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Personal Finance News 06/2010

AIA's IPO plans in focus after Pru rebuff (Reuters)
Reuters - AIG's rejection of a lowered takeover offer by Prudential for its Asian life insurance business has shifted attention back to the company's IPO plans.

5 Reasons to Start Investing for Retirement Today (U.S. News & World Report)
U.S. News & World Report - I'm not going to try and persuade you that our economy isn't shaky. But I actually think you're missing out if you aren't consistently saving for retirement right now. I will make an appeal to the long-term investor inside each of you and lay out these five reasons why there's no better time than today to start investing for your retirement.

The iPad: Huge in Japan (The Motley Fool)
The Motley Fool - Apple (Nasdaq: AAPL - News) continues marching into Japan, and you can't help but hear the faint tune of Queen's "Another One Bites the Dust" in its wake. The iPad just launched in the country to much fanfare and staggeringly long lines. It's a familiar story: With each subsequent product release, the press frets that Japan will reject Apple because it's a foreign company, and each time, Apple hits a home run.

10 Companies Back From the Brink (U.S. News & World Report)
U.S. News & World Report - The recession left behind a graveyard of corporate carcasses, from Circuit City to Linens n' Things to Lehman Brothers. Thousands of smaller businesses closed. AIG, Fannie Mae and Freddie Mac are staggering along as wards of the state. General Motors, Chrysler, Citigroup and several other name-brand firms would probably be toast too, if not for bailouts and forgiving consumers.

Citi restructures US consumer finance business (AP)
AP - Citigroup Inc. is closing 330 branches of its U.S. consumer finance business as part of a restructuring aimed at finding a buyer for the unit, the bank said Tuesday.

Pru deal near collapse as AIG snubs lower offer (Reuters)
Reuters - Prudential Plc's bid for AIG's Asian life insurance unit was close to collapse on Tuesday after the two failed to negotiate a price cut, raising questions about the future of the British insurer and its chief executive.

Prudential ends $35.5 billion Asian takeover bid (Reuters)
Reuters - UK insurer Prudential has abandoned its plan to buy AIG's Asian life unit for $35.5 billion, leaving management under fire and the company facing a $659 million bill for failure.

BofA reaches out to 10,000 mortgage borrowers (AP)
AP - Bank of America Corp. said Wednesday it has contacted 10,000 of its most troubled mortgage borrowers about its new loan forgiveness program.

Buffett defends rating agencies for missing crisis (AP)
AP - Billionaire investor Warren Buffett on Wednesday defended credit rating agencies that gave overly positive grades to mortgage-related investments before the housing bust. He said the agencies were among many who missed warnings signs of the crisis.

Pending home sales at 6-month high (Reuters)
Reuters - Pending home sales hit a six-month high in April, data showed on Wednesday, but falling demand for home loans pointed to ebbing activity in the vital housing market due to the expiration of a popular tax credit for buyers.

Filling Up 8 Extra Hours in Retirement (U.S. News & World Report)
U.S. News & World Report - Quick, what's the first thing you think of when you read the word retirement? Skydiving? Climbing Mount Everest? Saving the world? You're thinking non-stop excitement, right? Or maybe you're thinking hammocks, shuffleboard, and Bermuda shorts with black knee socks.

Summary Box: Mortgage rates inch higher this week (AP)
AP - RATES : Rates on 30-year fixed mortgages ticked up from the lowest level of the year this week, rising to 4.79 percent from 4.78 percent last week.

Should You Buy or Rent? (BusinessWeek)
BusinessWeek - To rent or to buy? For millions of Americans, that is the question. The recent housing boom and subsequent bust seem to provide a clear answer -- that given an affordable mortgage, we would all rather be buyers.

It Might Be the Right Time for REITs (BusinessWeek)
BusinessWeek - A year ago, the commercial real estate market was very ugly. Property values had dropped 40 percent and it looked like it was going to be very, very difficult to work our way out of the mess. There was a looming maturity of mortgages written between 2005 and 2007, the peak bubble years. A lot of these mortgages had five-year maturity triggers and were coming due. Very often all of the equity was wiped out, and mortgage holders were going to take a hit. It had elements of the housing mess, where it looked like no new mortgage financing would be available.

Where the Hot Money Is Going Now (The Motley Fool)
The Motley Fool - Thanks to renewed uncertainty over the economic health of the European continent, stock markets have been in a tizzy lately, marking large advances and declines on a daily basis. Uncertainty is back on the menu, and investors are reacting by sticking new money into two perhaps unsurprising places -- bond funds and index-based products. But are these the right moves to make right now?

Ahead of the Bell: Consumer Credit (AP)
AP - Consumers are expected to have increased their borrowing for a second consecutive month in April.

Countrywide settles FTC charges for $108 million (Reuters)
Reuters - Countrywide Financial Corp, the mortgage lender that became synonymous with risky lending practices, has agreed to pay $108 million to settle government charges that two Countrywide mortgage servicing companies misled and overcharged consumers.

You Can't Borrow Your Way Through Retirement (U.S. News & World Report)
U.S. News & World Report - It's a simple truth, but one for which many people need a reminder. You can't borrow your way to wealth and you can't borrow your way through retirement. Fortunately, it's not difficult to get started . All you need to do is make retirement saving a priority and begin investing. These tips can serve as a reminder to keep your retirement planning on track.

Consumer borrowing up slightly in April (AP)
AP - Consumer borrowing increased slightly in April, a sign that Americans may have more faith in the economic recovery.

Got Your Tax Refund? Now Analyze It. (U.S. News & World Report)
U.S. News & World Report - It's June and by now, unless you've requested an extension, you've probably had enough time to recover from preparing your taxes in April. If you think tax planning won't become a factor until December or next April, think again. Last year's tax return can provide a wealth of information you can use to be smarter with your money this year. Your tax return is quite possibly one of the best financial planning tools out there because it forces you to distill the events of last year onto one package of information.

9 Credit Score Myths, Debunked (U.S. News & World Report)
U.S. News & World Report - Credit scores can affect your credit card interest rates, how much you pay on a car loan or mortgage, and even whether you get a job. But despite the importance, 4 in 10 Americans never bother to check their credit scores. What's more, many people incorrectly believe that age and income influence the number, when only credit history matters.

The New, and (Almost) Free, Way to Refinance (U.S. News & World Report)
U.S. News & World Report - It sounds too good to be true: If you want to lower the interest rate on your mortgage, just call and ask your bank. They'll do it for you on the spot, without charging much in the way of fees, and within a month you'll be paying a lower mortgage.

Gulf Update: Where We Stand Now (The Motley Fool)
The Motley Fool - It appears that BP's (NYSE: BP - News) most recent "cut-and-cap" technique for stanching the flow of oil from its massive Gulf of Mexico spill is working to some extent.

Gulf Update: Where We Stand Now (The Motley Fool)
The Motley Fool - It appears that BP's (NYSE: BP - News) most recent "cut-and-cap" technique for stanching the flow of oil from its massive Gulf of Mexico spill is working to some extent.

Tax Breaks for Retirement Investors (U.S. News & World Report)
U.S. News & World Report - It is up to you to plan for your retirement. Thankfully, the government has given us some nice tools to help plan our retirement and get some nice tax breaks in the process. These retirement accounts often work in conjunction with Social Security and with each other, giving you several options for retirement saving.

Goldman unlikely to settle Timberwolf: source (Reuters)
Reuters - Goldman Sachs Group Inc may be looking at new legal headache, as settlement talks with an Australian hedge fund that invested $100 million in a now toxic mortgage-linked security appear to be breaking down, a source said.

Without tax credit, home demand keeps slumping (Reuters)
Reuters - Home buying applications sank for a fifth straight week to a fresh 13-year low, the Mortgage Bankers Association said on Wednesday, suggesting that tax credits had robbed more from future sales than expected.

What Dividend Stocks Can't Do (The Motley Fool)
The Motley Fool - As the stock market continues to get more and more edgy, investors are starting to look for shelter from the coming storm. Although dividend stocks become even more attractive as stock prices fall, you need to understand going in that even stocks that make excellent long-term investments won't necessarily keep you from suffering short-term losses.

Overall mortgage application volume falls 12.2 pct (AP)
AP - The number of customers applying for a mortgage to purchase a property fell to the lowest level in 13 years last week, a sign the housing market is struggling without government incentives.

Mutual Fund Buzz for June 9: The Tax Man Eyes The Fund Manager (U.S. News & World Report)
U.S. News & World Report - Next week could be a rough one for some fund manager paychecks. That's when the Senate is expected to vote on a jobs bill that includes a big tax hike on private equity firms, hedge funds, and some real estate fund managers, says the WSJ. Their income tax hit would rise to 35 percent on "carried-interest" income, which gets taxed at a more friendly capital-gains-like rate of 15 percent. The rate on partnership income, a tax that would hit the sale of a variety of financial firms specifically, would rise to 30 percent in 2011 and 33 percent in 2013.

Goldman sued by hedge fund over notorious CDO deal (Reuters)
Reuters - An Australian hedge fund is suing Goldman Sachs Group Inc over an investment in a subprime mortgage-linked security that contributed to the fund's demise in 2007.

SEC examining Goldman Sachs' Hudson deals: report (Reuters)
Reuters - The U.S. Securities and Exchange Commission, which charged Goldman Sachs Group Inc with fraud in April, is investigating another mortgage-linked deal once pitched by the Wall Street firm, the Financial Times reported, citing people close to the matter.

Freddie Mac: Mortgage rates hit low for year (AP)
AP - Rates on 30-year fixed mortgages fell this week to the lowest level of the year and were barely shy of the all-time low.

Base text for Wall Street panel includes changes (Reuters)
Reuters - U.S. lawmakers tasked with hammering out a final version of financial-reform legislation will use as a starting point a bill that combines mortgage reforms passed by the House and the Senate, according to a summary obtained by Reuters.

Don't Let Debt Get in the Way of Retirement (U.S. News & World Report)
U.S. News & World Report - Paying off debt is hard enough when you're in the working world, making a steady paycheck every couple weeks. But once you near retirement, managing credit cards, auto loans, or a mortgage can be almost impossible - in fact, carrying that kind of debt could prevent you from retiring at all.

Summary Box: Mortgage rates hit low for year (AP)
AP - LOWEST RATES OF YEAR: Rates on 30-year fixed mortgages fell this week to an average of 4.72 percent, the lowest level of the year and barely shy of the all-time low.

Summary Box: House OKs higher gov't mortgage fees (AP)
AP - FEES MAY RISE: Consumers who take out home loans guaranteed by the Federal Housing Administration could soon pay higher fees after House lawmakers approved a bill giving the agency power to hike monthly premiums.

Fed's Plosser says asset sales wouldn't disrupt markets (Reuters)
Reuters - U.S. financial markets would be able to stomach gradual sales of the more than $1.4 trillion of mortgage-related debt the Federal Reserve bought to fight the credit crisis, a top Fed official said on Friday.

A Game-Changing Trend You Need to See (The Motley Fool)
The Motley Fool - Observers have a tendency to underestimate the long-term impact of technology while exaggerating its short-term effects. That's why I was so interested to come across a recent study in Advertising Age that has sweeping implications for our society.

Goldman's CDO woes mean dollar signs for lawyers (Reuters)
Reuters - Goldman Sachs Group Inc's mounting legal and regulatory woes stemming from the firm's sale of subprime mortgage-linked securities are turning into gold for a growing number of lawyers in New York and Washington.

Looking to Invest Your Social Security Check? Consider These Factors (U.S. News & World Report)
U.S. News & World Report - For many seniors, monthly Social Security checks are a safety net used to cover immediate costs. But for those who have the luxury of being able to grow their portfolios, these payments can represent a regular source of investable income. "On the assumption that they don't need the money now, odds are good that they won't need the money for a while. And that argues that they can invest the money with the long term in mind," says Ric Edelman, a Virginia-based financial advisor and best-selling author.

Europe and economic data to call stocks' tune (Reuters)
Reuters - U.S. stock investors will keep a close eye on Europe next week, looking for signs the debt crisis may be stabilizing, while industrial production, housing starts and inflation data may offer more clues on the U.S. economic outlook.

Stocks look to Europe and U.S. economy (Reuters)
Reuters - Stock investors will keep a close eye on Europe this week, looking for signs the debt crisis may be stabilizing, while industrial production, housing starts and inflation data may offer more clues on the U.S. economic outlook.

AXA in talks to sell British units (AFP)
AFP - French insurer AXA is in talks with British rival Resolution on a 3.3-billion-euro (4-billion-dollar) deal to sell its life insurance and savings businesses in Britain, the French company said on Monday.

Federal Student and Parent Loans Are Getting Cheaper and Easier (U.S. News & World Report)
U.S. News & World Report - Now that the hype surrounding the government's overhaul of the scandal-tinged federal student loan program has settled, students and parents seeking loans for the 2010 academic year are getting some surprisingly good news: Many 2010 federal education loans will be cheaper, easier to get, and easier to repay than they've been in recent years.

Federal Student Loans Get Cheaper, Easier (U.S. News & World Report)
U.S. News & World Report - Because states have been cutting back on scholarships while hiking tuition, more students are having to borrow to fund college. Luckily, at least some federal student loans are getting cheaper, easier to get, and easier to repay.

These 3 Families Paid Off $373,000 (The Motley Fool)
The Motley Fool - It's easy to get discouraged when your financial big picture is drenched in red ink -- especially if you stop to calculate how much you're paying just for the interest in your debt. Phil Gardner did just that a few years ago, and realized that he'd forked over $193,345.59!

Who Will Win This Race to the Bottom? (The Motley Fool)
The Motley Fool - There's nothing better for customers than a price war. For a while, competing companies beat each other up, offering increasingly attractive deals to woo new clients to their services. As long as those competitive pressures don't drive the companies out of business, customers get a smorgasbord of great deals.

Housing starts drop to five-month low in May (Reuters)
Reuters - Housing starts fell more than expected in May to their lowest level in five months, a government report showed on Wednesday, as a popular homebuyer tax credit that had buoyed construction activity over the past two months expired.

Home building at five-month low post tax credit (Reuters)
Reuters - Housing starts fell more than expected in May to a five-month low as a homebuyer tax credit expired while plunging energy costs pushed producer prices lower, buying time for the Federal Reserve to maintain its ultra-low interest rate policy.

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