Yesterday, the FBI arrested two mid-level Bear Stearns investment bankers for intentionally over-valuing mortgage-backed securities even while their real value was plummeting. One of the bankers, Ralph Cioffi, valued one of the funds as having lost 6.5% in April, even while colleagues were valuing the same fund as losing 18.97% in that single month.

Now, of course, from all the major investment banks and global banks with investment arms comes the chorus of promises to self-monitor. (I’ve seen this play before. Have you?) Credit Suisse, Merrill Lynch, Morgan Stanley, and Citigroup are all rushing into the spotlight to assure the press and the public that they are cracking down on this sort of thing. Hard.

Sure they are. NOW they are. But how long will that last?

I predict it will last exactly as long as lower-level bankers are still being arrested and the whole thing is still in front of the press. Excuse my cynicism, but bankers today are under unbelievable pressure to make their employers money whatever the cost to their own integrity and safety. I’m not saying this excuses Bear Stearns Ralph Cioffi and Matthew Tannin, but I am saying that it is disingenuous in the extreme for corporate management to be out in front of cameras behaving like it is all very shocking and they certainly will not be tolerating any more of this, no sir. Juz terribul. Oh my!

In the past year alone several prominent CEOs retired early with huge golden parachutes after losing the financial institutions that employed them billions of dollars. They are not in jail. They have more money than God, and this as a reward for destroying the corporations that employed them through raw greed, financial mismanagement, bad investment decisions, and more than anything else, slippery underwriting practices and sleazy sub-prime mortgage deals. I guess if you are a CEO it’s OK. If you are a midlevel banker at an investment firm, you’re goin’ down, buddy!

It’s pretty hard to feel sorry for investment bankers. (Ever see the film ‘Boiler Room?’) On a personal ‘yuck’ chart they rank somewhere between insurance and car salespersons and attorneys; they move a little higher or lower depending on the firm. Still, the whole spectacle yesterday reminded me somewhat of the Abu Gharib scandal, in which a few low-level soldiers were hauled in front of cameras, charged, upbraided, and publicly shamed for actions that clearly originated in the offices of Donald Rumsfeld and Dick Cheney.

The soldiers deserved the court marshals. Where are the trials for Cheney and Rumsfeld?

Ever since Reagan, we have been singing the praises of deregulation and laissez-faire capitalism, and this is what it has brought us to. Now, all the weasels are scrambling for nice deep holes to hide in before any camera lights are shined in their direction.

When will we ask the bigger questions?

When will we say, you know what? This corporate model is not working very well. The financial industry is in a mess that verges on total collapse. The entire US has been gravely affected by it, and month after month it just gets worse and worse. When will we ask, How can we regulate the financial industry so this doesn’t happen for another 100 years or so?

Because it will happen again, you know it will. It’s the nature of the beast. The safeguards put in place after the Great Depression to prevent banks from collapsing, and the regulations put in place at that time are, by almost universal consensus, no longer working. That is because investment bankers have found ways around them, and retail banks and mortgage lenders, hungry for bigger bonuses and the chance to impress stockholders, have snapped up every chance to circumvent or slide under the law, just to make that extra buck. That’s what capitalism is all about.

The extra bucks have all floated to the top (what ever happened to the ‘trickle down theory?) and now the rest of us can’t afford to get to work. The entire economy is severely out of whack, so severely out of whack that no one even understands it anymore. Why not? Because it has never been this bad.

People who work for a living, or are laid off for a living, know this. Over 90% of us live on less than 50% of the money made in the US, and now that money is not being made. Fewer and Fewer people are working at all. Arresting a couple of suits and parading them around on TV is not going to fix any of that.

US prisons are already holding more people than any other country in the free world. Is there room in them for all the bankers who are breaking the law, or have done so during the housing bubble and the mess that followed? Probably not, but the image of shoving a bunch of bankers into shared cells with murderers, drug dealers, and child molesters is a compelling (and I confess, oddly appealing) one. Would they get tattoos? Would they become somebody’s bitch? Would they take up smoking?

Are there any Starbucks in prisons?

At the very least their presence would help even out the racial inequality in prisons across our nation. But until somebody addresses the underlying problem, it’s really just a big show.

Don’t hold your breath waiting for the big guys to go down.

They’re still in office until after November.

If you just graduated from college, chances are good that the biggest financial issue on your mind is your student loan debt. How are you going to repay it? Can you repay it? Whatever your answer to this question, do yourself a favor and check out the resources at the American Education Services website, You Can Deal With It.

The truth is, you really can deal with it, even in this tough economy, even if you feel totally overwhelmed by the cost of your education and can’t see a single professional job opening on your personal horizon. Maybe you can’t even get into your local MacDonald’s. That’s OK.

You can deal with it.

Most Americans are dealing with massive debt right now. In fact, America the country is dealing with massive debt right now. So if you too are now dealing with massive debt, welcome to adulthood. Pat yourself on the back for at least finishing with debt and a degree. That is no small accomplishment, especially now, and even if nothing looks too promising at the moment that degree will serve you well in the long run.

You may be tempted to reward your persistence and accomplishment with some kind of insanely self-indulgent purchase, like a new car, or a new wardrobe, or a boat, or any number of other things you don’t have money to buy. Don’t do it.

Instead, boring as this may sound, set aside half an hour or so and write out, in detail, where you picture yourself in five years. Write out everything about yourself in the year 2013: where you live, who you live with (if anyone), what kind of work you do, what your daily routine is like, what you look like, how much money you make and how much money you have; every single detail that you can think up, include that detail in your description.

Once you’ve finished this opus, sit quietly for a few minutes and really try to imagine yourself in the situation you just wrote about, as the person you want to be. Imagine it all as vividly as you can. Form a very clear image in your mind. If you want to go cut out some photos and make collage about it, do that too. The more vivid and real you make it the better. Fold up your description and put it in a box or a dresser drawer, then pin up the collage in a place where you can see it every day. Don’t worry about how you are going to achieve any of this, just get it as vividly in your mind as possible.

Why am I suggesting you do this Mickey Mouse exercise when you are staring at a six figure student loan mess that would crush even Bill Gates? Because knowing what you want is 99% of having it. Ask 20 random people who they really are and what they really want, and maybe two of them will be able to answer you. It is more than possible to stumble into an acceptable life without doing all of this dreaming, but why settle for an acceptable life? Why not dream of the best life, the ideal life, your life.

Listen, you will pay your student loan debts. You will learn to balance a check book. If you go to the AES website and learn about credit you will learn how to handle credit. So as far as finances at graduation go, yes, you have some finances, I know this, and I also know you can take care of them. You’re not ten anymore. You probably won’t have to take a paper route or babysit. Just do it, it will be all right.

What you may not think of doing though is creating your future. College graduation feels like and ending. You’ve been with the same people at the same insulated place for at least four or five years and now it’s all over. It’s the end. That’s how it feels. Now what? ‘Now what?’ is the best financial question your can ask yourself right now. This is my life starting, my adult life. What do I want from it?

You are the only one who can answer this question, and your answer will impact your longterm financial health more than any financial planning website or any bit of banking advice you could possibly be given. Don’t look around and think, what jobs are available? Ask yourself, what work do I want to do?
Once you know the answer to the second question, you are closer to doing that work than you realize.

In my opinion, (and I know I will get push back on this) it is better to take a half-time job to pay your loan debt and do volunteer work that moves you toward your goal than it is to take a full-time job you don’t even want and try to learn to love it. The world is changing very fast, and what is needed more than anything else are people with new ideas, drive and imagination. if working a in a cubicle with a headset permanently attached to your temples isn’t your idea of a dream life, don’t live that life. Don’t even go there. You are still young. You will have plenty of time to compromise your hopes and dreams later on if you decide you must.

Today, you have the whole world in front of you, student loan debt or not. Before you sweat the small stuff, keep that fact in the front of your mind and steer towards the life you want, not the life you think you are limited to living, calculator in hand.

And oh yeah, one more thing:

Congratulations!

This post is a part of the MoneyBlogNetwork Group Writing Project focusing on financial advice for new graduates.

Monday is recession day, Tuesday is mortgage day, and now, Wednesdays at Personal Finance Analyst are all about insurance! Did I hear a big ‘Yuck!’ out there? Shame! Insurance can be your friend if you understand it, and it doesn’t really take that much effort to understand it.

Take your homeowners policy for example. You probably think you are being gouged for no good reason, just because you own a home and therefore presumably have enough money to pay insurance premiums. The truth is, homeowners insurance is one of the best insurance deals going, and not only that, it is such a good deal that many property and casualty companies offer it as a ‘loss leader’ just to get your life and auto policy business.

The reason homeowners insurance is a good deal for you is the same reason it’s a bad deal for your insurance company. The premiums are low compared to the potential payout. For instance, I own a small house in Indiana that I pay about $400 a year to insure. Over the life of a 30 year mortgage that’s around $12,000 in premiums. But if that house were destroyed completely by a tornado, the insurance company would be obligated to pay out about $110,000 to rebuild the house itself, $82,500 for my property inside the house, $11,000 to rebuild the garage, and as much money as it took to keep me in a hotel or apartment until I could get back inside the house, for a total claim payout of almost a quarter of a million dollars. A quarter of a million dollars is not a bad return on a $12,000 cash investment.

In recent years, the pace of natural disasters has stepped up dramatically (particularly wildfires in the west and hurricanes along the eastern and southern coasts), and insurance companies have been looking for ways to protect themselves from undue exposure. That usually translates into much higher premiums, especially in those particular parts of the country. You can control your insurance costs, and you should, but you don’t want to do it in ways that are foolish or overly risky for you.

Here are some basic suggestions for keeping your coverage high and your premiums low:

1) Don’t move to a high risk area. It’s great to have a house facing the ocean in coastal Florida. Don’t expect to have that though if you aren’t filthy rich and you can’t bear the prospect of rebuilding that house every five or ten years. If you love the high desert in California or the southern Texas coastline, fine. But don’t expect your insurance company to treat the risk of writing a policy for you as though you lived in a field in Ohio. You wouldn’t run a business that way, and neither would they.

2) Carry a high deductible. The quickest and best way to shave dollars off of your homeowners premium is to carry the highest deductible you can afford. In some parts of the US, this dollar amount will be capped by state law. If you live in a low risk area and are carrying a $50 deductible on your homeowners policy, call your agent right this minute and increase that deductible to $1000. The days of filing small claims are long gone. You will not be using this policy unless your home burns to the ground, and you will be able to scrape up $1000 somehow if that happens, even if you have to charge it. Your savings from increasing your deductible alone can run into the hundreds of dollars each year.

3) Don’t file small claims. Somebody stole your lawnmower, a kid broke your front window with a baseball, six shingles blew off your roof during a recent thunderstorm; Well, take care of it yourself, leave your insurance company out of it. File even a single small claim and you may see your premiums go up by as much as 30% the following year. In other words, you get your $200 lawnmower replaced by your insurance company (minus that $50 deductible I just told you to increase–aren’t you listening?) and the very next year your annual premium goes from $573 to $880. Think of your homeowners policy as catastrophe insurance, because basically that is what it is. Use it for anything more than that and it will cost you.

4) Do check the replacement value of your home every year or two. Building costs are going up all the time, and so is the cost of building materials. Increasing your coverage from $220,000 to $275,000 may cost you an extra $50 each year, but isn’t that better than having to cough up $55,000 after a disaster because your home was under-insured? Call your agent if you add on to your home, make significant improvements, or if you just haven’t reviewed the policy in over five years.

5) Don’t forget liability coverage. Your home policy automatically comes with coverage to protect you from lawsuits instigated by people who are injured on your property. This is your liability coverage. It pays for their injuries and your legal costs and lots of other things you wouldn’t expect like court costs and so forth. Most policies come with $100,000 of liability coverage automatically. It is very cheap to buy homeowners liability coverage. Increasing that figure to $500,000 or even $1 million is inexpensive and worth every cent, especially if your home is new. Sadly, the world is full of people looking for a sprinkler to trip over in a gated community, and you don’t want that sprinkler to be yours, at least not without proper liability coverage.

6) Read your policy! Look, I know you won’t, and you know I know you won’t, but on the off chance your home policy is lying on your kitchen table as you read this, stop for a moment and at least look it over. If you only have the ‘declaration page’ listing what coverages you have and how much each of them costs you, call your insurance company and ask them to mail you a copy of the long version that lays out all the conditions and exclusions and extras and so on and so forth. Forewarned is forearmed.

7) Shop around, but know your company. Back in the day, lots of shady little insurance companies went around selling policies that covered homes for only a fraction of what they were actually worth. Although this is illegal now, don’t switch to Acme Home Insurance to save $50 a year without talking to the big guys first. What you want in an insurance company isn’t just low rates, it’s assurance that the company can and will pay out in the event of a claim. Don’t lose sight of this and save money by going with a dinky carrier with a reputation for denying everything or making itself inaccessible.

Anyway, now that I’ve assured you that home policies are easy to understand, and I’ve given you some good advice on how to control your premium costs, I realize that homeowner policies are actually not that easy to understand. So OK, I lied a little. What did you expect from an insurance agent? I just didn’t want to scare you. Things are scary enough in the country right now, am I right?

I promise to redeem myself though next week, by going over some of the potentially relevant small print. Yes, there’s lots of it, I’m sorry, it’s true. Some of it can be bad, some of it is actually really good.

Until then, it’s summer. Go outside, cook on the grill. Try to relax. Stay away from your windows with that softball, and make sure you own a kitchen fire extinguisher.

See you next Wednesday.

Starting today, Personal Finance Analyst is kicking off a regular weekly feature: Mortgage Tuesdays.

Every Tuesday we’ll be featuring topics related to mortgages and mortgage lenders; in short, everything you ever wanted to know and then some about borrowing money to purchase property.

In case you’ve been living in a cave since last summer and have just now emerged with the thought of possibly buying a house (to replace that cave), you might not know that the entire US is staggering under the weight of a burst housing bubble, made much, much worse by a wave of subprime mortgage defaults and foreclosures. You may be asking yourself,

“What exactly is ’sub-prime’ lending anyway, and how can I avoid getting tangled up in it?”

Sub-prime simply refers to any kind of loan made to a borrower the lender considers risky or less than ideal. Some people fall into this category through no real fault of their own: recently divorced persons, people who have been at their jobs less than two years, people who work for themselves, and people with nothing negative on their credit records but nothing positive either.

Other prospective borrowers fall into the ’sub-prime’ category because of bad credit, a past bankruptcy or foreclosure, or a high ‘debt-to-income’ ratio. When a mortgage lender decides to loan money to a buyer who falls into one of these categories, and that lender builds in features such as higher interest rates to compensate for the increased risk of lending to that person, that loan is called a sub-prime mortgage.

“What is a debt-to-income ratio?” you may well ask.

Your debt-to-income ratio consists of your monthly regular expenses (such as rent or mortgage payments, credit card payments, car payments, taxes and insurances, etc.) divided by your gross monthly income. Say you pay $735 a month in rent, you have a car payment of $350, and your minimum payment on your VISA card is $50. You make $2500 a month gross. You divide your total monthly debt of $1135 by your gross monthly income of $2500 for a debt-to-income ration of 45.4%

When mortgage lenders look at your credit report, not only are they looking for on-time payments and no past defaults or bankruptcies, they are looking for a debt-to-income ratio of no more 36%, with no more than 28% of that debt tied up in housing or rent expenses. So, in our example above, that person with the $350 car payment and the $735 rent payment would probably not qualify for the best rates on a conventional mortgage and would be instead looking at sub-prime rates.

Should our made-up person (let’s call him Bob) consider a sub-prime mortgage, or should he pay off his car and his credit cards so he can get a conventional mortgage at a good rate?

That’s not an easy question to answer, but there are some things Bob should do before he makes a decision or signs any papers. Here are some general questions Bob should ask himself:

1) Is this a reputable lender or a small lender that a broker found for me? If you’ve never heard of the lender, there’s a good chance your loan will be immediately sold to some other financial institution. This alone should make our potential homeowner Bob think twice. Some large reputable lenders do write sub-prime mortgages and keep them on their own books, but most don’t. Wells Fargo Home Mortgage is one major lender that does write and service their own sub-prime mortgages. If you think you might want to take out a sub-prime mortgage, look for a large, reputable lender that underwrites and services its own loans first and foremost.

2) What are the terms of the mortgage? Before Bob even asks about the interest rates, he MUST read the contract thoroughly, ask questions, even hire an attorney if he has to, in order to make sure he understands the terms. Many people who got into trouble with sub-prime mortgages agreed to loans that offered very low initial rates but had regular rate hikes written right into the contract. Some sub-prime mortgages even offered zero interest for five years followed by a variable rate structured in such a way that you could, in theory, end up owing more on your home the longer you paid on it. When that happens, it’s called negative amortization, meaning you never touch the principal on the loan and simply owe the lender more and more interest every year. Ideally, Bob should look for a fixed rate loan (the interest rate stays the same over the life of the loan), or a variable rate loan with a cap on both how much the interest can go up each year and over the life of the loan.

3) Can I afford the worst case scenario? Many people go into sub-prime mortgages counting on things getting better and better for them, because they really, really want a house. This is a very bad way to approach a sub-prime option. First of all, you wouldn’t be considering a sub-prime loan if things in your life hadn’t already gone less than well, so how logical is it to assume this will magically change? Look at what you will pay each month if your life goes great, and what you will pay if every negative consequence actually comes to pass. Are you still in your home and better off in both cases? Bob should not accept an 8% variable rate mortgage with a 10% cap on the rate over the life of the loan if he can’t afford the payment should the rate hit the maximum 18%. Period.

4) Am I feeling pressured or confused by the broker or lender? Bob should politely excuse himself and leave. Don’t answer when the lender calls back 400 times either. Find another lender. Talk to other people who had good experiences and find someone who treats you with respect and patience. Never, never let a broker’s need to close a sale cause you to commit to something you don’t fully understand or want. If you are feeling uncomfortable, that alone is a sign that you probably have a good reason to be nervous. Thank the person, get out as fast as you can.

If these questions have you feeling cautious just reading them, good!

You should be cautious. Very cautious. A home is probably the single biggest purchase you will ever make. If now is not a good time, pay down your debt, save your money, wait it out. It’s harder to get a sub-prime mortgage now than it was at the height of the housing bubble, but predatory lenders are still out there doing their thing. Don’t let yourself be victimized by them.

Here’s an idea: Stay tuned for the rest of the PFA mortgage series every Tuesday!

Stick around, and you’ll be armed to the teeth (with good information) that will enable you to get the best deal possible and truly live happily ever after.

That’s what it’s all about after all. Am I right?

On Sunday while everyone else was having a great time eating barbeque, I spent the most of the day following my DH around in Home Depot. My DH… *sigh* I adore him. He’s a great husband and father, but a great handy man… he is not.

My DH watches home improvement shows and gets these crazy ideas that he too is a master carpenter, plumber and electrician.

A few years ago, we did a bit of remodeling in the living room. We had these horrible wood panels on the wall that I wanted removed. I wanted to call a professional to do it. But my DH said no. Because he’d watched an episode of Bob Vila’s Home Again here and there, he knew everything he needed to know about removing the panels and installing the sheet rock.

I had this nagging feeling that I should stand my ground and call a pro like I wanted to do. But I talked myself out of it figuring I’d let him have his fun. He walked around feeling proud with a tool belt around his waist and a chainsaw in his hand.

I was kinda curious as to why he needed a chainsaw to remove wall panels. But I kept my mouth shut. He knows what he’s doing… after all, he’d watch Bob Vila do the same thing, right??

I do not know how my DH managed to splice the support beam in the wall, but he did!! I do not think Bob Vila told him to do that! Long story short… a huge mess and lots of money to repair… oh and Bob Vila was officially banned from our TV.

I hear that CBS cancelled Bob Vila’s show last year. Serves him right for going around making DH’s like mine think they know anything about home improvement.

But anyway since that day, my DH has been prohibited from engaging in any home improvement projects.

That was about 7 years ago. Let me move ya’ll forward to today… well, actually to Sunday.

My DH sat me down to talk. He said that it has been a long time since he’d wore his tool belt and he needed to put it on once again so he can feel like a helpful, handy husband. And for his Father’s Day gift he wanted me to allow him to take on a home improvement project.

That is when I had to remind him about “the little chainsaw to the support beam” thing. I told him I understood his need to wear a tool belt, but he needed to take it slow… real doggone slow.

I compromised. I told him go ahead. Start a new project, but start a new project that required little or no tools and NO CHAINSAW! He asked what kind of project requires no tools. I had to think for awhile but I finally came up with something he could do… that hopefully would require only a screw driver and maybe a set of pliers and a hammer at the most.

I told him that he could redo the patio. By redo, I mean replace the furniture and upgrade the grill. Nothing too fancy… no need to replace the overhead covering or install new outdoor ceiling fans and lighting. All you need is just enough to get your jollies… then step away from the patio Mr. Handyman.

So this is how I ended up at Home Depot on Father’s Day. All in all, I really enjoyed hanging out at the Home Depot with my DH. The new furniture and grill looks nice. And the best part of it all was that we were able to get a fantastic deal.

Home Depot currently has 20% off select patio furniture… and if you buy it online, you won’t pay shipping.

We could have applied for a Home Depot credit card and made no payments and accrued no interest for 6 months. But instead we used our Citibank Home Depot Master Card and finally earned the enough points for a $60 gift card.

There was even a rebate offered on the new grill we bought. You can check here to see other Home Depot rebate offers.

And to top it off, we were able to use the 10% off coupon that I signed up for here.

Home Depot always has great sales. If you are ever looking for a good deal at Home Depot, be sure to check out these forums for the latest bargains:

Ultimate Coupons

Coupon Chief

Mr. Rebates

Flamingo World

Daily Deals

Key Code

You’ve probably heard about the recent rice scare and about Sam’s Club and Costco putting a limit on 100 pound bags to keep people from buying them completely out of rice. That was over a month ago, and while it provoked lots of great parody, now I am starting to see serious articles about the recession that suggest, um, ‘hoarding’ as one strategy.

No less an organization than Newsweek has jumped on the hoarding bandwagon, for the simple reason that it actually happens to make sense. It’s ‘icky’, but sensible. Whatever it costs today, it’s going to cost more tomorrow. End of story.

It isn’t necessary however to go all insane with it. You don’t have to turn into one of those squirrelish people who saves every newspaper delivered since 1931 until the stacks reach the ceiling and only little narrow paths remain to take you from room to room. Seriously, don’t do that.

Instead of that, here instead are a few positive ways to hoard, (if in fact you can use those two words sanely in the same sentence):

1) Buy Paper Products in Bulk.

This is a good idea even when inflation is nil, for the simple reason that you can usually save a good bit of money by doing this, and also because running out of toilet paper is one of the least fun occurrences daily life has to offer. Paper towels, tissues, toilet paper, and office supplies can be purchased in large quantities both to save money and to make sure they are always on hand.

2) Hoard Only Items You Will Actually Use.

You wouldn’t think it necessary to write this one out, but the truth is, many people just can’t resist a good buy. If you happen to be at Big Lots just as a shipment of ramen noodles with jalepeno and raisins comes in and the only teensy flaw is that the writing on them is in Turkish, resist the impulse to buy up an entire case of them just because it averages out to only 10 cents a serving. You will be looking at that case of ramen noodles when you are 90, or worse, you will foist it upon poor people during next Thanksgiving’s food drive. What did those poor people ever do to you?

3) Keep Some Powdered Milk and Eggs Onhand.

The reason for this is that during power outages and storms the real thing can be hard to find, plus, if the price of these perishable necessities gets out of hand, you can always use the powdered variety for cooking while you look for a cheaper source.

4) Stock Up On Staples, but Do Your Homework.

Rice, pasta, flour, cornmeal, oats, cereal, and sugar don’t spoil, and you can keep them for years if you freeze them. Put them in heavy duty plastic bags or airtight containers and keep as much on hand as you can. With the floods in the midwest already forecast to hurt this year’s corn and wheat crop, prices are not likely to come down anytime soon. Before you rush off to Costco though, make sure you’ve compared their bulk prices to grocery store prices by calculating the cost per pound. Sometimes wholesale stores can trick you with off sizes that make you think you’re getting a bargain when actually that giant package works out to more per pound than if you’d just purchase 5 generic five pound bags of the same thing at the supermarket.

5) Consider Freezing and Canning Your Own Produce.

If you live near orchards, or near any kind of food grower, consider buying in bulk while items are in season and getting together as a family to process and share your fruits and vegetables. With the cost of diesel climbing by the day, the cost of supermarket fruits and veggies is bound to reflect the cost of transport. Already, the cost of peppers is insane, even in season. Think about what you and your family actually like to eat, and buy bushels of it direct from the grower, then can or freeze it for later use.

6) Buy Local Meat in Bulk.

Again, not only can this save you money, you have the advantage of knowing exactly what you are getting. So much of the meat in the supermarket these days is processed and made to look artificially fresh for shipping purposes. It can be full of hormones and other unnecessary, potentially dangerous poisons. So many good reasons exist for finding a good source locally, it would take an entire article to list them all. For the sake of your hoarding strategy, consider the cost savings alone.

You don’t have to feel guilty about providing for your family. Buying 50 100 pound bags of rice is excessive. But stocking up on items that are sure to spike in the coming months is just good sense.

Trust me, you won’t be the only one doing it.

Rodney Hixon is an ordinary guy trying to make an extra buck or two on the side, and why not? Living in the state of Michigan has never been more financially challenging, so when Rodney discovered that he could buy up slum properties In Kalamazoo with ’stated income’ mortgages that didn’t require him to show any proof of his assets or salary, he jumped at the chance.

Hixon, currently describes himself as ‘a former real estate agent’ who makes ‘a couple thousand dollars a year as the coach of Mattawan High School’s girl’s lacrosse team’. He was the ideal candidate for the creative ’stated income mortgage’ that became so very popular during the housing boom that preceded the sub-prime bust. As a former real estate agent he knew the area, knew the mortgage companies and their policies, knew the ropes, knew he could do it.

So, when a person wants to invest in real estate, the idea basically is to buy low, sell high, right?

Wrong!

In the past 15 months 38 of Rodney’s investment properties went into foreclosure, and it came to the attention of some Kalamazoo city officials that he had overpaid for each of the properties. In fact, Hixon had overpaid alot. On his 38 most recently foreclosed properties, Hixon paid between 2% and 375% over and above the city’s tax-assessed value, for an average purchase price on Hixon’s investment properties of 68% above SEV. Profits (for the seller) on Hixon’s 38 foreclosed properties (all of them in slum neighborhoods) topped out at $2.7 million.

On one property alone, Hixon saw a 1,837% appreciation in the short three years before the home went into foreclosure. That home, at 722 Egleston Avenue in Kalamazoo, sits in one of the cities most distressed areas and sold for $8,000 in December of 2002. Hixon purchased it in October of 2005 for $155,000. It went into foreclosure in June of 2007.

Hixon’s investment properties are all listed as rentals but few were ever rented, not even briefly. Most sat vacant from the date of sale right up to the date of foreclosure.

The FBI is currently investigating Hixon for mortgage fraud. They suspect that he might have been involved in a scam that goes like this:

A real estate agent, an appraiser, and a ’shill’ buyer purchase a slum property at many times its city-assessed tax value and take out a 100% mortgage on ‘creative’ terms. The shill buyer and the seller then divide the substantial profits amongst themselves, defaulting on the mortgage almost immediately, leaving the mortgage company or lender holding a bad debt on a property worth a fraction of its selling price.

The FBI would probably already have charged Hixon with something if it weren’t so horribly backlogged with similar cases occurring all across the United States. According to figures printed in the Kalamazoo Gazette, in 2002, the FBI investigated 5,623 cases of mortgage fraud that resulted in $293 million worth of losses for lenders. In 2006, the FBI was busy investigating 35,617 cases of mortgage fraud with losses totaling over $946 million. Figures currently available for mortgage fraud in 2007 are topping out at well over $1 billion, and by all accounts, at this point the FBI is not able to keep up with the number of claims in 2008.

In fact, as the chart above shows, the FBI is having no small amount of trouble just adjusting its tables and figures on this topic fast enough. You can look at other tables on mortgage fraud cases by year along with pending cases by year at the FBI’s own website, but that report hasn’t been updated since 2005.

Reading about Hixon, who tops the current list in Kalamazoo of foreclosed property owners, I couldn’t help but wonder what the real scope of this problem is, how deep it goes, and how much of it is institutional versus individual. Lenders often buy back their own foreclosed properties because it makes their books look a little bit better. (That is possible through some magical accounting process that I confess I do not entirely understand… sorry! If you do understand it, feel free to enlighten me here by posting why that works for them!) My question is this:

What (besides the law) would prevent lenders from doing the same thing Hixon is doing so successfully right in my home town? They would have to operate through a shill or third party and rip off some other lender of course, but how can we know that isn’t exactly what is happening as we speak? Kind of a very, very high stakes version of ‘hot potato’ and the one left holding the potato goes under. What a game! It makes Monopoly look positively warm and fuzzy!

Just ask Anthony Mozillo of Countrywide about those kinds of games. Countrywide is such a mess right now it doesn’t even have records that show how deep the mess is, and the records it does have, nobody can quite understand. Fewer and fewer employees remain to even look for those records, and I have no doubt that at some point everyone is going to just throw up their hands and exclaim, “Oh, nevermind!”

Honestly, I don’t want to rain on Hixon’s parade. He just got married after all, and he swears that everything he did is on the up and up and it’s all been very heartbreaking for him, losing all those homes. At least he has a sweetie now to soften the crushing blow.

I don’t know who he’s marrying, but if I were her, I’d want a separate bank account and a pre-nup.

In blood.

Ok guys, I come bearing my soul yet once again.  I have a small, embarrassing confession to make.  I’m not technologically savvy - AT ALL!

I really feel old.  I can remember when I was a kid… my parents would always call me so I could ”make the VCR work” for them.  They would joke about how advance technology is and how they felt dumb because they had to call on a 12 year old for help.  

Well at the time I thought it was funny?  I would think to myself… you can’t figure out how to press play on the VCR!?! 

But now I feel their pain.  That stupid DVD player gets me all the time.  

My son tells me… momma “all you have to do is” plug the red wire into the red hole, the yellow wire into the yellow hole.  

Yeah it may sound simple when he says and look simple when he does… but when its my turn to do it, I feel like I’m trying to operate a telephone switchboard.  For the life of me, I can’t ever get the darn thing to work.  It either has sound, no picture… or picture, no sound.  And it’s only a DVD player!  DVD players have been out for what… 15, 20 years now?  

Back in my younger days, I could hook up the DVD player just fine.  But for some reason… nowadays I just can’t get it together.  

Maybe as us parents age, we lose our how-to-get-electronics-to-work ability.  I think it’s because we spend so much time trying to get other things to work… like having hot cooked meals every night for dinner, breaking up fights between two five year olds who won’t stop annoying each other, making sure the bills are paid so that the lights will come on, slaving at work so we can take kids to Disney World.  

Well, I don’t know if that is true or not, but that’s the excuse I’m using.  

But I’m getting better.  I’m trying to move into the 21^st century.  I still don’t have one of those high-flouting TVs yet.  But the other day, I went to the electronics store to price a new home entertainment center. 

I think I tickled that sales guy. Well… I’m sure I did ‘cause he laughed at me.  I keep saying WOW! WOW! WOW! It can really do that!  I am sure he was thinking, Yeah!!… Lady, where have you been?! 

I was fascinated by how clear and life-like that HD stuff is.  All kinda thoughts came to mind about how cool it would be to have all of that new age TV stuff in my den. 

He worked out an estimate… it came up to about $5,000.  The TV only cost $2,500.  All of the extras I need to get the TV to work like it did in the store cost another $2,500. 

As soon as I get back from winning it big in Vegas, I’m getting that big, fancy TV… and all the extras!  Don’t worry… I won’t try to hook it up myself.  Installation was built into the estimate. 

The fanciest TV in my house right now is a 20 inch (the kind with the tube inside) that I’ve had for the past 10 years.  Goodness… if I had one of those big screen, LCDs with HD… then my DH might get upset ‘cause it really would be just me and Netflix… 24 hours a day. 

But anyway PFA I’ve digressed… 

What I wanted to talk to ya’ll about was the Dell Dollars (AKA free money) I just received in the mail.  Dell coupon codes are all over the internet.  I recently used one to get a good deal on a Dell laptop.  The computer came fast… it took about 2 months to get the Dell Dollars.  But now I have them, so I’m happy.  

I’ve got $200 dollars… so I suppose that’s enough for a couple of accessories for my new laptop.  I saw all kinds of cool stuff on the Dell site.  Only problem is… I know nothing about computer accessories!  

I know how to use my computer… but all that other fancy stuff – I leave that to the kids.  It’s not often that I can’t think of a way to spend free money.  But this time… poor, little, technologically-challenged me ain’t got a clue! So… I was hoping that maybe ya’ll can tell me the must-have computer accessory of 2008.  

While ya’ll are busy making suggestions, I’ll show you where to find the most up to date Dell coupon codes… just in case you’re in the market for a new computer. 

Here are Dell coupon codes, codes, codes, codes, and yes… more Dell coupon codes!!! 

After you’ve found a code you like, enter it here to get Dell’s official word on what the code really does and when it expires.

Then read this and this to learn how to get the best deals using your Dell coupon code. 

And if Dell sends you some Dell Dollars, please share with me how you spent yours! 

Almost every adult can remember at some point in his or her younger years being given a US Savings Bond by a grandparent or well-meaning relative for a birthday or graduation, and then being instantly frustrated by the fact that the bond couldn’t be converted into a Beatles album or Grand Theft Auto cartridge the very next day. Of course, that is the appeal of US Savings bonds as gifts (at least from the point of view of the giver): They are one way to (almost) force a young person you love to save.

The Savings Bond grandma gave you when you were twelve was a Series EE Paper Bond. Paper Series EE Bonds are purchased at half their face value. So, for example, a $50 paper bond costs $25. Series EE Paper Bonds mature at different rates depending on the interest paid, which is set by the federal government and changes every six months. You can’t really predict when a paper Series EE Paper Bond will mature. For example, if the interest averages 5%, a $50 Series EE Bond will mature in 14 and a half years. If it earns an average of 6% interest, it will mature in 12 years. Paper Series EE bonds earn market-based rates that usually are much higher than deposit account rates at retail banks.

You can also purchase Series EE bonds at face value electronically for up to $30,000. Most banks will help you to purchase Series EE Bonds, or you can purchase them directly from the Treasury Direct website at http://www.savingsbonds.gov/, and you can also manage your bonds there and find a wealth of information on bonds and investing, all free of charge.

Another less familiar kind of Savings Bond is the government I Bond, which is an accrual-type security, meaning interest is added (accrues) monthly, much like a savings account. The interest is paid when the bond is cashed. I Bonds can earn interest for as long as 30 years depending on how you set them up. I Bonds purchased after 2003 must be held at least 12 months before they can be cashed.

You will owe tax on interest on both I Bonds and Series EE Bonds, but the interest can be deferred in for a number of reasons. Tax is not owed on the interest earned on I Bonds that are cashed. With Series EE Bonds, you want to make certain you cash them by or before the maturity date, since you will owe tax on the interest on the maturity date whether you cash them or not, and since they also quit earning interest on that date.

Bonds are attractive when the stock market is a mess (like now), but there are strict limits on the amount you can purchase. You can buy up to $30,000 in paper and electronic I bonds (for at total of $60K), and $30,000 in paper and electronic series EE Bonds (for a total of 60K). So, you can’t have more that $120K locked up in bonds in your name, and you can’t get around this by changing up the other signers like you can on other kinds of interest bearing accounts. Basically, if your name is on the bond, it counts toward your total allowance no matter who else is on it.

Savings Bonds are regulated by the same great folks who brought you the US tax code, so don’t expect all the rules, regulations, and rates to be transparently easy to comprehend, especially if you’ve been buying them for awhile. The rules are changing all the time in regard to bonds. Once you’ve purchased a bond, those specific rules for that specific bond do not change. But you could come back a year later and find that everything has been moved around and new rules apply.

Other great sites to find information on bonds, how to manage them, how to buy them and which ones to buy, and all the rules and regulations that apply to them include The Bureau of Public Debt, Tom Weishaar’s Savings Bond Advisor site, and Jack Quinn’s Savings Bond Information Center.

For current rates on Series EE an I Bonds you can also call 1-800-4US-BOND (1-800-487-2663) or any Federal Reserve Bank, or you can write to request a rate table to The Bureau of Public Debt, Bonds Div., Parkersburg, WV 26106-1328.

You don’t have to wait for an excuse to buy bonds, and frankly, they’re a great way to save without even thinking about it.  All you need to do is set this up at the Treasury Direct website, www.savingsbonds.gov.

You can download the Beatles Album anytime you want from I-Tunes.

All you need is love. And Savings Bonds.

Working in the call center of a major retail bank, I know how nervous people get before they leave home for another country, or even to visit another part of the US. VISA has found a way to take a lot of the worry and stress out of summer travel with a prepaid travel card that comes with all kinds of helpful perks and can be easily reloaded from anywhere in the world.

VISA prepaid travel cards are available at banks and financial institutions throughout the US. You can find where to purchase one by visiting Visa’s handy travel money card locater and simply plugging in your home address.

Why use a prepaid Visa Travel card instead of your usual credit card or debit card? One of the best reasons is VISA’s Zero Liability Policy of complete protection from fraudulent activity due to a lost or stolen card while you are away from home. Should you lose your card or have it stolen, VISA will get a replacement card to you anywhere in the world within one business day. You will be credited back all fraudulent charges, usually within 24 to 48 hours, and you will also have immediate access to VISA’s Identity Theft Protection Services.

Convenience is another good reason to use a prepaid VISA travel card. VISA operates over 1 million cash ATMs around the world and is the most widely accepted credit card in the world. VISA also will reimburse or replace merchandise you buy with the card for up to $500 if it is stolen, lost or damaged within the first 90 days after purchase. You can reload your VISA travel card from anywhere using funds from your bank accounts, your other credit cards or your debit card.

Prepaid VISA travel cards come with a number of other excellent travel ‘perks’ such as lost luggage reimbursement up to $250 per trip and $1000 per person, whether you are traveling by plane, bus, cruise ship, or train. Replacement of your lost luggage through your prepaid VISA travel card is not contingent on the purchase of your ticket with the card itself. Even if you buy your ticket in advance with cash before you purchase the card, you can still use the lost luggage reimbursement feature.

Prepaid VISA travel cards also offer 24 hour emergency services which include access to a translator any time of day anywhere in the world if you need one, medical and legal referrals, emergency trip arrangement assistance, and emergency messages to friends or family if something happen while you are away and need to get word home fast.

VISA makes taking and spending money overseas so easy with this prepaid card, there is almost no reason to fool around with traveler’s checks or cash, and the perks are so excellent it’s hard to pass up the deal. You can also purchase the cards as gifts for teens or other family members about to go overseas, or for anyone going on a vacation within the US but far from where you are.

Prepaid VISA travel cards are a great option when peace of mind is what you want, first and foremost.

And who doesn’t want that?