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October 31, 2008

Help with your personal finance questions, get it here

I don't have any wealth to redistribute.

But I do have information that you may find useful.

So here's my idea:

Send me your questions about personal finance. I’ll answer them here, on this blog.
Let’s talk about how you and your money can survive this meltdown.

If you’re trying to make a decision – continue investing in this crazy market or not. If you’re trying to figure out if you’re positioned correctly – what do you think of my asset allocation?

If you’re considering not doing something, like not paying into a college savings account. Or sending the bank the keys to your house because you no longer are paying the mortgage.
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Give me your tips, too. On what you’re doing to make the best of these tough times.

Put your question into the comment space below or, send it to me in a private email at hjbrackey@SunSentinel.com.

I’d like to use your name and the city you live in with each question.

If I can’t answer it, I’ll find someone who will.

So, let’s get going.

Ask me.

POSTED IN: Your Money (256)

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Riding out the Storm on the Nightly Business Report

We're all trying to make it through this economic crisis. The Nightly Business Report on PBS decided to ask its viewers for input. What are some of your best ideas for handling this storm? I discussed those ideas on NBR. Here's the video...

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October 29, 2008

Consumer confidence falls

Any business counting on a pickup in consumer spending should take note: An early peek at consumer confidence among Floridians in October shows that consumers’ outlook is dismal.

The decline was most apparent when pollsters from the University of Florida asked people whether this is a good time to buy an expensive or big-ticket item. That part of the index sank 14 points to an all-time low of 52.

"Florida consumers are becoming increasingly pessimistic about their ability to maintain financial stability," said Chris McCarty, director of UF’s Survey Research Center at the Bureau of Economic and Business, said in a statement.

According to preliminary results of surveys in October, Florida’s consumer confidence index plummeted eight points to 60 in October, almost matching its all-time record low.

When the full survey is completed and released in November, McCarty said he expect the consumer confidence reading to be at or below its record low of 59, which was recorded in June.

POSTED IN: Your Money (256)

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October 27, 2008

Hey Wayne, here's what Obama has proposed

Taxes are on H. Wayne Huizenga’s mind. But he’s jumping the gun.

Huizenga, who has sold 50 percent of the Miami Dolphins, seems to be concerned about when to sell another big chunk of the team's ownership because presidential candidate Sen. Barack Obama.plans to raise capital gains taxes.

"He wants to double the capital gains tax, or almost double it," Huizenga said. "I'd rather give it to charity than to him."

Blunt, to be sure. But not entirely correct or comprehensive in describing the candidate’s proposal.

- Obama's plan, as his camp has revealed it, is to raise capital gains taxes from a current maximum of 15 percent to 20 percent. That's a 33 percent gain, not double.

- The increase would only be on the rich, those in top income brackets, above $250,000 for families or $200,000 for individuals. This would not be an increase on ordinary investors.

- The President doesn't make tax law. Congress does. So, Obama, first, has to: Get Elected, get a tax bill that Congress agrees to and get it passed with this idea intact.

- The likelihood of that? It could happen. It's worth noting that the last time we had a major tax overhaul was when Bush was newly elected and still popular.

- When? Next year or sometime in the next four years, your guess is as good as mine.

- Wall Street is a major political donor and lobbying force. There will no doubt be a push back against this idea once the real debate begins. No president gets to propose changes in tax law without first slogging through plenty of input from those who will be taxed.

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October 24, 2008

Found money! Get yours!

I know you’re out there, you folks who didn’t get your economic stimulus payment or your income tax refund. You’ve been calling me and complaining about it.

Here's your chance to collect. The IRS may just have your check. Because the agency couldn’t deliver it.

There’s almost $12 million waiting to be claimed by taxpayers in Broward, Palm Beach and Miami-Dade counties,. And some of those checks may be large.

In Palm Beach, the average refund that wasn’t delivered is worth $2,431, just about double the $1,221 average undelivered refund in Broward. The average economic stimulus payment in South Florida is $555.

You should act now to get your refund, because by law, the check must be sent by Dec. 31.

Here’s how to check to see if you’re due money: Go to www.sunsentinel.com/rebate.

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October 23, 2008

Money fears: A run on the bank

There are massive fears out there. When Wachovia reported its quarterly earnings Wednesday, it revealed that core deposits had fallen by 8 percent during the quarter, sparked by a massive exit of commercial depositors after the failure of Washington Mutual.

Wachovia’s execs went on to say that this trend had turned around since the quarter ended.

How frightening. In a story I’m working on , too, I’m going to point out that money market mutual funds lost $200 billion in assets in just two recent weeks.

A run on funds? A run on the bank?

There are some huge responses, too, to these scary trends.

Fidelity Investments has decided that massive disclosure of information is the way to deal with investors’ fears.

Fidelity is now disclosing exactly what securities its money market mutual funds own to any customer who asks. The list is updated daily.

Think about the size of that disclosure. Fidelity has $440 billion in its money market funds.

As the largest mutual fund firm in the land, this gigantic asset management firm says it had to make a tradeoff, according to a spokeswoman: Protect its proprietary research that goes into selecting those securities or meet the concerns of its investors. It chose disclosure.

A free flow of information is the one way to dispel panic.

And so is knowledge. Consumers (or businesses) have insurance, up to $250,000 per depositor, at every one of the almost 8,500 banks and thrifts that the Federal Deposit Insurance Corporation oversees. We have the similar federal insurance at credit unions.

Stay below the limits and you’ll be fine.

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October 21, 2008

Free Financial Advice

And who, exactly, doesn’t need help with their finances these days?

Free advice from professionals will be available Saturday, Nov. 15 in Miami.

The Certified Financial Planner Board of Standards, the group that oversees the certified financial planner designation, has rounded up local and national experts for a day of seminars and private consultations.

No one will be selling anything.
The advice planners give is supposed to be unbiased.

Participants can pick a topic and sit down with a planner for a brief consultation. Or you can attend some of the sessions on managing debt, college funding, planning for retirement, estate planning, planning for special needs situations, getting beyond living from paycheck to paycheck and investment planning for small businesses.

Four of the seminars will be conducted in Spanish.

The event will be held at the Hyatt Regency at the Miami Convention Center, 400 S.E. 2nd Ave., Miami.

To register, go to www.CFP.net or call 800-487-1497


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POSTED IN: Financial Advisors (1)

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October 20, 2008

Our debts = Our future

Digging your way out of debt?

For some thoughts on what that’ll do to the big picture, I turn to Jeremy Grantham, the value stock investor and noted bear who has been warning about this financial meltdown for some time. . Grantham is chairman of institutional money management firm Grantham, Mayo Van Otterloo, which manages $120 billion.

From his third-quarter newsletter…

“We were all spending and, in the case of the U.S., importing as if we were much richer than is in fact the case. Particularly here in the U.S., increasing household debt temporarily masked some of the pain from little or no increase in real hourly wages for 20 to 30 years….

"Household debt since 1982 has added over 1 percent a year to consumer spending. Unfortunately, this net benefit does not go on forever.”

This will happen worldwide “and will be a permanently depressing feature of the next decade or so compared with the last decade. It is indeed the end of an era.”
POSTED IN: Debt (5)

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October 17, 2008

Bail out homeowners

I applaud Sheila Bair, chairman of the Federal Deposit Insurance Corp., for telling The Wall Street Journal that the government's bailout efforts aren't doing enough to help homeowners.

She's right.

I was thinking about the reasoning behind not helping homeowners, which seems to be the moral hazard argument. That if we help the bad borrowers, who knew they couldn't afford their homes, that we are making it penalty-free to engage in bad, risky, damaging behavior. Borrow money for whatever, and you won't even need a get out of jail free card.

There's another way to think of it. We are bailing out banks but not homeowners. So they get the Get of Jail Free cards? We don't seem to be worried about moral hazard among financial institutions for what reason exactly? Are we assuming they don't behave badly?

Here's my response on the homeowner front:

Not long ago, many thousands of honest workers in the mortgage industry had the expertise it takes to pick a good borrower from a bad one. They spent their days evaluating and verifying loan applications, making judgments on whether to approve them.

That stopped at some point. A few years ago, when I went to refinance my mortgage, the approval came from software on a bank officer's screen. No one had to be spoken to. Paperwork wasn't checked.

Compare that to the first time I went to get a mortgage.

That was a huge ordeal, because our income was not verifiable. My husband was an attorney. When he won a case, he had money. When he did not, we did not. We had up and down income.

I wrote a huge explanation statement for our mortgage broker. I had to explain, too, all the flaws on our credit report that came from being young, with kids, and in debt. We got a loan, but at a high rate of interest.

None of that was required later. Just poof on the screen, your credit score is good enough.

I'm glad it was. But I was prepared, with a briefcase full of papers, to make my case. No one asked.

The expertise to separate out borrowers, I'm going to guess, has not evaporated.

This body of knowledge seems to have just been shoved aside. In its place are some stupid lending models that relied on the pseudo-science of a number, a credit score, as the great predictor.

I know they're stupid. Look how they turned out.

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October 15, 2008

The Dow drops 8 percent today. Huh?

All I've got now is questions.

Is there something the stock market didn't know about the deteriorating state of the nation's economy?

Should traders be surprised to wake up to poor retail sales figures? To poor conditions throughout the economy, according to the Fed's quarterly Beige Book?

Why does it a surprise them that the economy will take a long while to recover?

Something's going on here. The traders know what we know, they've seen the statistics that define our economic lives. There's nothing new to the misery that continues.

So why should stocks fall every day on every number that simply describes what we already knew?

I don't think logic can ever, ever describe the market's thinking on a particular day. It's just inscrutable.

POSTED IN: Wall Street (26)

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October 13, 2008

Market roars ahead;New Record?

With little more than an hour of trading to go, the Dow is ahead more than 600 as I write this. And it seems there are only two of those 30 stocks that are down.

Now, I'm not a great Dow fan, if you think that's the one and only important market barometer.

But I'm applauding now, as the Dow sails down toward the wire and it's largest one-day point gain ever, if it closes above 500 up.

It seems to be supported by more than mere glee. There seems to be solid reasons - dropping international interest rates, banks shored up with real capital -- that could lead us to believe the market is turning. Even Alcoa is up, despite a debt downgrade.

Of course, it'll take a while to see if this is true, but for now, this is good.

POSTED IN: Wall Street (26)

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Relief Rally

Welcome to The Market’s Not Melting Down Party.

What a relief. Not that anyone can guess whether this is going to last, but at least it’s a 500-point-upside on the Dow morning. I’ll take that.

It comes after many investors decided they could not take it and moved to cash.

Cash still is the main thing that seems to be moving the markets.

The big upswing seems to be in reaction not to the bailout getting going, although the breadth and depth of detail on its operations revealed this morning was impressive.

It seems to be more to be a reaction to the Fed, in conjunction with central banks in Europe and England, announcing that banks will be able to borrow essentially any amount they wish.

No limits. Just come on in and you can always get your backstop at the Fed.

That, combined with Britain, German and France each announcing rescue packages and bank bailouts, convinced lenders to start lending to each other again. Libor, an international rate for lending, plummeted.

And did anybody notice that oil is around $81 a barrel?

That won’t bring the housing market back, but it could have a big impact on consumer spending.

POSTED IN: Wall Street (26)

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October 8, 2008

Thanks and an idea about helping people to stay in their homes

Thanks, everyone, for being part of the Your Money Helpline yesterday. I'll get back to you on Sunday in the newspaper and on this blog with more from your many smart questions and the financial planners answers.


Here's an idea I got from watching the debate last night. To resolve the foreclosure crisis...

What if:
The government, in partnership with private lenders or investor groups, buys the troubled mortgages.

The government, in partnership with the private sector, then issues qualified borrowers new mortgages at, say, 85 percent of the home's current value. The interest rate will be 2.5 percent for the first five years, then it adjusts to a rate that is equal to the 10-year Treasury rate plus up to one and a quarter percentage points.

Congress repeals the bailout bill.

The $700 billion is used to fund this program. The mechanism the Treasury is developing now is used to put this program in place.

The banks get rid of the bad debts. The troubled homeowners get help.

And beyond that point, deposits are insured and the banks can go about rebuilding their business. Some of them won't be able to. Some of them will.

What do you think? Would it work?

POSTED IN: Foreclosure Crisis (84)

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October 7, 2008

Live chat: Your Money Helpline

Good morning and welcome to a live chat with Matthew Saneholtz, of Tobias Financial Advisors, in Plantation.

He's here to answer any questions you might have about your pocketbook. And given the way the economy has been rocked lately, I'm sure you have a lot of them.

I'm Howard Goodman, blogs editor for the Sun Sentinel, and for the next three hours I'll be moderating this discussion for Harriet here on her blog.

This is all part of today's Sun Sentinel Helpline. We've assembled a group of experts from the
Financial Planning Associations of Palm Beach, Broward and Miami-Dade. They've generously agreed to share their knowledge at no charge. So ask now, and you're already saving money!

The discussion will unfold right here. So keep your eye on your screen and send us your questions.

Or if you'd rather talk to one of our planners in person, call 1-800-809-1315. They'll be here until 2:30 p.m.

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Your Money Helpline: We'll be having a live chat right here today

We'll be holding a live chat today - right here on this blog - from 11:30 a.m. to 2:30 p.m., answering your questions about your pocketbook in this insecure economy.

We're bringing in certified financial planners and other professional advisers. Ask a question. Get some help. It's free.

And this group, all members of the Financial Planning Associations of Palm Beach, Broward and Miami-Dade, they're the experts.

Write us a question in the comments section.. Or call in at 1-800-809-1315. Or e-mail your questions to helpline@SunSentinel.com.


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October 6, 2008

Need Help? Tomorrow, We Have It For You

How safe is a fixed annuity? Is my only option to hold on to Fannie Mae and Freddic Mac preferred stock? Will all my years of hard work be for nothing and my savings disappear?

These are all questions we've gotten by e-mail for the Your Money Helpline. Our lunchtime chat takes place tomorrow.

We're bringing in certified financial planners and other professional advisors. Give us a call. Ask a question. Get some help. It's free. And this group, all members of the Financial Planning Associations of Palm Beach, Broward and Miami-Dade, they're the experts.

From 11:30 a.m. to 2:30 p.m., you can call 1-800-809-1315. You can e-mail your questions to helpline@SunSentinel.com or use the form on our web site.

Come back here, to It's Your Money, tomorrow to see the live Q&A session.

We're going to get you answers. And look at the paper, too, because we'll be publishing some of your questions and their answers there.

Look forward to talking to you.

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October 3, 2008

Here's the Bailout Bill

Want to know what's in the Bailout Bill?

All 451 pages of it are finally available.

Have a look here.

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October 2, 2008

The Bailout Bill: What's in it for you?

You want your portion of the Bailout Bill? You got it.

This thing's getting so many extras it's like a loaded baked potato -- sour cream, chives, bacon, you name it. Coming right up.

For Floridians and residents of a handful of other states that don't have state income taxes, there is the extension for the state sales tax deduction. Residents of other states which have state income taxes get to write off their state tax bills. But we don't. A few years ago, Congress made it possible for taxpayers to choose - write off state sales taxes or income taxes. That gave Floridians an extra deduction.

Congress put a time limit on it, however. And the sales tax deduction has already been extended once. So this bill extends it a bit more. Through 2009, from what I hear.

That's nice. But it's also not new. Last week, the Senate approved the same thing.

The Bailout Bill is getting this and so much more. I spotted another tax break for Puerto Rican and Virgin Island rum producers. That's a help, I'm sure, but must we do this now, to get a bailout?

I worry about what all will end up in there.

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About the author
You've got the job of managing your money. No one in school taught you how. But you and I, we can teach each other, how to handle it, how to save for retirement, how to make money last, how to educate the kids, how to make a budget work. The conversations I have with my readers are fun. Money's important, but discussing it does not have to be boring.

Harriet Johnson Brackey Harriet Johnson Brackey, the personal finance columnist for the Sun Sentinel, is an award-winning business reporter. Her columns for 2008 were named "The Best in the Business," a national award chosen by her colleagues at the Society of American Business Editors and Writers.

Brackey has worked at Business Week magazine and at USA TODAY, where she was a founder and part of the original staff of the Money section at the country's first national newspaper. After nearly 11 years there - spent covering the 1980s bull market, the insider trading scandals, the 1987 crash - Brackey left Washington, D.C., and came to The Miami Herald. She spent the next decade writing a column about personal finance that chronicled the stock market's Internet boom and bust, as well as the popular Money Makeover features.

Brackey also has done commentaries for Marketplace Money, which airs on National Public Radio and The Nightly Business Report which is broadcast on more than 250 PBS television stations nationwide. She also has been a radio guest on WLRN’s Miami Herald News.
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