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Personal Finance News 04/2010

Citigroup's Primerica IPO raises $320.4 million (AP)
AP - Citigroup says the initial public stock offering of its Primerica life insurance business has raised $320.4 million.

Dai-ichi Life gains on debut after $11 billion IPO (Reuters)
Reuters - Dai-ichi Life Insurance rose 14 percent on its debut on Thursday after pricing its $11 billion IPO at a discount to rivals, but investors remain wary of its growth prospects outside a mature Japanese market.

British media revel in April Fools' tradition (AP)
AP - In today's headlines: flavored newsprint, high-tech ferrets and the revelation that Britain's greatest writer was — quelle horreur! — half French.

Shares of Citigroup's Primerica rise in IPO debut (AP)
AP - Shares of Primerica Inc., a unit of Citigroup Inc. that sells life insurance and other financial products, rose in their IPO debut as the financial services company took another step in its effort to raise cash and streamline its business.

Web gets April Fools' makeover of goofy hoaxes (AP)
AP - The Internet got an April Fools' Day makeover, as many of the major destinations on the Web continued the annual tradition of lighthearted hoaxes.

Citi spinoff Primerica soars on hopes for economy (Reuters)
Reuters - Citigroup Inc's spinoff of its life insurance unit, Primerica Inc saw its shares gain more than a third in its debut on optimism that the life insurer will benefit from a rebounding economy.

Mortgage rates rise above 5 percent (AP)
AP - Rates on 30-year fixed mortgages climbed above 5 percent this week as a Federal Reserve program geared to keep interest rates low came to an end.

Ryland Group to buy back $225M worth of bonds (AP)
AP - Ryland Group Inc., a homebuilder and mortgage finance company, on Thursday launched an offer to buy back as much as $225 million of its outstanding bonds.

FDIC sells $491 million in home loans (AP)
AP - The Federal Deposit Insurance Corp. has sold $490.7 million in troubled mortgage loans from 19 banks that failed between August 2008 and March 2009 as it works through an inventory of assets from the institutions it has taken over.

Calif county reaches deal on tax refund to Chevron (AP)
AP - Contra Costa County officials have reached a tentative agreement on a repayment plan for an $18 million tax refund the county owes Chevron Corp.

Economist Robert Shiller: Is a Double Dip in Housing Ahead? (BusinessWeek)
BusinessWeek - The Case-Shiller Home Price Index, a respected measure of housing prices across the country, shows a slight improvement for the month of January. However, housing starts are sluggish, delinquencies are up, the foreclosure level remains troubling, and the National Association of Realtors just reported a drop in sales of existing homes. On Mar. 31, the day after the most recent Case-Shiller numbers were released, I talked with Bob Shiller, the Arthur Okun Professor of Economics at Yale and co-creator of the index.

Icahn now owns whole mortgage on Trump casinos (AP)
AP - Carl Icahn has bought the remaining half of the $500 million mortgage on the three Trump Entertainment Resorts casinos he's trying to buy out of bankruptcy.

Financial crisis panel turns to risky mortgages (AP)
AP - A panel investigating the roots of the financial crisis will press current and former executives of Citigroup Inc. at hearings this week about the bank's role in spreading trillions of dollars in risky mortgage debt through the banking system.

Financial crisis panel turns to risky mortgages (AP)
AP - A panel investigating the roots of the financial crisis will press current and former executives of Citigroup Inc. at hearings this week about the bank's role in spreading trillions of dollars in risky mortgage debt through the banking system.

Is the British Pound the Next Shoe to Drop? (The Motley Fool)
The Motley Fool - Though the Fool has extensively covered the euro crisis, few people have mentioned that Great Britain may be in even deeper trouble. The British economy grew at only 0.3% annualized rate in the last quarter of 2009, while the U.S. economy grew at a much faster 5.6%.

E-Trade paid ex-CEO Layton $4 million last year (AP)
AP - The CEO hired to help E-Trade Financial Corp. weather the financial meltdown was given a pay package worth $4 million last year, according to an Associated Press analysis of a regulatory filing.

Ahead of the Bell: Consumer Credit (AP)
AP - Consumer borrowing, after snapping a record stretch of declines in January, is expected to have increased again in February.

Home purchase loan demand steady as refis sink (Reuters)
Reuters - U.S. mortgage rates spiked last week, slashing refinancing demand, while requests for home purchase loans held steady amid a final rush for federal tax credits, Mortgage Bankers Association data showed on Wednesday.

Goldman takes on critics in shareholder note (Reuters)
Reuters - NEW YORK/BANGALORE (Reuters) -Goldman Sachs Group Inc issued a spirited defense in its annual shareholder letter against allegations that it had benefited unduly from government help and bet against its own clients during the financial crisis.

SEC seeks tighter rules on asset-backed securities (AP)
AP - Federal regulators on Wednesday proposed new, stricter rules for asset-backed securities, the bundles of loans that helped spark the market's collapse in 2008 and nearly brought down the financial system.

Pulte says class action suit vs Centex dismissed (AP)
AP - Homebuilder PulteGroup Inc. said Wednesday that a class-action suit that accused it of contributing to the subprime mortgage meltdown has been dismissed.

Fmr. Citi exec warned Rubin about mortgage risk (AP)
AP - A former executive of Citigroup Inc. is telling a panel investigating the roots of the financial crisis that he warned former chairman Robert Rubin and other bank leaders about the coming mortgage crisis back in 2006.

The End of Wall Street? (The Motley Fool)
The Motley Fool - William D. Cohan is a former senior Wall Street investment banker, and best-selling author of The Last Tycoons and House of Cards: A Tale of Hubris and Wretched Excess on Wall Street. In addition, he writes for Vanity Fair, Fortune, Financial Times, The Washington Post, Institutional Investor, Daily Beast, and ARTnews. He also has a bi-weekly online column in The New York Times and appears frequently on CNBC.

Consumer credit unexpectedly falls in Feb (Reuters)
Reuters - U.S. consumer credit unexpectedly tumbled in February, reversing the prior month's surprise increase, as households refrained from taking on new debt in favor of deleveraging.

Summary Box: Rising mortgage rates (AP)
AP - JUMPING UP: Mortgage rates jumped over the past week, rising to 5.31 percent from 5.04 percent a week earlier, according to the Mortgage Bankers Association.

Nearly half of US households escape fed income tax (AP)
AP - Tax Day is a dreaded deadline for millions, but for nearly half of U.S. households it's simply somebody else's problem.

Summary Box: Drop in consumer credit hits stocks (AP)
AP - BROKEN CALM: Stocks slid in late-day trading Wednesday after investors grew concerned that a two-month string of almost uninterrupted gains had pushed the market too high.

Homebuyers scramble as mortgage rates jump (AP)
AP - The era of record-low mortgage rates is over.

Goldman Sachs denies betting against clients (AP)
AP - Goldman Sachs Group Inc. is denying that it bet against clients by selling them mortgage-backed securities while reducing its own exposure to such investments before the U.S. housing market crashed.

U.S. panel sifts subprime wreckage, blames Greenspan (Reuters)
Reuters - The wreckage of Wall Street's subprime mortgage machine was laid bare on Wednesday by a U.S. congressional panel that pointed the finger at Alan Greenspan for not stopping it from running out of control.

There Be No Shelter Here (The Motley Fool)
The Motley Fool - Little is asked of a reserve currency other than that it hold its value and remain widely accepted for the purchase of internationally traded goods such as oil, ore, and food. Despite these minimum standards, there are only four currencies in the world today that meet the criteria: the U.S. dollar, the euro, the British pound, and the Japanese yen.

Rates on 30-year home loans rise to 5.21 pct (AP)
AP - Rates for 30-year home loans surged last week, rising to the highest level in eight months due to the improving economy and the end of a government push to keep rates low.

NAACP drops mortgage lawsuit against Wells Fargo (AP)
AP - The NAACP is ending its lawsuit against Wells Fargo that alleged the bank was forcing blacks into subprime mortgages while whites with identical qualifications got lower rates.

Rubin, Prince pressed on roles in Citi risk-taking (AP)
AP - Robert Rubin, a senior adviser to Citigroup Inc. at the time of its deep losses from subprime mortgages, and former CEO Charles Prince said Thursday they learned belatedly that Citi had $43 billion in high-risk securities on its books.

12 Hidden Costs of Homeownership (U.S. News & World Report)
U.S. News & World Report - As the spring season gets underway, many Americans will be looking to take advantage of the lower real estate prices, attractive mortgage rates, and federal tax credit by purchasing a home. But remember: Not all of the costs associated with homeownership are reflected in the listed price. Indeed, many buyers--particularly first-time buyers--may be surprised by the amount of cash they'll need to set aside for housing-related expenses that they hadn't previously considered. These often-overlooked expenses can include everything from title insurance to lawn mowing. ...

Correction: Last minute tax preparation story (AP)
AP - In an April 7 story about things to remember when preparing tax returns as the filing deadline approaches, The Associated Press erroneously identified a Baird Private Wealth Management financial planner. His name is Tim Steffen, not Steffan.

Armstrong to record $22M charge from health care (AP)
AP - Armstrong World Industries Inc. will record a non-cash income tax charge of about $22 million against its first-quarter earnings because of a provision in the health care overhaul signed into law last month.

Real Estate: Riding the REIT Rebound (BusinessWeek)
BusinessWeek - It's hard to believe that any asset class could top the 76% runup in equities since the stock market bottomed last March, but real estate investment trusts have done just that. Since Mar. 9, 2009, the S&P Global REIT Index has climbed 114%. In the U.S., the 14 REITs in the S&P 500 are up 140%. "A year and a half ago, people were saying that the REIT industry is going to disappear," says Howard Roth, global leader of real estate at Ernst & Young. Now, even after posting such gains, the industry is in recovery mode, says Roth. ...

Test Your Insurance IQ (U.S. News & World Report)
U.S. News & World Report - Now that the health insurance reform bill has become law, it's a good time for a quick check-up: Do you have enough coverage? Your own health care isn't the only area that deserves a second look. Many Americans fail to take out enough life insurance but end up taking out too much insurance for their pets, for example. Here are five tips for making sure you have the right amount of coverage and maximizing the benefits that you already have.

Ex-Fannie Mae execs try to defend track record (AP)
AP - Two former Fannie Mae executives said Friday that competitive pressures, combined with the political goal of increasing homeownership, were to blame for the company's decision to back riskier mortgages that fueled the housing bubble.

Ex-Fannie CEO apologizes, faults business model (Reuters)
Reuters - The former chief of Fannie Mae, the giant firm that dominates America's deeply troubled housing finance system, apologized and accepted responsibility on Friday for its failings.

Summary Box: Former Fannie Mae execs testify (AP)
AP - IN THE HOT SEAT: Two former top executives of mortgage giant Fannie Mae defended their actions before a panel examining the roots of the financial crisis.

Ex-Fannie CEO apologizes, blames business model (Reuters)
Reuters - The former chief of Fannie Mae, the top U.S. mortgage finance company whose purchase of risky home loans led to a massive government bailout, on Friday apologized for the company's failings, though he defended the lavish compensation of top executives as necessary.

Business Highlights (AP)
AP - Ex-Fannie Mae execs try to defend track record

Regulators failed to supervise Washington Mutual: report (Reuters)
Reuters - U.S. regulators did not properly supervise Washington Mutual Inc, even as the savings and loan began to crumble because of the subprime mortgage crisis, a federal investigation concluded, the New York Times reported.

Netflix: Independent for How Long? (The Motley Fool)
The Motley Fool - Now's a good time to be Netflix (Nasdaq: NFLX - News). The company thrived during the recession, growing subscribers and net profits by 31% and 40% respectively in 2009. With reduced competition from Blockbuster (NYSE: BBI - News), which closed 567 net U.S. stores last year, Netflix's physical DVD business should continue to expand. Online streaming is becoming mainstream; 48% of Netflix's 12.3 million subscribers streamed at least 15 minutes of video last quarter.

GMAC to sell European mortgage business (AP)
AP - GMAC Financial Services said Monday it struck a deal to sell its European mortgage operations to a New York asset management firm, bringing it closer to its goal of withdrawing from the home lending business.

New Freddie Mac CEO earned $800,000 last year (AP)
AP - The chief executive of Freddie Mac earned nearly $800,000 last year after being hired in late summer to run the government controlled mortgage finance company.

Calif. says Yellowstone Club founder skips taxes (AP)
AP - The California Franchise Tax Board says Timothy Blixseth, founder of Montana's exclusive Yellowstone Club, owes $894,000 in unpaid personal income taxes.

State: Pamela Anderson owes $493K in income taxes (AP)
AP - California officials say former "Baywatch" star Pamela Anderson has failed to pay $493,000 in personal income tax.

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