Yahoo Beats Google – in Personal Finance!

Hiring a Financial Planner: Angie’s List Has Suggestions

Just as do-it-yourself plumbing could lead to disastrous results, so too could do-it-yourself financial planning.

According to a recent poll of Angie’s List members, one in five said they have no financial plan in place. Of those who do have a fiscal plan, nearly half said they devised it on their own.

“Many people have a misconception that financial planning is only for the wealthy,” said Angie Hicks, founder of Angie’s List (www.angieslist.com), the nation’s leading provider of consumer ratings on service professionals, including financial planners. “You don’t have to have a trust fund to make smart money decisions but you might need some good advice. Hiring a qualified, objective financial planner can help you get the most out of every dollar – and it could even help you avoid mistakes that could cost you big.”
More Top 10 Tips for hiring a Financial Adviser >>

Cash for Clunkers Explained

The Consumer Assistance to Recycle and Save Program, more commonly known as the Cash For Clunkers Bill, has been one of the more popular financial incentives to come out of Washington in years.

The provisions in the bill allow for two different governmental rebates in the form of vouchers, either a $3,500 or $4,500 rebate based on the fuel economy of the vehicles involved in the deal. Vouchers can only be used to offset the purchase price or lease price of a new vehicle. The calculation that counts is the “combined” fuel economy of both your “trade in” and the new vehicle. Find the fuel economy figures at fueleconomy.gov

How to Quality for a Cash-Back Voucher >>

Mission: Regulation Innovation

On a mission to provide a new level of financial services safety, prevention and consumer protection, Treasury Secretary Timothy Geithner has presented a slew of changes to the current regulatory agencies, all with the goal of creating greater economic stability.

There are a few major changes that highlight the new administration’s goals.  The first would be to give new powers to the Federal Reserve to monitor the largest American companies deemed “too big to fail.”  This new capability on the part of the Fed is designed to prevent companies from having to be bailed out, or fail, both of which are dismal.  Under the new plan, the Federal Reserve will be responsible for regulating and supervising at-risk companies, which will likely include not only major financial institutions, but also holding companies and other large commercial institutions.

Read More About Innovation in Regulation

Credit Cards Come Under Gov’t Scrutiny

In a showdown between the federal government and credit card issuers, president Barack Obama meets with executives from 14 credit card issuers today, including American Express, Bank of America, Capital One Financial, Citigroup, Discover Financial Services, and JPMorgan Chase, to discuss concerns over practices such as raising interest rates on existing credit card balances.

A congressional panel was expected to approve a bill mid-week that would curb high credit card fees and penalties imposed by many banks that have benefited from the federal government’s financial bail-out program. The proposals are similar to sweeping rules adopted by US federal regulators in December. These rules take effect in July 2010, but the bill’s approval would accelerate their implementation, forcing the country’s banking industry to forgo billions of dollars of annual interest payments sooner. The pro-consumer bill is an important test of the political will of Democrats who are pushing for US financial regulation reform.

What’s your view on credit card policies? Should there be strict new disclosure standards for credit card lenders? Should pricing practices that expose borrowers to unforeseen costs be prohibited?

G20 and Beyond: “Signs of Green Shoots Raise Hopes”

At the site of the G20 Summit, the Financial Times of London reports that “Scattered signs of green shoots in the global economy are raising hopes that the recession could bottom out later this year, paving the way for economic recovery in 2010.”

However, the signs remain tentative. Economists warn that recessions rarely proceed in straight lines and false dawns are common before recovery finally takes hold.

Surveys of business sentiment round the world, particularly in the manufacturing sector, suggest conditions are less bad than they were a few months ago although still bad by historical standards.

In the US, economists point to surprisingly solid retail sales, which suggest consumer spending grew by more than 1 per cent in the first quarter. US home sales look to be bottoming, although house prices remain in rapid decline at least on some measures.
Learn more about when the recesssion will end

AIG Agrees to Break Itself Up

The Financial Times reports that AIG will announce a radical plan to break itself up after 90 years as a global insurance conglomerate by ceding control of its two largest divisions to the US government in exchange for a $30 billion-plus lifeline.

“We are breaking up AIG but we are trying to do it in a way that preserves value for the taxpayer, the employees and the businesses,” said a person close to the plan, which was revealed by the Financial Times last week.

People close to the situation said the authorities, which already own 80 per cent of AIG, would get a controlling stake of 70-75 per cent in American International Assurance (AIA) – AIG’s large Asian operations – and American Life Insurance Company (Alico), a global life insurance business. The structure is aimed at giving the government a better chance to recoup taxpayers’ money when the two businesses are sold or listed.

AIG will also securitize $10 to $15 billion of cash flow from its US life insurance operations and sell the bonds to the government, insiders said. In return, the government will cancel most or all of the $37 billion it is owed from AIG as part of a $60 billion credit line it extended in November. The authorities will also lower the interest rate on the rest of the loan, saving AIG $1billion a year. And the government will provide a $30 billion standby equity line – a promise to buy preferred shares in AIG – that it can tap if needed.

Financial Fitness Sought Through Bank “Stress Tests.”

The US Treasury has made it mandatory for banking institutions with more than $100 billion in assets to undergo “stress tests” which will be partly used to determine whether the banks need additional capital from a new program that could provide additional monetary reinforcement.

The stress test, a kind of financial fitness workout,  is based on a hypothetical scenario in which the economy shrinks 3.3 per cent this year and barely grows next, with unemployment averaging 8.9 per cent this year and 10.3 per cent in 2010.  The idea is to look at how banks would hold up under such a stressful scenario.

Troubled US banks will have six months to raise capital from either the market or the US Treasury if the government’s stress tests determine they need to bolster their balance sheets.

“US government ownership is not an objective” of the program,” Treasury said. “However, to the extent that significant government stake in a financial institution is an outcome of the program, our goal will be to keep the period of government ownership as temporary as possible.”  Treasury secretary Tim Geithner and Federal Reserve chairman Ben Bernanke both said the alternative of regulatory seizure and outright nationalisation of weak banks was not the best way forward.

A senior administration official said the hope was that by strengthening the big banks pre-emptively they would make this adverse scenario less likely.

Survey: More than a million Pennsylvanians lack health insurance

A survey released Thursday by the Pennsylvania Department of Insurance estimates the number of state residents without health insurance has topped 1 million — or about 8.2 of the state’s population.

The last health insurance survey conducted in 2004 found that 7.5 percent were uninsured.

Meanwhile, the U.S. Senate got ready to approve a bill today that provides health insurance to about 11 million low-income children, paving the way for President Obama to claim an early legislative victory and collect a quick down payment on his campaign pledge to guarantee care to every American child.

What’s your opinion on closing the gap for America’s uninsured?  Would you like to lower your own heath insurance premiums?
Learn more about the health insurance gap

Inauguration Sensation

When TIME magazine named Barack Obama the 2008 Person of the Year they did so for a host of reasons that cut across the fabric of American social and political life.   When the Financial Times also choose Obama as Person of the Year they recognized his practical, bipartisan approach and his selection of a top-notch cabinet as being vital signs for an economic recovery.

“Everything Mr Obama has done in public life so far suggests an instinctively bipartisan figure. Often compared with Franklin D. Roosevelt, whose “first-class temperament” enabled him to chalk up a historically productive first 100 days as president, almost nobody can recollect Mr Obama even raising his voice,” they cite.
[Read more]

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