Slides for the final exam

 

Here is the link for the slides to chapter 16. 

 

Chapter 10 slides

Chapter 15 slides

UCLA Students Running into Major Financial Trouble

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

The Curse of Executive Compensation

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

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.

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Black Friday or Cyber Monday?

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

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

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

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

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.”

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Cyber Monday Outperforms Black Friday

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

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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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

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

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

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

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

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

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

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

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

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

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?

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

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

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?

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."

 

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Commercial Real Estate Up But Still A Rocky Future

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

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.

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Posted by: Kelsey Hoffman

Graduating Without a Job?

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

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?

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

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

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

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

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

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

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

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

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