Banks are pushing for a change to banking rules that would allow them to ignore mark to market accounting for assets in markets that they deem “inactive.” In other words, if a bank is loaded with worthless assets but decides that the market for those assets is frozen, they can value those assets higher than the market would. Or to simplify it even more, they can create value out of toxic assets. And it looks like now the Financial Accounting Standards Board, which so far has been against this rule change, is caving in.
Nick Kapur at The Motley Fool says that men trade stocks more frequently than women. This is not a good thing; the result of all this hyperactivity and overconfidence is lower earnings on your investment. He writes, “Worse still (for unmarried guys like me) is that single men trade a whopping 67% more than single women, earning them annual net returns of 2.3% less! The authors cite increased trading costs, taxes, and a greater tendency to speculate as reasons for this underperformance.”
Blockbuster’s stock just dropped 79% this afternoon after Bloomberg published a story that said the company hired the firm Kirkland & Ellis “to evaluate restructuring options, including a possible pre-packaged bankruptcy.” Blockbuster says they’ve only hired the firm for “refinancing and capital raising initiatives,” and that they do not intend to file for bankruptcy.
“Suze Orman’s 2009 Action Plan” is free to download from Oprah.com for the next week. Unlike last year’s “Women & Money,” this book is intended for pretty much everyone. We haven’t read it, so here’s a line from the Amazon editorial review: “There are safeguards to put in place, actions to take, costly mistakes to avoid, and even opportunities to be had, so that you are protected during the bad times and prepared to prosper when things take a turn for the better.”
KidsSave is a kid-centric application (Windows XP only, with an OS X version coming out next year) that lets your child track allowances and other types of “income” and teaches the benefits of saving.
Slate’s “The Big Money” has decided it’s time to start educating readers on some core financial principles, and they’re starting with the very basics, presented in a “Schoolhouse Rocks!” style. Their first cartoon explains the four types of bonds. Visually, it’s a perfect match to the style of the original cartoons, but we hope they work on a catchier jingle for their next installment.
Are you so loaded that you exceed the FDIC’s guarantee limit for deposits? Consider the Certificate of Deposit Account Registry Service. Deposit the funds at one of 2,500 CDARS member banks and they’ll automatically spread your cash among other member banks as needed to stay within FDIC coverage limits. Kiplinger says, “You’ll earn one rate (set by the home bank) and get one statement and one form at tax time.” [Kiplinger]
Kiplinger has two quizzes named “Financial Truth or Bunk?“, and they go through some of the more popular tips you’ve heard about personal finance, including lines like:
- You can’t lose money investing in bonds.
- Stay-at-home moms or dads need life insurance, too.
- Don’t buy a red car — it’ll cost more to insure.
- Dollar-cost averaging boosts investment returns.
- The percentage of stock in your portfolio should equal 100 minus your age.
In one brain-melting two-minute clip, watch all the media frenzy, punditry, and cable-news excitement of the financial meltdown, courtesy of CNN’s own Rick “The Twitter Board Is Blowing Up!” Sanchez. [YouTube]
USAA just pulled a huge mindf#@k on Travis and his wife, and now he wants to talk to someone high enough up the chain to find out what went wrong and how to prevent it from happening again. His wife “went online yesterday to check on some transactions and discovered her IRA balance was $0. Six hours prior to that, her balance was $14,000.” When she tried to find out what had happened, the first CSR she spoke with told her she had no IRA account, and the second CSR told her to refresh her browser. Yeah, you know how these newfangled browswers are always wiping out retirement accounts.
What accounts are FDIC-insured? Which aren’t? Now that a fund that markets itself as the world’s “first and longest running money fund,” suddenly found itself in the nearly unprecedented position of having to “break the buck,” we thought we’d help clarify. Here we go:
In the history of money market funds, says the NYT, only one had ever “broken the buck” or actually lost money… before yesterday. On Tuesday, the managers of a multi-billion dollar money market fund announced that their customers might lose money in the fund– a type of investment that is considered as safe as a savings account.
According to a new survey from Zillow.com, Americans are totally out of touch with reality when it comes to their homes. 62% of homeowners surveyed said they thought their homes had appreciated in value over the past year. In fact, only 19% of homes in the US increased in value, and 77% actually decreased in value. (5% stayed the same.)
According to Bankrate, 57% of Americans do not have a will, leaving their personal finance, guardianship of children, and many other end-of-life decisions in the hands of strangers (state judges.) The lynchpin of a solid estate plan is having a will, but Vanguard suggests you also need the following assembled to leave your loved ones in good shape following your death:
You Starbucks haters out there can rejoice, because the company just posted its first quarterly loss EVAR “of $6.7 million, or 1 cent per share, compared with a year-earlier net profit of $158.3 million, or 21 cents per share.” Store closures and restructuring are to blame, as well as the fact that nobody can afford anything anymore. [Reuters]
Colgate-Palmolive has reported a 19% increase in quarterly profits, and says it’s partially due to price increases (but also greater volume sales and a weak dollar). [Reuters]
Here’s a list of 21 recommended finance books for people at every level of financial experience, from novice to “I could have written that.” [SavingAdvice]