Friday, May 29, 2009

Revised GDP

GDP Drops 5.7% as Fall in Economy Begins to Ease

The US economy contracted slightly less than initially estimated in the first quarter, while corporate profits rebounded, according to a Commerce Department report on Friday that hinted that the recession was moderating.

Gross domestic product, which measures total goods and services output within U.S. borders, dropped at a 5.7 percent annual rate, the department said, less than the 6.1 percent estimated by the government last month.

The revisions were below market expectations for a 5.5 percent contraction for the January-March quarter.

Output has declined for three straight quarters for the first time since 1974-1975.

The Commerce Department's preliminary report also showed corporate profits after taxes increased 1.1 percent in the first quarter, the first increase in a year, after plummeting 10.7 percent in the fourth quarter. Analysts polled by Reuters had forecast profits dropping 7 percent.

Economic activity in the first quarter was dragged down by cutbacks in business, federal government, residential and nonresidential investment as well as a drop in exports.

Business inventories fell $91.4 billion after slipping by $25.8 billion in the fourth quarter. Last month, the Commerce Department estimated the drop in inventories at a record $103.7 billion in the first quarter. Inventories subtracted 2.34 percentage points from the overall GDP figure.

Excluding inventories, GDP contracted 3.4 percent, the department said.

Exports fell 28.7 percent, the largest decline since the fourth quarter of 1971, after dropping 23.6 percent in the fourth quarter. The drop in exports lopped off a record 3.86 percentage points from GDP.

Investment by businesses tumbled a record 36.9 percent in the first quarter, while residential investment dived 38.7 percent, the biggest decline since the second quarter of 1980.

Consumer spending, which accounts for over two-thirds of U.S. economic activity, rose 1.5 percent, but slower than the 2.2 percent rate estimated by the government last month.

Spending had collapsed in the second half of last year.

Consumer spending was lifted by a 9.6 percent leap in the consumption of durable goods, the biggest advance since the first quarter of 2006. Motor vehicle output cut 1.36 percentage points from first-quarter economic activity, an improvement from the 2.01 percent subtraction in the fourth quarter.

Source: CNBC

Wednesday, May 27, 2009

Carnival of Everything Money #16

Welcome to the 16th edition of the Carnival of Everything Money. I wanted to give my thanks to everyone who is contributing to making this carnival a success! I would appreciate it if anyone who is featured in the carnival links back to this post. If you want to submit an article for next week's edition, the submission form is here. Just a reminder: I am not including articles that are not submitted with a category. If your article wasn't included, that's most likely why. Please change it because the more articles I can post, the better!


PFCreditCards presents Credit Card Companies are Screwed with the New Bill posted at PF Credit Cards, saying, "Credit card companies have had enough fun. They are going to lose tons of money on this new bill."

BrandonLaughridge presents New Credit Card Law Likely to Hurt Markets posted at Mortgage Loan Place Blog, saying, "An interesting take on the next meltdown. Credit card companies appear to be the culprit."

Jim presents How Secured Credit Cards Work posted at Blueprint for Financial Prosperity.

Jim DeSantis presents 3 Keys To Self-Control and Saving Money posted at On Line Tribune | Family Life, saying, "Lack of self-control when it comes to money is a common pitfall for most people. Often, when people come into an extra amount of money, they have this tendency to rush out and instantly satisfy the irresistible urge to splurge on anything they lay their eyes on. This is a very costly mistake from a number of aspects. Sometimes people fail to recognize the idea that the future has to be considered, too, whenever spending and saving enter the picture."

Wenchypoo presents The Protectionist Plastic Police posted at Wisdom From Wenchypoo's Mental Wastebasket.

Silicon Valley Blogger presents Discover Credit Card Rewards, Sign Up Bonuses and Holiday Promotions posted at The Digerati Life.

Mr Credit Card presents Credit Cards to Rebuild Credit - Credit Score of 640-680- What Cards Can I Get? posted at Ask Mr Credit Card.


Raj Patel presents A Second Glance at Debt Settlement posted at DebtGoal.

Nickel presents How to Find the Best Mortgage Rates posted at


Tiffany Colter presents Recipes for this week?s sales posted at Hidden Leaks, saying, "Don't know how to use those sale items in your local grocery store to help your finances? You'll get healthy, great-tasting, money-saving recipes here!"

Heather Levin presents How To Go Green and Save Money On Your Air Conditioning posted at The Greenest Dollar, saying, "Want to know how to reduce your costs for air conditioning this summer? There are tons of tips in this article!"

Steve Faber presents Get Cheap Car Insurance in California (of all places) posted at Cheap Car Insurance.

Wren Caulfield presents DIY Project: Bike Panniers posted at True Adventures in Money Hacking, saying, "For those of you who've been following my Bike to Work series, here's another way to save money and be green by commuting by bike!"

Pinyo presents How To Save Money - The 1,001 List Of Money Saving Tips And Ideas posted at Moolanomy, saying, "Saving money is the key to improve your finances. This list of lists contains over 1,000 ideas on how to reduce your expenses."

Patrick @ Military Money presents Lowe’s and Home Depot Memorial Day Discounts posted at Military Finance Network, saying, "Home Depot and Lowe's are supporting military personnel and their families with a 10% discount for Memorial Day."

SpendingIt presents The Three Biggest Opportunities to Save Money posted at Spending It.


Chris presents British Pound Information posted at Learn Currency Trading, saying, "Information about the British Pound"

Investing School presents Morningstar Review - Free vs Premium Membership posted at Investing School, saying, "Morningstar is a well known name but not many people know of its free service. Is it worth the money? Find out."

Raag Vamdatt presents Understanding Deep Discount Bonds :: :: Financial Planning demystified posted at

Vahid Chaychi presents How to Use MACD or Moving Average Convergence / Divergence in Forex and Stock Trading posted at, saying, "MACD is one of the most important and reliable indicators in forex and stock trading. MACD helps the traders to take a position on time and to stay with the trend and maximize their profit. It also prevents them from going against the trend."

Kristjan presents Investment Opportunities in the Uranium Mining Sector posted at Personal Development for Awesome People.

ABC presents Investment Time Horizons for Retirees posted at ABCs of Investing, saying, "A short and concise analysis of retirement asset allocation possibilities."

FIRE Getters presents What is the Current Inflation Rate? posted at FIRE Finance.

Patrick @ Cash Money Life presents How to compare online brokers posted at Cash Money Life, saying, "Tips on how to find the best online brokerage for your needs."

Silicon Valley Blogger presents $50 TradeKing Bonus Extended, Zecco Free Stock Trades Update posted at The Digerati Life.

The Smarter Wallet presents S & P Index and Crude Oil Market Trends: Next Steps? posted at The Smarter Wallet.

Zach Scheidt presents China Gaming Continues to Grow - NetEase Shares Rebound posted at ZachStocks, saying, ", Inc. (NTES) is one of China's strongest gaming companies with additional exposure to online advertising. The stock is rebounding after a strong earnings report. Eventually, shares could rise 60% from current levels."


Steve Faber presents How We?ll Be Forced To Drive the Most Fuel Efficient Cars - Even if We Don?t Want To posted at super gas saver.

EE presents 5 Things I’ve Learnt About Making Money on the Internet posted at Web Career Girl, saying, "Some things I've learnt on my road to making extra money on the internet through writing and blogging."

Kim M. Bayne presents Personal Finance: 10 Creative Ways to Earn Cash While in College - Official Quicken ® Blog posted at The Quicken Blog.

ChristianPF presents What to do when you hate your job posted at Money in the Bible | Christian Personal Finance Blog, saying, "Things to do if you can't stand your job!"

marjorie presents Econ4U: A Financial Literacy Resource posted at Wealth Junkies, saying, "Econ4U, a financial literacy website, stands out among the many websites of its kind as one that presents concepts in a way that most readers can grasp. In addition to simple articles, the site includes several quizzes on topics like credit card debt and home ownership. Although, the site isn’t going to solve everyone’s financial problems, it does provide excellent resources."


Chris presents Selling a house without an agent? 3 things to think about posted at Home I Own, saying, "This post about one thing people shouldn't try and save on when selling their house"

MoneyNing presents Let Businesses Deal with Sales Tax - Government Improvement Series posted at Money Ning, saying, "Government really needs to improve on somethings and I say to let businesses deal with sales taxes!"

Barry presents Saving Money At The Amusement Park posted at Associate Money.

Brian McKay presents Weekly Money Market Account - Savings Account Rates:Updated May 21, 2009 posted at, saying, "Money market account rates and savings account rates are dismal these days. The average rates for all account balances are under one percent."

Patrick @ Money Saving Deals presents $50 ING Checking Account Bonus posted at Cash Money Life Deals, saying, "Get $50 for opening a new ING Electric Orange Checking Account."

The Dough Roller presents Review of WT Direct Online Savings Account posted at The Dough Roller, saying, "While most banks offer interest rates on savings accounts below 1%, WT Direct is offering 1.76% for accounts over $10,000"

KCLau presents Easy Pawn Shops - Do you need to Pawn? posted at KCLau's Money Tips, saying, "Pros and cons of pawning"

Wenchypoo presents Saving Energy Begins at Home Part III--Examining Efficiency posted at Wisdom From Wenchypoo's Mental Wastebasket.


One Family presents eBay (EBAY) – Stock Analysis posted at One Family's Blog.

Bank Savings Review presents More Restrictions to Repaying the TARP posted at Bank Savings Review, saying, "The government have spoken. No one will be able to repay TARP until we say so!"

Tuesday, May 26, 2009

And The Rally Goes On!

A couple of important pieces of economic news today.  First off, consumer confidence had a huge jump today. Consumer confidence is important because the higher it is, the more likely it is that consumers, who make up 2/3s of the economy, will spend money, helping to grow the economy. Remember, it is a lack of confidence that is hurting this economy. Unemployment is up about 3 or 4 percent from the average unemployment rate. However, you see the revenue in business fall far more than just 3 or 4 percent. Why? It is because once people see someone get laid off, they automatically think that they might get laid off. It is this fear of getting laid of that makes everyone stop spending money because everyone wants to save just in case they are going to lose their job. That is why the damage in the economy is a far greater percent than the 3/4% increase in unemployment. So when confidence goes up, that means that fear of losing your job is going away. The hope is, if confidence goes up, people will start spending more and not hoard their money in fear of unemployment. So while the confidence has gone up, which is a great sign, we will have to see if that confidence actually translates into more spending. 

The second piece of news was the Case-Shiller Home Price Indices, showed a huge drop in home prices at a record annual rate. While some people thought this was bad news because it showed more problems in the housing sector, I think it is beneficial. First off, we need prices to go down so that housing becomes more affordable which will then drive the housing market back up. Second, the prices were from the first quarter, which was Jan, Feb, and March. The great rally in the stock market began towards the middle of March, meaning that these house prices were before the rally started. So they are pretty far behind lagging indicators.

Both pieces of news were positive in my eyes. Lets hope it can continue this week.

Sunday, May 24, 2009

Wine Rx

Watch CBS Videos Online

Economy Stabilizing

Goods Orders, Home Sales Probably Rose: U.S. Economy Preview 

By Courtney Schlisserma

May 24 (Bloomberg) -- Orders for durable goods and home sales probably rose in April as the worst U.S. recession in at least half a century started to loosen its grip, economists said before reports this week.

Bookings for goods meant to last several years increased 0.4 percent, the second gain in three months, according to the median forecast in a Bloomberg News survey ahead of a Commerce Department report May 28. Combined sales of new and existing homes likely advanced to a 5.02 million annual rate from a 4.93 million pace in March, other figures may show.

Stabilization in housing and manufacturing, the two areas suffering the biggest contractions, will help ease the economic slump. Still, gains will be difficult to sustain in coming months as banks remain hesitant to lend and unemployment climbs, underscoring projections from Federal Reserve officials and private economists that a recovery will be subdued.

“Evidence that the 16-month recession is coming to an end continues to build,” said David Resler, chief economist at Nomura Securities International Inc. in New York. “Home sales and building activity seem to be stabilizing and manufacturing surveys point to smaller production cuts and smaller job losses.”

An increase in orders for durable goods would follow a 0.8 percent drop in March. The Commerce Department’s report may also show bookings excluding transportation equipment fell 0.3 percent last month, according to the Bloomberg survey.

Orders Steady

United Technologies Corp., the maker of Pratt & Whitney jet engines and Carrier air conditioners, last week maintained its profit forecast for the year as order rates stabilized across its divisions since March.

There are some “early signs” of price stabilization in some markets, Chief Executive Officer Louis Chenevert said at a conference May 19, citing benefits from stimulus programs in the U.S. and in China for the Carrier and Otis divisions. Demand at the commercial and business jet aerospace units may have peaked in 2008 and will take several years to recover, he said.

Boeing Co., which saw a gain in bookings last month that probably contributed to the increase nationally, is among companies trying to make it easier for customers to get credit. Its financing arm may tap debt markets for as much as $800 million this year to help clients fund purchases, Chief Financial Officer James Bell said last week.

Cancellations at Boeing, the second-largest commercial- plane maker and defense contractor, have paralleled new orders this year. The Chicago-based company is cutting 10,000 jobs and reducing or postponing production of some models next year.

Auto Slump

Automakers continue to struggle. Chrysler LLC this month idled its 22 U.S. plants after filing for bankruptcy. General Motors Corp. also has cut output as a bankruptcy deadline looms.

Sales of existing houses, which account for more than 90 percent of the market, rose 2 percent in April to a 4.66 million annual rate from a 4.57 million pace the prior month, according to the survey median. The National Association of Realtors’ report is due May 27.

A day later, Commerce Department figures may show new-home sales increased 1.1 percent to a 360,000 annual rate, the most this year, the survey showed.

Toll Brothers Inc., the largest U.S. builder of luxury homes, said last week signs were beginning to emerge that the worst was over. The Horsham, Pennsylvania-based company said fiscal second-quarter revenue fell 51 percent from the same period last year as banks cut lending and demand sagged.

More Deposits

Deposits from buyers per community rose in seven of the past nine weeks compared with last year, Chief Executive Officer Robert Toll said on a May 20 conference call with analysts. The increase made him “slightly more optimistic,” Toll said.

“We believe the U.S. government’s forceful intervention in the capital markets has begun to restore some confidence that the financial system is on the road to stabilization,” Toll said.

A report tomorrow may show the decline in home prices that began almost three years ago is moderating. Property values in 20 of the largest metropolitan areas probably dropped 18.4 percent in March from the same month last year compared with an 18.6 percent decline in February, economist project figures from S&P/Case-Shiller will show.

The rebound in stocks and easing of the housing slump are helping to make Americans less pessimistic. The Conference Board’s gauge of consumer confidence, also due tomorrow, may rise to 43 for May, a six-month high, from 39.2 last month.

Finally, revised data from the Commerce Department on May 29 may show the U.S. economy contracted in the first quarter less than initially estimated, reflecting a smaller decline in inventories and a narrower trade gap.

Source: Bloomberg

Wednesday, May 20, 2009

15th edition of the Carnival of Everything Money

Welcome to the 15th edition of the Carnival of Everything Money. I wanted to give my thanks to everyone who is contributing to making this carnival a success! I would appreciate it if anyone who is featured in the carnival links back to this post. If you want to submit an article for next week's edition, the submission form is here. Just a reminder: I am not including articles that are not submitted with a category. If your article wasn't included, that's most likely why. Please change it because the more articles I can post, the better!


Jim presents Citi Forward Credit Card Review: Rewarding Responsibility posted at Blueprint for Financial Prosperity.

David presents CNN Money Names Top 5 Credit Card Offers posted at Credit Card Offers IQ, saying, "CNN Money 100 has named the top credit cards in five categories, including cash back, travel and balance transfer."

The Smarter Wallet presents No Credit History? Here's Why Building Credit Is Important posted at The Smarter Wallet.


Dave presents Debt is Squalor posted at Do You Dave Ramsey?.

Raj Patel presents Yahoo! Personal Finance: DebtGoal Puts Financial Houses in Order posted at DebtGoal.

Brian McKay presents Buying Down Mortgage Rates with Points posted at, saying, "Getting a lower mortgage rate is possible by shopping around for the best mortgage rates. Another option to getting a lower rate is to buy points."


MoneyNing presents How to Deal with Frugal Advice posted at Money Ning, saying, "Don't just skip the article if you think it doesn't apply to you as it might be useful later on in life."


Kristjan presents Gold & Silver About to Hit Resistance posted at Personal Development for Awesome People.

ABC presents Warning - Not All Index Funds and ETFs Are Low Cost posted at ABCs of Investing, saying, "Some index funds and etfs are too expensive."

Silicon Valley Blogger presents TradeKing Review: How Does TradeKing Measure Up? posted at The Digerati Life.

ChristianPF presents Retirement Plans (Part 1) - 401k questions answered posted at Money in the Bible | Christian Personal Finance Blog, saying, "A bunch of 401k questions answered by a CFP..."

Cash Tree presents Cash Advance Payday Loans Not an Option for Everyone Says Payday Loan Company posted at Cash Advance Loans, saying, "With people more often tempted to pursue lending options to make ends meet during tough economic times, Cash Tree Loans ( is offering free tips to help consumers better understand the risks to decide if payday loans are really right for them."


GrrlScientist presents Tough Love for City's Homeless: Pay Rent or Get Out! posted at Living the Scientific Life, saying, "Sounding like a story that is fresh out of the satirical newspaper, The Onion, the eighth richest person in America tells thousands of homeless families in NYC to pay rent to live in a shelter or GET OUT!"

PicktheBrain presents Gallows Humor: 21 Economy Inspired Cartoons posted at School Loans.

Kate Kashman presents Four Financial Lessons from a Six Year Old - The Paycheck Chronicles posted at The Paycheck Chronicles, saying, "Learning about shopping, budgeting and debt from a six year old perspective."

Wren Caulfield presents Adventures in Cake, Installment One posted at True Adventures in Money Hacking, saying, "starting a home business"

Jerry presents Figuring Payments On A New Car posted at Talking About Cars, saying, "How much can you afford to pay for a car?"

Patrick @ Cash Money Life presents Reasons to Buy Whole Life Insurance posted at Cash Money Life, saying, "Here are a few times when you should consider whole life insurance over term life insurance."

Patrick @ Military Money presents GI Bill Transfer Rules posted at Military Finance Network, saying, "The GI Bill now allows some military members to transfer their benefits to their family members."

Nickel presents How Much Life Insurance Do You Need? posted at


Fabulously Broke presents Fabulously "Broke" the City: What is your lifetime income? posted at Fabulously Broke the City, saying, "What is your lifetime income? The number may be shocking and it will certainly help change your mind in how you spend/fritter away your money on non-productive items."

Online Dividends presents Blogging Banks: $200 Capital One Bank Bonus Opportunity posted at Blogging Banks.

Bank Champ presents GMAC Bank Becomes Ally Bank posted at Bank Champ.

Lazy Man and Money presents Glad I Have an Emergency Fund posted at Lazy Man and Money.


Ryan Suenaga presents What’s in My Portfolio: Apple, Inc. posted at Uncommon Cents.


Shadox presents Issue Bonds with No Tax Increase? Dream On... posted at Money and Such, saying, "The truth about bond issues: tax payers always end up paying. Bonds necessarily lead to higher taxes. There is no such thing as a fre lunch in economics."

Monday, May 18, 2009

Small Bankers See Green Shoots

Good interview on CNBC today with some regional bankers who have a better feel of how the individual consumer is borrowing money than some of the big banks do.

Saturday, May 16, 2009

14th edition of the Carnival of Investing Strategies

Welcome to the 14th edition of the Carnival of Investing Strategies. This is a carnival focused on different strategies of investing your money. If your article was included, please be sure to link back to this carnival. If you want to make a submission for the next edition, the form is here.

ChristianPF presents Should I sell my stocks or buy more? posted at Money in the Bible | Christian Personal Finance Blog, saying, "What is your current investing strategy? Buy more or sell them all?"

Jim presents Best Money Market Account (MMA) Rates posted at Blueprint for Financial Prosperity.

Khan Ben presents Investing on a Shoestring Budget - College posted at Higher Education and Career Blog, saying, "Elicit as much advice as you can from those who are qualified to give it."

Investing School presents ShareBuilder Review - Stock Broker for Automatic Investing posted at Investing School, saying, "ShareBuilder is not a much talked about stock broker but the automatic investing feature could be golden for those that just don't time markets."

Bank Savings Review presents Bank Stress Test Results posted at Bank Savings Review, saying, "We finally got the results from the bank stress test but did anyone fail? Nope. Not much of a test huh?"

Nickel presents Risk Tolerance vs. Risk Capacity posted at

MatthewPaulson presents Grow Your Investments: Know the Rule of 72 posted at Fine-Tuned Finances.

ABC presents Commodities posted at ABCs of Investing, saying, "A brief explanation of commodities."

Patrick @ Cash Money Life presents Alternative Income is a Form of Insurance posted at Cash Money Life, saying, "Tips on how you can make more money by creating alternative income streams - and why it is important."

Dana presents Four Reasons I’m Bullish on Canada posted at Investoralist, saying, "Canada's sound banking system, plentiful commodities, liquid social welfare system, and favourable demographics make it attractive amidst the global downturn."

Four Pillars presents BMO InvestorLine Discount Brokerage Review posted at Quest For Four Pillars, saying, "Review of BMO InvestorLine discount brokerage."

Freddy presents Stock Of The Week For Defensive Investor (May 12, 2009) posted at Protege Analytics.

Praveen presents Successful Trading is About More than Generating A Buy Signal.. posted at Stock Trading Riches.

ABC presents Warning - Not All Index Funds and ETFs Are Low Cost posted at ABCs of Investing, saying, "Some index funds and etfs are too expensive."

Friday, May 15, 2009

Citigroup... Getting Their Act Together?

It is little, unknown news like this that makes be bullish on the banks. In the past few days I have become increasingly bullish on Citgroup. Yes their bank sucked, no doubt about that. But they are working hard to fix their loan portfolio, and I am confident that their efforts are going to work. Citigroup is lending out a lot of their money, while some people have a problem with that, I think it is the best thing to do because that is how banks make money... Citi has been doing a lot of lending to schools and city government, which typically provide a lower default rate than the individual consumer. Also Citigroup is conducting efforts to keep people from foreclosure (as seen in this article). The less foreclosures, the less write offs Citi has to do. Citi is not the best bank right now, but I certainly think they have the most room for improvement.
CHICAGO, May 15, 2009 (BUSINESS WIRE) ----Today, Citi's Office of Homeownership Preservation (OHP: undefined, undefined, undefined%) announced that Citi's foreclosure prevention and industry-leading loss mitigation efforts in the first three months of this year have successfully helped thousands of people throughout Illinois and the rest of the country avoid foreclosure.

CitiMortgage is the fourth largest mortgage servicer in the United States and is committed to helping families stay in their homes. According to Citi, its U.S. efforts to keep distressed Citi borrowers in their homes outnumbered foreclosures completed by a ratio of more than ten to one in the first quarter, a significant increase over the fourth quarter 2008 ratio of six to one. Citi continued to show increased success in Illinois specifically, with company initiatives keeping homeowners in their homes by a ratio of more than eight to one, compared to over five to one last quarter.

Sanjiv Das, CEO of CitiMortgage, said, "Preemptive outreach to homeowners is often the best defense against foreclosure. At Citi, we are committed to working with our national and local community partners as well as using Citibank's retail banking resources to communicate with homeowners, to keep people in their homes and to strengthen neighborhoods across the country. With upcoming events nationwide from Chicago, to Stamford, Conn. to Tucson, Ariz., I look forward to expanding upon the progress Citi and our partners have made in foreclosure prevention."

Chicago Homeowner Events Part of Citi's Ongoing Efforts to Keep People in Their Homes

This weekend, Citi will host homeowner outreach events in Chicago. The events, organized by Citi Community Relations, the OHP, Citibank retail banking and other nonprofit partners, will build on Citi's ongoing progress in keeping distressed Chicago homeowners in their homes.

Citi will meet with local leaders from Rainbow PUSH Coalition, the Spanish Coalition for Housing and the Westside Ministers Coalition at events to discuss foreclosure prevention and homeowner assistance. Citi also will counsel at-risk borrowers from the Chicago-area on alternatives to foreclosure and offer specific tips on how they can get started, such as writing a hardship letter.

Similar events are scheduled in other cities significantly affected by the housing crisis such as Cleveland, Bakersfield, Calif. and Phoenix.

These community events are an extension of Citi's foreclosure prevention programs in which Citi works with nonprofit organizations through the following efforts: coordinating foreclosure prevention strategies across the country; offering broad-based financial education and free nonprofit counseling for its mortgage customers; and providing nonprofit counseling organizations with direct access to Citi's loss mitigation staff. In partnership with Neighborhood Housing Services of Chicago, Citi was the first financial institution to support the 2003 launch of the Home Ownership Preservation Initiative (HOPI: undefined, undefined, undefined%) to provide foreclosure prevention initiatives and counseling programs in Chicago, which became the national blueprint for foreclosure prevention.

Ophelia Navarro, Executive Director of the Spanish Coalition for Housing, said, "Citi continues to be an important partner in our work to expand and preserve communities throughout the Chicago metro area."

Reverend Jesse L. Jackson, Sr. of Rainbow PUSH said, "The Rainbow PUSH Coalition is pleased to announce our partnership with Citi. Their successful and innovative initiatives around foreclosure prevention have positioned them as a leader in this area of business. We look forward to our work together to achieve our mutual goal of keeping homeowners in their homes."

Citi's Successful Foreclosure Prevention Initiatives

Last year, Citi launched the Citi Homeowner Assistance program, a multi-faceted program to help homeowners avoid foreclosure and stay in their homes. Citi has developed programs addressing homeowners at all stages - from those who are current on their payments but may face economic distress, to borrowers who have fallen behind on their payments, to recently unemployed eligible customers - to provide assistance.

The company is using a variety of means to help homeowners, including expanding its specially trained servicing units to work with homeowners to find long-term solutions; a continuous evaluation of portfolios to identify those borrowers who may be eligible for reduced monthly payments; adoption of the Obama Administration's streamlined long-term modification program; and partnering with community and nonprofit partners through the Company's OHP to offer free services to borrowers and training to counselors.

Additional Statistics

Since the beginning of 2007, Citi's ongoing efforts in foreclosure prevention have helped approximately 520,000 of its customers avoid potential foreclosure.

Foreclosures completed in the total Citi servicing portfolio in Illinois were down approximately 41% in the first quarter of 2009 as compared with the fourth quarter of 2008, and down approximately 32% over the prior year time period.

For more information about Citi's foreclosure prevention efforts and for tips on how homeowners can preserve their home, visit
Source: Fox Business

Wednesday, May 13, 2009

So The Rally Hit A Road Bump...

We've hit a little bit of a wall here in the rally. I hope/don't think it will last but we will see. If we do continue going down it just provides us with an even better buying opportunity. Everyone has been saying we are due for a correction/pull back blah blah... as if it is some rule that we must follow. There are a lot of stocks out there that are great buys, they might go down some more this week, but through out the summer I think they rise. We can't go up in the market every single day so obviously we were going to hit a few down days, which we have seen the past few days, but I just don't think the downturn will be as severe/long as everyone is predicting. We hit a road bump today with retail numbers, but hopefully tomorrow's more important weekly jobless claims number will be on the positive side.

Tuesday, May 12, 2009

Carnival of Everything Money #14

Welcome to the 14th edition of the Carnival of Everything Money. I wanted to give my thanks to everyone who is contributing to making this carnival a success! I would appreciate it if anyone who is featured in the carnival links back to this post. If you want to submit an article for next week's edition, the submission form is here. Just a reminder: I am not including articles that are not submitted with a category. If your article wasn't included, that's most likely why. Please change it because the more articles I can post, the better!


The Smarter Wallet presents Microsoft Money Software Review: A Look At Money Essentials posted at The Smarter Wallet.

Nash Dadameah presents The secret to having money posted at, saying, "A real-life experience on how to keep having money"

Barry presents Tips To Curb Impulse Buying posted at Associate Money.


PabloPabla presents Five Alternatives To Traditional Credit Cards posted at Free Credit Card Information, saying, "There are many alternatives to credit cards that can be used for all of the purposes that a credit card is traditionally used for. Here are five alternatives that can be used for credit cards."

Money Beagle presents Are Rewards Credit Cards Worth It? posted at MoneyBeagle.

Jim presents What Is A Good Credit Score? posted at Blueprint for Financial Prosperity.

David presents 9 Tweeters Every Credit Card Hound Should Follow posted at Credit Card Offers IQ, saying, "Check out theses credit card twitterers worth following."

Nickel presents Is a Scam? posted at

freefrombroke presents Credit Cards Suck! posted at Free From Broke, saying, "There are a lot of reasons credit cards are not your friend!"

SingleGuyMoney presents Still Getting 0% Balance Transfer Offers posted at Single Guy Money.

Kevin Fleming presents Best Cash Back Credit Cards posted at CreditShout.

Woman Tribune presents Fed Report Shows Banks Tightening Lending Standards on Credit Cards posted at Woman Tribune.

Sun presents Starwood Preferred Guest Card 25,000 Bonus Points [Card Reviews] posted at The Sun’s Financial Diary.


Raj Patel presents Mortgage Renegotiation Options posted at DebtGoal.

Patrick @ Cash Money Life presents Who is Dave Ramsey? posted at Cash Money Life, saying, "A mini bio about Dave Ramsey, one of the most popular personal finance gurus in the US."

Sam presents Credit Card Debt. Get Out of Debt and Take Back Your Power $$$$ posted at Surfer Sam and Friends.


FinancialHealthGuy presents Quick Tips You Probably Never Heard To Save Money: Part One | posted at Financial Health Guy.

Anotherjen presents The Recession Hits the Wedding Industry posted at The Next Rich Girl, saying, "today's brides and grooms can't afford to be as extravagant as couples getting married just a year or two ago..."

Renee V. Rouse presents Garage Sale Shopping Tips posted at Frugal-Living-Skills Blog, saying, "Garage sales can be a great place to find just about anything. Here are 5 garage sale shopping tips"

Dan at Everydayfinance presents Savings Tips Consumer Reports Style posted at Everyday Finance, saying, "This article highlights several great savings tips from the latest Consumer Reports edition, as well as some additional ideas."

Wren Caulfield presents 10 Ways to Have Big Fun for Little (or No) $$ posted at True Adventures in Money Hacking.

BankMan presents Get a Free Garmin GPS at Key Bank posted at High Yield Savings Accounts, saying, "Get a free Garmin GPS system for opening a free checking account at Key National Bank. This offer excpires soon!"

Lazy Man and Money presents Save Money on Cell Phones posted at Lazy Man and Money.


ChristianPF presents Should I sell my stocks or buy more? posted at Money in the Bible | Christian Personal Finance Blog, saying, "Is now the time to be selling or buying?"

MoneyNing presents TradeKing Review posted at Money Ning, saying, "TradeKing is quickly becoming one of the best stock brokers out there. Find out why."

Ray presents TradeKing Review posted at Money Blue Book.

Investing School presents ShareBuilder Review - Stock Broker for Automatic Investing posted at Investing School, saying, "ShareBuilder is not a much talked about stock broker but the automatic investing feature could be golden for those that just don't time markets."

ABC presents Commodities posted at ABCs of Investing, saying, "A brief explanation of commodities."

MoneyEnergy presents Peter Schiff on the Rally and Why You Still Need to Buy Gold posted at MoneyEnergy, saying, "fits with saving and wealth protection, too."

Shadox presents Passive Investing is for Extremists: The Critique posted at Money and Such, saying, "This post explains why trying to time the stock market - even over the long term - is a fool's game."

Manshu presents Value Traps posted at OneMint.

Dana presents Don Coxe on Sunspots, Demographics, and Your Investments posted at Investoralist, saying, "Don Coxe discusses in his March 2009 Basic Points report his views on demographics and the housing market, sunspots and agricultural stocks, and more."

Four Pillars presents BMO InvestorLine Discount Brokerage Review posted at Quest For Four Pillars, saying, "Review of BMO InvestorLine discount brokerage."

Craig Ford presents Your First Step in Developing A ‘Personalized’ Investing Plan posted at Money Help For Christians.

Zach Scheidt presents ZachStocks Podcast 10: Stress Tests, TARP Repayments, Moral Hazard And Solar posted at ZachStocks, saying, "Bank Stress Test lifts financials, TARP money repayments meet opposition, Moral Hazard is now in the works, and some interesting solar information on tap."


Michael presents What Credit Score Do You Need to Buy a Car? posted at Vital Motion, saying, "If you want to buy a car, you might be worried about your credit score."

Kim Staudenraus presents Should I lend money to a friend or relative? posted at Tranquility Financial Visioning, saying, "Lending money to a friend or family member - at some point in time someone close to you will ask you for a loan - what do you do when they ask?"

Brian Reilly presents Zen and the Art of Creating Competition in Merger and Acquisition Deals posted at Merger and Acquisiton Advice, saying, "Selling your private business"

Leon N. presents Residual Income - Making 1 Dollar A Day posted at How to Build Residual Income.

Bank Savings Review presents Bank Stress Test Results posted at Bank Savings Review, saying, "We finally got the results from the bank stress test but did anyone fail? Nope. Not much of a test huh?"

Patrick @ Military Money presents Watch Out For Stimulus Check and Government Grant Fraud! posted at Military Finance Network, saying, "Tips on how to guard your identity and avoid online rip off scams like the infamous government grant scheme."

Junior presents How To Evaluate Car Buying Deals posted at Car Commentary, saying, "When it comes to buying a car, everyone wants to get the most value they can for their money."

KeithMcC presents What is your price? posted at {be} Wealthy / [get] Happy, saying, "This talks about how you value your time and in turn, how much money you will make"

Vicky presents Wedding Planning On A Budget posted at Affordable Wedding Planning, saying, "Basic wedding planning help."


The Dough Roller presents Dave Ramsey Unleashed: How to Apply Ramsey’s ‘Baby Steps’ to Grown Up Finances posted at The Dough Roller, saying, "See how to apply Dave Ramsey's Baby Steps for those already on their way to retirement."

Brian McKay presents CD Early Withdrawal Penalties posted at, saying, "When you invest in a certificate of deposit be sure you don’t need access to your money for the duration of the certificate of deposit term."


Robert D Flach presents Here's Something To Think About posted at The Wandering Tax Pro.

Monday, May 11, 2009

Price to Earnings Ratio

I think this is a great article.
Since the stock market's March 9 low, the S&P 500 rose from 676.53 to 929.93 and the Dow Jones industrials jumped from 6,547 to 8,574 by May 8--gains of 37.5% and 31%, respectively. Such stunning gains encouraged bears to dust off the same argument they used two months ago to predict the S&P 500 could fall to 500 and the Dow to 5,000.

A May 11 Wall Street Journal headline claims, "By Most Measures, Stocks No Longer Look Cheap." In this article, Tim Lauricella alludes to three measures of valuation: a trailing ratio of S&P 500 stock prices to operating earnings over the past 12 months; a forward ratio of stock prices relative to estimated earnings over the next 12 months; and a nostalgic ratio of stock prices to a 10-year history of inflation-adjusted earnings. The latter is thought to be "the most widely followed of these barometers ... created by Yale Professor Robert Shiller."

The trouble is that such valuation measures were also cited in a March 9 Wall Street Journal front page feature--"Dow 5,000? There's a Case for It" by Annelena Lobb. "Looking solely at valuations," she wrote, "the S&P at 500 isn't necessarily a wild stretch."

Relying on Professor Shiller's valuations, Barrons' March 7 cover story claimed, "the Dow could fall a further 25%, to 5,000, and the S&P could drop to about 500." In a March 12 commentary on, Nouriel Roubini used forward P/E ratios to predict that "even in the best scenario" the S&P was unlikely to exceed 500-600 this year. The following Sunday, TheNew York Times posted Shiller's chart emphasizing that the ratio of stock prices to earnings "hasn't fallen as far as the market bottoms of 1932 and 1982."

By March 23, after the DOW had risen 14% from the bottom, Mark Gongloff's "Ahead of the Tape" column in The Wall Street Journal suggested "such rallies are fairly typical of the worst markets." He compared it to other "dead cat bounces" between 1929-32. Relying on Shiller's figures, Gongloff said "the S&P is priced about 13 times earnings. ... But that ratio has fallen below 10 in the grimmest bear markets. ... A 30% plunge in the S&P to 530 would take its P/E ratio to 10 in a hurry."

All of these gloomy projections of falling stock prices have been based on falling valuations, not falling earnings. We're told the ratio of stock prices to earnings could supposedly fall below 10 simply because that happened before, in years like 1982.

But stock valuations are not just a matter of opinion, gyrating unpredictably between waves of optimism and pessimism. On the contrary, the graph shows that P/E ratios mainly depend on interest rates. It makes that point by simply turning the P/E ratio upside down, resulting in an earnings-price ratio or "earnings yield."

The previously mentioned New York Times graph highlighted the fact that the P/E ratio briefly fell to seven in early 1982, which is equivalent to an E/P ratio of 14.3 (one divided by seven). My graph, however, reveals that such a low multiple (high E/P ratio) made sense in January 1982 only because the yield on 10-year Treasuries was 14.6%.


This graph bases the earnings-price ratios on trailing earnings over the past four quarters rather than relying on analysts' estimates of the future or on Shiller's decade of ancient history. I used annual figures from the Economic Report of the President for 1980-88 because quarterly data from the Standard and Poor's Web site don't go back that far. After 1988, bond yields in the graph are for the last month of each quarter because that captures changing rates better than a three-month average.

Since 1960, the yield on 10-year Treasury bonds averaged 6.68%, while the earnings yield averaged 6.43. The earnings yield on stocks rarely deviates much from the coupon on bonds partly because stocks and bonds compete with each other, and because stock prices gauge the discounted present value of expected earnings. Expectations of future earnings differ from recent reported earnings, of course, yet nonetheless involve estimating changes from that starting point.

Note that the E/P ratio was lower than bond yields toward the end of the recessions of 1991, 2001 and 2008. That is because trailing earnings are an increasingly bad indicator of future earnings as recessions near an end. Year-to-year comparisons of earnings become easy to beat during the early stages of recovery.

The relatively low E/P ratio in 1999, despite a rising bond yield, does suggest some unduly euphoric momentum, though scarcely a "bubble." Conversely, the E/P ratio was higher than the bond yield in 2005-2006, suggesting prescient pessimism about future earnings but also accurate optimism about rising bond prices (falling yields).

It is not hard to envision future earnings disappointments as a result of higher tax rates on companies or shareholders, health care price controls or cap and trade schemes. But these are threats to earnings, not to multiples. They are to some extent reflected in the weakness in stock prices ever since the election.

Any big drop in P/E multiplies, by contrast, requires a big increase in bond yields. It is certainly possible to envision massive federal borrowing and aggressive Fed easing culminating in a sizable increase in long-term interest rates. Yet such a future of "reflation" and "crowding out" presupposes faster growth of overall demand, gross domestic final sales. In that case, earnings would be rising so the net effect on stock prices might well be positive. Bearish economists, by contrast, typically assume depressed demand and deflation--forecasts impossible to reconcile with the double-digit interest rates required to push the E/P ratio to 10 or more.

I first met Bob Shiller in the early 1980s, when I invited him to speak at Lew Lehrman's Institute in Manhattan. He thought stocks were grossly overpriced then too. Indeed, Shiller always seems to see the current P/E ratio as too high relative to some historical average. But the stock multiple is not a mean-reverting series. On the contrary, the height of today's P/E ratio relative to the past tells us nothing except that (1) interest rates are far below average and (2) future earnings are very likely to rise from today's depressed base.

Unless those who have spent the past two months predicting P/E ratios of 8-10 are also predicting a tripling of long-term rates, their forecasts of stock prices are inconsistent and unworthy of the slightest attention.

Friday, May 8, 2009

Carnival of Investing Strategies #13

Welcome to the 13th edition of the Carnival of Investing Strategies. This is a carnival focused on different strategies of investing your money. If your article was included, please be sure to link back to this carnival.If you want to make a submission for the next edition, the form is here.

Ben presents IRA Vs Roth IRA posted at Money Smart Life.

Debt Kid presents No More Buy and Hold Strategy for Me posted at DebtKid.

MoneyNing presents Fees in Your 401(k) posted at Money Ning, saying, "Mind the small little fees in your 401k"

Tushar Mathur presents How to choose a financial planner posted at Everything Finance, saying, "There's retirement to plan for and college tuition for the kids. Insurance. Estate planning. And, oh, don't forget a wedding for your daughter. If all this sounds familiar, it may be time for you to start shopping around for a financial planner."

Jack Schmidt presents How To Pick A Profitable Mutual Fund posted at SectorMatic Money Journal, saying, "Personal Finance | Everything for the Big Spender on a Budget. Now you can live like a fat cat, even if you're on a money diet. Laugh all the way to the bank with Jack Schmidt and SecorMatic Money Journal. It's for you!" presents Investing In Gold posted at Ways To Invest Money.

Manshu presents Gold ETF: iShares Comex Gold Trust (IAU) posted at OneMint.

Bank Champ presents Failed Banks Not Required to Honor CD Rates posted at Bank Champ.

Investing School presents Investor Mistakes - Constant Refresh posted at Investing School, saying, "Most of us love the real time information provided by our stock brokers but it really doesn't help us much to look at it every day (or worst yet, several times a day). This article explains why."

Jack Schmidt presents Starting Young: Teaching Teens to Save Money posted at SectorMatic Money Journal, saying, "Personal Finance - Everything for the Big Spender on a Budget. Now you can live like a fat cat, even if you're on a money diet. Laugh all the way to the bank with Jack Schmidt and SectorMatic. It's for you!"

Jim presents Buying Municipal or State Bonds posted at Blueprint for Financial Prosperity.

Joe Light presents Dear index buyer, you too are an active investor posted at Invest Wisdom, saying, "Invest Wisdom is a blog about the market, investing for retirement, and mutual fund trends. This post reflects on whether or not index investing is really "passive" investing."

Caterina Christakos presents INVESTMENT STRATEGIES IN A LOUSY ECONOMY posted at Forex and Currencies Explained.

Praveen presents Combining Fundamental and Technical Analysis in Stock Trading posted at My Simple Trading System.

Four Pillars presents Transfer In Kind posted at ABCs of Investing, saying, "Learn about the "transfer in kind" option if you are transferring an investment account to save taxes and money."

Nickel presents The Best 529 Plans - 2009 Edition posted at

Michael Haltman presents Man, Is This A Real Bull Market? posted at The Political and Financial Markets Commentator, saying, "Why Do I Watch CNBC? I'm not sure, but if you look closely at CNBC during the day the anchors are all wearing Dallas Cowboys cheerleading uniforms. Men and women. Now it is my fault for watching it, as I have the option to change the channel, but I do like the ticker going across the bottom. Takes me back to my trading days."

Adam presents How to Get Started in Stock Trading and Investing posted at Pimp My Trade, saying, "Tips for the average Joe getting started in the stock market. Whether it be investing in your 401K or taking an active trading approach, learn to do it right."

Steve Patterson presents SSO June Calls Reentry posted at - Steve Patterson, saying, "The markets are not providing much space to get back in after taking profits as each day pushes the indexes higher."

The Investor presents Crisis investing as swine flu panic spreads posted at, saying, "How should investors react when markets fall because of scary headlines in the newspapers?"

Zach Scheidt presents Blackstone Offers Mixed Results posted at ZachStocks, saying, "The Blackstone Group L.P. (BX) reported relative strength in the Private Equity business while the Real Estate division suffered. The company will reinstate their dividend which sent the stock significantly higher."

Mark Aucamp presents How often should you remortgage? posted at Money Saving Tips, Consumer Finance, Expert, Advice and Help | Talk Money Blog, saying, "Over the years I have come across people who have been brainwashed into remortgaging every two or three years by their Bank, Building Society or their Mortgage Broker. These intelligent people are sold the story that know body knows where the interest rates will be in two or three years time and it is better not to tie yourself into a long term fixed rate just in case interest rates fall."

Peter Maclennan presents Four Benefits of Real Estate Investing posted at Maclennan Investment Group, saying, "Investing in real estate has four benefits of cash flow before taxes, principal reduction, depreciation, and appreciation that set it apart from other investment vehicles."

Alex Fotopoulos presents RSP Chart - May 7, 2009 posted at Chart Analysis, saying, "Alex charts equal weight S&P ETF RSP for the past three months looking for an entry point."

Great Start To The Weekend

Unemployment came in at around 530,000, much better than the 600,000 something that was predicted. While unemployment continues to climb, the rate of of the decline is slowing down and we need that to happen before we can start increasing employment. Unemployment hit 8.9%, it will probably climb to 10% but I hope it doesn't go much further than that. 

On a side note, tech has been showing a lot of weakness the past two days.... for no apparent reason. I bought some tech stock on the weakness. I think tech is giving us a good buying opportunity right now because once investors come back to their senses and see how most tech companies are saying things are bottoming out, they will realize there is no where but up to go from here. Tech CEOs are the few CEOs that have been saying things are only going to get  better, it seems most CEOs have been reluctant to say that about their company.

I'll have the carnival of investing strategies up later today, don't worry I didn't forget :)

Thursday, May 7, 2009

Stress Test Results: Nothing Surprising

Stress results are out... I don't really see any surprises, it seems that the leaks this week were accurate. I am looking to tomorrow's unemployment numbers now to see how the economy is performing. People have become custom to the better than expected numbers that have been released as of late so we will see how the market reacts to the numbers tomorrow. I think the market is expecting job losses closer to 500,000 even though the estimate by most economists is 610,000. 

US banking regulators released results of the stress tests on the 19 biggest American financial institutions, saying which banks need additional capital to survive a worsening of the economy.

Here's a rundown of the results:

Capital Needs of Big U.S. Banks (in alphabetical order)

American Express — None

Bank of America — $33.9 Billion

Bank of New York — None

BB&T — None

Capital One Financial — None

Citigroup — $5.5 Billion

Fifth Third — $1.1 billion

GMAC — $11.5 Billion

Goldman Sachs — None

JPMorgan Chase — None

KeyCorp — $1.8 billion

MetLife — None

Morgan Stanley — $1.8 Billion

PNC Financial — $0.6 Billion

Regions Financial — $2.5 billion

State Street — None

SunTrust Banks — $2.2 billion

U.S. Bancorp — None

Wells Fargo — $13.7 Billion
Source: CNBC

Wednesday, May 6, 2009

An Update on the Stress Tests

US regulators released capital guidelines for the nation's 19 largest financial insitutions under the government's stress test and said banks needing fresh capital will have until June 8 to develop a plan and Nov. 9 to raise the capital.

The eagerly awaited results, which will be released at 5 pm New York time on Thursday, will lay out how much more capital some banks may need to raise to satisfy new stringent capital cushion targets, the US Treasury and bank regulators said in a joint statement late Wednesday.

Banks must ensure that they have tier one risk-based capital ratios of 6.0 percent, and tier one common risk-based capital ratios of 4.0 percent at the end of 2010, under a hypothetical sharper than expected economic downturn, the statement said.

Regulators described the capital as a 'one-time buffer' that will give market participants confidence in the ability of the top banks to continue providing credit to U.S. households and businesses, even if the economy is weaker than expected.

Regulators also said the banks must review their existing management to "assure that the leadership of the firms has sufficient expertise and ability" to manage risk.

Banks seeking to repay U.S. taxpayer bailout funds will have to prove they can maintain the higher capital buffers and can issue debt not backed by government guarantees.

"The U.S. government reaffirms its commitment to stand firmly behind the banking system during this period of financial strain to ensure it can perform its key function of providing credit to households and businesses," the statement said.

The release of the capital guidelines follows a steady stream of leaks to the news media concerning how individual banks may have fared on the tests.

Bank of America needs to close a nearly $35 billion capital gap. Wells Fargo needs $15 billion, while Citigroup probably will require about $5 billion.

Among the banks that will need no additional capital are:

JPMorgan Chase , Goldman Sachs , American Express , Regions Financial and Bank of New York Mellon .

Shares of bank stocks soared Wednesday even as the government told some of the industry's leaders that they'll need to raise billions.
source: CNBC