The Fair Credit Reporting Act (FCRA) and the Privacy of Your Credit Report

Posted by: Anshu Dixit

Top News
•Companies Unblock Links to Free Credit Report Site. The major credit reporting agencies have unblocked links to the free credit report site, annualcreditreport.com. In December 2004, EPIC and other groups urged the Federal Trade Commission to order that the links be unblocked. Congressman Barney Frank (D-MA) wrote (pdf) to the credit industry trade group to summarize changes made at the site to make it more consumer friendly. The World Privacy Forum recommends in a report that individuals call to get their free credit report instead of using the web site to avoid privacy-invasive practices of the credit reporting agencies. For more information, see the EPIC Fair Credit Reporting Act Page. (Mar. 21)
•Coalition Urges FTC to Unblock Links to Free Credit Site. EPIC and five privacy and consumer groups have called upon the FTC to order credit reporting agencies to stop blocking web hyperlinks to a site that provides free credit reports. The letter argues that blocking links violates federal regulations, and that, "Whether intentional or not, every subtle and not so subtle web design tactic has been employed to make www.annualcreditreport.com difficult to find and use." EPIC has posted a webpage that circumvents the blocking. (Dec. 7, 2004)
•Free Credit Report Site Blocks Web Links. Nationwide credit reporting agencies are required under federal law to provide a free credit report to residents of western states online starting December 1, 2004. However, the credit reporting agencies have blocked links to the free site, citing bogus security concerns. By blocking outside links, the companies create a greater risk of phishing because consumers have to type in the URL, and the companies can steer consumers to their expensive, unnecessary credit monitoring services, avoiding their duty to provide free reports. To get your free report, paste the following URL into your browser: http://www.annualcreditreport.com. (Dec. 4, 2004)
Introduction
The Fair Credit Reporting Act (FCRA), Public Law No. 91-508, was enacted in 1970 to promote accuracy, fairness, and the privacy of personal information assembled by Credit Reporting Agencies (CRAs).

CRAs assemble reports on individuals for businesses, including credit card companies, banks, employers, landlords, and others. The FCRA provides important protections for credit reports, consumer investigatory reports, and employment background checks. The FCRA is a complex statute that has been significantly altered since 1970 by Congress and the courts. The Act's primary protection requires that CRAs follow "reasonable procedures" to protect the confidentiality, accuracy, and relevance of credit information. To do so, the FCRA establishes a framework of Fair Information Practices for personal information that include rights of data quality (right to access and correct), data security, use limitations, requirements for data destruction, notice, user participation (consent), and accountability.

The Federal Trade Commission (FTC) issues commentaries on the statute, but does not engage in rulemaking for the FCRA.

CRAs may also be referred to as "credit bureaus" or "consumer reporting agencies."

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Can I really fix my credit?

Post by Lingxiao Li
Of course you can! Many of our readers (even yours truly) have cleared up a few blemishes on their reports. And by the way: everything a credit repair clinic can do for you, you can do for yourself at little or no cost. That being said, we know that sometimes people feel overwhelmed with the process and want to ask a live person a question if they get stumped. If you do, you can set up a paid consultation with one of our counselors for a small fee.

Make sure you also read our article, "The 5 Biggest Mistakes People Make in Credit Repair". We've also started a FREE credit repair video series.

What the information provided in this page does is help you fix ERRORS on your credit report and clean up those "questionable" items. While no one can legally remove accurate negative information from a credit report, the law does allow you to request an investigation of information in your file that you dispute as inaccurate or incomplete. On the other hand, *nudge* *nudge*, *wink* *wink*, it is perfectly legal to challenge ANYTHING on your credit report. There is no charge for requesting an investigation. The whole key to the credit repair procedure is that if the credit bureaus cannot verify information on your credit report they must remove it. For instance, if a credit bureau cannot contact a collection agency which is reporting a collection on your report, they cannot verify the information, and the credit bureau must delete the entry.
Read more here.

Revised formula puts 1 in 6 Americans in poverty

By: Zachary Pienkowski

WASHINGTON (AP) -- The level of poverty in America is even worse than first believed.

A revised formula for calculating medical costs and geographic variations show that approximately 47.4 million Americans last year lived in poverty, 7 million more than the government's official figure.

The disparity occurs because of differing formulas the Census Bureau and the National Academy of Science use for calculating the poverty rate. The NAS formula shows the poverty rate to be at 15.8 percent, or nearly 1 in 6 Americans, according to calculations released this week. That's higher than the 13.2 percent, or 39.8 million, figure made available recently under the original government formula.

That measure, created in 1955, does not factor in rising medical care, transportation, child care or geographical variations in living costs. Nor does it consider non-cash government aid when calculating income. As a result, official figures released last month by Census may have overlooked millions of poor people, many of them 65 and older.

According to the revised NAS formula:

--About 18.7 percent of Americans 65 and older, or nearly 7.1 million, are in poverty compared to 9.7 percent, or 3.7 million, under the traditional measure. That's due to out-of-pocket expenses from rising Medicare premiums, deductibles and a coverage gap in the prescription drug benefit.

--About 14.3 percent of people 18 to 64, or 27 million, are in poverty, compared to 11.7 percent under the traditional measure. Many of the additional poor are low-income, working people with transportation and child-care costs.

--Child poverty is lower, at about 17.9 percent, or roughly 13.3 million, compared to 19 percent under the traditional measure. That's because single mothers and their children disproportionately receive non-cash aid such as food stamps.

--Poverty rates were higher for non-Hispanic whites (11 percent), Asians (17 percent) and Hispanics (29 percent) when compared to the traditional measure. For blacks, poverty remained flat at 24.7 percent, due to the cushioning effect of non-cash aid.

--The Northeast and West saw bigger jumps in poverty, due largely to cities with higher costs of living such as New York, Boston, Los Angeles and San Francisco.

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Obama Seeks More Payouts

Posted by Jennifer Chang

By ELIZABETH WILLIAMSON and HENRY J. PULIZZI

WASHINGTON -- President Barack Obama said he will press Congress to provide $250 payments to 57 million seniors, veterans and people with disabilities next year, a $13 billion effort to offset an expected announcement this week that there will be no cost-of-living increase in Social Security payments.

The proposed $250 payment is equivalent to a 2% increase for the average retiree receiving Social Security benefits, the White House said. Notably, it would act as additional economic stimulus at a time when the government is concerned about rising joblessness.
A decline in the rate of inflation precluded any cost-of-living increase next year.

"These payments will provide aid to more than 50 million people in the coming year, relief that will not only make a difference for them, but for our economy as a whole," Mr. Obama said.

Administration officials said in a briefing that they had no plan to offset the $13 billion cost, but would negotiate with Congress to find a means of financing it. The proposal requires approval by Congress, where concern over the escalating federal deficit has fueled questions about new spending. Click Here to Read More

Financial Crisis Worked Out Well for Goldman Sachs

Posted by Scarlett Lu

Goldman Sachs reported its earnings today. For the quarter, profits from trading and principal investment were $10.03 billion, up from $2.7 billion for the same quarter last year.

A year ago the company was saved by Treasury Secretary Hank Paulson, who intervened on its behalf. So it is interesting, to say the least, that last year's flirt with disaster turned out to be so great for Goldman Sachs. Now that they are a regular commercial bank they actually trade more, which makes sense: if the US Treasury covered my losses, I would also be happy to take major risks.

And they can lever up, since much of their assets are valued at what Goldman says they are worth.

What's more, compensation is up to $17 billion so far this year, up from $11 billion during the same period last year. That is $527,000 per employee, up 46% from last year's figure. I don't resent them that, since every Goldman employee I ever came in contact with was bright, competent and professional, so they probably deserve it.


Read more at: http://www.huffingtonpost.com/alan-schram/financial-crisis-worked-o_b_323184.html

Government or Banks???

By Anshu Dixit

Bank plays an important role in our life. Many of our life’s big decisions depend on these banks. All of us know that due to the current economic situation most of the industries are not doing really good. Bank industry is one of them. A crisis of historic proportions struck financial institutions in the U.S. and globally in September, 2008. Major financial markets went into a free-fall after The U.S. government took over mortgage lenders Fannie Mae and Freddie Mac. As a result, several banks and investment firms were went bankrupt or were bought by other companies at well below their value. Research has shown that majority of people blaming investments system banking industry for this financial disaster. But banks are one of those firms as well who is bearing losses. For example, JPMorgan Chase & Co's robust $3.6 billion quarterly profit this year. JPMorgan's earnings were not uniformly positive. As expected, losses on loans still rose and net charge-offs on consumer loans climbed to $7 billion. Does not it show that our economic condition is improving? Like some people are blaming financial institutions for this crisis, some other people are blaming our government policies for this economic problem. On the other hand some people are supporting our government as well. Paul Krugman a columnist on the Op-Ed Page and continues as professor of Economics and International Affairs at Princeton University, said in his article that “So what saved us from a full replay of the Great Depression? The answer, almost surely, lies in the very different role played by government.” He thinks that government has done a lot for to come out from this economic problem. And if we will flip the coin, other side some people are blaming the government for all this. So, who is really to balm for? Banks or the government.

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Government Intervention, Regulatory Policy, and the Financial Crisis

By Anshu Dixit

This video explains how the housing bubble is probably the biggest reason why America now faces a financial crisis. But what caused the bubble, and why are there now so many foreclosures causing so much damage in the rest of the financial sector?

Click here to see this video...

Is the US becoming a Socialist State

By: Michael Herscovici

Many believe that the US as we knew it is over. The days of pure capitalism as well as huge financial companies running free have come to an end. But is the US losing its identity and becoming more and more like a socialist state by the day? According to several sources they are.

According to one report:"The American Heritage Dictionary defines socialism as a system of social organization in which the means of producing and distributing goods are owned by a centralized government that plans and controls the economy.
Socialism requires a totalitarian system -- that gives the ruling gang the power to distribute the fruits of other people's labor to its political pals. That is what is happening to the United States as President Obama proceeds with his goal of 'remaking America.'"

But what does this mean? Many feel that the Obama administration is taking control of many of the financial institutions is a move to socialism and one that violates the very core of this country. Obama believes that to restore the ecomony the government needs to step in and make sure that things are done right. There are many people that disagree but one thing remains certain, is the US losing its identity as a captialist state by continuing to take over more and more banks and financial organization. Only time will tell if the move is a perminate one.

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Global finance crisis crunches marriages

By Lingxiao Li
Global markets may be edging toward recovery, but the worst impact of the global financial crunch on families and couples may be still ahead, a leading Australian charity said Wednesday.
"The economy, we've been told, is showing 'green shoots'. We've certainly not seen that," Kasy Chambers, executive director of Anglicare Australia, told Reuters.
The crisis of the past year is still driving a wedge between couples and families, and could bring higher rates of divorce and breakup in the months ahead as more people lose jobs and come under financial stress, Chambers said, releasing a new report on the impact of the global crisis on families.
"If one member of a couple experiences unemployment in one calendar year, they are 70 percent more likely to experience divorce in the following year," she said.
The report said the financial fallout may continue for almost another year as companies tried and sometimes failed to retain staff. One in three families have already experienced financial distress this year, government reports show. Read More.

Explaining the financial crisis

This is a funny video explaining the financial crisis

Posted By: Michael Herscovici

More Bailouts: Next FDIC

By: Jennifer Chang

After taking over many banks, the FDIC is in the red and may not have enough money to cover the rest of the banks. Insuring each bank deposit up to $100,000 in 8500 banks, the government fund has been keeping a list of banks to watch out for. In 2007, 3 banks failed, and in 2008 the number of banks failed grew to 25. At the beginning of the year, there were 90 banks on the watch list held by the FDIC. That number has grown to 117 banks, which is the highest number in five years.
The FDIC has predicted that the number of bank failures will increase, and it will cost $100 billion in the next four years. In dire need of cash, regulators are now thinking of ways to replenish money quickly. The FDIC chairman has stated that the fund is considering all options including borrowing from the US Treasury. Bank analysts have stated they expect continued bad news about the fund for the next few years. Until the FDIC is out of the red, regulators are going to have to find ways to replenish the fund quickly, especially to cover the expected number of banks that will fail in this coming year.

Sources:

http://abcnews.go.com/Business/story?id=5660122&page=1&page=1

http://www.cbsnews.com/blogs/2009/09/22/business/econwatch/entry5328732.shtml

http://money.cnn.com/2009/10/14/news/companies/fdic_deposit_fund/index.htm?postversion=2009101415

Rescession and Housing Market

Posted by Scarlett Lu

Expensive houses are losing more value than lower priced houses. Mortgages for expensive housing are suffering delinquency and foreclosure. Mortgage payments are increasing and wealthy homeowners are falling behind on their payments. The market for expensive homes is deteriorating more quickly than the subprime housing market. The more expensive a home is the harder it is to sell. So people are lowering the prices so someone can buy it. The number of wealthy homeowners will also decrease. People are unable to pay back mortgages. People who lost their jobs during the recession are unable to pay their mortgages. Deals are incredible for homes now. Home prices declines dramatically; it dropped by 21% from their 2006 peaks. The shrinking economy will result in additional layoffs, the unemployment rate is now 6.5% and expect to increase in the coming year, by the end of 2009, the unemployment rate is expect to rise to 9%(predicted by Goldman Sachs). Loans to buy home totaled $718 billion this year, down 2% from $731 billion last year. These days more than 40% of mortgages made at the Bank of America are for homes. Loans for homes expect to rise by 12% in 2010 as existing home sales recover and prices start stabilizing.

http://business.theatlantic.com/2009/10/housing_crisis_worse_on_the_high_end.php
http://www.cnbc.com/id/26441417
http://www.latimes.com/business/la-fi-mortgage14-2009oct14,0,7151440.story

Having a cash stash is still important during recovery

By: Zachary Pienkowski

During the last few weeks, several economists have claimed they believe the economic recession has come to an end. However, financial experts warn that this does not necessarily mean individual households will feel any difference for a while yet. Claims that the recession is over only apply to the technical definition of the word, meaning that economic contraction has stopped. Over the last 2 years many people have been forced to learn how to budget and save money in the event of layoff. Despite the beginning of economic recovery, interest rates are very low and the stock market has been steadily increasing, leaving people with the tricky decision of where to keep their extra cash. Since the unemployment rate is at 9%, and is expected to increase to over 10% it is recommended that people have enough cash stashed away in a liquid fund to cover 6 full months of expenses. Right now if six full months of expenses can not be covered, you should continue to fund that account until that goal is met. Investing in money market accounts and 6-month cd's just are not worth return right now for having to have your money locked up for a set period of time. Once your 6 month nest egg is complete, it is a good time to start investing in a stock fund that matches your current level of risk tolerance. The economy is going to continue to feel like a recession for a while, but if you think the economy is going to continue to grow, investing in a growth fund might be the right choice.

Sources:
http://money.cnn.com/galleries/2009/moneymag/0910/gallery.spend_1000.moneymag/5.html

http://www.newsweek.com/id/208633

http://www.marketwatch.com/story/bernanke-declares-the-recession-over-2009-09-15

Deadbeat Banks Fail to Pay TARP Dividends

By: Zachary Pienkowski

NEW YORK (TheStreet) -- Thirty-three banks missed their August dividend payments to the Treasury Department for money granted through the Troubled Asset Relief Program, or TARP.

TARP began almost a year ago with some arm-twisting from the Treasury Secretary at the time, former Goldman Sachs Chief Executive Officer Henry Paulson. He told nine of the largest U.S. banks, including Bank of America, Citigroup, JPMorgan Chase, Wells Fargo, Morgan Stanley and Goldman Sachs, they had to accept billions of dollars in support from the government even if they didn't need it.

While many big banks have already repaid TARP in full, it's clear the banks that have deferred their dividend payments are still short of capital.

For the four largest companies missing TARP dividend payments, the total deferred was an estimated $41.6 million. The biggest bank was New York-based CIT Group, which is negotiating with creditors to avoid filing for bankruptcy. CIT received $2.3 billion in government money in December. The bank would represent the first significant loss to TARP.

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Recession may be over, but recovery is painful

Posted by: Jennifer Chang

By Chris Isidore, CNNMoney.com senior writer
October 12, 2009: 10:28 AM ET

NEW YORK (CNNMoney.com) -- More than 80% of top economists believe that the recession that started almost two years ago is finally over. But most don't expect meaningful improvement in jobs, credit or housing for months to come.
That's according to a survey released Monday by the National Association for Business Economics (NABE). The group asked 43 top economists last month if they believe the battered U.S. economy has pulled out of the worst U.S. downturn since World War II. Those surveyed include economists from leading Wall Street firms and major corporations, as well as from highly respected universities and research firms.
Thirty-five respondents, or 81%, believe the recovery has begun. Only four, or 9%, believe the economy is still in a recession. The other four say they're uncertain.
Economists in the survey forecast that the U.S. economy grew at an annual rate of 3% in the three months that ended in September, though the official reading of gross domestic product won't be out for weeks.
And all of the economists surveyed expect the recovery to be slow and painful, leaving many people and businesses feeling the effects of the downturn for years to come. Click Here to Read more

Healthcare, financial regulation and unemployment benefits a priority for Congress this week

By: Amy Williams
Posted by: Scarlett Lu

Congress returns to work Tuesday after taking an extended weekend to honor Columbus Day and by the looks of the schedule, they'll have plenty to keep them busy.

All eyes will be on the Senate Finance Committee as it prepares to vote on Max Baucus's (D-MT) $829 billion healthcare bill. While the measure is expected to pass through committee, not everyone has pledged full support, namely Olympia Snowe (R-ME). Baucus was buoyed last week by the Congressional Budget Office's assessment of his bill whereby the non-partisan agency declared that his legislation would help reduce the deficit over the next 10 years. On Monday, however, the American Health Insurance Plans (AHIP) rained on Baucus's parade by criticizing his healthcare legislation stating it would cost Americans more money by 2019. click here to read more

US Deficit effects everything

By: Jennifer Chang

The Congress Budget Office estimated the federal deficit to be $1.4 trillion on Wednesday. Despite the large deficit, Democrats are pushing Obama to extend elements on the stimulus package. Also, with job employment rates not picking up, the White House is planning to extend unemployment benefits. Congressional leaders are also pushing to give tax credit to employers who hire new employees. The big issue with this is employers taking advantage by firing their current employees and re-hiring them to earn the tax credit. President Obama had originally pushed for this plan but it was rejected do to this concern. Despite this year being the largest deficit in US history, Democrats continue to push for more stimulus plans and more money-spending bills, which will only be an opening for Republican criticism.
Besides this massive budget deficit, the healthcare plan is still being pushed through by Democrats. According to the CBO, the $83 billion healthcare plan will eventually lower the deficit, by creating an $81 billion surplus, but Republicans argue that the plan will only reduce the deficit because of increases in taxes and fees that Americans will have to pay. Whether or not the healthcare plan will actually go through remains to be seen as the Senate continues to ask Democrats for more disclosure on the plan, saying they will not vote on it until they get it.

Sources:

http://online.wsj.com/article/SB125495949171872049.html
http://features.csmonitor.com/politics/2009/10/08/new-healthcare-bill-wont-hurt-deficit-what-about-your-wallet/
http://www.bloomberg.com/apps/news?pid=20601103&sid=a2F9BBYF3eCE

How to Keep Your Family Together During a Financial Crisis

Posted By- Anshu Dixit

By Matthew Paulson

There's going to be a time in your life where there's not a lot of money around for whatever reason and it's going to add stress to your life and put strain on your family. It could be anything: a job loss, a medical issues, a loss in the family, a lawsuit, an unexpected bill, a natural disaster, a fire, or something of the store. Money is going to be tight and your stress levels are going to increase, that's reality.

You can handle the added stress from the weight of your financial problems in two ways. The first is that you can let them get to you, you'll become moody, angry, depressed and unpleasant to be around. These actions are perfectly natural, but you have to resist them for the sake of your family. The other way you can handle this adversity is to treat it like a challenge, something to take head on and overcome...

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what to do...what not to do?

BY- Anshu Dixit

what to do...what not to do?

Financial crises have affected every part of the society. People in upper class, upper-middle class, middle class, and working class, everyone has seen many problems due to the financial crisis of 2008. This financial crisis was problematic for everyone, especially for the women, as single parents. This financial crisis problem has not only affected our monetary conditions but our family conditions as well. There are many problems have risen due to this financial downturn in our economy, and in our families as well. So many people have financial problems because we have such a high unemployment rate. More than 70 percent of both men and women admitted making significant spending changes, including a decision to limit or eliminate the purchase of items deemed non-essential. More than 80 percent of both men and women also admitted that it was unlikely they would be able to retire when they wanted and with the amount of money anticipated as recently as one year ago. Bigger problem than unemployment and cutting costs is “suicides” cases, and number is not declining. The Samaritans of New York have seen calls rise more than 16 percent in the past year, many of them money-related. The Switchboard of Miami has recorded more than 500 foreclosure-related calls in the year 2008 and most of them were women. To find out some of the potential solution, some of the business women gather in Miami Beach to discuss economic future, such as, what kind of framework does our nation need in this situation, Americans should start saving more and many other points. It's sure to be a long and painful phase for many for us, our nation or in other words for everyone.

· http://www.huffingtonpost.com/2008/10/14/financial-crisis-suicide_n_134453.html

· http://www.miamiherald.com/news/breaking-news/story/1272998.html

· http://www.cbsnews.com/blogs/2008/10/22/couricandco/entry4539917.shtml

· http://www.sciencedaily.com/releases/2009/03/090312115049.htm

The great tax drought of 2009

Posted by: Jennifer Chang

By Jeanne Sahadi, CNNMoney.com senior writer
Last Updated: October 7, 2009: 3:56 PM ET

NEW YORK (CNNMoney.com) -- You don't need a Ph.D in economics to know that the government fiscal year that ended last week was ugly for the budget.
Much attention has been paid this year to the record-high spending and deficit accrued because of the financial and economic crisis.
But one of the driving factors that has gotten less notice: plummeting tax revenue. The crisis, after all, walloped company profits and savaged Americans' income stream.
Through the end of August, Uncle Sam collected 25% less in tax revenue for the year than he did during the same period a year earlier. The two biggest culprits -- a 56% drop in corporate income tax revenue and a 20% drop in individual income tax revenue.
On balance, the Congressional Budget Office expects that tax receipts will be 14.9% of gross domestic product this year, well below the historical 18.3%average.
While revenue forecasts for next year are better, the CBO estimates tax receipts will only make up about 15.7% of GDP. Click Here to Read More

Financial Crisis Hurting Nursing Homes

Posted by Scarlett Lu

Nursing homes have been facing difficulties during the recession. Many nursing homes are on the verge of bankruptcy and others have already filed for chapter 11 protection. The senior facility faces many state government cuts that affect their services. Since people are living longe, nursing home care is increasing. Medicaid accounts for 2/3 of all dollars spent. The recent state cuts Medicaid reimbursements by 8% . The nursing home industry is able to make money on their Medicare reimbursements and the money they make helps offset what they lose in Medicaid. However the cuts in Medicaid will affect nursing homes in poor and rural areas because they rely heavily on Medicare reimbursements.

American Association of Retired Persons wants to increase spending by $45 million a year on programs to help the elderly. Nursing homes need more beds; elderly need home and community based care. Keeping the Medicare budget means that it can only be spent on seniors.

If Medicare reimbursements are cut the employees at nursing homes will be the first to be affected by this. People will lose their jobs and the elderly will not receive the care they need.

http://www.redorbit.com/news/health/522645/aarp_nursing_homes_face_off/index.html

http://www.adaction.org/pages/issues/all-policy-resolutions/social-amp-domestic/140-the-nursing-home-crisis-public-policy-gone-awry.php

http://www.upnorthlive.com/news/story_print.aspx?id=359346&type=story

The Lehman Myth in the Financial Crisis

Posted by Scarlett Lu
David A. Skeel is the S. Samuel Arsht professor of corporate law at the University of Pennsylvania School of Law.

America’s great corporate and financial crises are usually accompanied by spectacular corporate scandals that provide a simple, roughly accurate storyline for the crisis as a whole. Early in the Great Depression, Franklin D. Roosevelt railed against the “Ishmael or Insull whose hand is against every man’s” — a reference to Samuel Insull, whose utilities empire had imploded in scandal. The Insull story, along with several other scandals, inspired the securities laws of 1933 and 1934 and other important corporate reforms. Sixty years earlier, the Philadelphia banker and railroad magnate, Jay Cooke, had been the face of the Panic of 1873.

The current crisis has been deficient in these terms. In the absence of obvious, hissable villains and a simple story line, the conventional wisdom seems to focus more on the crisis itself than on its causes, with the Lehman Brothers bankruptcy now viewed as its pivotal moment. The Lehman story line is worrisome for at least two reasons: it threatens to distract attention from the causes of the crisis and the story line itself is deeply mistaken.

The absence of a simple story line was brought home to me when I began giving occasional talks about the crisis in late 2007 and early 2008. click to read more.

Signs of recovery in some US areas

By: Zachary Pienkowski

Signs of a slow and fitful recovery emerged in August in some communities across the country where unemployment dropped and foreclosures stabilized, according to The Associated Press' monthly analysis of economic stress in more than 3,100 U.S. counties.

The average county stress score fell slightly, and fewer counties qualified as economically distressed.

But those glimmers of hope are providing scant benefit for most people suffering from the recession. Some of the statistical improvements in employment were inflated by seasonal jobs, workers who quit the labor force and temporary federal stimulus money.

"It's pretty clear that even though the recession likely has ended, not too many people are likely going to be humming that Bobby McFerrin tune, 'Don't Worry, Be Happy,'" said Sean Snaith, an economist at the University of Central Florida.

The latest results of the AP's Economic Stress Index showed the pain easing in some of the nation's hardest hit areas, such as Elkhart, Ind., and pockets of the Carolinas. But foreclosure hotbeds in metro Las Vegas and South Florida continued to suffer.

The AP calculates a score from 1 to 100 based on a county's unemployment, foreclosure and bankruptcy rates. Under a rough rule of thumb, a county is considered stressed when its score exceeds 11. The average county's Stress score dipped to 10.3 in August, from 10.54 in July, the first drop in three months. In August 2008, it was 6.94.

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Education for Money OR Money for Education?

By Anshu Dixit

Every one of us is affected by financial crisis one way or other. The financial crisis is severely affecting our colleges and universities. Education cost has gone up during this economic problem instead to going down. Here we are in the situation where people have stayed unemployed for more than 6 months or more and can afford the things they used to; things are getting expensive day by day. But people do not have enough money to spend. People are looking for alternatives, but is there any alternative for higher education. Right, there is no alternative for education. However, there are some options for the people who cannot afford the cost of higher studies. Such as, some students are either going to public colleges or community colleges or taking online classes. Online degree program is attracting many people who cannot afford going to colleges due to financial and family problem. For example, while taking online classes a person can save the cost of dorm or housing and a student can work as many as hours they want according to their flexibility. On the other hand, colleges are proving the options of loans to pay off the cost, where there is no surety if you would be able to pay off our loan or not. Is education the thing that we need to earn money later by working or we need money to get education now?

Sources:

http://www.cnn.com/video/#/video/bestoftv/2009/06/23/ldt.ferre.learning.online.cnn?iref=videosearch

http://www.docstoc.com/docs/2590739/The-Financial-Crisis-of-American-Higher-Education-and-the-Future-

http://www.nytimes.com/2009/09/05/your-money/paying-for-college/05money.html

The Financial Crisis and America’s Casino Culture

Posted By Anshu Dixit

By PETER S. GOODMAN

Published: September 19, 2009

Throughout the history of American commercial life, one cultural trait has tended to dominate: Americans are optimists, a people prone to seeing the glass as not merely half-full but rapidly expanding, and bearing liquid that might yet be turned into gold.

This exuberant optimism has proven beneficial, emboldening risk-taking that has achieved innovation and wealth. It has prompted entrepreneurs to invest borrowed money in untested ideas that sometimes yield breakthroughs. It has encouraged ordinary people to accept debt in the name of accelerated gain — more comfortable homes, higher education, late-model cars.

Click here for more

Is FDIC A Broken Promise?

By: Michael Herscovici

A lot of people have invested in banks thinking that their money would be safe. Afterall, the FDIC will protect us right? We always knew that if all the people asked for all their money back, there was no way the FDIC could possibly pay it all back. Due to the current financial crisis, it seems as though this theory is being put to the test.

According to multiple reports, the FDIC is asking for aide to pay off all the investors that lost money due to the current crisis. This time last year the FDIC fund had more than $50 billion dollars in it, however, at the end of this week, the fund will be in the red.

What the FDIC is asking for is that banks prepay for the next three years of fees right now, to help the FDIC cover the banks current loses. The banks really do not have any other alternative. If they do not pay, they risk losing the FDIC insurance which will surely lead to a bank run on most banks which would put them out of business. So its either pay a little now or lose it all eventually. Also, isn't the banks poor manangement of funds what put them in this position in the first place?

If this plan goes through, the FDIC will receive $45 billion dollars in much needed funding. This is the 3rd time this year the FDIC has needed to raise funds to protect consumers.

Source 1

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Financal Crisis For Children

Posted by: Michael Herscovici

This short clip explain the current financial crisis we are in.

Click Here to view.

Swine flu -- and no paid sick leave

Almost half of America's workers can't take paid sick leave. With swine flu cases on the rise, that problem could hasten the pandemic's spread.

Posted by: Jennifer Chang

By Neil deMause, CNNMoney.com contributing writer

September 28, 2009: 3:54 AM ET

NEW YORK (CNNMoney.com) -- As the H1N1 swine flu virus starts its second major sweep through the U.S., business owners are bracing for the impact of a worse-than-usual flu season on their workforces. That's reviving debate on a contentious issue: What kind of sick leave should companies offer employees -- and should it be mandated by law?

"On the one hand, you have all of our top officials saying, 'Do the responsible thing. If you're sick, stay home,'" says Debra Ness, president of the National Partnership for Women and Families, a Washington, D.C.-based advocacy group that is pushing for paid sick leave laws. "You have advice from the Centers for Disease Control on exactly how many days you should stay home, and how many days we need to keep kids at home. And at the same time, we have a country where almost half the workforce doesn't have a single paid sick day."

Currently, 48% of the U.S. private-sector workforce can't take paid leave without advance notice, according to the National Partnership. In response, unions and worker advocates have intensified their campaign for local laws requiring businesses to offer paid sick leave. San Francisco voters passed a law requiring paid sick leave for all workers, full- or part-time, by referendum in 2006, and Washington, D.C., followed with its own law last year, though it exempted new hires and restaurant staff who earn part of their pay in tips.

Now 15 states and cities have paid sick leave bills in the works. Earlier this year, Connecticut narrowly missed becoming the first state to mandate paid sick time, when the state legislature fell one vote short of passing a bill that would have required businesses with 50 employees or more to provide up to six and a half paid sick days per year.

With swine flu panic beginning to build -- reports of flu-like illness are already up sharply three months before the traditional start of flu season -- some elected officials are taking the opportunity to press for new legislation.

"This is definitely pressing because of all the projections of how the swine flu and the regular flu season will be affecting people," says Shula Warren, chief of staff for New York City council member Gale Brewer. Click Here to Read More

Protect your family from income challenges during the financial crisis

Posted by: Scarlett Lu

How to protect your family from challenges in the Financial Crisis.

To experience a financial crisis is frustrating,during a financial crisis we may lose our job and businesses might close down. Everyone faces a financial crisis of some sort throughout our lifetime. An accident can destroy the financial stability of many families. We should be prepare for tough times. Layoffs can cause families barely make their monthly payments; but if .Big companies can close down causing thousands of people to lose their jobs. I you lose your job, don't panic. Work with what you have and figure out what you have. Cut down on your spending. Work with your creditors and keep a positive attitude.

We should have a financial plan to meeting our life goals through good management of our finances. Good planning can help families save money and prepare for financial emergencies. Plan ahead so you will have savings if you were ever to lose your job. Smart financial planning includes: Protecting your family by getting Health Insurance, Life and disability coverage, estate planning, and have college savings.

http://www.businessdayonline.com/index.php?option=com_content&view=article&id=5315:protect-your-income-from-challenges-of-financial-crisis&catid=55:personal-finance&Itemid=327

http://www.ehow.com/how_4562030_protect-family-financial-crisis.html

http://www.fitpregnancy.com/yournewlife/work_money/smart-financial-planning-for-families-45760492.html

Market Frenzy May Be Over

By: Zachary Pienkowski

Recent studies and trends have shown that the utter chaos that has been the stock market over the last year and a half may be over. On September 29, 2008 the market took its largest point drop in history after the news that congress had rejected the $700 billion stimulus plan for our downward spiraling economy. While some thought the eventual approval of this plan would help calm the storm, the stock market continued to take a large number of plunges throughout 2008. Even when things appeared to be turning around and financial analysts and economists urged people to invest, they were still extremely hesitant because investors were unwilling to lose what they had left. Many people saw their retirement pools that took 30 years to accumulate nearly cut in half in a matter of months. Since late August of 2009, the lack of volatility in the market has been an encouraging sign for investors, as well as small but steady increases in the Dow and S&P 500. Strategists attribute this period of recovery to the lack of volatility in the markets and a return to normalcy in the credit markets as well. A large number of Americans are still concerned though because the national unemployment rate is near 10% and and companies that are showing profits are mostly doing so by significantly cutting costs and laying off workers. This may lead to smaller profits reported and investors having to comes to terms with the idea that we may not see a market like we had before the collapse for a long time. This may not necessarily be a bad thing though because it should result in a more stable economy in the long run.

Sources:

http://money.cnn.com/2009/09/28/markets/thebuzz/index.htm
http://money.cnn.com/2009/09/29/markets/thebuzz/index.htm
http://finance.yahoo.com/news/Drop-in-consumer-confidence-apf-1913425646.html?x=0&sec=topStories&pos=main&asset=&ccode=

Study: Bad economy may be good for your health

By: Theresa Tamkins
Posted By: Lily Mei

Are you finally ready for some good news about the recession? As it turns out, a shaky economy might actually be good for your health.

In a bad economy, therapists often suggest taking control of things patients can, including eating right, exercising.

Although it seems hard to believe, a new analysis of the Great Depression -- the mother of all economic bad times -- suggests that mortality dropped and life expectancy increased during that period.
Researchers estimate that around that time, a year with a 5 percent drop in the gross domestic product was associated with a 1.9-year gain in life expectancy, while a 5 percent rise in the GDP lowered life expectancy by about one to two months.
And it's not just the Great Depression, says José A. Tapia Granados, M.D., of the Institute for Social Research at the University of Michigan, Ann Arbor.
Past research has shown similar results -- at least a drop in mortality -- in periods of U.S. economic recession during the 1980s and 1990s, as well as in recessions in other countries, Tapia says. Health.com: How exercise may boost your mood
"In some sense it is good news," he explains. "The usual view of a period of recession is that everything is bad during these periods."
In a study published this week in Proceedings of the National Academy of Sciences, Tapia and his colleague Ana V. Diez Roux analyzed the economic growth and population health in the United States between 1920 and 1940, including the years of the Great Depression, which lasted from 1929 to 1933.
Life expectancy in general increased 8.8 years between 1920 and 1940, but gains fluctuated with the economy. Health.com: Will your depression diagnosis protect you from employment discrimination?
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They found that mortality declined and life expectancy increased during the Great Depression, as well as in the recessions of 1921 and 1938, compared with other years during that period. Suicides did increase during the Great Depression, but they made up less than 2 percent of deaths during that time.

Click here to read more

G-20 to supplant G-8 as international economic council

By: Zachary Pienkowski

Leaders of the G-20 economic summit will announce Friday that the group will become the new permanent council for international economic cooperation, senior U.S. officials told CNN Thursday.

The move comes in the wake of a major push by President Obama, the officials said. The G-20 will now essentially eclipse the G-8, which will continue to meet on major security issues but carry much less influence.

"It's a reflection of the world economy today and the players that make it up," said one senior official. Nations like China, Brazil and India -- which were locked out of the more elite G-8 -- will be part of the larger group.

The Group of 20 -- leaders of 20 countries representing 90 percent of the world's economic output -- are meeting in Pittsburgh for a two-day summit, focusing on the financial crisis and how to avoid a future repeat. The gathering is Obama's first time hosting a major international summit.

"We're meeting at a time where, for the first time since London, certainly for the first time in a year, we're seeing the first signs of optimism about prospects for global recovery," U.S. Treasury Secretary Timothy Geithner told reporters Thursday. "I think the broad consensus of private economists and businesses are that we're beginning to see growth in the United States, and around the world we see exports rising and forecasts for growth are being revised upwards."

"This is encouraging," he said, "but we have a ways to go."

To continue reading on this topic, click here

Financial crisis rewriting the rulebook on personal investing

By: Mark Jewell
Posted by: Scarlett Lu


BOSTON — Stocks always rise over the long run. Bonds are for retirees and investors with little taste for risk. Companies rarely cut their dividends.

Those are three of the long-followed rules of investing — and rules that, as investors learned during a year of the stock market's worst turmoil since the Depression, can't always be counted on.
The new rules: Bonds might be the better long-term bet. Diversifying your portfolio means more than just picking different types of stocks. And nothing, including the humdrum money market fund, is risk-free.

Not even blue chips such as Dow Chemical and General Electric, once considered so reliable they were deemed to be good for widows and orphans, were safe when everything seemed to be crashing.
At their lowest points over the past year, a share of GE or Dow could be purchased for less than the price of lunch at McDonald's. And both companies slashed their sacred dividend last year — Dow for the first time in 97 years, GE for the first time in 71.
As the meltdown helped take out half the stock market's value from its peak, investors and advisers began to question the time-honored strategies of the longest investing binge in American history, dating to the start of a bull market in 1982.
click here to read more

A Timeline of the Financial Crisis

Some say that we are on the way out of this recession and financial crisis. But are we? When and where did it all begin?
It was in February of 2007 that the Federal Home Loan Mortgage Corporation decided they would no longer buy the most risky supreme mortgages and mortgage-related securities. This was the start to what was a downward spiral in the housing market and our economy. People no longer could pay for their homes and real estate was hard to sell. Then in April, the New Century Financial Corporation, a leading subprime mortgage lender, filed for Chapter 11 bankruptcy protection. Chapter 11 was a way for companies to restructure their business model and pay investors over time.
Skipping ahead, more mortgage companies went under and filed for bankruptcy. In 2008, banks were being hit hard and were being taken over by other banks. This included JPMorgan taking over Chase, and Bank of America taking over Countrywide Financial.
The Fed stepped in many times to try to stimulate the economy throughout these last 3 years. They met again a few days ago again to hash out more problems. Are we on an upturn now? That’s for each one of us to decide.

By: Kelsey Hoffman

Sources:
http://timeline.stlouisfed.org/index.cfm?p=timeline
http://en.wikipedia.org/wiki/Subprime_crisis_impact_timeline
http://www.foxbusiness.com/story/markets/economy/timeline-financial-crisis/

Is the Economy Healing Yet?

By, Meredith Anderson

Our government has been trying hard to help our country out of this recession. The auto plan, the Recovery Act, the housing plan, and many other acts have been helping our economy strengthen ever so slightly. However we are not totally out of the hole yet and the climb back to a healthy economy is still quite a while away. Obama lets the country know that although things are looking in a more positive direction we still some hard times to face. “But economic improvements do not mean that hard times are over -- 2009 will continue to be a difficult year for America's economy. ... The severity of this recession will cause more job loss, more foreclosures and more pain before it ends.” To further back up Obama’s statement Federal Reserve Chairmen Ben Bernake says, “"full recovery is likely to take more than two or three years."

For lots of us it is hard to know whether or not we are improving. We rely on the media and our government to tell us where we are headed. The problem with this is that everyone seems to be confused about what’s good and what’s bad. Not only has our economy spiraled our perception of what is a healthy economy is becoming slightly impaired as well.




Sources:

http://edition.cnn.com/2009/POLITICS/04/14/obama.economy/index.html
https://www.eccu.org/resources/thebuzz/2008/october/14
http://www.usatoday.com/money/economy/2009-02-24-bernanke-economy_N.htm

Government & The Financial Crisis

By, Amy Nightingale


While Sarah Palin was at a conference in Hong Kong, she gave a speech where she spoke about her thoughts on the causes behind the current financial crisis to a group of executives and bankers. She said, “ We got into this mess because of government interference in the first place. We’re not interested in government fixes, we’re interested in freedom.”

Palin attacked the Federal Reserve’s low interest rates as the main reason why the U.S. is in its current financial position. She feels that the low rates caused people to buy homes, which they were unable to afford. Sarah Palin was speaking against the Obama administration, and wasn’t taking into account the progresss that they have made.

Obama spoke this week at this year’s Group of 20 Summit. The Pittsburgh Summit is a conference where leaders can meet to discuss the hard work that the government has done in confronting the global economic crisis. At the summit, the leaders will be attempting to create an exit strategy for the programs that were necessary in the financial crisis which have resulted in additional government debt.

References:

http://edition.cnn.com/2009/WORLD/americas/09/23/economic.summit/

http://www.americanbankingnews.com/2009/09/23/sarah-palin-government-cause-of-financial-crisis/

http://topics.nytimes.com/top/reference/timestopics/organizations/g/group_of_20/index.html?scp=1-spot&sq=group%20of%2020&st=cse

Should We Worry About the Shrinking Dollar?

By: Lily Mei

The dollar has been shrinking since March 2008, and at the end of last week the dollar was only 0.65 euro down from 0.80 from last month. The underlining question is should we be worried?
The answer is yes and no. Yes, because the shrinking dollar is a problem for investors especially if all your assets are in dollars and most of your goods and services are priced in other currencies. Luckily, most investors can protect their assets from further erosion of the dollar in three simple ways.
Essentially you would want to diversify your assets in foreign currency, gold, and/or a range of different sustainable commodities. There are risks in reinvesting your assets in any of these three ways. In general, if you are trading in foreign currencies you can faced hefty tax rates.
Gold may be the safest way because in history whenever there was a recession the price of gold usually increase. Furthermore, if the dollar keeps dropping, you may want to think of stocks and bonds in euro, yen, or rubles because they will tend to become more valuable than buying in dollar.
Overall, in time the dollar may strengthen once again, but in a scenario of a long-term decline in dollar it may not be bad to rethink and plan ahead of diversifying your dollar valued assets so you wouldn’t suffer as much of a loss.

Sources:

http://articles.moneycentral.msn.com/Investing/Dispatch/061128.aspx

http://www.bloomberg.com/apps/news?pid=20601100&sid=apvyWkjStAL0

http://online.wsj.com/article/SB125271048869905007.html

http://www.economist.com/opinion/displayStory.cfm?story_id=2404984

Panel Probing Crisis Adds to Role

WASHINGTON -- Members of a bipartisan federal panel investigating the financial crisis made clear at their first meeting Thursday that they plan to work closely with congressional leaders to help shape pending overhauls of financial rules.
View Full ImageBloomberg News
Former Sen. Bob Graham, left, and Phil Angelides leave a meeting of the commission probing the financial crisis in Washington on Thursday.

That could help speed the balky legislative process. But it could also complicate the commission's already tricky task of maintaining internal harmony, given the partisan divides that could emerge over the legislation -- and the number of political figures among the blue-ribbon panel's membership.
The 10-member commission, created by Congress earlier this year, is headed by Phil Angelides, a former California state treasurer and one-time Democratic gubernatorial candidate, and its vice chairman is former House Ways and Means Chairman Bill Thomas, a sometimes-combative conservative Republican. Other members include a Democratic former U.S. senator, Bob Graham of Florida, as well as Keith Hennessey, a top economic adviser to former President George W. Bush, and Doug Holtz-Eakin, a top economic strategist for 2008 Republican presidential candidate John McCain.

Click here to read more...

Posted by: Kelsey Hoffman

Transcript of September 'Money Summit: Money & Main St.'

Posted by: Lily Mei

(CNN) -- Anderson Cooper, Ali Velshi and the CNN Money Team hosted a special "CNN Money Summit: Money & Main St." Thursday night, September 17. Here's a transcript of the show:

ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Two topics in the hour ahead: the economy and you.

ANDERSON COOPER, CNN HOST: It's been one year since Lehman Brothers declared bankruptcy putting into motion a series of events that plowed the American economy deeper into recession and cost you money.

VELSHI: Everyone felt the effects as the crisis rippled through the job, housing and stock markets.

COOPER: In the hour ahead, we're going to figure out what happened over the past year and point you in the right direction for the year and years ahead. Our panel of experts will give you the tools you need to profit and even prosper.

Tonight on this CNN MONEY SUMMIT: MONEY AND MAIN STREET.

A year after the fall of Lehman Brothers there's good news and bad from the guys who crunch the economic numbers.

First the good, Federal Reserve Chairman Ben Bernanke said earlier this week the recession is very likely over. The bad news, not all economists agree with him nor do most Americans.

New polling we did for this program shows 86 percent of the country still feels we are in a recession. And more than three quarters of all Americans say it's a pretty bad one.

But it's not all doom and gloom. There is good news, things are improving in some areas very quickly.

We're going to be discussing this tonight with our panel: Fortune magazine senior editor Leigh Gallagher; an economist and author, Stephen Leeb; Christine Romans, host of CNN's "Your Money;" also Money magazine senior writers Walter Updegrave and Donna Rosato; and Ryan Mack, president of Optimum Capital -- Ali.

VELSHI: Anderson, thanks.

But first, how did we get here? One year ago this week, America's subprime crisis became a global financial crisis. What had been a downturn fueled by falling home prices and mortgage defaults became in a matter of days something much bigger.

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