POST PUBLISHED INAugust, 2009
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  • Is Schwab to blame for investments gone bad?

    August 27th, 200912:09 PM ET
    By Joseph Slife
    Who should be held responsible when an investment goes sour: the investor who chose the investment? Or the broker who provided the trading platform that allowed the investor to buy? That's the bottom-line question in a lawsuit (text in PDF) filed last week by New York Attorney General Andrew Cuomo against Charles Schwab Corporation. The sui...

  • GM stock: when investing turns into gambling

    August 26th, 200910:04 AM ET
    By Mark Biller
    USA Today ran a story last week about recent trading in old GM stock. General Motors, of course, declared bankruptcy while saddled with huge amounts of outstanding debt, making it virtually certain that their old stock will wind up being completely worthless. So why do millions of shares continue to change hands each day? There are two reasons...

  • The next bailout

    August 24th, 200908:29 AM ET
    By Mark Biller
    Fortune's senior editor at large, Allan Sloan, says the next government bailout will be for a familiar program: Social Security. And if you thought AIG was bad, you haven't seen anything yet. Many people have painted grim portraits of this program's future. Few have ever made the case that it could go cash-flow negative as early as this year. ...

  • Do you feel protected yet?

    August 20th, 200912:23 PM ET
    By Mark Biller
    Today, the first provisions of the new Credit CARD Act - designed to protect consumers from the dirty tricks of credit card issuers - kick in. Unfortunately, as is so often the case with federal legislation, the law of unintended consequences appears to have kicked in already. As Chuck Jaffe points out, this law that was supposed to make thing...

  • Could your house soon be "underwater"?

    August 19th, 200910:07 AM ET
    By Joseph Slife
    "How high's the water, mama?" Johnny Cash sang in "Five Feet High and Rising." A report from real-estate tracking firm, Zillow.com offers an answer: it's getting higher. Zillow's second-quarter numbers, reported by Bloomberg, show that almost one-fourth of U.S. mortgage holders were "underwater" - i.e., the balance on their mortgage exceeded t...

  • 5 tips for dealing with a home-equity-line freeze or reduction

    August 14th, 200911:26 AM ET
    By Joseph Slife
    In the April issue of SMI, we reported that even homeowners "with good payment records and strong equity levels in their homes" have had their home equity credit lines frozen, reduced, or closed during the economic downturn. "The fine print gives banks that option," we noted. Last week, the Federal Reserve Board issued an updated five-point guide ...

  • Baby steps back toward normal

    August 13th, 200908:41 AM ET
    By Mark Biller
    As expected, the Federal Reserve left its target interest rate unchanged yesterday. However, they did take one tiny, positive step back towards "normal" monetary policy. One of the more controversial policies to come out of the financial crisis was the Fed's program to buy long-term government bonds directly from the Treasury. In other words, ...

  • Fraud "not uncommon" in 401(k) hardship withdrawals

    August 12th, 200909:58 AM ET
    By Joseph Slife
    One result of the rocky economy has been a sharp rise in requests for "hardship distributions" from 401(k) retirement plans. Employers aren't required by law to allow for hardship distributions, but many do - or at least they have until now. That might change. The publication Workforce Management reports that hardship-withdrawal fraud (comm...

  • Generosity toward the poor

    August 10th, 200909:31 AM ET
    By Joseph Slife
    A post last week by Christian financial planner Jason Topp at the Redeeming Riches blog asks the always difficult question: "Should you give money to a homeless person?" All of us can think of reasons why giving money to the homeless might not be a good idea. It might be frittered away on alcohol or drugs, for example. Still, I recall what my ...

  • The new kid on the block in the municipal-bond market

    August 07th, 200909:24 AM ET
    By Joseph Slife
    Tucked in among the 400-plus pages of the "stimulus" act passed earlier this year (see Part V, Sec. 1531) is the authorization for Build America Bonds, a new kind of taxable municipal bond subsidized by the federal government. (Right now, the authorization is for 2009 and 2010 only.) Billions of dollars worth these bonds have already been issu...

  • Will the Fed be able to restrain inflationary pressures?

    August 05th, 200911:20 AM ET
    By Joseph Slife
    In two recent SMI cover stories (May and August), Austin explained why current fiscal and monetary policy could lead to a surge, perhaps even a strong surge, in inflation. While Federal Reserve Chairman Ben Bernanke is busy offering repeated assurances (here, for example) that when the time is right the Fed will act to restrain inflationary pr...
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