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September 2008

I don’t want to belittle the condition of the economy currently. Someone who is close to retirement may have just lost a significant portion of their intended source of income if invested solely in stocks. If you listen to the media and politicians, you might get the impression that the American public is “freaking out” about their money right now and experiencing the downstream effects of high anxiety.

The Today Show’s Dr. Gail Saltz, a psychiatrist, recently appeared on this show and claimed that stress due to money has increased “hundredfold.” The video clip also describes people’s current attitudes as a “state of panic” and “intense fear.”

Dr. Saltz admits that “watching the media constantly is a terrible idea, like being stuck with needles.” That’s a great comment to hear on a popular television show. She also says that more people now will be seeking professional help for their anxiety due to the economic downturn.

I haven’t seen much evidence of panic in my daily interactions, other than what I hear on the radio from politicians. Long term prospects are likely to still be good. I can imagine that panic might set in when someone has their entire portfolio investments tied up in companies that failed or someone set to retire and rely on investment income, but that should serve as a reminder to have an asset allocation appropriate for your needs and reduce exposure to risky investments like stocks when you are relying on the money being available.

Are you panicking or anxious about money right now? Is your financial situation affecting other aspects of your life? Also, do you think the media are accurately portraying people’s attitudes? Share your thoughts, anonymously if you like.

If you want to watch the Today Show clip, it’s available inside this article. RSS readers, please view this article on Consumerism Commentary to view the video. Read the full article →


In the original version of this article, I was under the impression that the Senate had passed this bill already. It hasn’t; they have only just released the details to the public. A vote will come later.

Over the weekend as I watched the Mets end a frustrating season with a disappointing final series, the details of the Senate’s bill to bail out the financial industry, and presumably the economy, were released to the public. I understand that passing a bill requires compromises to be made, but there is one interesting point that reduces the effectiveness of the bill.

Curbs would be placed on the compensation of executives at companies that sell mortgage assets to Treasury. Among them, companies that participate will not be able to deduct the salary they pay to executives above $500,000. They also will not be allowed to write new contracts that allow for “golden parachutes” for their top 5 executives if they are fired or the company goes belly up. But the executives’ current contracts, which may include golden parachutes, would still stand.

The executives in charge of the bailed-out companies will be replaced if they haven’t been already. Those being replaced will not have to face any penalties for driving their companies into the ground by acquiring risky debt. While fully aware of the risks involved, they did not have to bear any personal financial risk. While these executives should be commended for being able to negotiate ridiculous contracts allowing them to fail and still be paid massive bonuses, this should be eliminated for any company that requires “rescuing” with taxpayer money.

President Bush, Treasury Secretary Paulson, and the Democrats and Republicans in Congress are tied to the financial firms on Wall Street. They don’t want to make enemies now, particularly when some individuals currently in government may look for financial jobs in the private sector in the near future.

Let’s hope that the bill presented by the House of Representatives curbs bonuses for executives who mismanaged their businesses to the point that the government needed to enact the biggest market intervention in the history of market interventions.

Will financial executives refuse to allow their companies to participate in the bailout if they don’t receive their multi-million dollar “golden parachutes?” It would be a dumb, selfish move to put the health of the economy on the line until they receive their bonus for driving their companies into the gutter.

Rescue bill unveiled, Jeanne Sahadi, CNN Money, September 28, 2008


Once again, I’ve refreshed the list of ING Direct $25 bonus codes. This bonus is available to anyone looking to open a new account at ING Direct, one of the most popular high-yield savings accounts. These bonus codes are provided by Consumerism Commentary readers. Thanks to everyone who has helped another reader by sending in their codes!

Here are some interesting articles from around the blogs:

Career in Financial Services? It’s well known that a career in financial services can be lucrative. FrugalTrader looks at the pros and cons of this career path, one which I have considered.

Six Ways to Get Intense About Your Finances. Prime Time Money suggests reading personal finance blogs as the number one option. Luckily, pfblogs.org gathers the best in personal finance articles and presents them to readers in a number of different ways.

29 Steps I Took to Leave the Workforce at Age 29. Madison has exited the corporate workforce and is now living off “retirement” income and “alternative” income.

Behind the “We Deserve It Dividend” Hoopla. Smart Spending responds to a forwarded email making the rounds, purporting that the $700 billion bailout would be better spent if distributed directly to taxpayers, at a rate of $425,000 per person! The calculation is off — the $700 billion divided among all Americans works out to $425 per person. Many have already received more than this from the economic stimulus package.

JPMorgan Chase Owns Me! The Frugal Duchess responds to her friend whose home, credit cards, and checking account, once owned by Washington Mutual, are now owned by Chase. By the way, The Frugal Duchess published a book this year, The Frugal Duchess: How to Live Well and Save Money.

Warning: Post Office Not Offering First Class Mail. If you use the United States Postal Service, it helps to educate yourself about the types of shipping methods available to you. Apparently, government employees are not providing the entire picture, favoring more expensive methods for shipping than may be required.


While I’m generally happy with my ING Direct account for a good portion of my savings, I’m looking to spread the money around to take advantage of some higher interest rates. One of the banks I’ve targeted is FNBO Direct, the online arm of First National Bank of Omaha, currently offering 0.70% interest yield as of September 2011.

FNBO Direct is a member of FDIC, so deposits at the bank are insured. As long as balances stay below the limits set by the FDIC, I won’t have to worry about the safety of my money.

Opening my account at FNBO Direct

Opening a savings account at any bank takes several days from start to finish, and FNBO Direct is not an exception. I started the process this past Sunday.

Step 1: Visit FNBO Direct and fill out an application. Read the full article →


Washington Mutual Acquisition: What Happens to Savings Accounts?

by Luke Landes

Late Thursday night, JPMorgan Chase confirmed that it has acquired the deposits (bank accounts), assets, and “certain liabilities” of Washington Mutual. The acquisition has created the largest depository institution in the United States, with over $900 billion in bank accounts alone. WaMu branches will become Chase branches as the acquisition progresses over the next two ... Continue reading this article…

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Charitable Giving: A Case of Bad Market Timing

by Luke Landes

I made a mistake, and I should have known better. Last year, I struggled with coming up with a needy non-profit organization that I felt I should support through charitable giving. The indecision stems from the desire to contribute to an organization with a mission that reflected one of my passions and the lack of ... Continue reading this article…

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Mark Cuban to Government: Show Us How the $700 Billion Will Be Spent

by Luke Landes

I swear I’m trying to write about topics other than the massive national bailout of the financial industry, but there always seems to be something interesting to say. Yesterday, it was Mark Cuban, owner of the Dallas Mavericks and chairman of HDNet who offered interesting insight. He suggested that the United States Treasury Department list ... Continue reading this article…

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Washington Mutual Increases Savings Account Interest Rate to 4.0% APY

by Luke Landes

February 5, 2009 update: The following information has expired. Washington Mutual no longer offers these rates. Washington Mutual wants your deposits. I received word that starting tomorrow the bank will offer 4.0 percent APY on its online savings account, maintaining its position at the very top of the list of popular high-yield savings and money market ... Continue reading this article…

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Citi Raised My Credit Limit

by Luke Landes

Last week, I received an official-looking notice in the mail. You know the type: the envelope requires you to tear the perforated edges in a specific order and contains security ink so the contents cannot be seen until opened. There is a return address on the envelope but no business name. In my experience, the ... Continue reading this article…

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Gas Stations Charging Credit Users More Than Cash Users

by Luke Landes

Clark Schinger owns a gas station. Like an increasing number of gas station owners, he is charging his customers who use credit cards a surcharge for every gas purchase. Effectively, there are two tiers of prices: one for customers who use credit cards and one for those who use cash. This is apparently not against ... Continue reading this article…

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$700 Billion to Bail Out the Financial Industry: Good Idea or Bad Idea?

by Luke Landes

Over the weekend, President Bush asked Congress to grant the United States Treasury Department the authority to purchase $700 billion in assets from troubled financial companies. The government would create a corporation, like 1933′s Home Owners’ Loan Corporation, to buy mortgage-backed securities at a discount and sell them later for a profit. This is by ... Continue reading this article…

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Why Put Your Money in an Investment Earning 0%?

by Luke Landes

Yesterday I mentioned that the U.S. Treasury was able to raise $40 billion in a one-day auction of 35-day Treasury bills. When you bid for these investments, you could either compete with others by offering to invest at the lowest interest rate you’re willing to accept or bid “non-competitively,” accepting whatever the Treasury Department determines ... Continue reading this article…

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Where Did the Federal Reserve Get $85 Billion for AIG?

by Luke Landes

When I heard the news that the Federal Reserve Bank of New York is making $85 billion available to American International Group in the form of loans, one of my first questions was about the source of the money. Does the Federal Reserve keep an emergency fund available to bail out companies during financial crises ... Continue reading this article…

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Who Do You Blame When You Lose $6 Million Overnight?

by Luke Landes

The New York Post presented an article about David Shorr, a shareholder of Lehman Brothers, who lost $6 million as the company filed for bankruptcy. David spent many years as an employee of Lehman Brothers, building up compensation in the form of stocks which are now worthless. “What the hell was he thinking?” asked Shorr, ... Continue reading this article…

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HSBC Direct Dropped Rate From 3.50% to 3.25% APY

by Luke Landes

This morning, online bank HSBC Direct ended the extended promotion in which customers were offered a savings account earning interest of 3.50 percent annual percentage yield. This was planned; when the promotion was extended back in July, the company warned that after September 15, the interest rate would return to normal, which it has. The interest ... Continue reading this article…

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Calming Facts About Identity Theft

by Smithee

If someone successfully applies for a loan or a credit card using your identity, there will be a big mess to clear up. I don’t want to downplay the hassle, there. I would be extremely annoyed if that happened to me. However, what we hear on the news and especially in commercials for services like ... Continue reading this article…

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Ten Things to Do With $1,000 (Plus 21 More)

by Luke Landes

If you’ve suddenly come upon $1,000 you didn’t have the day before, you may get the urge to celebrate. $1,000 doesn’t open many new opportunities to you these days, but there are a number of options. Kiplinger has published a special with 37 ways to invest $1,000, but I have a few suggestions of my ... Continue reading this article…

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Choosing Your Major and Your Career For Earning Potential

by Luke Landes

If your goal in life is to earn as much money as possible, then you need to determine before you graduate high school what high-earning career path is best for you. You’ll need to weigh your skills and aptitude to decide the collegiate degree that provides you the best chance for professional success as well ... Continue reading this article…

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Whoo Hoo: Washington Mutual Next to Fail?

by Luke Landes

Shares in Washington Mutual, the country’s largest savings and loan bank, dropped over 30 percent in one day due to fears that this institution will be the next in a series of failures of financial companies. WaMu holds $310 billion in assets, a huge amount of deposits. The FDIC, which might step in to take over ... Continue reading this article…

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FNBO Direct Giving Away $25,000 to Customers

by Luke Landes

Liz Pullliam Weston, author and personal financial columnist, has teamed up with FNBO Direct (the online savings arm of First National Bank of Omaha) to sponsor a contest called “Pay Yourself First” in which five winners will each receive $5,000. Those who wished to participate sent in a one-minute video about why they save money ... Continue reading this article…

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