Taxes 
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NBC Video: Analysis of Obama & McCain’s Tax Plans

Earlier this year, I wrote a post outlining the projected impact of both the Obama and McCain tax plans, as analyzed by The Tax Policy Center. NBC recently produced a two and a half minute piece about the two.

A huge point that the piece makes is that we don’t know how the recent bailouts will affect tax plans going forward. Both plans were introduced in a world where the government didn’t own Freddie Mac, Fannie Mae, or an 80% piece of AIG (and not in discussions for a $700B bailout package!). I personally think that the tax cuts proposed by both sides will be impossible and you’ll have a case of George H.W. Bush’s “Read My Lips, No New Taxes” flip.


 Personal Finance 
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Welcome (Back) Marketplace Money Listeners!

Welcome, welcome, all of the great listeners of Marketplace Money!

For those of you who haven’t heard the podcast, Lynnae of BeingFrugal.net, Steve of Brip Blap, and I had the pleasure of chatting once again with Tess Vigeland of Marketplace Money and it was a blast, yet again. The last time we chatted, it was about personal finance blogging, this time the topic was the financial chaos of these past few weeks and how things may be going forward. The entire show is available here and our discussion is here (clip recap).

If you only listen to our clip, you should consider listening to the whole radio show because there’s a piece where Stephen Hoffman interviews some children on the economic crisis. It’s absolutely adorable and priceless. They’re in Chicago and there’s one girl who says she’d resort to buying stuff in another country… like Detroit!

About Me & BFP

If, after my answers, you’re curious as to who I am, I discuss a little about myself and this site on the About page. I try to touch on all personal finance topics from banking to frugality, the stock market to saving for a home, and everything in between. If it deals with our money, how to save more of it, how to spend less of it (and still maintain a happy lifestyle), then chances are I’ll touch on it. If I don’t, tell me about it and I’ll try! And if you ever want to reach me, you can email me at the address in the upper right or use this handy contact form. Thanks!

Please Subscribe!

I hope that you enjoy your time here and consider subscribing to receive free updates of the site. You can do so with your favorite RSS reader or get posts piped directly to your email each day. I update at least twice daily (you’ll only get one email a day) and I don’t use the email for anything other than to send out these updates (oh, I giveaway stuff too and email subscribers are automatically entered). You can sign up by entering your email below and clicking the submit button.


 Banking 
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Wachovia Next To Fall?

Since the biggest of the titans, Washington Mutual, was acquired by JP Morgan Chase last week, the spotlight now moves to Wachovia Corporation, another bank that carries a lot of “toxic” debt on its balance sheet. Shares tanked over 35% on Friday after the market had a chance to react to the WaMu acquisition news. (though Citi might be buying them up)

So what was Wachovia’s greatest sin? It acquired Golden West Financial Corporation in 2006 for about $25 billion at the height of the housing boom. Guess waht Golden West specialized in? “Pick-A-Payment loans” where borrowers picked what kind of payment they wanted. As you can imagine, that’s not all prime 30-year fixed stuff on those books.

“The fundamentals at Wachovia right now are not real strong, there is no question about that,” said Joe Keetle, senior wealth manager at Dawson Wealth Management, who previously spent 25 years at Wachovia. “But the reaction today has more to do with WaMu going under and waiting for Congress to pass a bill. It’s more emotional reaction today.”

As I said with WaMu, don’t panic. If you have deposits there, make sure you’re under the $100,000 coverage limit because there’s no reason to be above the FDIC limits nowadays. If you’re under the limit, just conduct business as usual until you hear otherwise. If you’re really concerned and think that stuff might get complicated, open an account somewhere else, and transfer over some spending money. That way you can still get access to your money in the event there is a failure and there’s an extended delay before you can access to your funds.

Wachovia shares plunge as investors question fate [AP]


 Your Take 
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Your Take: What The Heck Happened These Last Two Weeks!?!?!?!

Last week, the stock indices had both their single greatest losses and single greatest gains in the last six years. Despite all the insanity, the market as a whole lost little from Friday the 12th to Friday the 19th. We were short a few companies as Lehman collapsed and 80% of AIG went to the Feds but despite all that turmoil, the various market indices were OK. We also lost the last of the investment firms as Goldman Sachs and Morgan Stanley became bank holding companies. Oh, and did you hear? JP Morgan Chase is picking up a few pieces of WaMu yesterday.

A heck of a week huh?

What I’d like to know is what do you think about the last two weeks, what do you think about this $700B bailout bill (yeah, the one where one second there’s agreement and the next there isn’t?) and what have you been doing with your finances as a result of all this craziness?

Me? I haven’t touched a thing, fortunately I’m far enough away from retirement that I believe we can weather it. I don’t think we’re going into a Great Depression or anything like that (the central bank understands monetary policy and economics well enough to prevent that) but I wouldn’t be surprised if things were slow for a few years as a result.

As for that bailout bill? I only have eight classes of economics (that’s all I needed for that Econ double major, w00t w00t) and I am wholly unqualified to either justify or tear down the bailout bill. I understand the reasoning behind it but I don’t know if we’re going down the right path or whether we’re just signing yet another IOU. All I know is that the provision to snip the golden parachutes of executives at bail out firms better make it into the final draft. TGIF.


 Banking 
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Washington Mutual Acquired by JP Morgan Chase

The word on the street is that JP Morgan Chase is buying parts of Washington Mutual after the FDIC seizes the country’s largest thrift. I guess all the reports of WaMu’s demise were not so greatly exaggerated.

The government on Thursday made the largest bank seizure in American history, taking over Washington Mutual, the severely troubled savings and loan, and selling pieces of it to JPMorgan Chase in an emergency deal intended to avoid sticking the taxpayer with a bill for another bank, according to people briefed on the plan.

Game over WaMu.

(WaMu account holders should read this FAQ that Chase published to learn what’s new)

Government Seizes WaMu and Sells Some Assets [New York Times]
JPMorgan Chase May Acquire Washington Mutual After FDIC Seizure [Bloomberg]


 Banking 
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Converting APR to APY, What’s The Difference?

If you’ve ever seen any interest rates, chances are you’ve seen the tandem of APR and APY splashed across brochures, flyers, banners, and computer screens. If you didn’t know what the difference was, as I didn’t when I first started reading about this stuff, I’ll give you the quick explanation.

  • APR stands for Annual Percentage Rate.
  • APY stands for Annual Percentage Yield.

What’s the difference between APR and APY?

It’s in how they account for compounding. APR doesn’t consider compounding and APY does, meaning APY will almost always be a slightly higher number.

(Click to continue reading…)


 Banking 
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No Reason To Be Above FDIC Insurance Limits

If you have more than $100,000, there is no reason to keep it all at one bank.

(There is actually one reason, but it’s not a good one. At most banks, the interest rate on jumbo CDs is a little larger than regular CDs but it requires that you open one with at least $100,000 – but that’s a bad reason.)

Here’s one horror story about a woman who kept more than $100,000 at Silver State Bank, the Nevada bank that recently went into FDIC conservatorship, and lost over $20,000 (~$20 million was uninsured in total).

(Click to continue reading…)


 Frugal Living 
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Standby Recipes: Buying Last Minute Meats

If you’ve ever walked through your grocery store’s meat aisle, you’ve probably seen those “Save $2.00″ or “Save $1.00) (or more) stickers on packages of meat. Those are typically put on by the butcher for quick sale because the product is nearing or at the Sell By date. Take advantage of those quick sale discounts by stopping by your grocery store on the way home and having a few standard recipes handy.

Our Standby Recipes

Chicken: Our standby chicken recipe, when we don’t feel like grilling it, is either a chicken stir-fry or chicken marsala. Chicken stir-fry is a cinch, simply cut it up, grab some veggies, and stir it all up with some rice or noodles into some yummy goodness. Chicken marsala requires a little more work – lightly bread the chicken and hope you have some marsala wine handy. If it’s summer time, you can always just put on some BBQ sauce and grill that sucker.

(Click to continue reading…)


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