OK, now that I’ve skimmed most of the 100+ page bailout plan (most of which, as is in the case in all government legal stuff, a bunch of blah blah blah - and warning, do not operate heavy machinery after reading), I can see that it’s clearly not the end of the process and isn’t intended to be. I have a thought, though, and I humbly submit it to you.

Before that, though, I did want to mention that those golden parachute limitations for fat cat executives are not quite defined in the plan - are you surprised? I was hoping that some kind of wording to the effect of “any deferred compensation packages for senior executives in an institution that is taken under federal control are immediately null and void.” I was also hoping for salary caps for CEOs but that’s not there either - these politicians might actually be in the private sector again someday, doncha know. They don’t need to be cutting off their future income.

Anyway, here’s my idea -

Refinance/renegotiate (at no consumer net cost) every single outstanding mortgage to current housing market levels, maintaining the percentage of equity ratio between lender and homeowner, into a 15-, 20- or 30-fixed rate mortgage.

Use the homeowner’s most recent mortgage appraisal as the starting point for determining equity percentages and  existing data to do a general percentage home value adjustmentfor a neighborhood.

Losses are shared - lenders lose interest and principal and homeowners lose equity dollars (but maintain the same percentage of ownership).

Example: John and Jane Doe bought their home in 1995 for $150,000 and initially took out a loan for $120,000 (80%) at 6.5%, making their payment about $760 a month before taxes and insurance. In the early 2000’s, they both had good jobs, their home value appreciated to $300,000, and they used the equity to consolidate some other debt and payoff student loans, putting their total mortgage debt at $225,000 (75%) and a payment of about $1425.

Since then, the bubble has burst. The value of the home is now $250,000, making it almost impossible for them to refinance into another loan because they don’t have enough equity - even though they still hold on to the false belief that their home is “worth” $300,000.

Under this plan, the balance on their mortgage would be reduced to 75% of $250,000, or $187,500. They would be required to take on a fixed rate mortgage and would be barred from refinancing the loan or taking out an equity loan for a certain number of years.

That’s it. Any questions? Of course …

1. This seems like it gives homeowners who have overextended a bailout. How about some personal responsibility? It sure does look like that, doesn’t it. But given the screeching across the country this week, it sounds like that’s what people want - “where’s my bailout,” right? But besides that, it does provide a bit of relief. It reduces mortgage payments and would allow many to keep their homes without going through a whole court mess.

2. What about people who own their homes outright? What’s in it for them? Well, since most of those people will tend to be older and are facing scary health costs, I’d be fine with saying that for the next five years, they get a dollar for dollar credit on their property taxes.

3. Renters? Hello? What about them? No direct benefit, but renters have been impacted by this fallout as well - owners of rental properties that go into foreclosure means eviction for renters. Also, a general reset of home prices and mortgage values would put downward pressure on rents as well.

4. Does this apply to second and third (or however many McCain owns) properties? Nope, only primary residences. If you got in over your head on investment property because you watched infomercials in the middle of the night, that’s your problem. The only partial benefit you get is that if you used your primary residence to finance a second home, you’ll get a break as that primary home mortgage is reset, but your investment home mortgages remain as they are and if you can’t afford them, they go on the market.

5. My house is in pristine condition with beautiful handcrafted wood details and stained glass accents and my next door neighbor’s house is “Plain Jane.” How could you possibly compare the value of the two homes? Well, for one thing, homes that have been cared for spectacularly will actually come out ahead in this deal because they’ll have the bigger actual decrease in mortgage amount. But besides that, your real estate agent will probably tell you that sometimes investments in your home don’t pay you back and if you’re going to do them, you do it because it’s important to you and your family.

6. I still can’t afford my home even under this plan. Well then, time to sell.

7. What does this do to help the economy as a whole? It seems like most of the blather about this crisis comes from mortgages that carry high default risk. This plan would hopefully reduce that default risk by directly lowering house payments.

8. Wouldn’t it be incredibly difficult to undertake this plan? Probably, but nothing up to this point has sounded particularly simple. This would have actual lasting impact for homeowners, it is equitable both to those who have been responsible about their debt and to those who maybe overextended by reducing the amount of the mortgages on both. There is already data out there about general pricing broken down my neighborhood, I’m sure we have the brains to handle this.

9. But what if the mortgage amount DOESN’T go down - what if I bought my house 20 years ago and haven’t refinanced and the value of my home has actually gone up? You’re not going to RAISE my mortgage, are you?? No no, no raising of amounts for long term owners who have showed that kind of staying power. Extend the property tax credits to you too, you deserve it!

10. Won’t this cost the banks and mortgage companies billions? Probably, but it doesn’t sound like there’s too much kind feeling towards them anyway, and besides - collections and foreclosure isn’t cheap, and it might cut down on THOSE costs.

11. What about the mortgage brokers out there - cutting out all refinances for the next several years will kill the business, won’t it? Kill the business? No, but it will cut it back quite a bit. There will still be buying and selling of homes, but yes, an imposed moratorium on refinancing will knock quite a few people out of the business.

12. Why the fixed rate requirement? What’s wrong with adjustable rates? Well, for one, it adds confusion the the markets - too many people have been sold adjustable rate mortgages under less than transparent circumstances. It also creates an environment where you are gambling with what may be the biggest investment you ever make. Personal responsibility or shady mortgage brokers aside, your home shouldn’t be a risky venture.

So there you go. Whaddya think?

OK, first of all - I’m not even remotely defending the banks and insurance companies and mortgage companies that caused this mess, but I’m also not defending the entitlement drenched society we live in. I’m not supporting golden parachutes but I’m not going to slam people who got mortgages that they didn’t understand. This bailout isn’t about rescuing Wall Street or Main Street, it’s about saving Wall Street and Main Street - and a lot of streets all over the world.

So really? Let’s stop the whining and just get on with our lives. What exactly are you going to do about it anyway? Vote? Good, do that - this crisis shouldn’t have been the turning point to get you to vote anyway. Write a letter to your legislators and the President? Excellent, knock yourself out. Other than that, all most of us can do now is take care of our own - do whatever you can to make yourself indispensable at work, practice frugality, continue to learn what you can about personal finance (so keep visiting here!), and focus on the parts of your life that you can control.

I bring all of this up because I have received a chain mail from several people over the last few days and it’s this kind of garbage that gets people all feisty and worked up and useless. Stop me if you’ve heard it. I’m condensing some of it…

I’m against the $85,000,000,000.00 bailout plan. Instead, I’m in favor of giving $85,000,000,000 to America, in a We Deserve It Dividend (WDID).

To make the math simple, let’s assume there are around 200,000,000 Bonafide U.S. Citizens over the age of 18yo. Our population is more like 301,000,000 +/- counting every man, woman and child. So 200,000,000 might be a fair stab at adults 18 and up.

So lets take the 200 million adults and divide that into $85 billon, that would equal $425,000.00. My plan would be to give $425,000.00 to everyone of the 200 million adults as a we deserve it dividend (WDID).

To be fair and ensure we do our duty we would of course, pay taxes on the money. … So let’s assume a tax rate of 30%. Every individual getting money would then pay $127,500.00 in taxes. That would send $25,500,000,000 right back to Uncle Sam. Sounds pretty fair so far doesn’t it?

So every adult citizen over the age of 18 would get $297,500.00 in their pocket. A husband and wife would have $595,000.00.

What could you do with your $297,500.00 up to $595,000.00?????

One would be to pay off your mortgage - housing crisis solved. Ultimately the banking institutions would end up with the money solving their legidity issues and we the american public would own our home free and clear or at least make a significant dent in the mortgage. Repay college loans - what a great boost to new grads and again money back into the hands of the lending institutions, and we the college student would no longer be obligated and could therefore have more cash flow when we enter the workforce. Thus bolstering the econemy even more.

…

Remember this is for every adult U S Citizen over the age of 18 including the folks who lost their jobs at Lehman Brothers and every other company.

…

If we’re going to do an $85 billion bailout, let’s bail out every adult U S Citizen over the age of 18!!!!!!!! As for AIG and the other banks and lending institutions let them be bailed out by us the consumers and not by government…… a government by the people for the people. They could each sell off their parts. Let American General go back to being American General. Sell off the real estate. Let the private sector bargain hunters cut it up and clean it up.

Here’s my rationale. We deserve it and the banks, lending institutions and corporations don’t deserve this bail out. Who bails out the families of those who are laid off or cannot afford the increasing mortgage payments? We the American public are left to figure it out on our own, no one is there to bail us out or carry us financially, need I say more?

Uh, no. Please don’t.

OK, first of all, let’s look at that simple math, bubba. $85,000,000,000 divided into 200,000,000 parts is not $425,000 pre-tax. It is $425. That’s all. Pre-tax.

But besides that, could we please STOP with the “we deserve” it stuff? What exactly do we deserve, after decades now of easy credit that enables us to have huge flat screen TVs and DVRs and luxury cars and homes that have doubled in size on average over the last 50 years?

Sure, times have been tough for the last few years and I’m not denying it. We have a serious issue with health insurance, real wages are flat or down, jobs have moved overseas … it’s not great. But these silly chain mails … please don’t forward them. Actually, don’t forward any chain mails that have to do with economic solutions, like not buying gas at Exxon for a day or Nancy Pelosi wants a 100% tax on windfall stock profits (what does that even MEAN, for crying out loud?!) - just hit delete, OK?

Thank you so very, very much. Mailboxes the world over thank you.

As I went through some actual paper mail this morning, I came across yet another letter from Bally’s asking me to renew my membership. It looks like a magazine renewal thingie and the text makes it sound like I’ve never NOT had a Bally’s membership, even though I haven’t set foot in one of those places in years.

I actually did have a membership at Bally’s from way back. Remember Richard Simmons? Back in the 80’s, he opened a line of aerobic studios in strip malls and I would go a few times a week with a group of high school friends. At some point my Richard Simmons studio was bought by President’s Health Clubs, and they eventually turned into Bally’s. This chain of events was a great deal for me because I had a really cheap renewal rate and had gone from being a member of a small aerobics club to a full fledged health club with those classes and much, much more.

It made sense, I thought, to keep the membership because I’d never be able to match it again, which is a really STUPID way to look at expenses. I kept that silly membership for years, even when I lived in areas where there wasn’t a Bally’s within 100 miles of my home. Silly, silly, silly behavior.

Flash forward.

My husband and I currently have a gym membership and we’ve definitely gone often enough to get our money’s worth (about $16/month for the two of us), but gym memberships in general are a big numbers game. Gyms know that lots and lots of people sign up with great intentions but never follow through - that’s why most places don’t let you just go month to month. They want a steady stream of income that goes well beyond your initial burst of “no really, this time I MEAN it, I’m totally going every day.”

Now, think about this - there ARE people who go every day, and if you’re not one of them, not only are you not getting in shape, you’re almost kinda subsidizing that chick with the buns of steel or the guy with the killer biceps. Harumph!

So anyway, to the point of the post - there are lots of free exercises you can do that don’t involve trying to lie to yourself by saying, “but if I pay for it, I’ll surely use it - that’s my motivation.”

• Go to the library and see if they have any workout DVD’s - ours has a few hundred, I could do a different one every week and probably never get through them. Yoga, pilates, aerobics, strength … pregnant, seated (for those with mobility issues), workouts with your kids, the list goes on and on.
• I know you’ve heard this one - go for a walk! Take the kids, use it as a time to talk.
• If you have access to a great trail system or bike route lane, break up the walking with a bike ride every so often.
• Walk the steps in your home, and take the stairs at work.
• Yard work.
• Don’t walk when you can run, don’t stand when you can walk, don’t sit when you can stand, don’t lie down when you can sit.

You can also do many of the strength exercises that you do in the gym, but without all of the equipment, such as …

• Wall squats - if you have an exercise ball, try putting that behind your back and do some reps of up and down wall squats with one leg out at a 45 degree angle. Owie.
• Tricep dips on a sturdy chair or the side of a bathtub.
• Calf raises on a step or raised mantle - try them one leg at a time for a minute each if you really want to feel a bur.
• Push-ups and sit-ups - how old school!

I could go on for a while, but you get the idea. Anything you do that means you move more than you are now is good. Find a video you like that involve mostly floor exercises so you can do from memory while you watch TV. And smile as you think about all of the money you’re saving.

I know The Daily Show isn’t everyone’s cup of tea and frankly, this isn’t the funniest bit in recent memory (or even in that entire episode), but it did get me chuckling:

OK, first of all, and be honest here - when was the last time you bought a McDonald’s apple pie? I didn’t even know they still had ‘em.  And second, I just watched the clip again and right after the apple pie bit, Stewart goes into Paulson’s “no oversight” and recent “no, really, the banks are fine” … apparently I had forgotten that someone sent me this clip a couple of days ago, but it must have gotten stuck in my brain and popped back out when I was writing yesterday’s bailout post. I blame Alka Seltzer Cold Plus in yummy orange zest flavor.

But anyway, what else does $700 billion equal? I’m sure other sites have already done this but hey, what’s one more post in the big sea of the interweb …

About 11,000 Sloane Mansions (Brooklyn Row House blog)

13.46 Warren Buffetts (Wikipedia) and 12.5 Bill Gateses (Wikipedia) - in sexy poses!

155 Nimit-class aircraft carriers (Wikipedia)

7,000 Diamond Skulls (BoingBoing)

Five Apple 32gb iTouches for every man, woman and child in the United States, with a few left over (Apple)

6,422,018 Tesla 2009 Roadsters - with no frills added, but no emissions either (Tesla)

Two times the 2007 estimated Gross Domestic Product of the Axis of Evil - combined (CIA World Factbook)

5.4 BILLION GPS units with real time traffic so that no woman will ever have to ask a man to pull over for directions ever again (CNET - h/t Syedakram)

About $100 billion LESS than the combined 2007 revenue of Exxon-Mobil, Chevron and ConocoPhillips (Yahoo Finance)

A year and a half of interest on the US National Debt when the new debt ceiling is approved (Fools and Sages)

It’s a beautiful day in Colorado, typical “not a cloud in the sky” weather, hovering around 80 degrees, and I’m hopefully recovering from whatever the heck I’ve had for a few days. We just had some nice potato and corn chowder (fresh from our trip to the pick-your-own farm) as we watched the news, and lo and behold, the first story is about what else - The Bailout.

Specifically, it’s about the response from Congress to Bush’s initial plan, and I had to grin because the one issue I had a problem with concerning the Bush plan was addressed quite bluntly … but we’ll get to that in a moment, because first I think it’s important to explain that this bailout has to happen, it will happen, and you shouldn’t stress out too much over what the shrieking media bobbleheads are saying in the meantime.

Let’s review, quickly.

The Republicans say that this all goes back to Jimmy Carter and more recently to Bill Clinton. The 1977 Community Reinvestment Act had the worthy goal of trying to make home ownership more possible to lower income citizens - and let’s not be subtle here, to take some of the racism out of the lending market. Fannie Mae and Freddie Mac were “encouraged” to guarantee these loans. It is fair to say that loans to people who make less money who live in neighborhoods that have lower appreciation rates are riskier, so this definitely isn’t a completely vacant point.

The Democrats disagree, though, and say that’s a load of malarkey - this problem was caused by greed in the financial markets. Banks should be safe, investment firms should take on risk and never the twain should meet. It’s the re-combination of these two types of firms that were specifically separated after the Great Depression, taking mortgages and packaging and repackaging them into investments that in effect “create” money - that’s the problem, they say.

The truth is somewhere in the middle, of course, but it seems that most Americans are at least pretty much in agreement that a taxpayer funded bailout of CEO’s with multi-million dollar golden parachutes is pretty lame - why should we pay to prop these companies up, where’s our freakin’ bailout?

Guess what, peeps - this IS your bailout. Deal with it. The bottom line is that these companies can’t just be liquidated, can’t just cease to exist. Their reach is too far flung, too global - and too domestic. Without the “housing bubble” that has kept our economy floating along with a false sense of prosperity, you might not have had a job over the last several years. The reckoning was going to come sooner or later - perhaps it would have been better if it had come a several years ago, but who knows? It’s pointless to even debate now - we need resolution. A global depression will quite literally kill people and it’s stupid to spend a lot of time casting blame at the moment. Let’s get on with it.

So - $700 billion dollars, that’s what Bush and Paulson asked for. From CNN:

The plan calls for the government to buy from firms up to $700 billion in troubled assets — mainly mortgage-backed securities — whose values declined as the housing market imploded. The goal is to stabilize the companies and prompt them to lend again.

By the way, that $700 billion a bit of a random number, by the Treasury Department’s own admission, which doesn’t engender much confidence in the plan. From Forbes:

…  In fact, some of the most basic details, including the $700 billion figure Treasury would use to buy up bad debt, are fuzzy.

“It’s not based on any particular data point,” a Treasury spokeswoman told Forbes.com Tuesday. “We just wanted to choose a really large number.”

Oh good. Next time I have a job interview and they ask for a salary range, I’m gonna give that a shot - just make up a really huge number.

But anyway, the biggest problem with this bailout - in my ever humble opinion -  is the unprecedented explicit power it would give the Treasury Department - all hail King Paulson! The text of the bailout plan can be found in the New York Times, but are a few highlights:

The Secretary may, at any time, upon terms and conditions and at prices determined by the Secretary, sell, or enter into securities loans, repurchase transactions or other financial transactions in regard to, any mortgage-related asset purchased under this Act.

I understand the need for this, but who says he’ll do any better than the banks? I mean, just a couple of months ago he thought things were hunky dory:

“I think it’s going to be months that we’re working our way through this period, clearly months. Of course the list [of difficulties] is going to grow longer given the stresses we have in the marketplace, given the housing correction - but again, it’s a safe banking system, a sound banking system. Our regulators are on top of it. This is a very manageable situation.”

You go get ‘em, Hank.

More from the bailout text:

Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

Say what? Hang on … let me rub my eyes, certainly I didn’t read that correctly.

There is no oversight, no review, no Congressional interference - not a check or balance to be seen?

Oh HELL no.

And then there’s this:

Subsection (b) of section 3101 of title 31, United States Code, is amended by striking out the dollar limitation contained in such subsection and inserting in lieu thereof $11,315,000,000,000.

That huge number is the debt cap, you see, the amount of money we owe interest on to holders of US Treasury instruments.**

OK anyway, back on topic - Congress sat down today to ponder the Bush plan and came back with what sounds like a concerted “we don’t think so.” Turns out it’s fairly easy to get bipartisan support for something when the alternative is the Treasury Department telling Congress they can go take a hike. Not everyone’s on board because of course SOMEBODY needs a photo op as the lone wolf (”maverick,” anyone?) who doesn’t like it, but it sure looks like overall there is some common sense prevailing. From the Associated Press:

Under the plan agreed to by key lawmakers at the Capitol, the Treasury secretary would get $250 billion immediately and could have an additional $100 billion if he certified it was needed, congressional aides said. The last $350 billion could be blocked by a vote of Congress under the arrangement, designed to give lawmakers a stronger hand in controlling the unprecedented rescue.

I think that’s fair. Give the kids some money to play with, see how they do, and then decide if they deserve more. And here’s some really good news for those of us who think it’s about time the CEO’s got their comeuppance:

The Bush administration has made concessions almost daily to demands from the right and the left from its original three-page proposal, including agreeing to limit pay for executives of bailed-out financial institutions and give taxpayers an equity stake in rescued companies.

“Limit pay,” huh? Inmates in Colorado make $.60 per day - that sounds fair, doesn’t it?

Can’t wait to see what happens tomorrow …

**Just to give you a little idea of what that number means, let’s say that the average interest rate on that amount is … oh … 4.36% (that’s what the Treasury says as of August 2008).If we hit that debt ceiling, the monthly interest amount paid would be a little over $41 billion.

I also just took a peek at the last ten years of national debt (that’s as far back as it goes on their interactive site) - ten years ago on 9/30/1997, we were at $5,413,146,011,397.34.

As of 9/24/2008, we’re at $9,788,080,661,828.23. That’s quite a jump there, Mr. President and Mr. Treasury Secretary. I have to ask - why exactly do we think you’re any good at managing money?

So, I’ve been sick the last few days. The toddler had it last week and it looked like the rest of us were going to dodge the bullet but Sunday morning middle child and I woke up with sore throats.

By Monday, after a day in the fields and canning at home, my throat was much worse and I could feel it moving into my ears. Meanwhile, middle child sounded like Squeakers in Toy Story, so he stayed home from school. Going to bed at 8:00 and getting 10 hours of sleep seemed to help tremendously and I thought I’d escaped it … but no.

Tuesday was spent in a cold medicine haze, and by Tuesday night I felt the familiar symptoms of bronchitis, my particular disease that shows up when I’ve pushed too hard.

This morning I caved to the antibiotic gods and got a course of azithromycin for myself and the middle child. I am one of those people who really doesn’t like antibiotics and besides ACL surgery and giving birth, it’s probably been about three years since my last need for antibiotics.

I am a walking NyQuil commercial - well, a sitting NyQuil commercial, I haven’t really walked much today or done anything, really. But still - stuffy and runny nose at the same time (how is that POSSIBLE?!), burning itching eyes, headache like you wouldn’t believe. The only thing I don’t have is a fever, hallelujah.

Hopefully this will all pass by this weekend.

In the meantime, I got to thinking about frugality in terms of illness. Is it frugal to try to tough out an illness to the point that your productivity at work suffers, you’re too tired to cook so you order out, or you don’t get to spend nice time with your loved ones? I don’t think so. I think that’s just being cheap, and it doesn’t do you or anyone else any good.

If you have the coverage, take advantage of it when you get sick. Get in and get it taken care of and hey everybody, let’s stay healthy out there.

Just a little follow up on yesterday’s post about whether cards like this are insured, and if not, it hurts particularly vulnerable populations - the poor.

From CreditCards.com:

After Bank of America endured a flood of criticism for offering undocumented immigrants savings accounts and credit cards in 2007, nimbler, less-conspicuous players have stepped in to pick away some of the estimated $4 billion to $5 billion that immigrants pay in fees for financial services.

These players are offering products that look like credit cards and function like debit cards, but have no traditional bank account associated with them. Called reloadable prepaid general spending cards, these cards are branded with the Visa, MasterCard and Discover logos and are accepted wherever those network brands are processed.

Because they don’t require traditional bank accounts, many don’t require Social Security cards, the flash point that generated controversy for Bank of America.

I really can’t imagine that it will be too long before the government steps in and slaps banking regulations on products like this, but hey, what could possibly go wrong when you let non-bank entities act like banks?

Well here’s something I never thought of, but if you have a prepaid credit card and your issuer goes out of business, what happens to that balance?

And even more to the point - do you know if YOU have a prepaid credit card? I would have assumed that they were mostly those cards that people with bad credit get where you put up the money but then get to use the card as if it was a regular debit card, but I would have been wrong. I think those cards still fall under this category and scope of this petition and certainly hope they do because most of the people who have those cards are folks who seriously cannot afford to lose even a little bit, but it turns out that the “prepaid credit card” category is much broader than I expected.

From CreditCards.com:

Prepaid cards are becoming increasingly popular as a means to quickly transfer funds from one entity — such as an employer, the Social Security administration or the Federal Emergency Management Administration — to an individual. Other prepaid cards or stored value cards allow one person to purchase a gift card from a bank to give to another person. Tax refunds, loan proceeds, public assistance benefits, employee flexible spending account benefits and payroll proceeds are among the types of items that can be held on prepaid cards.

A coalition of consumers groups has asked for clarification from the FDIC as to how, if at all, these types of instruments are insured in the case of the issuing bank’s failure. Seems like a good thing to know.

“All types of prepaid cards are funded with the hard assets of American families, precisely the types of funds that the FDIC deposit insurance system was designed to protect,” according to the coalition. “Unless deposit insurance is clarified, individuals and families who have participated in a prepaid card program and have entrusted to a bank wages and other household funds … could experience exactly the type of loss or delay in access to funds that deposit insurance was designed to avoid.”

Damn skippy.

I did a little surfing and found out that currently, there are parameters for coverage but most prepaid cards are not included. You can read the entire petition text at the Consumers Union site, but this paragraph is unsettling:

Current law, as described in General Counsel Opinion Number 8, does not provide a rule that can be clearly understood by the public from looking at the face of the card. Instead, that opinion divides prepaid cards issued or sold by banks into four categories, depending on the bank’s accounting and other arrangements with third parties. Only one of those categories is insured to the cardholder. A second category is insured to the third party, which means that if the card program overall has balances above the $100,000 deposit insurance limit, not all of the funds will be insured. The other two categories of back-end card setup appear to lack deposit insurance.

On a related note, a different coalition (overlapping, many of the same groups are involved in both actions)  of consumers groups has also asked the Federal Trade Commission to put some protections in place for holders of retail gift cards - I’m SURE everyone out there has one or two of those laying around. If you have a gift card and the issuer goes out of business, you may be the proud owner of a worthless piece of plastic - it’s really up to the bankruptcy court. Also from CreditCard.com:

The petition asks that the FTC:

• Take part in bankruptcy proceedings and ask that the court require the bankrupt company to accept its own gift cards at full value while the retailer’s doors remain open.
• Create and keep a new FTC registry on bankrupt retailers’ gift card practices.
• Require stores to update the new FTC registry within one day of a bankruptcy filing.
• Force bankrupt companies to halt gift card sales no later than the date of the bankruptcy filing.
• Compel retailers to tell third-party vendors to stop selling any bankrupt retailers’ gift cards.
• Require third-party vendors to immediately stop selling bankrupt retailers’ gift cards.

Jiminy Crickets - yeah, I’d say if you’re in bankruptcy, STOP SELLING GIFT CARDS.

I’m glad these groups are at least asking the questions - no answers yet that I can find.

I don’t. It’s never really been my thing to go on rides that make me feel like I may die. I mean seriously, look at this monster, Kingda Ka, in New Jersey:

After the train has been locked and checked, it slowly advances out of the station to the launch area. The train goes through a switch track which allows 4 trains on two tracks to load simultaneously. Once the train is in position, the hydraulic launch mechanism rockets the train from 0 to 128 miles per hour (206 km/h) in 3.5 seconds, pulling about 1.67 g’s. At the end of the launch track, the train climbs the main tower, or top hat, twisting 90 degrees to the left before reaching a height of 456 feet (139.5 m).^] The train then descends 418 feet (127 m) straight down through a 270-degree spiral. Finally, the train climbs the second,137 foot hill, producing a moment of weightlessness before being smoothly brought to a stop by the magnetic brakes. The train then makes a U-turn and enters the station.

If I was in control of that Wikipedia entry, the next sentence would be, “where there should be a large, continuously irrigated trough for vomiting guests.”

Anyway, I don’t like real roller coasters and don’t much care for them in the stock market either. It was fun back in the day when I worked on a trading team and spent the day placing big option trades and day trading for big clients and generally not caring because I was a poor kid who didn’t have any money to invest myself, but now that I’m all grown up and mature and stuff, it’s not really that amusing.

One thing I did learn from those days, though, is that the stock market is made up of people. Duh, right? But really - remember that there is a mob mentality that comes into play, and moves like those of the last several days have more to do with emotion than anything else. Emotion, fear, and greed - have no doubt, there are people who are making a fortune off of this nuttiness.

Monday’s market was a flight to oil and gold - and the flight to oil was caused by a fear caused by rising oil prices because of a flight to oil! There was NO supply disruption, no OPEC statement, no hurricane heading for the Gulf, no new wars (that we know about, anyway), it was all about issues that really had nothing to do with oil. From Marketwatch:

On Monday, a steep drop in the U.S. dollar, assumptions that the government rescue plan will help improve the economy and boost oil demand as well as short-covering related to the expiration of the October crude contract on Nymex all combined to pull oil prices to their highest intraday level in two months.

…

It all just “underscores that energy is the only place to expect outsized profits these days and the money is flocking into that market,” he said.

…

“Clearly the money out there needs a place to go, and oil is now a
major safe haven,” said Michael Lynch, president of Strategic Energy
& Economic Research (SEER).

Yeah, and clearly we need to get away from an energy source that can cause this much ruckus, CONGRESS AND PRESIDENT AND PRESIDENTIAL CANDIDATES, and it’s not ethanol.

The article goes on to explain that there’s no logical reason in a bad economy for oil to go up and all but admit that it’s more about speculation than anything.

What does that mean for you? Well, it means the same thing it usually means when the market is behaving badly in the short term - try to look at the long term. Your concerns should be more about the long term market and where you see that going. I’m not quite ready to bail yet myself, although I see a lot of people in the news and blogosphere suggesting otherwise. I could be wrong - and so could they. Sit back and enjoy the ride if you can.

What it is:

A type of insurance product (contract) in which an insurance company or issuing financial institution pays a fixed dollar amount of money per period to the annuitant (owner).

What it means:

Because companies offering fixed annuities try to differentiate their own products, it is difficult to give a bottom line, absolute explanation of the product.

That being said, here it is in a nutshell: When you purchase a fixed annuity, you give your money to an insurance company, and they make a promise to pay you a certain (fixed) amount of money at regular intervals.

Annuities have two main phases – an accumulation phase and an annuitization phase.

The accumulation phase is the amount of time that the money is allowed to grow before payments begin and varies by product – there are even some annuities that have no accumulation period and begin payments immediately (called, oddly enough, “immediate annuities”).

The annuitization phase is the time period during which the owner will receive payments and varies by product, with the two main types being “term” and “life.”

Term annuities have payouts that span a specific amount of time. In other words, payments end on a specified date. If the owner dies before the term ends, the insurance company keeps the difference.If the owner outlives the annuity, there will need to be other investments or strategies in place to replace the annuity income.

Life annuities have payouts that span the lifetime of the owner and, in some cases, longer, with payments going to joint holders or beneficiaries.

Although every situation is different, annuities generally should not be purchased for short term investment goals or with funds that may be needed in the short term. Because the insurance companies expect to be able to invest the funds during the accumulation period, there are usually substantial “surrender” fees if the owner needs to withdraw part or all of the initial investment.

Fixed annuities are tax deferred during the accumulation phase, with taxes paid only when you begin taking distributions.