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Personal Finance News 09/2010

The True Risk of Bond ETFs (The Motley Fool)
The Motley Fool - In coming up with ways to protect their portfolios, many investors draw on lessons learned from their most recent mistakes. Unfortunately, most people right now are taking the lessons they learned from the 2008 bear market and buying bonds, which could easily prove to be far riskier than they thought.

The Great Value Investors Are Heading West (The Motley Fool)
The Motley Fool - When Berkshire Hathaway (NYSE: BRK-A - News) was buying railroad company Burlington Northern last December, Warren Buffett told Matt Rose: "I've seen what's been done here [in the U.S.]. I think I know how the country is going to develop. I think the West is going to do well. I'd rather be in the West than the East. So I really don't have much of a worry about that."

Mortgage applications rise 2.7 pct on low rates (AP)
AP - Mortgage applications rose 2.7 percent last week as more borrowers took advantage of the lowest rates in decades to reduce their monthly loan payments.

5 Ways to Simplify Your Personal Finances (U.S. News & World Report)
U.S. News & World Report - If you're combining your life with a new spouse, moving from one house to another, or just frustrated with the amount of documentation you have filed (or unfiled) in your basement, it's a good time to simplify your finances. Simplification is not only practical, it is beautiful. This is the concept of kanso, a Japanese aesthetic usually applied to gardens. Through a stretch of the mind, we can apply this beauty to our lives and our finances.

Why It's Harder to Be a Clueless Consumer (U.S. News & World Report)
U.S. News & World Report - American consumers hate being told what to do, and to prove it, we routinely make choices that are irrational and counterproductive. We make impulse purchases we can't afford. We build bigger houses than we need, chaining ourselves to an onerous mortgage for years. We drive rugged, four-wheel-drive vehicles even though we never leave the pavement. We buy Snuggies.

No bank account? Get your tax refund on plastic (AP)
AP - A new Treasury Department program to give people without bank accounts faster access to their tax refunds will help some avoid costly short-term loans. But careless consumers could end up racking up fees and padding bank profits.

AP - July factory orders edge up as strong demand for aircraft offsets weakness in other sectors.

Mortgage rates hit record low: Freddie Mac (Reuters)
Reuters - U.S. mortgage rates fell in the past week to the latest in a series of record lows as yields on government debt dropped, according to a survey released on Thursday by Freddie Mac, the second-largest U.S. mortgage finance company.

The Next 4 Dot-Com Buyouts (The Motley Fool)
The Motley Fool - Shares of (Nasdaq: SLRY - News) -- a small provider of human resources applications on the cloud -- soared 43% yesterday, after agreeing to be acquired by larger rival Kenexa (Nasdaq: KNXA - News).

5 Reasons You Should Buy Your Latte (U.S. News & World Report)
U.S. News & World Report - The Latte Factor, a term coined (and trademarked) by personal finance guru David Bach, is one of the most talked about concepts in the world of personal finance. But it might be based on faulty math.

How to Get a Government-Backed, Zero-Down-Payment Mortgage (U.S. News & World Report)
U.S. News & World Report - More than four years after real estate values peaked, the historic plunge in home prices remains fresh in the minds of mortgage lenders. After taking painful losses on delinquent home loans, banks have imposed tougher standards--such as increased credit scores and higher down payment requirements--on applicants of all stripes. And as investors fled for the hills, the exotic mortgage products that helped fuel the real estate boom have largely disappeared from the private market. But that doesn't mean all buyers need a big pile of cash to snag a home loan. ...

Summary Box: Mortgage rates hit low of 4.32 pct. (AP)
AP - RECORD LOWS: Mortgage rates fell to the lowest levels in decades for the tenth time in 11 weeks, mortgage buyer Freddie Mac said Thursday. The average rate for a 30-year fixed loan was 4.32 percent. The 15-year fixed loan hit 3.83 percent.

5 Tax Moves to Make Now (U.S. News & World Report)
U.S. News & World Report - It may seem a bit strange to be talking about income taxes in September. There are, however, good reasons to think about taxes well before April 15. For starters, there are some big changes in the tax code that go into effect in 2011. Depending on your income tax bracket and investments, some simple planning now could save you a bundle later.

Petrobras sells 64 bln dlrs of stock to fund exploration (AFP)
AFP - Brazil's Petrobras unveiled one of the world's biggest share offerings on Friday, a sale of up to 64 billion dollars in new stock to finance oil exploration aimed at turning Brazil into one of the world's top 21st century oil exporters.

Sirius XM Has a Stern Decision to Make (The Motley Fool)
The Motley Fool - Satellite-radio star Howard Stern is negotiating in public again.

MGIC added $1.2B in mortgage coverage in August (AP)
AP - Private mortgage insurer Mortgage Guaranty Insurance Corp. said Friday it added $1.2 billion in new primary insurance coverage in August and the number of delinquent loans it insures declined.

AIG seeks Sept 21 approval for AIA IPO: sources (Reuters)
Reuters - American International Group Inc plans to seek Hong Kong listing committee approval on September 21, to list its Asian life insurance unit, aiming to raise about $15 billion, two sources with direct knowledge of the deal said on Tuesday.

Small investors quitting Wall Street: SEC boss (AFP)
AFP - The head of the US stock market watchdog said on Tuesday that individual investors have been turning away from equities since a May crash that exposed weaknesses in Wall Street's trading structure.

Bullish or Bearish? The World's Greatest Investors Debate. (The Motley Fool)
The Motley Fool - The bears and bulls were battling as ferociously as ever over the past month. Let's dive right into the debate, through the words of some of the world's greatest investors.

Home buying up in week, but down 40 percent in year (Reuters)
Reuters - Americans applied to buy homes at the highest pace last week since May, but more than 8 of every 10 loan requests was for a refinancing, Mortgage Bankers Association data show on Wednesday.

Mortgage lending down 1.5 pct as rates inch up (AP)
AP - Applications for home loans dipped last week as mortgage rates ticked up slightly from the lowest level in decades.

Summary Box: Mortgage lending falls 1.5 pct (AP)
AP - MORTGAGE APPLICATIONS SLIP: Applications for home loans dipped last week as mortgage rates ticked up slightly from the lowest level in decades, according to the Mortgage Bankers Association.

What Great Chess Players Can Teach Investors (The Motley Fool)
The Motley Fool - The constant iterative calculation of risk and reward required in every chess move translates well to the investing world. I thought it might be instructive to look at three chess world champions and see how their style matches up to various investment styles. Do you see your own style in any of these Grandmasters?

Oppenheimer downgrades H&R Block to 'Perform' (AP)
AP - Tax preparation company H&R Block has struggled for the last two tax seasons and faces uncertainty over the mortgages it still holds from its former lending operations, an Oppenheimer analyst said Wednesday.

Freddie Mac to issue new 5-year note due 2015 (AP)
AP - Government sponsored mortgage buyer Freddie Mac said Wednesday it plans to issue new five-year notes due on Sept. 10, 2015.

Consumers cut back on credit card use once again (AP)
AP - Consumer borrowing fell again in July as households cut back on their credit card use for a 23rd consecutive month, adding more drag on an economy struggling to mount a sustained rebound.

Bankers urge government to pull plug on Fannie, Freddie (Reuters)
Reuters - The federal government should take mortgage finance giants Fannie Mae and Freddie Mac off life support sooner rather than later, the Mortgage Bankers Association urged on Wednesday.

Financial crisis panel tells NV leaders to be bold (AP)
AP - From mortgage problems to education and budget issues, Nevada leaders on Wednesday delivered a sobering assessment of the state's future as a result of the Great Recession during seven hours of testimony before a federal panel investigating the country's financial meltdown.

FDIC's Bair warns of government "exposure" in mortgages (Reuters)
Reuters - A key U.S. banking regulator raised concern on Wednesday about the risk of "exposure" the government is taking on in the mortgage market and urged more stringent standards for underwriting mortgages.

Avg. mortgage rate up to 4.35 pct. off decades-low (AP)
AP - Mortgage rates mostly edged up last week as investors' fears about the economy eased.

3 Texas men indicted in Va. in $103M scam (AP)
AP - A federal grand jury in Richmond has indicted three Texas men for allegedly defrauding investors in their life insurance settlement businesses.

Retire Rich While Others Work Forever (The Motley Fool)
The Motley Fool - The looming cloud hanging over our collective financial future has a big, fat silver lining -- if you bother to look for it.

Capstead Mortgage shares fall on dividend cut (AP)
AP - Shares of Capstead Mortgage Corp. fell Friday after the real estate investment trust cut its dividend for the fifth straight quarter.

Treasury's Barr to testify on Fannie and Freddie (Reuters)
Reuters - Michael Barr, assistant treasury secretary for financial institutions, and Edward DeMarco, acting director of the Federal Housing Finance Agency will testify on Capitol Hill next week on the future of Fannie Mae and Freddie Mac .

Advice for Widows and Older Couples, Too (U.S. News & World Report)
U.S. News & World Report - Kathleen Rehl shares an unwanted identity with 11.5 million other American women. She's a widow. Unlike most of them, she's a financial planner. And now, more than three years after the death of her husband, Tom, she is also an author. "Moving Forward on Your Own: A Financial Guidebook for Widows," is a short, 80-page journey through the stages of grief that she felt. It's also an emotional as well as financial guide to the types of adjustments faced by a sadly growing number of women who have outlived their husbands.

Where to Buy a Home for Less Than $800 a Month (U.S. News & World Report)
U.S. News & World Report - While the nation's real estate crash has been a nightmare for homeowners, it has created some outstanding opportunities for would-be buyers. Home prices in 20 major cities dropped 33 percent from the summer of 2006 to the spring of 2009--and in certain markets, the plunge was even steeper. At the same time, the federal government's efforts to revive the housing market have helped drive financing costs to record lows. Thirty-year fixed mortgage rates fell to an average of 4.32 percent for the week ending September 2. That's the lowest level in nearly 40 years of record-keeping. ...

Will Anyone Buy Electric Cars? (The Motley Fool)
The Motley Fool - If you looked solely at the efforts being made to produce them, you'd swear that electric vehicles (EVs) are a sure bet to be the Next Big Thing.

College loan default rates rise, report says (AP)
AP - The number of college students who defaulted on their federal student loans climbed in the fiscal year that ended in September 2008, according to new government data released Monday.

Citi defends $75M mortgage disclosure settlement (AP)
AP - Citigroup Inc. on Monday defended as fair and in the public interest its $75 million civil settlement with the government over charges it misled investors about billions in potential losses from subprime mortgages.

How to Invest for Tomorrow's Inflation (The Motley Fool)
The Motley Fool - Bond investors have been walking on thin ice for quite a while. Now that bonds have fallen considerably from their recent highs, the cracks are getting louder. And what the bond market is signaling right now is the reawakening of a long-sleeping giant: inflation.

Consumer confidence rises in September versus August: IBD (Reuters)
Reuters - U.S. consumer confidence rose 3.9 percent in September from August as optimism about the state of personal finances offset continued worry about the weak labor market.

Buffett Doesn't Double-Dip (The Motley Fool)
The Motley Fool - Is the notion of a "double-dip" recession purely a figment of pundits' imagination? Speaking in Montana yesterday, Berkshire Hathaway (NYSE: BRK-A - News; NYSE: BRK-B - News) CEO Warren Buffett took it to the bears, stating:

Morgan Stanley sued by Taiwan's CDIB on mortgage deal (Reuters)
Reuters - Taiwan's China Development Industrial Bank (CDIB) has sued Morgan Stanley in a U.S. court to recover millions of dollars in losses it suffered from its investment in a residential mortgage product.

Home loan demand drops as refinancing loses luster (Reuters)
Reuters - Mortgage applications for home loan refinancing fell for a second straight week, dropping to its lowest level since early August, as rock-bottom interest rates failed to boost demand.

Regulator says banks slow to buy back bad loans (AP)
AP - A federal regulator is criticizing banks for failing to take back bad mortgages sold to giant mortgage buyers Fannie Mae and Freddie Mac.

6 ETFs That Won't Rip You Off (The Motley Fool)
The Motley Fool - Exchange-traded funds started out as a great low-cost answer to higher-priced mutual funds. Now that they've gotten popular, though, Wall Street is trying to warp the biggest advantage ETFs have to its own ends by introducing new products with higher management fees.

How the New Consumer Bureau Will Help You (U.S. News & World Report)
U.S. News & World Report - The new consumer financial protection bureau, which was created this summer by the bank reform bill, aims to make complex financial products easier to understand. The bureau will serve as a watchdog over credit cards, mortgages, payday loans, and other products. One goal is to avoid another subprime mortgage meltdown, which economists partially blame on people signing up for mortgages that they couldn't afford and didn't understand.

Is Oil Heading to $150 a Barrel? (The Motley Fool)
The Motley Fool - Some people still maintain that it was oil at $147 a barrel that sparked the credit crunch. When U.S. motorists saw how much they were paying for a gallon of gasoline, they stopped spending, the argument goes. The rest is history.

5 Tips for Adjusting to Retirement (U.S. News & World Report)
U.S. News & World Report - There's more to retirement planning than saving up a bunch of money. Being financially prepared is only part of the work. You've got a whole new life in front of you. Here are some tips for making the transition from work to a life of leisure a smooth one.

ICF, SkyWorks create new aviation advisory firm (AP)
AP - The consulting firm ICF International Inc. and the financial advisor and asset manager Skyworks Holdings LLC are creating a firm that will provide advisory services to the aviation industry.

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