00.000-08:00

Written by AINSLEY THOMSON
Posted by Minjune Kim

LONDON -- The cost of insuring Dubai's sovereign debt against default fell Monday as investors' concerns about the region were allayed after the United Arab Emirates central bank pledged support for the country's local and foreign banks.

It now costs $576,000 to insure $10 million of Dubai sovereign debt against default for five years, down from $647,000 at Friday's New York close, according to data provider CMA.
The cost of insuring neighboring Abu Dhabi's sovereign debt also fell Monday. It now costs $146,000 to insure $10 million of Abu Dhabi's sovereign debt against default for five years, down from $175,600 at Friday's close.

The drop in cost comes after the U.A.E. central bank said Sunday it is offering an additional liquidity facility to local and international banks in the U.A.E. and stressed that it "stands behind" them. Dubai and Abu Dhabi are two of the seven emirates that make up the United Arab Emirates.

Last week, Dubai World's restructuring announcement also affected countries such as Greece, as investors became increasingly concerned about financially stretched countries. However, the cost of insuring Greece's sovereign debt also fell Monday as it benefited from the improved tone in financial markets. It now costs $192,000 to insure $10 million of Greece's sovereign debt against default for five years, down from $200,000 at Friday's close, according to CMA.

Meanwhile, the five-year credit default swaps for Dubai-based port operator DP World tightened Monday to 6.425 percentage points compared with its closing level Friday of 7.44 percentage points, CMA said. The port operator's CDS moved as wide as 8.10 percentage points during trading on Friday.

Dubai World owns 77% of DP World, which is the fourth-largest ports operator in the world. The port operator will be excluded from its parent's debt standstill talks and restructuring.

CDS are tradable, over-the-counter derivatives that function like a default insurance contract. If a borrower defaults, the protection buyer is paid compensation by the protection seller. Wider spreads show the cost of default insurance is going up, suggesting investors are less confident in a borrower's ability to repay debts.

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Private Health Insurance

2009-11-30T13:14:00.000-08:00

By Adam Lindheim

It is estimated that close to 46 million Americans don’t have health insurance coverage, and with today’s economy that number is expected to increase. If your job doesn’t provide health coverage, or you’re jobless, private health insurance is the only option. Private health insurance is very expensive, and depending on your age and health will determine the type of coverage you are eligible for. Premiums typically range from $100-$1000 dollars, it is important to note the lower the premium the higher the deductibles, and smaller range of coverage that your plan is likely to cover. For those citizens who have recently lost their jobs, and have pre-existing health issues are more likely to run into a tougher situation.

If you are looking to secure private health insurance and you have heart disease, asthma, diabetes, cancer, or even AIDS the chances of getting health insurance dramatically drop. Those who have been let go by their company (with at least 20 employees) will be covered by CORBA. This means that you will be covered for up to 18 months following your departure from your company, which is especially good news for those who have pre-existing illnesses. Some states wont even allow discrimination when it comes to acquiring health insurance. A lot of American citizens such as Don Hall, a manufacturing supervisor from Ohio has seen a $500 dollar increase in his health insurance premiums per month. The American government is scrambling to find a solution to this growing problem that is hitting many homes in the U.S. Some citizens who belong to worker unions can apply for health insurance through a group health plan through their unions. It is important financial decision to pick an affordable but secure plan when evaluating private health insurance plans.

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Consumer Finance Tips for Holiday Shoppers

2009-11-29T17:23:00.001-08:00

Written By: Lisa Matthys

We all know Christmas is coming when retailers start putting up festive decorations and advertisements drawing consumers into their special deals only available on Black Friday. Even most employers give Black Friday off to employees as it is the day after Thanksgiving, initiating the beginning of the Christmas shopping season. As the economy continues to struggle, the unemployment rate rests at an all-time high, giving consumers very little savings to spend on gifts this holiday season.

With the economy in a recession, consumers need to find other ways to give their family the gifts they want. Many turn to credit cards to help finance the lack of immediate capital. However, experts say to try to limit your credit card use to online purchases and big ticket items. If you do use your credit card this holiday season, make sure to pay on time to avoid any extra penalty fees.

Many shoppers, approximately 43%, plan to use debit cards instead of credit cards. However, there are drawbacks to using debit cards over credit cards. When purchasing online and your security is compromised, your entire bank account can be withdrawn without protection. Likewise, if you spend more than you have in your account, heavy overdraft fees will apply. So shop wisely this holiday season!

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"Free" credit reports- just not true

2009-11-29T17:22:00.001-08:00

Written by Michael Rivezzo

The term "free" is a popular buzz word for consumers, every company would use the term loosely in their commercials if it was legal, but companies can't just use the word "free" lightly, it actually has to mean something for nothing. Now the government is taking the initiative to investigate those annoying commercials offering "free" credit reports. After 11,000 complaints have been filed with the Better Business Bureau stating that consumers where actually charged a monthly fee of $15 dollars. Many complaints stated that the commercials are actually misleading and that the true information lies in the the small print.

The truth is there is only one website where people can actually obtain a free credit report, with no strings attached. Its a government owned website: AnnualCreditReport.com. Through this website everybody is allowed one free credit report a year. The credit-monitoring business is a $700 million dollar a year industry, where analyst saw that people do not need to be checking their credit so much, they can simply get by with the one free credit report a year.

Decision are soon to be made on whether the government will allow these "free" credit report ads to continue. I think they should allow the companies to change the way they market their service, then disallow them from using that stupid jingle.

http://www.cbsnews.com/stories/2009/11/22/eveningnews/main5739490.shtml

http://blog.nj.com/njv_editorial_page/2009/11/free_credit_report_websites_wh.html

http://www.nytimes.com/2009/11/03/your-money/credit-scores/03scores.html

U.S. Looks to Australia on Credit Card Fees

2009-11-29T15:59:00.001-08:00

Article by KEITH BRADSHER
Post by David Held

SYDNEY — When Steve Franklin bought four plane tickets on Qantas last June, he faced an unexpected expense: a surcharge of 7.70 Australian dollars on each of the 136.70 dollar ($126) tickets — just for using his Visa credit card.

Mr. Franklin, who planned to fly his parents and his 7-year-old twin daughters from Sydney to Adelaide, knew that changes to credit card rules had affected the cost of using plastic, but the extra 5.6 percent seemed excessive.
The charges were the consequence of changes in credit card rules in Australia that were aimed, in part, at reducing the cost of hidden fees for using plastic. But the law, passed six years ago, also allowed merchants to tack on new charges, and many have done just that, in some cases with fees that exceed the old ones.

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China Seeks to Slow Rapid Growth of Lending

2009-11-29T15:58:00.001-08:00

Post by Shawn Chandok

Article by Keith Bradsher

Chinese banking regulators are putting pressure on the country’s banks to raise more capital and temper their rapid growth in lending, in a clear sign of official concern about the sustainability of the nation’s credit boom, senior Chinese bankers said on Monday.

United States and European officials have also pressed their banks to shore up their finances in recent months, but the reasons behind the Chinese regulators’ capital-raising push are very different. In some ways, the regulatory pressure reflects the robustness of the Chinese economy, in contrast with lingering economic weakness in the West.

Western regulators have put pressure on the banks they oversee to raise money, often through the sale of overseas units and other assets, to rebuild capital bases depleted by losses on mortgage-backed securities and other investments. Western banks have moved to raise the money even as they have slowed their issuance of new loans, which has helped hold up their capital as a percentage of assets.

Regulators in Beijing have a different concern, Chinese bankers said. As bank lending has soared this year, banks’ capital has risen less quickly, so their capital adequacy ratios have begun to slip.

While China’s regulators are comfortable with current capital adequacy levels at the nation’s major banks, they want them to have plenty of capital to be able to continue lending briskly next year without difficulty if needed to sustain economic growth, bankers said.

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Safest Cars for 2010

2009-11-28T23:03:00.000-08:00

Posted by Quang Nguyen
By Sarah Hacker - ASSOCIATED CONTENT

Every year, car companies constantly work to innovate and make their cars better and safer for the driver. These five 2010 cars are at the top of the list for being the safest on the road.

The Volvo XC60

The Volvo XC60, new to Volvo in 2010, has many safety features that don't even compare to their other cars. The car is equipped with new preventive safety, protective safety, and child safety features. Some of these features include an anti locking brake system with hydraulic brake assist, ready alert brakes, collision warning with auto brake, and city safety. The car is well lit with daytime running lights, dual xenon gas discharge headlights with active bending lights, side marker lights, rear fog lights with auto off and front fog lights. In case of a crash, the car comes with a whiplash protection system, an energy absorbing interior, dual stage airbags, a side impact protection system, and an energy absorbing frontal structure.

The 2010 Volkswagen Polo

This car is not only one of the safest of 2010, but one of the safest cars world wide. The airbags in the car include the combined head-thorax airbag. The seat belts come with belt force limiters and seat belt tensioners that that prevent whiplash and therefore injury. For children, there is a three rear head restraint and isofix child seat.

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Forget Car Insurance, Does It Have Medicare?

2009-11-28T23:00:00.000-08:00

by Jacques Steinberg
posted by Jameel Murray

MY son, Jordan, who is 9, desperately wanted a pet that might be more interactive than the fish in his aquarium. But I am severely allergic to most animals with fur. I am so asthmatic that, unlike the Obamas, who went with famously hypoallergenic Bo, our family wound up choosing something less huggable though no less lovable: a gecko.

And so last fall, a white lizard no longer than a BlackBerry and no heavier than a stack of Post-it notes took up residence in Jordan’s bedroom. He called him Belzer, after a character in “Rotten School,” a series of children’s books. Before long, Jordan had coaxed Belzer to climb from his palm to his elbow. We also noticed that when Jordan put a Yankees game on the radio, Belzer would emerge from his cave to listen. To assure that his gecko would be the last thing he saw at night, Jordan positioned Belzer’s glass tank, illuminated by a red heat lamp, within sight of his pillow.

So it was with some concern that I noticed earlier this fall that Belzer appeared to be “blocked,” as my grandmother might have said. In other words, he was no longer littering his sand with the remains of whatever worm or cricket he had consumed the night before.

As far as I know, Metamucil makes no product for a gecko. Which meant that this situation called for a specialist. My journey to the cutting edge of veterinary care would ultimately cost me more than $500, I am embarrassed to say. That was what I spent on an X-ray that revealed a major intestinal blockage, from Belzer’s consuming too much sand bedding with his meals.

Those fees also covered the potential cure: the delicate administration of laxatives formulated for a reptile — Procter & Gamble, the maker of Metamucil, take note — as well as so many injections of fluid into Belzer’s backside that he must have felt like a baseball player on steroids.

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Black Friday Saves Familes Big Dollars

2009-11-28T19:28:00.000-08:00

By: Laura Reginelli

Posted By: Group 1B

When Thanksgiving rolls around, many people tend to think about the day after, Black Friday. In this economically troubled time, families are looking for ways to cut costs and in some cases make ends meet. Black Friday allows shoppers to buy for the holiday season and receive great deals while doing it, inevitably saving them money.

Black Friday can be a competitive, mad-dash for shoppers, sometimes proving to be too much for people. When it comes to this day of shopping, make sure to plan ahead by packing snacks and wearing comfortable clothing. Also shopping may be a little easier if you go with a list of what you need and where the deals are.

Some stores are even joining in on the family planning process. This year Kohl’s is allowing their customers to use their Web site to create a shopping list that they can print and take with them. From there, the customers are off to the stores. Kohl’s will open at 4 a.m. on Black Friday this year, allowing for the madness to start even earlier.

Black Friday shoppers are often a breed of their own and some of the most determined individuals. Although many of us may not see the real importance of going out into this “mob scene,” others swear by the savings.

One Black Friday shopper confesses “I've been venturing out early on Black Friday for eight years now, and every year, I've saved at least $200 — usually much more.”

So if you are looking to save a few extra dollars in the holiday season, make a plan and venture out instead of sleeping in the day after Thanksgiving! It may just save you.

Sources: http://blogs.sun-sentinel.com/consumerblog/2009/11/skip-black-friday-sales-you-may-as-well-set-your-wallet-on-fire.html

http://www.cnbc.com/id/33862032

http://www.bloomberg.com/apps/news?pid=20601103&sid=aEfbyXYEsM1I

Teaching Your Children the Value of Money

2009-11-28T19:25:00.000-08:00

By: Janielle Viggiano

Posted By: Group 1B

When it comes to teaching children about money, the earlier the better. It’s not an easy task but if you start early enough there are short and long-term benefits. In the short term, they will develop strong savings habits and learn how to make smart purchasing decisions. In the long-term it will help them to avoid accumulating debt and plan for financial security. It’s also a good idea to teach your children where the money is coming from because most children only see it as coming out of mom and dads pockets. Start by explaining to your children that money is earned by working.

There are different feelings about whether or not an allowance is a helpful way to teach children the importance of money. According to the University of Arkansas, “Children need to have money of their own to learn how to manage it. An allowance is a better teaching method than simply giving children money upon their request, says the Cooperative Extension Service, University of Arkansas. An allowance for children should be a set amount, should be paid regularly, and not tied to regular tasks required of the child. When deciding on the amount of an allowance, discuss what items will be covered. The amount should be enough that the child has money to manage with no strings attached (2006).” More examples of lessons to teach your children about money include: make saving interesting, banking and investing, and compounding.

Sources: http://www.arfamilies.org/money/children&money/

http://money.cnn.com/magazines/moneymag/money101/lesson12/index.htm

http://finance.yahoo.com/how-to-guide/family-home/12820

ABC News: Tiger Woods’ Injury in a Car Crash: How Does this Impact His Corporate Value?

2009-11-27T18:10:00.001-08:00

Word that Tiger Woods was involved in an early morning car accident likely rattled not just fans, but also the broad swath of major corporations that rely on Woods' star power to sell everything from sports drinks, T-shirts and razors to golf tournament tickets.

Reports say the golf star hit a fire hydrant and a tree near his home.

"I can imagine that the world stopped for Tiger Woods advertisers when they first heard the news and that, literally, their hearts missed a beat," said ABC News sports consultant and USA Today sports columnist Christine Brennan.

Woods has earned more than $100 million annually and, according to Forbes, more than $1 billion during his career thus far, thanks, in part, through endorsement deals with companies such as Nike, Gatorade, Electronic Arts, TAG Heuer and Gillette. The companies declined requests for comment from ABC News.

Nike, in particular, has been especially dependent on Woods, said advertising expert Larry Woodard, an ABC News columnist and the CEO of the advertising agency Vigilante.

"Nike wasn't really into golf before Tiger Woods came," he said. "He helped them take a pre-eminent role in golf."

The PGA Tour also has a lot riding on Woods -- he drives ratings for PGA Tour broadcasts like no one else before him, allowing the tour to rake in greater advertising revenues and higher TV ratings.

"Tiger brought a lot of color to the sport both on his skin and his style of play and that's something that the PGA sorely needs," said Boyce Watkins, a finance professor at Syracuse University.

In the short term, companies tied to Woods likely wouldn't lose too much cash if Woods couldn't fulfill his immediate endorsement obligations; corporations take out insurance policies to cover themselves in case of such events.

"I bet you any intelligent corporation that deals with Tiger Woods has conditions in place to protect them in the event that something like this were to happen," Watkins said. "You have to confront the fact that a human being is perishable commodity. It is a commodity that does not come without risk."

Click to read.

Commercial Real Estate Up But Still A Rocky Future

2009-11-27T17:10:00.001-08:00

By, Meredith Anderson

For the first time since 2007 the commercial real estate activity seemed positive. However this rise although slightly encouraging does not acknowledge the fact that the real estate market had a drastic fall just one year earlier.

The NAR, National Association of Realtors, showed that the brokerage activity rose from .09% to 102.4. However the index is still falling short of what it once was on a couple years ago.

Although there was somewhat encouraging news form the real estate market, credit availability remains a huge problem for the industry. The vacancy of both commercial and residential properties is predicted to reach record highs this year. "Credit availability needs to significantly rebound for any hope of a meaningful commercial recovery in 2010," NAR chief economist Lawrence Yun said. Its a great time to buy, but only if you have the money at hand.

Sources:

http://online.wsj.com/article/BT-CO-20091119-711360.html

http://www.reuters.com/article/GCA-Economy/idUSTRE5AI39920091119

http://www.bcbr.com/article.asp?id=103101

Real estate: October home sales up in Hampton Roads

2009-11-27T17:09:00.001-08:00

Sales of Peninsula-area existing homes were up 24.2 percent in October, compared to October 2008.

At first blush, it sounds like a drastic improvement. But, real estate agent Bob Sullivan cautioned, October 2008 was a terrible month.

"October of last year is when it really started to go into the toilet," said Sullivan, president of the Virginia Peninsula Association of Realtors.

Nationally, existing-home sales were up 10.1 percent from September, and year-over-year sales were up 20.8 percent, according to the National Association of Realtors.

A rush to cash in on the up to $8,000 first-time home buyer tax credit before it expired Nov. 30 bolstered sales. Since then, legislators have extended and expanded it.

Now, a credit of up to $6,500 is available to qualifying existing homeowners. Both first-time and existing buyers have until April 30 to find a home.

That will keep the housing recovery momentum going, Sullivan said.

Extending the credit to existing homeowners will give them the incentive they need to find another home, Sullivan said.

"They might be able to recoup some of the money they would've lost because of the pricing coming down," he said.

October was the third consecutive month to show year-over-year gains in the number of sales on the Peninsula and Middle Peninsula, and November sales hold promise. Year-over-year pending sales are up 43.6 percent, according to a Real Estate Information Network report.

Click here to read more.

Posted by: Kelsey Hoffman

Graduating Without a Job?

2009-11-24T11:47:00.000-08:00

By: Zachary Pienkowski

No one needs to tell college students that the job market is difficult. Countless recruiters tell students they are not hiring and cutting back, but will hold on to their resume and give a call if something opens up. Think that call ever comes? Probably not. However college grads are not the only ones seeking job, as the national unemployment rate has risen over 10%. The question in many Americans mind is when is this going to stop? Well many reports have been put out by the Federal Reserve recently saying the jobless rate will begin to drop, but do so very slowly. Most experts don't expect the job market to return to the full health of the past for at least 5 or 6 more years. Meanwhile, many unemployed men and women must take whatever they can get to pay the bills, even if it means settling for less. The economy is expected to have a 2-4% growth rate next year, but that will not be enough to jump-start the dismal job market. President Obama said that with the first stimulus package that was issued the unemployment rate would not rise above 8%, but it ended up soaring over 10% in a matter of months. The Obama administration still believes that the stimulus packages were effective and plan to release another one, however it will not be called a stimulus package because of the negative feelings the American public has about the effectiveness of the original.

Sources:

http://finance.yahoo.com/news/Fed-says-jobless-rate-to-drop-apf-2316913196.html?x=0
http://newsbusters.org/blogs/julia-seymour/2009/11/06/unemployment-surges-10-2-percent-cnn-asks-about-second-stimulus
http://money.cnn.com/pf/features/lists/state_unemployment/

Ways a Will Might Be Deemed Invalid

2009-11-23T19:32:00.001-08:00

Even if a person dies with a Will (which is known as dying "testate"), a court generally has to have an opportunity to allow others to object to the Will, and if there are any objections, to determine if the Will is valid, because it is always possible that
(1) There was a later Will (which, if valid, would replace the older Will);
(2) The Will was made at a time the deceased was not mentally competent to make a Will, or
(3) the Will was the result of fraud, mistake, or "undue influence";
(4) The Will was not properly "executed" (signed);
(5) The so-called Will is actually a forgery;
(6) For some other reason (such as a pre-existing contract) the Will is not fully valid; or
(7) There are other claims against the deceased's estate that impact what the beneficiaries under the Will would receive.

Is it legal to force people to buy insurance?

2009-11-22T22:54:00.001-08:00

Posted by Shawn Gao

Is it legal to force everyone to buy insurance? Can Congress force you to buy insurance?
As part of health reform, Democrats want to require all Americans to purchase insurance or face a fine.
However, by Utah Sen. Orrin Hatch, say Congress has no constitutional authority to tell people what to buy with their money.
I agree with the Sen. Orrin Hatch. America is a country where people are free to do anything under its laws. The Congress should not have the power to force people to do anything.
Despite any benefits from the health reform to the country, “ individual mandate” cannot be taken at this moment. Even though, each individual could be covered under insurance, and each state economy, it is unreasonable for people to be urged to purchase require insurance.
I mean people have their own right to purchase anything they want. Or, Congress may simply ask each individual to purchase America- made cars that easily help American economy.
The key is people shall decide whether they need to purchase insurance or not. Also, required insurance should be considered as substantial.
Source:
1.http://www.sltrib.com/news/ci_13838615
2.http://www.google.com/hostednews/ap/article/ALeqM5gm81TTE7a0EUL9JlzVML1dnH2N2gD9C43GRG2
3.http://www.freep.com/article/20091122/OPINION05/911220457/1068/opinion/Stupak-amendment-breaks-promise-of-health-reform

Public option vs. public opinion

2009-11-22T22:52:00.000-08:00

By Alma Zhumagulova

With the US health care system being changed, many people are not sure whether the new health care system proposed by Barack Obama is better than the existing system and whether the Government should adopt it or not. According to the results of the poll conducted by Associated Press, when told that the new health care plan would be much cheaper since it is a government run program 52% favored it and 35% opposed it, while when told that with the new plan the government will get to decide which medical treatments to cover, only 44% favored it and 38% opposed. Clearly the general population does not have a strong opinion about the new plan. However, in general, 75% want the plan to be available nationally and 25% think that the individual state governments should decide on whether to offer the plan to the residents or not.
The Patient Protection and Affordable Care Act (H.R. 3590) provides that in the upcoming decade the US economy will be better off with the plan. It will cut the federal deficit, and increase federal spending and revenues. At the same time the insurance industry is aggressively lobbying and campaigning against the new plan. America’s Health Insurance Plans group states that “bill would increase costs for individuals, families and employers, reduce benefits for older Americans, and threaten employer coverage.”
In general, though, CBO estimates that since the low-income population is covered by Medicaid, the majority of working force is covered by their employers and the older population is covered by Medicare, only those who have preexisting conditions, approximately 2% of the US population under age 65, will sign up for it.
Sources:
http://prescriptions.blogs.nytimes.com/2009/11/19/insurance-industry-pans-the-senate-bill/
http://www.osnsupersite.com/view.aspx?rid=50801
http://www.nevadaappeal.com/article/20091119/NEWS/911189962/1058/rss08

Money Monday: The Best Personal Finance Stories from the Weekend

2009-11-22T19:37:00.000-08:00

Posted by Ka Lee Angel Lee

Here is a run down of the personal finance stories you might have missed this weekend:

In Forbes, we wrote about why long-term investors might want to think twice before investing in gold (whether the metal itself or stocks from gold mining companies), how to push for a better retirement plan at work and how to avoid costly mistakes in your Individual Retirement Account.

The New York Times, meanwhile, discussed how investors are in better shape with the Dow at 10,000 now than they were with the Dow was at 10,000 in 1999.

Los Angeles Times columnist Kathy M. Kristof (a sometimes Forbes contributor) listed steps to take before the end of the year to lower your tax bill.

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Personal finance: Keep holiday spending under control this season

2009-11-22T19:33:00.000-08:00

Posted by: Andrew Pia

Written by: Kathy DiCenso

As the year comes to a close, spending in most households heads up -- on holiday gifts, entertainment and, depending on where you live, on already high energy costs.

It's easy to lose control. So make a plan now to minimize debt while putting money where it absolutely needs to go.

Put your current finances under a microscope

Call it a gift from you to you. If you're trying to get your finances in order, plan a visit now with a financial adviser, such as a certified financial planner professional. This meeting should extend beyond your holiday spending to setting goals for saving, investing and extinguishing debt and setting financial goals for the future. You also can examine your spending patterns and the emotional drivers behind many of our financial decisions.

Create a holiday budget

If you have credit card debt now, you don't want to elevate those numbers. Set a spending number you will not exceed and start setting aside cash in an account to cover it. When should you make the budget? As early in the year as possible, but if you haven't started shopping yet, figure out how much money you can realistically set aside and stay as close to that number as you can.

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More Members of Middle Class file for Bankruptcy

2009-11-22T17:05:00.000-08:00

Posted by: Scarlett Lu

Many middle class members have filed for bankruptcy. Among them are college educated and owners of homes. More than 100,000 middle class families have filed bankruptcy every month in 2007. The bankruptcy filings are warning risk that people can no longer count on their college education, good job, or home ownership in protecting them from a financial collapse. However, some highly educated have never been unemployed. There are many factors that cause bankruptcy these factors include poor saving habits, health problems, and excess spending.
Some people thought that having a home will save them from bankruptcy however, it does not. Many people had to file bankruptcy in order to pay for medical bills. Studies show that 2 million Americans annually.
Middle class families are encouraged to spend. So they spend more than they make. They are wrapped up in materialism. Some families had to downsize to save themselves from bankruptcy. Middle class people need to learn how to save more money by putting it in a bank, spending less, and etc. They should also learn how to budget their money correctly and save up for difficult times.

http://www.consumeraffairs.com/news04/2005/bankruptcy_study.html
http://www.usatoday.com/money/perfi/general/2009-11-19-bankruptcy19_CV_N.htm
http://www.mpbn.net/News/MaineNews/tabid/181/ctl/ViewItem/mid/3475/ItemId/9845/Default.aspx

http://www.consumeraffairs.com/news04/2005/bankruptcy_study.html

AIG gets a pass

2009-11-22T17:03:00.000-08:00

By: Zachary Pienkowski

While we all have heard about the troubles that AIG has been facing over the last year, one thing that is nice talked about quite as much is what happened to those they insured? While it was all over the media how federal regulators worked around the clock in an attempt to bailout AIG, they did not properly work out agreements with their business partners to negotiate the value of their assets. The result was over $62 million of taxpayer and AIG money being distributed to 16 banks which were business partners with AIG. Generally when a toxic asset is being liquidated the value of the asset drops considerably and is usually acquired for pennies on the dollar. This wasn't the case with many of AIG's counter-parties. The exact opposite occurred, in fact, they paid 100 cents on the dollar for nearly all of the underlying assets. Complaints have been pouring in that the Fed gave up too easy and did not exercise their leverage to make AIG's business partners to fall in line like many of the other banks that were bailed out did. The Fed rushed to bail out AIG but then lost all of its leverage because they had nothing to threaten them with anymore. Prior to bailout AIG had the fear of going bankrupt, but after the bailout this was no longer the case. The Fed felt pressured to keep making the collateral payments to the other 16 banks that AIG could no longer fund because they did not want to have to force taxpayers to fully fund the 100 cent on the dollar default swap.

Sources:

http://money.cnn.com/2009/10/13/news/companies/aig_bonuses/index.htm?postversion=2009101318

http://money.cnn.com/2009/03/07/news/companies/aig.fortune/index.htm

http://www.forbes.com/2009/03/16/aig-counterparties-bailout-markets-equity-cds.html

College Expenses

2009-11-22T11:20:00.000-08:00

Article by Tamar Lewin

Post by Shawn Chandok

The price of a college education rose substantially last year, despite a 2.1 percent decline in the Consumer Price Index from July 2008 to July 2009.Hit hard by state budget cuts, four-year public colleges raised tuition and fees by an average of 6.5 percent last year. Prices at private colleges rose 4.4 percent, according to a report issued Tuesday by the College Board.

Patrick Callan, president of the National Center for Public Policy and Higher Education, called the increases “hugely disappointing.”

“Given the financial hardship of the country, it’s simply astonishing that colleges and universities would have this kind of increases,” Mr. Callan said. “It tells you that higher education is still a seller’s market. The level of debt we’re asking people to undertake is unsustainable.

“A lot of people think we can solve the problem with more financial aid, but I think we have to have some cost containment. For all the talk about reinventing higher education, I don’t see any results.”

With room and board, the average total cost of attendance at a public four-year college is now $15,213, the report found. At private nonprofit colleges, which enroll about one in five college students nationally, the average total cost of attendance is now $35,636.

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Credit Card Companies Willing to Deal Over Debt

2009-11-22T11:17:00.001-08:00

Post by David Held
By ERIC DASH

Hard times are usually good times for debt collectors, who make their money morning and night with the incessant ring of a phone.

But in this recession, perhaps the deepest in decades, the unthinkable is happening: collectors, who usually do the squeezing, are getting squeezed a bit themselves.

After helping to foster the explosive growth of consumer debt in recent years, credit card companies are realizing that some hard-pressed Americans will not be able to pay their bills as the economy deteriorates.

So lenders and their collectors are rushing to round up what money they can before things get worse, even if that means forgiving part of some borrowers’ debts. Increasingly, they are stretching out payments and accepting dimes, if not pennies, on the dollar as payment in full.

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Commercial Real Estate Up But Still A Rocky Future

2009-11-22T09:24:00.000-08:00

Realtors see sunnier 2010

2009-11-22T09:21:00.000-08:00

Posted By: Nicole Nelson

Scott Van Voorhis

OK, here’s one that is sure to get all the housing bears out there feeling downright surly again.

The National Association of Realtors is forecasting that prices will rise 4 percent in 2010 after hitting bottom in 2009.Home sales will also rise by 700,000 to 5.7 million, he argued.

Lawrence Yun, the association’s chief economist, made the sure- to- be-controversial predictions to the faithful assembled at NAR’s annual convention in San Diego last week.

He also noted foreclosures will top out in the first half of next year and the “fear factor’’ of falling prices that has put such a damper on the market will fade.

I guess you have to hand it to Yun, if nothing else, he’s not afraid to stick his head out there.

Still, given some of notoriety the real estate trade group earned for some of its predictions during the bubble years, this is risky territory.

Would passage of health reform require quick changes in insurance plans?

2009-11-21T14:19:00.000-08:00

By DAVE HELLING The Kansas City Star
Posted by Alma Zhumagulova

Millions of Americans are now engaged in a familiar ritual: signing up for next year’s health insurance coverage.

Pick a plan. Pick a premium. Make sure choices are submitted and approved on time.

But roughly half of those millions, according to a recent survey, are worried. They think the health care reform plan now working its way through Congress may force them to make major changes in their health plans quickly — perhaps within weeks — if it passes.

With one important exception, they can probably relax. Many of the major components of health reform won’t take effect until 2013.

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New Health Reform Bill is coming our way

2009-11-21T14:17:00.000-08:00

By Jonathan Tse

Senate just unveiled a new health care bill that is supposed to expand health insurance coverage to 30 million more Americans. This is expected to cost about $849 billion over the course of 10 years. It was stated by Senate Majority Leader Harry Reid that this will not add to the current deficit but will instead reduce federal deficit by $130 billion over the next 10 years. On Saturday, November 30th, debates on amending the bill will begin if Senate decides to take up the bill. This bill is expected to be the largest revision of the US health care system since the creation of Medicare health insurance program in 1965.
The goal of this reform bill is to offer affordable and reliable coverage for those who are not insured and also help to lower costs for individuals, families, businesses and governments. It seeks to reduce long-term costs of health care for governments, businesses, as well as individuals and families, while also increasing the efficiency and quality of health care services provided by reforming how health care is provided. The bill is expected to introduce many new taxes and fees. A new feature of this bill is that it would require all individuals to purchase health insurance and would be fined if they do not comply with this rule. Parents are also liable for covering their children who are under 18 years of age. Another new feature is the Medicaid coverage will be expanded from the poor to everyone.

http://www.businessinsurance.com/article/20091120/NEWS01/911209989 http://www.insurancenewsnet.com/article.asp?a=top_news&id=112025 http://www.insurancejournal.com/news/national/2009/11/20/105471.htm

How to Manage the Cost of Your Funeral

2009-11-20T09:01:00.001-08:00

by Dr. Boyce Watkins, Syracuse University

Funerals are never fun. They are emotionally draining and you are forced to endure the shock of knowing that your loved one will never be back in your life. In addition to the emotional devastation, you have to deal with the financial burdens of paying for someone to be buried. We all know that funerals are not free or cheap, and the last place you want to be cheap is when it comes to burying the person you love.
But there are ways you can keep the cost down. They say you can't take the money with you, but someone who doesn't plan for their death may be taking their relatives' money with them to the grave. Here are some ways that you can bury on a budget: giving relatives dignity without creating financial hardship.

There is a funeral cost calculator on FuneralswithLove.com that helps you to figure out how much your funeral might cost and whether or not you're going to be able to pay for it. Effectively, the cost estimator first determines your total resources from prepaid expenses, personal savings/investments, and death benefits. Once you know what is available to you, you have to determine how much you want to spend. Some of us want to go out in style and some of us figure that since we're dead, our relatives should be the ones having all the fun.

click to read.

Exam chapter clarification – chs 10 and 15

2009-11-17T06:20:00.001-08:00

Chapter 10 slides

Chapter 15 slides

college loans could contribute to tuition hikes

2009-11-16T12:08:00.000-08:00

By Jeremy Davis

Originally Posted by Leah Gorham

It’s safe to say the hardest part to stomach about college is the tuition fees.In order to combat the rising tuition rates, students engage in a staple ritual of college life: obtaining student loans. Without them, most of us wouldn’t be able pursue a college career or afford the outrageous tuition. But most of us never thought one major culprit contributing to rising college costs may actually be the loans themselves, government-guaranteed student loans in particular. College tuition increases all the time, and as we know, UC is no different, with a possible increase in tuition for the 2010-11 school year. As it stands now, yearly tuition rates at UC for the 2009-10 academic years are currently $9,399 for in-state undergraduates and $12,723 for in-state graduates. Only a decade ago, yearly tuition rates were $4,998 for in-state undergraduates and about $5,880 for in-state graduates for the 1999-2000 academic year. Tuition has nearly doubled in 10 years; that’s a painful and significant difference.So the more tuition goes up, the more loans students take out, which in turn will contribute to future increases, keeping the cycle going.

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Tuition Costs Increase Despite Sour Economy

2009-11-16T12:04:00.000-08:00

Posted By Christopher Johanning

The College Board’s latest study on college tuition shows that the price for college has risen by 6.5% — right in the teeth of the recession. But all is not lost. For students and families, there are some more pleasant figures in the study, too.BankingMyWay will open this — the week before Thanksgiving break for collegians — with a look at college prices going into 2010.The Big Kahuna of college cost barometers is the College Board’s annual tuition report. This year, the study says that the average price for four-year public colleges climbed $29 on a year-to-year basis to $7,020. Tuitions at private four-year colleges rose 4.4% for 2008-2009 bringing the average yearly cost to $26,273, the College Board says

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Fed Tightens Rules on Overdraft Fees

2009-11-15T18:22:00.001-08:00

Written by: Lisa Matthys

Are you one of those consumers who look at their bank account to find that they had overcharged their account by $0.01? Many consumers, who purchase small ticket items with their debit cards, have the impression that the transaction simply won’t go through if there is not enough money in the account. However, that isn’t the case.

Some banks offer consumers an option for overdraft protection upon establishing their account with the bank. If declined, consumers who run their accounts close to zero are at a high risk of paying an additional fee if they overcharge their account (between $25 and $35). Banks generate approximately $38 billion a year nationwide. So for example, going over your account by $0.01, you will have to pay approximately $35.01 if you didn’t agree to an overdraft protection program.

However, not all banks market overdraft protection programs. Most banks silently and automatically enroll their customers into overdraft programs, and charge large fees for each overdraft purchase. The Federal Reserve has put in place new finance rules to ensure consumer protection. Customers will have to opt-in to overdraft protection programs before banks can charge them with overdraft fees on debit purchases and ATM withdrawals. These new rules will be implemented next summer.

Banks will be sure to complain, fight, and find loop holes, against this new financial rule because the overdraft charges account for a bulky portion of their profits. However, finance leaders in Congress feel that more needs to be done to protect consumers such as capping the number of overdraft fees allowed per year and prohibiting banks from manipulating the chronology of purchases in order to maximize the number of overdraft fees.

Source 1
Source 2
Source 3

Invest like Warren Buffet

2009-11-15T18:20:00.000-08:00

Written by Michael Rivezzo

No,it's probably not economically possible for you to actually invest like Warren Buffet. His trading volume is in the billions and his investments usually signify ownershop of a company. He even gets a price that is strictly for the "VIP" investors. These stocks are commonly known as preferred shares.

Warren Buffet appears to have some cult like following in the business world. His books become instant New York Times Bestsellers and everytime he invests it makes the front page on every business journal. His company Berkshire Hathaway is currently trading over 100,000 dollars. Investors who are financially able to afford one share make it every year to the shareholder's meeting to hear Warren speak. He owns over 5% of Coke and didn't follow the whole dot come phase of the late 90's, which investors lost billions on.

But yet its still possible to invest like him regardless of assets. His strategy is yet simple for even the common investor. Invest in companies that are well-established, while yet undervalued. In the slang of investors, Buffet is a long trader, he holds shares for the long run. He learned the hard way that you must have patience with the stock market and he is known for several quotes regarding this.

""The stock market is designed to transfer money from the active to the patient."

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Paying for College 101

2009-11-15T18:19:00.000-08:00

By Jorden Meltz

The past year and a half has affected the finances of everyone and the impact it had on colleges was no different. Creditors have begun to downgrade some Universities debt and now nearly one in every three private universities in planning for a decrease in tuition for the next year. This comes after the Student Aid and Financial Responsibility Act was passed in September, which will now eliminate college and universities need to rely on private sources for student loans and instead the loans will now come directly from the government. In response, Bank of America has suspended its federally-backed student loan program, as the U.S. prepares to phase out the Federal Family Education Loan Program. The new act will help to further ensure that families in need of loans to pay for college will have access to them through this federally backed program. The act comes as no surprise as the past year has seen both a decline in private sources making themselves available to give loans and a heavier reliance upon federal loans. Although students will not receive better interest rates on the loan, the act helps to make sure their is a larger pool of money to make loans with and that a greater number of people will have assistance in paying for their education if they need it.

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10 Secrets to Raising More Than $15,000 for College

2009-11-15T18:18:00.000-08:00

Posted by Nick Porcell

Grandparents are pitching in. Students are working more, and eating less. Parents are taking out more and bigger federal loans.

As the economy has declined and college costs have risen, families have buckled down and become more resourceful to pay for college.

They have been so successful at funding tuition that college enrollment is up dramatically. A record 40 percent (or 11.5 million) of 18- to 24-year-olds are taking at least one college course this year. Add in all the adults returning to school because of the lousy job market, and the total number of college students is likely to exceed 19 million this year.

How are more students affording tuition even though many colleges' prices are at record highs and many scholarship programs, private lenders, and family savings accounts have been wiped out?

Click here to read more

Effects of the Recession Linger...

2009-11-15T16:53:00.001-08:00

By: Robert Katz

While all experts seem to be saying that the recession is over, it is the after shock of this massive economic collapse that is definitely still effecting the American population. The worst part of all is that the real problems the recession created weren't even financial.
In today's American capitalist society, life seems to revolve around money and finances. Due to such high increases in unemployment and job opportunities families' financial situations have become the least of their worries. The plummet of the economy left most Americans unprepared for the years to come. Families have a lot to worry about with providing for kids, paying a morgage, car payments, insurance, saving for retirement, kids college, etc. The abortion rate in the US during this recession has increased substantially showing that families have had to alter their mind sets when thinking about starting a family. Yet, those already with a family that depend on a single income have been the ones that are really effected the most.
Inability to pay bills or even afford some of the luxuries we have come to take for granted in every day life have become out of their price range. This creates frustration and tension in families and more specifically problems in marriages. Marriage counseling has also had a surprising increase during a recession. This just shows the importance of saving and not being frivolous with your money. While always been worried that worst is coming isn't good either, it just never hurts to just be prepared and budget money wisely.

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Front-End Loaded Mortgages hurt Family Finances

2009-11-15T16:51:00.000-08:00

Posted by Chris O'Sullivan

Interest on home mortgages is commonly "front-end" loaded, meaning lenders are making what some may consider unfair amounts of cash on your interest payments. Often times it may take 20 years to pay off only half of the principal on a 30 year mortgage. Front-end loads are structured in a way that requires the mortgage holder to pay off the interest first before chipping away at the principle.

If large interest payments in the early years really do generate excess profits for lenders, you would think that they would prefer 30-year to 15-year mortgages, because interest payments on the 15 decline much more rapidly. You would also suspect they should charge higher rates on 15s. However, they actually charge lower rates on 15s.

The way that lenders price loans is just the opposite of what we would expect if interest was front-end loaded. Lenders actually prefer shorter-term mortgages because their money turns over faster, which reduces their exposure to rising interest rates, and the more rapid pay-down of the balance reduces the risk of loss from default. This show why it is important to know the fine print in any contract that you sign.

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Real Estate Career

2009-11-15T16:15:00.000-08:00

By Ka Lee Angel Lee

Real estate jobs are getting more popular and competitive. Everybody needs a place to live, to work, and if one is smart, investments in real estate can earn you a fortune.

Real estate jobs endow freedom, time flexibility, challenges and juicy rewards. If you are really interested, you can start by enrolling in some real estate courses in schools. There are licensing requirements for entry of the real estate job market. Therefore, some pre-licensing educational courses can definitely help you to get through more easily. Then you will start from the real life training and get your way into bigger firms.

There is a wide range of real estate jobs to choose from, from residential brokerage to commercial ones, from industrial and office brokerage to real estate appraising. It is important to find out which direction you want to aim at and your effort will be paid off.

Sources:

http://www.restatecareer.com/

http://www.realtor.org/REALTORorg.nsf/pages/careers

http://www.business.uc.edu/realestate/careerpaths

Investors Finding Deals in Real Estate Market

2009-11-15T16:13:00.000-08:00

Posted by: Christina Dove

Although the housing market has taken some criticism and has struggled recently in the ongoing economic crisis, there is a glimmer of hope for some real estate investors. Many investors who have the money are able to take advantage of the slow economy's low prices and are getting great deals on houses. Especially with so many people foreclosing their homes and turning them over to the bank, it creates a lot of opportunities for people looking to buy a home or just a place to invest their money.

Housing prices are at an all time low and are attracting several types of people - those looking to buy their first home, those looking to relocate and those looking to invest their money and have a payoff in the future when the market returns to its normal conditions. Another benefit of entering the real estate market at this time is for the wide selection of homes that are on the market, with so many people getting out of their homes because they cannot afford them, it really opens up the doors for people with a little extra cash to get some great discounts on homes.

One issue in the housing market is that investors believe that the banks are being too leinent on people who cannot afford their homes. The banks are continuing to give out questionable loans to avoid foreclosures, but this is not helping the economy or the people who are living in these homes, strapped for cash. In order for our economy to get back on its feet, we will have to take stronger actions on people living in homes that they cannot afford and open them up to investors who have the fund to live in that caliber of homes. Therefore, in order for the real estate market to prosper and investors to get the most of their money and take advantage of the low housing prices, banks must be more aggressive in getting people to pay for their mortgages.

Sources:

http://money.cnn.com/news/newsfeeds/articles/prnewswire/200911110100PR_NEWS_USPR_____LA09203.htm

http://www.dsnews.com/articles/low-cost-foreclosures-attract-investors-2009-11-12

http://blogs.wsj.com/developments/2009/11/12/big-opportunities-for-real-estate-investors-reit-execs-skeptical/

How do you know what your Home is Worth?

2009-11-15T15:03:00.001-08:00

Post by David Held

The first step in the process of selling your home is getting an appraisal, an estimate of what your house is worth. This is the key step in determining what to list your home for. The appraised value of your home most likely will not be the same as the “market value” for your home. Depending on the economy the appraised value might be more than the market value or some times less (not in your favor).

Ten Appraisal Tips are:

1. Continuously research the value of your home and homes in your neighborhood; pay attention to foreclosures in your area; they will drive down the value of your home.
2. Since appraisers use "comps" (comparable market sales) of local properties sold within the last six months to value your home, make sure to work with a great loan officer who will leverage their knowledge to research comps in your area, before ordering the appraisal.
3. If you use your own appraiser, research them first and ask your lender to cross check them for any potential issues that may delay the process. Great loan officers will always confirm your appraiser's credentials.
4. Direct your loan officer to work with local, experienced appraisal companies. Local appraisers have a deeper knowledge of the surrounding neighborhood and will likely be more readily available for the home inspection, to speed your appraisal process.
5. The appraisal report is yours to keep. Find out in advance who pays for the appraisal--many times appraisal fees are the homeowner's responsibility and have to be paid up front.
6. New lending regulations require two appraisals in some situations--ask at the beginning whether you'll need one or two.
7. Commit to your lender before committing to an appraisal. Being comfortable working with your loan officer is imperative. They often will be the liaison between you and the appraisal company.
8. Make sure any major repairs are completed before moving forward with your refinance. Structural damages drive your home value down and jeopardize the approval process for today's popular government-backed FHA loans.
9. Don't overestimate the value of making cosmetic home improvements. The expense is rarely justified because in the appraisal world, only improvements that add square footage will significantly increase home value.
10. Rely on market value rather than tax assessments for a realistic appraisal value--in today's market, tax value and current market value may differ widely, but your lender can only go by appraisal value.

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Best Places to Live 2009

2009-11-15T15:02:00.001-08:00

Article by Luke Millins

Post by Shawn Chandok

With the decade winding to a close, Americans have grown increasingly reluctant to gas up their moving vans. Last year, the Census Bureau's national mover rate—which represents the percentage of Americans 1 year and older who moved within the past year—hit its lowest level since 1948, when the bureau began tracking the data. And who can blame us? In the face of a terrifying banking crisis, a historic housing crash, and a grueling recession, relocating to a new city isn't exactly on the to-do list. But despite the uncertain economy, the nation's diverse topography presents an enviable menu of great places to find work, retire, or just change your scene.

In selecting our Best Places to Live for 2009, U.S. News took a thrift-conscious approach: We looked for affordable communities that have strong economies and plenty of fun things to do. The cities we selected are as distinct as America itself—ranging from a quaint suburb to a live-music mecca. But whether you prefer hiking through the Rocky Mountains, pulling a fish out of the Atlantic Ocean, or grilling hot dogs at a college football tailgate, here are 10 places that will fill up your daybook without emptying your wallet.

1. Albuquerque, New Mexico
Along the banks of the Rio Grande, with the Sandia Mountains in the background, is the beautiful city of Albuquerque, N.M. The sunny climate and endless landscape have long drawn writers, poets, and artists to this spot, which includes an unconventional mix of American Indian, Hispanic, and Anglo cultures. But it's not just freethinkers who drift to this Southwestern city of 511,000. Kirtland Air Force Base, Sandia National Laboratories, and Intel Corp. have helped develop the area into a manufacturing and research hub. They provide a stable anchor for the local economy.

Click here to read more!!

There is hope

2009-11-14T14:28:00.000-08:00

By Jonathan Tse

On the week of November 7th, there was an all time low of 502,000 first-time claims for unemployment insurance since the week of January 3rd. Some believe that this could be a sign that the problem of joblessness is beginning to be solved and that unemployment rates may begin to decline. This number of first-time job claims was much lower than expected since the estimate for this week was 510,000. It is believed that this is a sign that companies are cutting jobs at a slower pace than at the beginning of the year, but economists say that joblessness rates are expected to rise until they peak during mid-2010. The reason for this is that analysts say that claims must fall to approximately 450,000 or below to indicate that the economy is adding jobs. The concern that there will be a jobless recovery still worries many, but the government is working to improve the situation. President Obama announced that he plans to hold a new jobs forum and economic growth in December. Also, last week President Obama signed a bill that would provide 20 more weeks of jobless benefits to the unemployed. This plan will be funded by extending the long-standing unemployment tax on employers to 2011.

http://money.cnn.com/2009/11/12/news/economy/initial_claims/index.htm
http://www.reuters.com/article/ousivMolt/idUSN0243717320091112
http://www.nytimes.com/2009/11/13/business/economy/13econ.html?_r=1&ref=business

Asian Real Estate Investment Market Buoyed in 3Q

2009-11-14T14:25:00.000-08:00

Posted By Shawn Gao

The Asian real estate investment market continued to gain momentum in the 3Q of 2009 as capital values generally stabilised, sentiment improved and the bid-ask spread narrowed, particularly for quality yield-accretive assets in prime locations.

Direct real estate investment in Asia jumped 25 percent quarter-on-quarter to an estimated US$9.1bn. Hong Kong accounted for 36 percent of the total volume followed by China, Korea and Taiwan. However, overall transaction volume remained low in the first nine months of 2009, falling by 49 percent year-on-year according to CB Richard Ellis’ 3Q 2009 Asia Investment MarketView report.

The office sector attracted US$4.7bn of investment during the quarter, or 52 percent of the total flow of capital. Residential properties accounted for 16 percent, with the retail sector comprising 13 percent of the total volume. Despite the relatively low transaction volume in the hospitality sector, a total of six hotel transactions worth a combined total of US$300m were concluded during the quarter, surpassing within three months the five transactions recorded in the first six months of 2009. Transactions involving industrial properties also showed signs of improvement with a total of 24 deals concluded between July to September, a similar figure to the total number of deals completed in the first six months of the year.
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How to invest $10,000 right now

2009-11-14T12:45:00.001-08:00

By Harry Domash

Posted by Lily Mei

You're not rich. You own a few mutual funds in a 401k or an individual retirement account. And you're ready to take the next step: to buy a few stocks with $10,000 or so sitting in certificates of deposit or languishing in a bank account.

But how do you get started?

Let's begin by admitting this much: All of us, no matter how good we are at stock picking, are going to pick an occasional loser. That's why diversification is important. How many stocks must you own? Opinions vary, but dividing your $10,000 into 10 chunks of $1,000 each is probably sufficient. With many discount brokers charging less than $10 a trade, the commissions won't be significant.

However, different folks have different investment needs. I'll describe three strategies, including links to screens to see today's picks. Feel free to mix and match the stocks turned up by the screens or stick with the strategy that best suits your needs.

I used free online tools to build these three screens. The first two use StockScreen123, arguably the most capable free screening tool available on the Web. The third uses the Finviz.com screener, which I find easier to use but not as capable.

As tools, screens work best if rebalanced every six months. Rebalancing means that after six months, you'd rerun the screen and update the portfolio based on the new screen results.

Click here to read more

How to Budget Money During College

2009-11-14T12:43:00.001-08:00

Posted By,

Meredith Anderson

College tuition is expensive enough these days. When we budget our money we might not realize how much er spend on our daily expenses. Rent, eating out, books, clothes, alcohol, and daily coffee runs, are expenses that we might not always budget for but in reality probably spend the most on.

There are a couple things that will help reduce our expenses by a lot. Reducing your meal plan to only purchasing a realistic amount is a good start. Most of us have double the meals we actually use a week. Right there is hundreds of dollars a month we can save. Buying used books is not as fancy as brand new ones, however each semester you can save a couple hundred on books that are already highlighted, and you probably won't look at ever again! Of course then there are the simple things that can save us over time. Making our own snacks, coffee, and evening reusing notebooks will add up after four years.

Its important to stay informed about your finances. Try to use cash as much as possible and make simple lists and spread sheets to keep track of your expenses. It is true that not everything we learn in college will matter after graduation, however the way you manage your money will be a life time lesson to remember.

Sources:
http://collegelife.about.com/od/moneyfinances/qt/savingmoney5.htm
http://www.msnbc.msn.com/id/14448831/
http://www.bankrate.com/brm/news/sav/20000814b.asp

Slides for Chapters 9 and 15

2009-11-14T09:44:00.001-08:00

Chapter 9 slides

Chapter 15 slides

Businesses are downsizing their Real Estate

2009-11-13T10:24:00.000-08:00

Posted by: Scarlett Lu

Businesses are moving into smaller office because their staff is shrinking and more workers telecommute. When a company decides to downsize the reasons are obvious, it may be that they have no other choice; it’s either they downsize or go out of business. They may go as far as eliminating employees. Another trend that arise is closing down properties and letting employees work from home. Owners are saving money on office equipment such as furniture and other expenses. By letting employees work from home, or by using independent contractors who don’t work on-site. Owners do not have to provide space at the office for them. Space equals money. The CEO of Edge Electronics; has turned seven salespeople in Texas into telecommuters. Telecommuting has enabled some businesses to close down their offices and expand their headquarter space. Workers are working from homes and they save time and money without commuting. Employees have the opportunity to work offsite. They can still accomplish work at home.It is extraordinarily expensive to run a small business especially in the New York area. Since every employee has a computer, phone, internet connection it is convenient to work from home. The internet has made it easy for people to keep in touch with one another.

http://www.google.com/hostednews/ap/article/ALeqM5h9oAwWv3WYNik27YYKef62OoO-mAD9BTJA7O0

http://abcnews.go.com/Business/wireStory?id=9057594

http://www.helium.com/items/245133-how-to-downsize-business-and-retain-dignity-for-everyone

Are Houses Really Finally Cheap?

2009-11-13T10:20:00.000-08:00

By Lingxiao Li
A handful of early signs suggest America’s housing market is on the mend. Construction starts and new house sales were up nicely in June. Prices rose from April to May, the first monthly increase in nearly three years.

Time to buy, then? Perhaps, but be cautious about how and where you shop.

Some experts are no evangelist for the financial merits of homeownership. Two years ago they argued here that house prices in the U.S. had grown so bloated that renting had become a better deal than owning. An expert said:" Since then, prices have plunged 30%, or about 36% after inflation. Nationally, they still seem too high, as I’ll show in a moment, and May’s gain could prove illusory -- SmartMoney’s Aleksandra Todorova points out that it disappears after adjusting for seasonality, and that the numbers probably got a temporary boost from government freezes on foreclosure proceedings.

Still, a handful of major markets now look affordable, and all of them are closer to sane.

http://customsites.yahoo.com/financiallyfit/finance/article-107466-2179-0-are-houses-finally-cheap/?ywaad=ad0035http://finance.yahoo.com/real-estate/article/107458/high-end-homes-frozen-out-of-budding-housing-rebound.html?mod=realestate-buy

Solutions for Exam 2

2009-11-12T12:25:00.001-08:00

Make sure you study these solutions as I mentioned in class. You can get them by clicking here.

How to Save on Health Insurance

2009-11-09T16:36:00.000-08:00

By: Nicole Nelson

With open enrollment for many plans starting soon, it is important to know how to chose and maximize your health insurance plan. This may mean changing such things as deductibles, co-pays or co-insurance. It could also mean that you should start buying your own insurance, or switch to your spouse’s plan. In determining whether you should sign up for a high or low deductible plan, you should consider how many times you use your coverage during the year. Usually higher deductibles have lower co-pays and lower deductibles have higher co-pays. Therefore, if you are financially stable and a relatively healthy person that doesn’t visit the doctors that often, a lower deductible plan may be a better idea. Also, flexible spending accounts have become easier to obtain and more beneficial. Some employers may also let you have until March of the following year to use these funds. Flexible spending accounts are a good idea because these funds are taken from your pay pre-tax, saving you tax dollars. Also, in determining health care one should look into an HSA (health savings account). These are usually only offered if you have a high-deductible plan. Not all high deductible plans offer an HSA though. There are many options in choosing a health insurance plan. Therefore, all options should be considered in finding the best option for you.

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The downside of debit cards

2009-11-09T16:33:00.000-08:00

Posted By: Sara Sindelar

Rising rates and soaring credit-card fees mean many are switching to debit cards. But there are risks to using debit cards as well.

By Gerri Willis, CNN personal finance editor

November 2, 2009: 3:40 AM ET

NEW YORK (CNN) -- Out: credit cards. In: debit cards. As more and more Americans shun traditional credit cards, they're turning to debit cards. But you should know there are downsides to debit cards too.

1. Security

This can be a big issue -- You know that if your credit card is stolen, you're not responsible for unauthorized charges over $50. But if your debit-card number is stolen, you have fewer protections. First off, you have to report any misuse within two days to get the same $50 limited liability. If you miss that deadline but you report the loss or misuse within two months, you could be on the hook for up to $500. After 60 days, your liability is unlimited. Card issuers do have different policies though-so make sure you go through the fine print says Curtis Arnold of cardratings.com.

Click Here to Read More

The Economical Path for a Graduating High Schooler

2009-11-09T12:39:00.000-08:00

By Andrew Lipsitz

Senior year of high school is a nice balance of partying like no tomorrow and the stress of college applications. However, other strains have recently been plaguing many senior classes and their parents whom fund many of their graduates. A recent report from the College Board showed that the costs associated with a college education are rising significantly faster than many parents’ salaries. While more students are applying to college more than ever now, costs for parents have risen, as many face unemployment, credit card debt and many other financial issues.

With this being said, many people forget about the other, more economical, paths that their future college graduates can take. Pre college breaks, started at community college and finishing at instate schools are just a couple of routes that many successful graduates today have taken and it has definitely cut down on their student loan costs.

Aside from parent or student loans, another extremely important way to cut down on student costs, which is increasing in popularity, is applying for financial aid. Two types of financial aid include merit-based scholarships and need-based scholarships. Merit-based scholarships include both scholarships awarded by the individual college or university and those awarded by outside organizations. Merit-based scholarships are typically awarded for outstanding academic achievements and minimum SAT or ACT scores, although some merit scholarships can be awarded for special talents, leadership potential and other personal characteristics. Need-based finacial aid is awarded, as the title hints, on the basis of financial need of a student. The Free Application for Federal Student Aid, or FAFSA, is generally used for determining federal, state, and institutional need-based aid eligibility. At private institutions, a supplemental application may be necessary for institutional need-based aid.

In determining the amount of aid your student will receive, the federal government will calculated the expected family contribution amount and compare it to costs to determine any shortfalls in your financial plan. The bottom line is, if your future college student expects to go to any college they get into, there are always different ways to accomplish these goals, but also some tradeoffs.

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Unemployment Benefits Extended

2009-11-09T12:36:00.000-08:00

Posted by Chris O'Sullivan

The Senate voted unanimously on Wednesday to extend unemployment benefits by up to 20 weeks in all 50 US states. All unemployed individuals are entitled to an additional 14 weeks on benefits, while those living in states with unemployment rates of 8.5% and higher are eligible for an additional 6 weeks (20 weeks total). This proposal will be funded primarily through an extension of the federal unemployment act. It will still have to pass through the House and eventually be approved by the signature of President Obama.

Unemployment rates continue to be an issue in the United States, with 15 million unemployed vying for only 3 million available jobs. The unemployment rate hit a 26 year high of 9.8% in September and is expected to rise once again when October figures are released in the upcoming days. 1 in 3 unemployed Americans has been out of work for at least 6 months. According to government sources, this will be the last extension on unemployment benefits.

This new legislation also extends the $8,000 homebuyer tax credit to contracts signed by April 30 and closed by June 30. This is meant to energize the real estate business and put home builders back to work. This extension will cost $10.8 billion over 10 years. 1.8 million homebuyers are expected to exercise the credit by November.

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One of the oldest symphony houses declares bankruptcy

2009-11-08T21:06:00.000-08:00

Written by Michael Rivezzo

The Honolulu Symphony, one of the oldest symphony houses still left, has decided to file for Chapter 11 bankruptcy protection. Last week the symphony stated that it did't have the money to supplement their payroll. The house decided it will cancel the rest of their shows for this year, they do not want to spend money they don't have said Majken Mechling, the executive director of the symphony society. They stated that ticket sales were the same as usual but donations, which covers 70 percent of costs, were down exponentially.

The symphony had trouble signs over the past years of the upcoming bankruptcy. Last year they held checks for sometimes up to three months. Musicians, conductors and staff tried to help carry the load by accepting a 15-20 percent payroll cut for this year. They just did not have the money to support a 64-piece orchestra. They go into bankruptcy with a 1 million dollars in debt. They have plan to re-organize themselves and possibly cut the orchestra's size to be easier to sustain a future growth.

Effectiveness of Government Bailouts

2009-11-08T21:04:00.000-08:00

Written By: Lisa Matthys

It was hardly a surprise that CIT filed for Chapter 11 bankruptcy protection on November 1st as it has been expected for months. However, mainstream media is calling the collapse “one of the largest in U.S. corporate history”, fifth after Lehman Brothers, Washington Mutual, WorldCom, and General Motors.

The 101-year-old CIT received a $2.3 billion bailout from the federal government last December. The bankruptcy of CIT marks the first failure of a government-bailed-out firm. Last year during the peak of the financial crisis, government bailouts were expected to help those banking companies near the verge of filing for bankruptcy. Out of those companies given government money, companies like Goldman Sachs Group Inc. and JPMorgan Chase & Co. have already repaid their debt and restrictions have been lifted. But companies such as Citigroup Inc. and Bank of America Corp will continue to have restrictions, on bonuses for example, until they pay back the government.

But when will enough be enough? The Obama Administration is currently contemplating whether to provide a third rescue to GMAC, which provides financing for dealers, primarily General Motors and Chrysler. GMAC is seeking as much as $5.6 billion in taxpayer money, on top of the $12.5 billion it received previously. Many say that GMAC’s failure would be devastating not only to General Motors and Chrysler, but also to consumers who often use GMAC to finance loans to buy new vehicles.

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Filing Personal Bankruptcy or Opt for a Debt Relief Program?

2009-11-08T21:03:00.001-08:00

Written by Stefanie Marty

Bankruptcy filings are at near historical highs. Consumers feel that they are benefiting through filing personal bankruptcy. But totaldebtrelief.net advises to avoid personal bankruptcy due to different reasons. By filing bankruptcy it doesn’t mean that personal property cannot be seized anymore. Further bankruptcy has a long-term effect on the filers by destroying their credit records. It is almost impossible for filers to get any form of credit during a long period of time, it will be more difficult for them to get a job and it also leads more likely to higher deposits paid by them for utilities.

But certainly there are cases when filing bankruptcy makes sense. When to file for bankruptcy is different for everyone. John Turner, an attorney specializing in bankruptcies, says that in general people might need to start thinking about filing when they pay everyday expenses with their credit card.

Instead of filing personal bankruptcy totaldebtrelief.net advises individuals to consider alternatives like debt relief programs. One such alternative is a debt settlement which helps eliminating credit card debt. But also in such a process every step has to be evaluated carefully. As Susan Grant, director of consumer protection at the Consumer Federation of America, said: “There's no guarantee that a debt-settlement company is going to be able to in fact settle your debts for pennies on the dollar, if at all.” To make sure a debt settlement is the right thing to do in your situation, visit a consumer-credit counseling agency, talk to attorney, and try working out a settlement yourself. Working out a settlement helps you to find out what you can afford to pay and come to an agreement with your creditors.

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Bankruptcy Buyout Basics

2009-11-08T20:59:00.000-08:00

By Adam Lindheim

With more and more businesses filling for bankruptcy, bankruptcy buyouts are becoming more common, but can be problematic compared to traditional acquisitions. Most modern bankruptcy buyouts are considered 363 deals. 363 refers to a section of the bankruptcy codes, and are designed to maximize value of each of the businesses assets. These deals are not intended to follow the same procedures as chapter 7 or chapter 13, as well speeds up the processes.

If a businesses entrepreneur is aware of a business potentially filling for bankruptcy, they can work out a deal to make the buyout easier before the company files for bankruptcy. The company or individual purchasing the company can build in protections in order to insure the success of buyout. Once the seller files for bankruptcy, they can ask the judge to approve the deal and then authorize the auction of the company. The seller must still give the auction to the highest bidder, but the 363 deal insures a quick and speedy deal is done. Despite these facts Moody's Investors Service did a study that followed the largest private equity deals of the decades buyouts. They found that these deals fared much worse than in past decades. It is important to carefully study the companies that are filing for bankruptcy before an acquisition deal is finished.

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Foreclosures: Worst Hit Cities

2009-11-08T12:42:00.001-08:00

By Julianne Pepitone

Posted By Ahmed Al-Salem

NEW YORK (CNNMoney.com) -- While foreclosure rates are easing in some of the hardest-hit cities, the crisis is beginning to expand into new metro areas.

On Wednesday, RealtyTrac released its list of cities with the biggest foreclosure problems during the third quarter. As expected, towns in California, Florida and Nevada dominated the top 10, with Las Vegas taking the top spot with a rate of 1 in 20 homes. That's a 53% increase over the third quarter 2008.

But there was a bright spot: Half of the cities in the top 10 showed year-over-year declines in their foreclosure rates, and 60% showed improvement compared with the second quarter.

For example, second place Merced, Calif., saw foreclosures fall by 11% from last year and 13% from last quarter, to 1 out of every 27 homes. And Stockton, Calif., slipped to No. 4 from No. 2 last quarter. The city, which is 80 miles east of San Francisco, had ranked highest for all of 2008.

"We're not sure if that will be a one-time thing or a true continued trend, but it's one of the first positive signs we've seen," said Rick Sharga, a senior vice president at RealtyTrac.

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“The World” in Dubai

2009-11-08T12:40:00.000-08:00

By Shawn Chandok

It has recently been stated that Nakheel, the government controlled corporation in Dubai, United Arab Emirates will be constructing a series of artificial islands to replicate countries of the world. It is confirmed that “The World is a heady $14 billion endeavor, consisting of 300 individual islands arranged to mimic the shape of the globe's landmasses. Ranging in size from five to 20 acres, and with 50 to 100 meters of water separating each island, the total area encompasses just over 20 square miles. The development is located about two and a half miles off the coast of Dubai city. Islands go for $7 million to $35 million each.” In addition to the Burj Al Arab which is famous for being the worlds most expensive and only 7 star hotel, these series of islands are being created in order to attract wealthy tourists and make Dubai a hub amongst the world’s famous cities such as Paris, London, Tokyo, etc. It has also been rumored that Virgin Atlantic entrepreneur Richard Branson is considering buying the island of England in The World for an astronomical amount of around $25 million. People say that “Sir Richard Branson symbolizes the best of British and is the ideal person today to plant the Union Jack on Great Britain.”

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4 smart ways to reduce your tax bill

2009-11-08T12:17:00.000-08:00

Posted by Nicholas Vanikiotis

NEW YORK (Fortune) -- We spoke to several leading financial advisers about the strategies they were recommending their clients adopt to cut their taxes now and in the future.

Harvest your stock market losses

"We have been aggressively harvesting tax losses for our clients over the last year or two, and of course the market environment has assisted us with that," says Gregg Fisher, president of financial advisory firm Gerstein Fisher.

"Those losses can be used to offset capital gains in the future, and if you think capital gains rates might be higher in the future, those losses become even more valuable," he says.

And for clients who still like the battered stock they just sold, no problem. IRS rules allow an investor to buy the asset back after 31 days.

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Saving for College

2009-11-08T12:07:00.000-08:00

Posted by Nicholas Vanikiotis

By: Laura Reginelli

Paying for college is enough to make even the wealthiest families feel the pinch. Many wonder when they should start to save for the children’s college expense. The answer is as soon as they are born, if not earlier! As discussed previously, the sooner one starts saving, the more return they will see. So if you invest even small amounts now, you will see better returns than those who start saving ten years later than you.

So where to begin you must be wondering- well there are several resources you can turn to in order to fulfill this duty.

· Consider taking on a 529 plan. According to savingforcollege.com, a 529 plan is an education savings plan operated by a state or educational institution designed to help families set aside funds for future college costs.” These allow you to start saving early and they do not limit what college you have to send your child to.

· Don’t panic if you can’t pay the full bill of tuition, many people have to seek outside assistance. There are several loans that are available solely for educational purposes for both independent and dependent children.

· Do not forget about saving for your retirement. Although planning for you children’s college tuition is important, you can obtain a specialized loan, unlike retirement funding.

· The burden shouldn’t only fall on the parents. Make sure your children study hard, seek out scholarship opportunities and apply to a wide array of institutions.

Although funding college may be a scary endeavor, it is important to break it down piece by piece and consider all the alternatives. So just remember, it pays to start early and seek out the options that are available for funding higher education.

Sources: http://www.savingforcollege.com/college_savings_201/

http://money.cnn.com/magazines/moneymag/money101/lesson11/

http://www.usnews.com/blogs/college-cash-101/2008/12/15/the-4-rules-of-paying-for-college-in-a-recession.html

Real Estate Near College Campuses

2009-11-08T10:48:00.000-08:00

Posted By: Michael Herscovici

Now might be the right time to purchase property in or near a college town. Listed below are the four main reasons why this might be an attractive investment:

1. Current Real Estate Prices: Real estate prices are lower than in past years so you might be able to get a great deal.
2. Higher Rent Charges: The price of rent is higher in college neighborhoods than in other parts of the country allowing you to pay off your mortgage payments faster.
3. Abundance of Renters: Since your property is in a college town, it will be easy to find someone who is willing to live there. Whether that person is a college student, or works for the university, there is always going to be someone willing to stay at your place even if it is not in the best condition.
4. Increasing Rent Charges: Most likely you will be renting to college students who will be staying in your house for up to a year max. This will allow you to increase the rent from year to year without the backlash from renters who have been with you for a while.

All of these benefits show why it might be worth it to purchase a house near a college campus.

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10 Ways to Increase the Value of your Home

2009-11-08T10:46:00.000-08:00

By: Zachary Pienkowski

In a dour housing market, wouldn't it be nice to know that your remodeling project would pay off when you went to sell the property? Remodeling Magazine evaluated the top remodeling projects, how the cost-to-value has changed since the housing market implosion, and which projects are still worth the investment. Using the magazine's "Cost Vs. Value Report for 2008-2009," let's look at some of the best projects you can undertake and recoup the majority of your cost.

Upscale Projects

Siding Replacement (fiber-cement or foam-backed vinyl). With the economic slump, home buyers aren't being dazzled by bells and whistles as much as they are improvements that will ensure lower repair and utility bills. Although replacing current siding with fiber-cement has lost value from 2007, it still nets an astonishing 87% ROI. If you prefer a foam-backed vinyl product replacement instead, you can still look to recoup 80% of your cost.
Window Replacement (vinyl or wood). Windows are not only an aesthetic feature. For most homeowners, they represent one of the easiest ways to lower home heating and cooling bills. By replacing your current windows with more efficient vinyl or wood ones, you can save on your utility bills, attract future home buyers and net a nearly 80% (vinyl) or 77% (wood) return on your investment.
Bathroom Remodel. Depending on the size and amenities of your desired bathroom, you could expect to pay over $50,000 to tear out walls, repair joists and wall studs, change structural elements and make major layout changes, such as switching a toilet and shower. However big the price tag, you can still expect to recoup nearly 71% of the cost (which would be $36,400 if you have a $50K bill) when you go to sell. This project increased its value since 2007, while its sister project – adding a complete bathroom – fell in value.
Major Kitchen Remodel. Kitchens are typically the most frequently used room in a home, so it makes sense that investing money here is going to pay off when it comes time to sell. While a major kitchen renovation is usually the most time-consuming and expensive home improvement job (averaging more than $110,000), it's also one of the most profitable. Regardless of the size of your financial layout, you can expect to get a nearly 71% ROI.
Deck Addition (composite product). With families cutting their entertainment budgets, they're spending more time at home, so it makes sense that adding a deck (composite, not wood) is a good investment. You can plan on recouping 63% of your total job cost to boost your home's value by nearly $24,000 if you paid the average job cost of $37,000.

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Strategy on Buying Health Insurance

2009-11-07T15:28:00.000-08:00

By Quang Nguyen

Insurance is what most people planning to get when living in the United States. Since the medical cost is too high, it is important to get the right insurance. Especially with the current economy, with the increasing amount in medical cost, Americans should look for plans best fit for themselves and prevent from looking for ones with lowest premiums. Choose the plan that’s most important to you.

You can begin with the group plans from your employers. Group plans are usually a lot cheaper than individual plans. I suggest you should get insurance and health benefits from your employer even if they might pay you less than someone else that do not offer benefits.

There are 3 main types of insurance plans you can select. The first one is health maintenance organization (HMO). The second one is preferred provider organization (PPO). The last option is high deductible health plan. Fee-for-service still exists, but the use of it has been decreasing.

Choices are limited if you choose HMO, because you can go to doctors that are associated with HMO’s network. The advantages are that you don’t have to pay deductible and co-payment, and it is a low-cost option.
For PPO you can go to the doctors without its network and only pay a small portion of co-payments. High deducible health plan allows deductible to be higher. The plan is connected with a health savings account. You can save pretax amount in the savings account and withdraw it when you need to pay for deductibles.

In conclusion, it is important to find the insurance plan that fits you. Different people have different needs. A single mom might have a different insurance plan than a senior citizen. You should talk to your doctors before purchasing an insurance plan in order to make sure it covers your needs.

References:
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Mo' Money Mo' Problems for Antoine

2009-11-07T15:21:00.000-08:00

By Jameel Murray

Besides reading of Nicholas Cage squandering his money, there have been numerous reports of celebrities going broke. One recent report has been the unfortunate story of former NBA star Antoine Walker. According to the Boston Globe, Antoine Walker owes over $4million dollars to his creditors. Walker faces up to four years in prison if he is convicted on several felony charges for writing bad checks. Over Walker’s career in the NBA, he earned over $110 million dollars including several endorsement deals. Walker is yet another example of a celebrity who did not manage his money correctly.

According to several sources, Walker was a big spender. He purchased a suit for each game, gambled hundreds of thousands of dollars, and supported 70 friends and relatives. Some also say that Walker’s driveway reflected an auto showroom, filled with Bentleys and other luxurious cars. Walker also picked up the tab on several team dinners, increasing the former All Star’s debt by hundreds of thousands of dollars. The reason for Walker’s situation basically is a consequence of Walker not investing his money wisely. Had Walker taken a course or two on financial planning, he may have been able to live the rest of his life out of debt. Because he is extremely out of shape, he may never get a chance to play on an NBA team to pay off some of his debt. Walker’s only other option is to take his game overseas.

Sources: http://www.sportingnews.com/blog/the_sporting_blog/entry/view/40285/antoine_walker_picked_the_wrong_place_to_do_too_much_the_real_world

http://www.suntimes.com/sports/basketball/1851241,antoine-walker-nba-broke-28.article

http://dealbreaker.com/2009/10/aw.php

The Price of Education

2009-11-07T13:33:00.002-08:00

By Jorden Meltz

At a time when figuring out how to more efficiently save money and follow a budget have become a priority for a majority of the country, the one thing that has become more difficult to plan for is college. This past year tuition and fees at public universities increased by 6.5% and at private universities increased by 4.4%. This comes at a time when many families have seen their college savings decrease in value and a continued growth of number of students applying to college. According to the College Board at least fifty-eight private colleges and universities charge at least $50,000 a year for tuition, room and board, and fees. Although the 2% decrease in the consumer price index has brought relief to many, for those in the college planning stages these growth rates will be very difficult to account for. With Healthcare reform at the forefront of many political discussion and legislation, it seems that discussion about how to make college more affordable if these tuition rates continue cannot be too far away.

Covering college-tuition loans -- somebody give me some credit!

2009-11-07T13:33:00.001-08:00

Posted by Nick Porcell

With two daughters in college, tuition loan repayments were stacking up, and my wife and I felt the weight of multiple monthly payments kicking in. We began to realize what a job it was to keep track of all the loans, and figured there had to be a better way.

Remembering we'd gotten good advice from the credit union on retirement accounts and mortgage refinancing, and eager to avoid any lender that smelled like last year's banking industry meltdown, we called our adviser to set up a new strategy for squeezing tuition payments into the family budget.

The good news came quickly. "Call the loan office in the morning," our adviser said. He agreed that using the equity we'd built up in our home to pay tuition bills would liberate us from the structured federal loan programs. If things went as expected, it would allow us to repay on our own terms, at 3.99 percent (I know!), and 'defer' if we needed to, by making only minimum payments in tight months.

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2010 Worst Time To Buy A House

2009-11-07T10:47:00.000-08:00

Posted by: Christina Dove

According to a study done by PriceWaterHouseCoopers, U.S. commercial property prices are likely to hit bottom next year after falling more than 40 percent from their 2007 peaks. This does not have a very good outlook for 2010 home buyers, who are going to find it very difficult to get a loan or any type of credit from banks. In addition, this is going to put a huge strain on those who are struggling to maintain ownership of their home and are falling behind on payments.The housing boom of 2006-2007 is to blame for this housing market catastrophe. Too many people were getting loans that they were not able to afford and living in houses that were way above their means. Just because the bank allowed them to get a loan for that much, does not mean it was the most financially wise thing to do. Now these people are paying the price as the value of their homes is decreasing as we speak. People should have known that is was not wise to be paying for a mortgage that was worth well above what their house was worth.The only good thing about this housing crisis is that those with the cash are able to buy some great properties at an all-time low price. Some investors are taking advantage of those who have had to foreclose their homes and those homes that have been repossessed by the bank and resold. However, this is not the case for many people who are strapped for extra cash in this economic crisis and are finding it hard to even afford the property that they are already living in. The housing market will always be going through ups and downs, but it seems that 2010 will still be a down year for the housing market and people are going to have a lot of trouble selling their homes for what they paid for them.

Sources:

http://www.bloomberg.com/apps/news?pid=20601103&sid=aHljg1MMC.MU

http://moneycentral.msn.com/content/Banking/Homebuyingguide/P37627.asp

http://finance.yahoo.com/real-estate/article/104278/Best-and-Worst-Places-to-Buy-a-House

Real Estate Strategy and Competitive Strategy

2009-11-03T10:06:00.001-08:00

Posted by Lindsey Connell

An organization’s real estate decisions can greatly benefit and support the company’s overall business objectives. Some organizations consider how a specific real estate transaction relates to their real estate strategy but many do not even have a real estate strategy. By not having this strategy, many companies result in miscalculations and have a difficult time judging the appropriateness of a specific real estate plan. These companies may also go into a real estate transaction without a strategy.
A standardization real estate strategy, for example, is an appropriate one to have within a company because it supports all three competitive strategies: low cost, differentiation, and focus. A value-based real estate strategy supports the competitive strategies of differentiation and differentiation-focus. Incremental real estate strategies, on the other hand, are ambiguous and do not support any of these competitive strategies. If a business were to choose this strategy even though they had a competitive strategy of lowest cost, for example, then their competitive strategy and real estate ones would not be supporting one another to their full potential. A company must first determine their competitive strategy and from there they can make their real estate one. If these two strategies do not match up then the company will not be able to be successful, but with both strategies complimenting one another, it can give the company a competitive edge.

http://aux.zicklin.baruch.cuny.edu/jrer/papers/pdf/past/vol08n04/v08p475.pdf

http://www.emeraldinsight.com/Insight/viewContentItem.do;jsessionid=92B8DB3B1FB7FEE4415A3364BE9D807A?contentType=Article&contentId=1597993

http://www.siteselection.com/issues/2002/mar/p135/

Fraud Watch for Homeowners

2009-11-03T10:02:00.000-08:00

Posted By Pete Hill

MORTGAGE fraud continues to expand, in both the number of incidents and the methods that criminals use to strip equity from homeowners and lenders. Now a new online service offers free help to keep homeowners safe from an emerging form of fraud known as “house theft.”

Like other real estate Web sites, this new service, called ePropertyWatch.com, provides informal home appraisals and other information to help track neighborhood real estate activity. But unlike the others, it also monitors public documents associated with a home and promises to alert homeowners to possible criminal activity, like a forged deed that purports to transfer a home’s title in order to release an existing mortgage.

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CIT Nears Bankruptcy Filing

2009-11-02T10:49:00.000-08:00

CIT Nears Bankruptcy Filing

Post By Rico K Setyo

By Mike Spector and Kate Haywood

CIT Group Inc. plans to file for bankruptcy as soon as Sunday afternoon, said people familiar with the matter, in a high-stakes restructuring intended to keep the doors open at one of the U.S.'s largest small-business lenders.

CIT's board was meeting about the likely filing early Sunday afternoon, these people said, and the company expected to seek Chapter 11 protection in New York in a matter of hours. The lender expected to have considerable support from creditors for its "prepackaged" reorganization, which could allow CIT to have its plan approved quickly and emerge from bankruptcy by the end of the year, other people familiar with the matter said.

The filing comes after a previous debt-exchange offer made to CIT's bondholders failed. But CIT garnered broad support for a prepackaged bankruptcy, people familiar with the matter said.

The $2.3 billion in taxpayer money spent to save CIT is likely to be wiped out, as the lender prepares for the filing.

In a move smoothing its restructuring, the company said Friday that it had persuaded billionaire investor Carl Icahn to support its prepackaged bankruptcy plan. Mr. Icahn, who wanted to push CIT into liquidation, failed to persuade other bondholders to derail CIT's restructuring plan.

With $71 billion in assets, CIT would have the fifth-largest bankruptcy filing in U.S. history, trailing only those of Lehman Brothers Holdings Inc., Washington Mutual Inc., Worldcom Inc. and General Motors Corp. CIT's Utah bank, which has about $10 billion in assets, wouldn't be part of the bankruptcy filing.

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New Law Banning Credit Card Offers On College Campuses

2009-11-01T20:10:00.000-08:00

Posted By: Janielle Viggiano

There is an upcoming change in the laws that govern credit promises to rid campuses nationwide of credit card pressures and sales tactics. According to Vellequette, “Passed in May, the Credit Card Accountability, Responsibility, and Disclosure Act of 2009 will, beginning in February, prohibit credit card issuers from signing up anyone under 21 who either doesn't have a co-signer or the ability to make payments on their own (2009).” The law also prohibits companies from passing out free incentives such as: t-shirts, hats, pizza on campus or at events such as football games or any sporting event. The law requires people under the age of 21 to get a parent or guardian signature of approval before they can be issued a credit card and colleges and universities must disclose any deals they make with credit card companies.

In a 2008 study done by Sallie Mae Inc., a leading student loan company found that, “of 280 undergraduate college students’ ages 18 to 24 found that 84 percent of the respondents had a credit card, compared to 76 percent in 2004. Half of the respondents had four or more cards. The mean balance of the students’ cards was $3,173, and the median debt grew from $946 in 2004 to $1,645 in 2008. The number of freshman arriving on campus with a credit card went from 23 percent in 2004 to 39 percent in 2008, according to the study. Forty percent of the respondents said they charged items to their credit card knowing they didn’t have the money to pay for them (2009).” In the same study they found that 18 to 24-year-olds carry more debt than ever before as a group, and are most likely to be the focus of aggressive, manipulative, and even predatory practices and are the most likely to not make payments.

Sources: http://toledoblade.com/apps/pbcs.dll/article?AID=/20091029/BUSINESS07/910290316/-1/BUSINESS06

http://mainecampus.com/2009/10/08/credit-card-offers-banned-on-college-campuses/

http://www.myhometownnews.net/index.php?id=63358

Barter for the Services You Need

2009-11-01T20:07:00.000-08:00

By: Jessie Bruyn

Camille Tominaro's vacation home near Hunter Mountain in New York could use some new floors and a good paint job, but she doesn't have the money to hire a professional to do the work.

So, to get the job done, she is using another form of currency: her house. In exchange for getting the home improvements done, Ms. Tominaro is offering painters and carpenters a free stay in the vacation home.

Cash-strapped consumers are increasingly bartering to get needed products and services. If you're considering bartering, here are a few things you should know:

Web sites that allow people to post ads for barters, such as Craigslist.org and U-Exchange.com, can help you track down someone who provides a service or product that you want and needs what you have. You can place an ad detailing what you're looking for and what you have to offer in return. You also can respond to an ad you think would be a good fit.

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The 10 towns with the highest rates of personal bankruptcy

2009-11-01T19:23:00.001-08:00

Written by David Budworth
Posted by Stefanie Marty

Bankruptcy and recessions go together like fat cats and bankers - but a report out this week reveals that in some parts of the country this is more true than others.

People in coastal towns are particularly prone to declare themselves bust, according to research from Wilkins Kennedy, the accountant

Overall, the average rate of personal insolvencies in coastal towns was almost one third higher last year than the national average at 20.6 per 10,000 adults, compared with 15.7 across the country and 9.1 in London.

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Increase in Personal Bankruptcy

2009-11-01T19:15:00.002-08:00

Written by Stefanie Marty

Personal bankruptcy filings in the United States have risen dramatically in 2009. Here are some numbers: In September alone 130,000 families filed for bankruptcy and so far this year more than one million people have done so. This is a huge increase from 2008 when the total number of bankruptcy filings was 1.1 million. And compared to the first nine month in 2008, there has been a 40% increase in the same timeframe of 2009.

A report of Equifax showed that together with this rise of bankruptcy filings, mortgage delinquencies raised as well, while credit card debt and lines of credit are being reduced. Dann Adams, president of Equifax’s U.S. Consumer Information, explains this result with the current economy in transition. He said that many consumers are still struggling with the high unemployment and the restricted credits, but have improved their cash management.

Other reasons for the high increase in personal bankruptcy filings are the high debt-level people carry, the medical problems people face and the way the real estate market has developed. The debt US citizens hold relative to their income is too big for that they would be able to pay the debt back in case of a job loss. Today, the debt to income ratio of Americans is bigger than 130%. Further many people face high medical costs which make them take on high levels of debt. A statistic says that between 30% and 50% of bankruptcy cases involve medical debt. Lastly, the assets people held – especially the real estate- have lost their value over the last year, what makes people owe even more.

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Homeowners face increased debts

2009-11-01T17:03:00.000-08:00

Posted by: Scarlett Lu

When it comes to buying homes, Canadians are taking on too much debt. "Canada's housing market has rebounded more strongly than other parts of the economy with sales at times at record levels, although prices remain despressed." The low rates are attracting Canadians to take out mortgage debts to buy homes.These low rates eventually increased which eventually led to the collapse of the U.S housing market , which led to the financial crisis. Policy makers have the ability to influence financial institutions that issue mortgages, they should tigten government gauranteed mortgages. The housing market can be regulated and re-evaluated.Home prices across Australisa have rose in the three months to Septemer because investors upgraded into more expensive properties. Interest rates are expected to rise and some homeowners may not be able to afford it. And some people may not be able to buy a home anytime soon.Despite signs that the economy is recovering, home prices will continue to decline if unemployment rates remain high. Home prices play a role in rebulding the economy. As prices of homes go up, homeowners debt also increases. Homeowners may not be able to pay off the debt if they do not have a job.

http://thechronicleherald.ca/Business/1149969.htmlhttp://www.newsday.com/business/home-prices-up-in-august-but-can-it-continue-1.1553600http://www.smh.com.au/business/home-prices-rise-as-owners-upgrade-20091029-hltf.html

What type of Mortgage should I take for my House?

2009-11-01T11:21:00.000-08:00

Post by David Held

When purchasing a home there are many things to consider, the location, the asking price, the taxes, and most especially the type of mortgage you can get. When considering a mortgage there are many things that come into question, what is the loan to value ratio, how much interest will I be paying, can I afford the mortgage payments, do I need to put down any points, and what type of mortgage is it (Fixed Rate or ARM)?

There’s a huge difference between a fixed rate mortgage and an adjustable rate mortgage. First of all the interest rate for an adjustable rate mortgage starts off lower than a fixed rate mortgage. This sometimes could be considered a teaser rate, which means that you have to be careful because your interest rate will spike at a certain time. An ARM puts the market risk on the borrower because he is betting that the interest rates say lower than the fixed rate in a fixed rate mortgage, but most of the time this is not the case. The borrower must evaluate/analyze the economy because if he jumps into an ARM. If interest rates spike, he will be paying a lot more than expected, thus having a greater chance to default. If one defaults on a mortgage their credit rating will drop tremendously and they will have a tough time getting another loan.

The safe option, unless you know exactly what the market is going to do, is a FRM because all the risk is on the lender. If the economy starts thriving and you are missing out on a lower interest rate, than there is always the ability to refinance (if it’s cost efficient).

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Bargains Abound in New York’s Sublease Market

2009-11-01T11:20:00.001-08:00

Article by ALEX TARQUINIO
Post By Shawn Chandok

There is a fire sale these days on Park Avenue. Financial companies are trying to sublet space that they are no longer using in some of the most desirable office buildings in Midtown Manhattan, and the rents they are asking are heavily discounted compared with what landlords are seeking for similar space across the street — or even in the same buildings.

It started last fall, during the financial turmoil that was unleashed after Lehman Brothers collapsed. Many large financial companies dumped hundreds of thousands of square feet on the sublet market, with much of that space in prime Midtown locales near Grand Central Terminal, Rockefeller Center and the Plaza Hotel. Now, the sublet space that is still on the market is being offered at rents much lower than rents for space that can be leased directly from landlords in the same submarkets.

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Credit card borrowers will see minimum repayments double under new proposals

2009-10-31T11:12:00.000-07:00

posted by Shawn Gao

The move is part of a package of measures announced by the Government to tackle consumer debt amid the recession.
It said forcing credit card companies to raise the minimum monthly repayments would encourage people to focus on paying off their debt.
The minimum amount that the majority of companies currently require card holders to repay should be raised from just 2 per cent of the amount owed, to 5 per cent, it suggested.
The increase could cut the time a borrower takes to repay a £1,800 credit card debt to ten years – compared with 40 years at 2 per cent. It could also reduce the amount repaid by almost £4,000, according to the Department for Business, Innovation and Skills.
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Investment Options

2009-10-31T11:06:00.000-07:00

By Jonathan Tse

Although stocks have been seen to be steadily rising these past few weeks, it seems that stocks prices have recently stopped rising and are beginning to fall again. Sadly, hopes that the economy may have finally been coming out of the recession have been wrong. It is thought that there will still be some time before true recovery of the economy arrives. A reason for this is the low consumer confidence rating, as consumers are still not very confident to invest as much as they would have before the recession. It is said that the current economic situation parallels the recession of 1973-74 in which the market fell more than 45% and then rebounded 60-70%.
A strategy to make profit during this time of economic hard times is to build a portfolio that is split into five parts: US stocks with constant dividends, mature foreign stocks and bonds, stocks and bonds from emerging markets, oil and commodity stocks and bonds, and bonds that return based on inflation. This type of portfolio diversification will allow investors to make decent profits even while still investing in cheap investments that other investors are afraid to take part in. Exchange traded funds (ETF) are also another option to invest in while the economy is not doing too well. There are five recently launched ETFs that appear to be profitable and will help to diversify one’s portfolio. Some rising countries have new ETFs which investors should look into. The top five include: Vietnam, Indonesia, Peru, Colombia, and Nordic region. International investments are some things to look into to invest in while the economy is in recession.

http://www.businessweek.com/blogs/personal_finance/archives/2009/09/new_normal.html
http://www.investmentnews.com/apps/pbcs.dll/article?AID=/20091028/FREE/910289998
http://www.straightstocks.com/indonesia/five-hot-new-international-etfs-to-consider/

How to Build Your Credit Score in College

2009-10-25T22:14:00.000-07:00

Posted by Mary Clare McGraw

First, a good way to get started is to open a checking and savings account. If you are going to take out a small loan, while still in college, try to co-sign on the loan with someone who has great credit. You basically get to piggyback on their good credit. The thinking is that if someone with great credit is willing to cosign with you, and you pay your bills on time each month, you’re probably very credit worthy. It’s like getting someone to vouch for you. It’s an excellent way to build credit extremely fast. You can try a student credit card but make sure to be careful about the card you sign up for. Don’t take a credit card offer that you get in the mail because they can charge as high as 21% interest! Signing up for a store credit card at your favorite store could be a way to ease into building your credit by only having to pay a bill when you shop at that one store. It minimizes the amount of bills you will have to deal with at first and it is more difficult to rack up a large amount of debt at one store than at various stores you may shop at in one day even. Getting a loan is a good way to build credit in college, even if it is subsidized and there is a grace period until after you graduate. Lastly, if you have a credit card, be sure to use it every month but try not to charge more than 30% of your credit limit. Keeping your balance below this amount shows creditors that you are responsible with credit and are not very likely to overextend yourself financially.

GoCollege.com

Rising Tuition Cost and How To Handle It

2009-10-25T22:11:00.000-07:00

By Leah Gorham

According to a survey released by the College Board Tuesday, tuition and fees at private 4-year schools rose 4.4% in the current school year to $26,273. Charges at public 4-year universities spiked as well, over 6% for both in-state and out-of state students. There are several reasons why tuition costs are going up. Private schools have seen their endowments shrink and public schools are suffering from a drop in state funding, which decreased 5.7% per student this year. Moreover, the availability of financial aid isn't keeping up with these climbing costs. Grant funding grew only 4.7% in the 2008-2009 academic year. As a result, student loans are also up, with total borrowing increasing by 5% between the 2007-2008 and 2008-2009 school years.

Looking at these numbers we may wonder, why even during a recession do college tuition rates continue to rise and where does all the money we pay for tuition really go? At many colleges with tuition rates on the rise, management is more similar to a political environment then that of a private corporation. In other words, colleges are not good at cutting programs when they add. For example, it is hard to cut faculty members because of tenure and many colleges also spend more on nonfaculty salaries than it does on pay for the teachers.

There are several strategies one can use to make paying for college a little bit easier on the wallet. It is important to use savings strategically, such as pulling money out of a 529 savings account before borrowing, even if the account has been devalued over the past year. It is also important to borrow smart by using Stafford loans and PLUS loans and check for available tax breaks for paying college tuition. Also, always encourage someone applying to college to apply to several safety schools and to apply to two or three schools with average GPA and SAT scores lower than theirs. They may be able to get more financial aid from these schools, who are looking to boost their reputation by attracting smarter students.

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Americans expect to focus on personal finance in short term

2009-10-25T20:45:00.000-07:00

Posted By: Sara Sindelar

A new survey finds that Americans plan on continuing to increase their savings and investments for the near future.

The survey from First Command found that Americans have less money in their savings accounts and are still paying down their debts at about the same rate as in previous months.

The average amount of money in a short term savings account was said to be $860 in September, down from $1,169 in July but up from $787 in August.

The financial institution noted that more consumers have been applying for debt consolidation loans recently, further adding to the widespread emphasis on personal finance.

In a potential warning sign to the retail industry, the survey also found that 57 percent of consumers plan to scale back their holiday shopping activities this year. This could tie in with a trend where the pace of the economic recovery is held back even as Americans continue to improve their overall personal finances.

By Bill Laforme

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Financial games: It can pay to play

2009-10-25T20:44:00.000-07:00

Posted by: Nicole Nelson

Written by:Eileen Ambrose

One of the big hurdles to teaching personal finance to children and young adults is how to do so without boring or confusing them with talk of compound interest and annual percentage rates.

Now, there's a growing effort to reach kids on their own turf: online games.

More than 70 percent of people play some form of games, a percentage far higher among teens. Gaming experts see this as an opportunity to pack critical lessons into a fun activity.

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The good and bad of chapter 13 bankruptcy

2009-10-25T20:24:00.001-07:00

by Michael Rivezzo

Filing Chapter 13 bankruptcy can actually be beneficial to you if you have failed redundantly to pay off debt . Chapter 13 can help people that still make a income and who want to avoid a foreclosure, while still being able to pay off some of their debts. This is why Chapter 13 is also called the reorganization bankruptcy.

Some of the positives of Chapter 13: you can still be able to keep real estate and some personal property. You can pay back some or all of your debt with a payment plan. This usually take 3-5 years to completely pay back the creditor. Creditors also stop calling and any legal action brought against you is nullified.

There are still some bad parts of Chapter 13. Your credit score will drop 200-250 points. The bankruptcy will stay on your report for 7 years. There is also fees that need to be paid regularly.Most people will not even qualify for Chapter 13 because there strict criteria for eligibility. You must have a regular source of income, while your gross income should be greater then the State median for your family size.

http://www.brainerddispatch.com/stories/101709/new_20091017032.shtml

http://blogs.wsj.com/economics/2009/10/23/qa-what-the-middle-class-recession-means-for-bankruptcies/

http://toledoblade.com/apps/pbcs.dll/article?AID=/20091002/BUSINESS07/910020354/-1/BUSINESS05