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Post by SeattleDan on Oct 30, 2008 1:06:18 GMT -5
Thank you, joew. For fixed income folk it cant be easy now, and probably won't be for a while.
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Post by gailkate on Oct 30, 2008 9:27:01 GMT -5
I have always loved the notion of spending in order to do my bit for the economy. But it's true that a fixed income can put a damper on righteous shopping. Joe, were you thinking of Wordsworth? The world is too much with us; late and soon, Getting and spending, we lay waste our powers; Little we see in Nature that is ours; We have given our hearts away, a sordid boon! This Sea that bares her bosom to the moon, The winds that will be howling at all hours, And are up-gathered now like sleeping flowers, For this, for everything, we are out of tune; It moves us not.--Great God! I'd rather be A Pagan suckled in a creed outworn; So might I, standing on this pleasant lea, Have glimpses that would make me less forlorn; Have sight of Proteus rising from the sea; Or hear old Triton blow his wreathed horn.Maybe the answer is to spend money at flower shops.
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Post by joew on Oct 30, 2008 14:42:12 GMT -5
Actually, my thought was that I'm not being laid off; I'm not seeing my income go down; and I have no real worries. So for once I can keep spending while bankers, booksellers (and others in retail trade), and blue-collar workers — along with a host of other folks — see their income shrinking or their jobs vanishing. Right now, I'm one of the fortunate ones. Not to gloat. Just to note. It isn't often this way.
Sorry I didn't have Wordsworth in mind. But that's a good thought.
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Post by sailor on Oct 30, 2008 17:13:24 GMT -5
I have a stable income, job security, and, no debt. The problem with spending money is that there isn't much that I need to buy. I don't need a large flat screen TV, or a home theater, no need for another car or a new dinning room set. Got a second home already; don’t need a third. I got all the junk a man needs to be happy already. So, all that's left for me to buy is more shares in my stock fund, which I did a few days ago... I thought the timing was right; the price sure was!
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Post by joew on Oct 31, 2008 0:13:17 GMT -5
Good going, sailor.
The main thing I think, is just to keep spending normally, and maybe if the question is, do I buy this now or later, lean toward now.
I certainly would not advocate spending for things you neither want nor need.
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Post by gailkate on Oct 31, 2008 9:27:23 GMT -5
Be sure to take a look at Krugman's column today. www.nytimes.com/2008/10/31/opinion/31krugman.html?_r=1&ref=opinion&oref=sloginIt's ironic that consumer demand is falling just when we need people to spend - doggonit, I've been trying to do my part! A nice little erudite comment to illustrate why Krugman deserves his Nobel: Sooner or later, then, consumers were going to have to pull in their belts. But the timing of the new sobriety is deeply unfortunate. One is tempted to echo St. Augustine’s plea: “Grant me chastity and continence, but not yet.” Did I tell you all we've put ~$600 into our 1998 Taurus this month? The mileage is only 65K, so we're hoping to push it a few more years. Maybe this will be a record, a museum-quality example of Ford engineering at its best. Here's a sort of dreamy shot of our car, the way it will look in the museum catalog. It's a prettier color than our almost-black-green, with side mirrors that appear never to have been knocked off by someone's inexpert aim into her 1940 garage. Note the sort of plump, oval look of this car. I named her Mrs. Pankhurst after the famous suffragist who was also rather plump and oval.
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Post by doctork on Oct 31, 2008 9:43:54 GMT -5
I'm surprised at how little attention has been paid to Paul Kruger's Nobel prize award. He's better known for his NT Times column, but he's also a highly regarded for his economic research having to do with the rule of comparative advantage (which I was taught as The Gospel Truth in business school). Or more precisely refuting and providing an alternative theory to that law. Kudos to Dr. Krugman!
I believe I'm doing my share and more on consumer spending, with my upcoming trip to California and then to Tel Aviv for a tour of the Holy Land. Biggest part of the cost is airfare paid to Delta Airlines, just buying/merging with Northwest.
gk, I inherited a Mercury Sable from my mom - the Ford Taurus twin. It had way over 100,000 miles when it died, but then I never buy a new car just because I want a new car; I run them into the ground and replace them only when they die and it would cost me more than it's worth to fix it. And last year I gave away my 1985 Mazda with 110,000 miles on it because it was basically a sound car that had some small issues well-suited to a mechanically inclined owner. So that's who I gave it to.
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Post by joew on Oct 31, 2008 13:40:24 GMT -5
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Post by gailkate on Oct 31, 2008 13:44:06 GMT -5
Good for you, K. The story of your Sable pleases me no end. For years we bought Jerry's company car when he was approved for a new one, usually around 50K miles. For some reason this one had only about 25K on it when we bought it to be 'my' car. So it's had decent care and ought to last a good while longer. I like the idea of having a 20th century car when most everyone else will be into their 2nd or 3rd of the new century. If your Mazda is a fair comparison, we should need a new car in about 12 years!
For some people, cars really matter. I don't feel superior, just have no car gene. And look how patriotic we've been buying 4 new tires!
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Post by Trusty on Oct 31, 2008 22:04:32 GMT -5
I have a stable income, job security, and, no debt. The problem with spending money is that there isn't much that I need to buy. I don't need a large flat screen TV, or a home theater, no need for another car or a new dinning room set. Got a second home already; don’t need a third. I got all the junk a man needs to be happy already. So, all that's left for me to buy is more shares in my stock fund, which I did a few days ago... I thought the timing was right; the price sure was! I thought you were going to pour some money into expanding your wine cellar.
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Post by gailkate on Nov 1, 2008 11:33:02 GMT -5
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Post by sailor on Nov 2, 2008 22:44:37 GMT -5
I have a stable income, job security, and, no debt. The problem with spending money is that there isn't much that I need to buy. I don't need a large flat screen TV, or a home theater, no need for another car or a new dinning room set. Got a second home already; don’t need a third. I got all the junk a man needs to be happy already. So, all that's left for me to buy is more shares in my stock fund, which I did a few days ago... I thought the timing was right; the price sure was! I thought you were going to pour some money into expanding your wine cellar. I bought a case of Columbia Crest Cabernet Sauvignon yesterday, you know, just trying to do my part for the economy.
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Post by booklady on Dec 7, 2008 17:30:07 GMT -5
Why should an industry whose executives earn many millions each year be "bailed out" by the United States government?
Can someone explain this to me?
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Post by doctork on Dec 7, 2008 19:29:42 GMT -5
Why should an industry whose executives earn many millions each year be "bailed out" by the United States government? Can someone explain this to me? Well, here's the standard explanation, as I understand it. Supposedly these industries (automobile, airlines) and services (banks, mortgage lenders, investment banks) are too big and too important to fail. I've read that 3 million jobs will go away if the "big three" auto makers are allowed to fail. And we've seen the rebound effect on Main Street of Wall Street's failure - tight credit markets so even those who are solvent can't get the funds to start/expand their businesses, buy a home or a car. And all the homes that are abandoned to foreclosure stand vacant, increasing crime in their neighborhoods and lowering property values of remaining homeowners who are in good standing (which is at least 9 out of 10). There is certainly a paucity of executive talent in the auto and airline industries, yet the execs keep getting huge salaries. I'd like to see some of this money repaid to shareholders by these greedy self-aggrandizing "leaders." Perhaps some of these aggressive Attorneys General in various state and federal offices could pursue this tactic. Preferably by punishing the criminal execs without bankrupting and shutting down their companies, thus putting more people out of work. The Sunday papers and talking heads are claiming it's the worst economy since 1974. Frankly, I remember 1974 and I don't think it was nearly this bad. Nor was the late 80's oil and real estate bust involving the Silverado and other S & L scandals. It has been a bear for my husband and I to find new jobs - and everyone everywhere claims there is a shortage of primary care docs and nurses. When even we have trouble, things are pretty dire.
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Post by Jane on Dec 8, 2008 8:54:59 GMT -5
Just because Mom and Dad are lousy parents doesn't mean the kids should starve. But mom and dad need to either take some pretty serious parenting classes or the kids need to be put into foster care.
Michigan is already devastated. I can't imagine what it will look like if the car companies fail.
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Post by gailkate on Dec 8, 2008 10:28:48 GMT -5
The idea of forcing GM's CEO out is welcome news. I'll be surprised if that ends up in the final deal, though. Would Bush agree?
It's also very important to note that the salary numbers being bandied about are grossly misleading. Auto workers don't average $70-some an hour. That includes the cost of healthcare and other expenses. When I last worked in a job where the budget was set with the average cost per worker, it was ~$50 an hour. Believe me, only managers were making that much per hour. The cost was healthcare, and perhaps workers comp, unemployment ins., etc. Auto workers have had a good secure income and retirement, but no more than any American worker should be able to earn. It's the execs who have pigged out on profit.
If the numbers quoted for Japanese auto companies' workers are truly equivalent (including all benefits) then they are miserably exploited.
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Post by sailor on Dec 8, 2008 17:06:27 GMT -5
The big three U.S. auto makers are falling on their swords; meanwhile, Toyota is opening a new plant in Canada. Most peculiar mama... apparently someone knows how to run a business.
I'll bet that the greedy financial institutions that only days ago were having their bonuses questioned in the front page news, appreciate the U.S. auto makers taking the lime (or is it lyme) light off of them.
See the USA today in your Chevrolet Toyota!
Mike
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Post by Jane on Dec 8, 2008 17:36:04 GMT -5
Our senator is on the local news right now; the White House has a bill in hand (worth two in the Bush?) and restructuring looks like a given. For all those Republicans who were accusing Obama of perpetuating socialism, this is quite ironic. Looks like the government is going to end up "owning" the banks, the car companies and all of our mortgages!
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Post by booklady on Dec 8, 2008 19:09:47 GMT -5
The big three U.S. auto makers are falling on their swords; meanwhile, Toyota is opening a new plant in Canada. Most peculiar mama... apparently someone knows how to run a business. I'll bet that the greedy financial institutions that only days ago were having their bonuses questioned in the front page news, appreciate the U.S. auto makers taking the lime (or is it lyme) light off of them. See the USA today in your Chevrolet Toyota! Mike Mike, my sentiments exactly. My last two cars have been Toyotas and my next one will be, too. I don't want a thousands of Americans to lose their jobs, but on the other hand, what have the executives of the US car companies been smoking for the last 30 years? Why have they not taken the opportunity to develop energy-efficient and reliable cars? I'm stupid when it comes to economics, but there is a part of me that wants to let the market duke this out and restore itself where it will.
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Post by gailkate on Dec 9, 2008 0:55:11 GMT -5
I think I heard that the Japanese aren't doing well in America either. Mammoth trucks and SUVs are what sold. In fact, i think there was some IRS write-off.
Oh, looky! This may not be the official word, but at least it's in comprehensible English. Best Strategy to Write Off a Business Car Posted December 13th, 2007 by Megan Hughes | permalink
Have you been inundated with car dealership ads in the past couple of weeks all promising you a big tax break along with your new vehicle purchase? I have! My favorite was the one from Land Rover, who also included a packet of tea from those fine folks who provided the tea for the Boston Tea Party. So I thought I would take a couple of minutes and just go over how the vehicle purchase deduction works.
My Favorite Christmas Catalogue
The deduction falls under the Section 179 (of the IRS Code) depreciation guidelines, which applies to “qualified personal property” that is bought and placed into active service in the year you take the deduction. In other words, you can take this deduction for any property or equipment you buy this year on your 2007 tax return). Qualified personal property means, roughly, any type of assets that aren’t fixed in place and are used in the active conduct of a trade or business, including vehicles.
It works by allowing you to essentially trade a multi-year depreciation deduction in exchange for an immediate write-off, as long as whatever you’re buying fits under the depreciation cap. That cap is currently $112,000, but starting next year cost of living adjustments will take it up to $125,000 or more.
So how does it apply to cars? In one of two ways:
Option 1: The $25,000 “SUV” deduction. If you buy a vehicle that weighs between 6,000-14,000 lbs, you can write off up to $25,000 of the purchase price under Section 179. The “SUV” label is kind of self-explanatory — what other passenger vehicles out there weigh 6,000 lbs?
Option 2: The “Business Vehicle” deduction. Originally Section 179 was supposed to help people write off the cost of delivery and other hard-working vehicles. In fact, if your vehicle weighs more than 14,000 lbs you can apply the entire $112,000 deduction to your purchase. If your vehicle weighs more than 6,000 lbs but less than 14,000 lbs, you can also take the full deduction amount if it meets one of the following conditions:
Your vehicle is designed with a seating capacity of 10 people or more, not including the driver Your vehicle has no seating other than the driver, a fully enclosed storage area and a short front end (i.e., a UPS van) Your vehicle is a pick-up truck with a bed at least six feet long (Yes, pick-up lovers, this means what it says - buy a “long bed” and take the entire cost as a Section 179 deduction, as long as your vehicle weighs 6,000 lbs or more) Now here’s a fun fact - if you look for a good deal between now and the end of the year you don’t have to pay the full purchase price to get the deduction. You just have to make the sale. And remember, if you’re buying the vehicle through a C Corporation, you’ve got until your business’s year-end, which may or may not be December 31st.
If you’d like to learn more about the Section 179 deduction and depreciation in general, check out the 2-part Special Report series on Depreciation, Top 10 Strategies to Make the Most of Depreciation and Depreciation Loopholes for Smart Real Estate Investors
I guess I could have written off an SUV for my ultimately unsuccessful doll business. It sure would have made carting things to shows a bunch easier.
I buy American whenever I can. It's getting really hard, though, really hard. Clothes and shoes aren't made here any more.
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Post by doctork on Dec 9, 2008 17:54:16 GMT -5
Ironic isn't it? Bush and our current Congress are the biggest socialists since the Great Depression.
However, we the people aren't blameless, since until very recently it was us who bought most of those SUV's and other large vehicles. And I sure don't know enough about macroeconomics to tell if we should or should not be doing these bailouts. I hope someone in charge knows what he is doing. At least at the moment I think we have two teams working on the economic crisis. It appears that Bush and his staff are working closely with the incoming Obama & staff.
I'd always owned foreign cars until last summer, when I bought a Ford Focus. Our elderly Subaru was about to give up the ghost, the local Ford dealer was celebrating its 100th anniversary with great deals, and they had always provided good service to my husband when he took his Explorer in for service. So I bought the Focus the afternoon before I left for the GK Norway cruise. It gets great mileage and I've had no trouble with it.
Of course I'd never had significant problems with my Subarus or Mazdas either. The elderly Subaru had suffered from all 3 of our kids learning to drive with it, and it had almost 200,000 miles on it.
NB - we do own an SUV - the Ford Explorer - but then we did live in WV where you need at least one 4WD vehicle, and my husband is big on hiking and mountain biking, which requires hauling lots of equipment off road. I've read that 90% of SUV's are never driven off road, so why the popularity?
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Post by BoatBabe on Jan 19, 2009 14:23:04 GMT -5
Wow, I found this thread highly entertaining, well-thought, boardering suicidal and supportive, and educational. That's a very good recommendation for reading.
What do you all know of the TARP money being spent for bank buy-ins instead of bail-outs? Any thougts? I heard a rather unflattering rendition reported on NPR last week.
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Post by doctork on Jan 20, 2009 1:52:24 GMT -5
Wow, I found this thread highly entertaining, well-thought, boardering suicidal and supportive, and educational. That's a very good recommendation for reading. What do you all know of the TARP money being spent for bank buy-ins instead of bail-outs? Any thougts? I heard a rather unflattering rendition reported on NPR last week. Good question that has been actively discussed at another board I post on. Yours seems to me to be the key question: Is the purpose of the bail-outs moneys is to maintain or sustain a bank through hard times, or is it to be a pass-through mechanism for loan funds to homeowners? And if by "buy-in" you mean shareholders (US government and taxpayers who lend the bailout money), it doesn't seem to me that government lenders have a good idea of what they are buying (as shareholders) or loaning. One problem is that there have been changes in the definition of the term "bank." It used to mean commercial/consumer entities where one kept checking & savings accounts, and bankers used those funds to make loans to individuals starting businesses, buying homes, or buying cars. They used to be fairly localized, which is how I believe you described the thrift where you work, bb. No sub-prime loans that get bundled elsewhere; you loan the money locally and service the loans yourself, so you really care about whether the money gets repaid. And you wouldn't make a foolish loan to someone who obviously won't be able to repay it next year. Then there were the investment banks (and hedge funds and private banks) whose main job was to service the capital markets. They make money on the transaction, but may or may not have any money or risk of the asset itself. Without proper regulation (which was limited to non-existent) this is a recipe for disaster - which we are now seeing. I think many institutions have sound balance sheets and can prove their financial viability (debt and liquidity ratios); they deserve access to more capital to make more good loans (if there are enough credit-worthy customers). Less sound institutions, or those that are so complex that the feds can't even tell where there monsy is going, or for what - well maybe it's not such a good idea to give them more money to squander. Since the fed and the state bank regulators should already have financial details on the banks (quarterly and annual reports, audits) - and they already know who is troubled - why don't they have a better idea of where the money is going? Would money be better spent if the feds guaranteed the questionable loans, rather than throwing good money after bad? That would restore confidence - right now entities basically accept 0% interest just to insure money isn't lost. Restoring trust by guaranteeing against loss would go a long way. Why is it so hard to track who actually owns the loans? This is the excuse used to explain why loan servicers don't work with strapped homeowners facing bankruptcy. I don't believe that in this day and age, it isn't known who the owners are. I think they prefer to remain unidentified, lest they be compelled to take a loss or return billions in fee income. I have a feeling that the main goal of the decision makers here is to somehow keep the rich getting richer, while someone else pays.
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Post by joew on Jan 20, 2009 10:25:40 GMT -5
Seems to me that the problem was there were all these people with home mortgages they could no longer afford. There were so many of them that the financial institutions that held the paper were in trouble. (If you owe the bank $10,00 and can't pay, you're in trouble; if you owe the bank $10,000,000 and can't pay, the bank's in trouble, as the old saying has it. This time it wasn't a single debtor, but a whole slew of them.)
Somehow, the bailout has to reach the debtors who are in trouble. I would have liked to see it pay off or down the actual loans, thus saving the homes and the institutions at once. If it just goes to the financial institutions, that solves their problem, but leaves the debtors in trouble, which can't be good for them or the economy.
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Post by doctork on Jan 21, 2009 0:04:11 GMT -5
The problem is that with many/most problem loans, "the bank" doesn't own them, and because they have been resold in large bundles, it is claimed the no one knows who does own the loan. So if the money were to be spent by paying down particular loans - who do they pay?
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Post by joew on Jan 21, 2009 19:32:05 GMT -5
I suppose the problem is there are too many debtor homeowners to identify the ones who need the bailout — which would be ideal: give the $$ to the people being foreclosed and let them pay the loan, thus rescuing the financial institutions.
Maybe give the money to the institutions and force them to forgive the bad loans. I.e., no foreclosures for the next x months and, if possible, undo the foreclosures of the past year.
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Post by BoatBabe on Feb 4, 2009 10:31:56 GMT -5
[WARNING: Subject change, still slightly related to the economy] Suze Orman either does not understand the new FDIC regulations, or she doesn't possess the vocabulary to give the impression that she DOES understand them. Drives me crazy! (Fortunately, it is a short drive.) The new allocation of $250,000.00 (instead of $100,000.00) FDIC insurance coverage is a MINIMUM, not a maximum. And the very restrictive definition of "beneficiaries" has been dropped. I spent a total of two hours yesterday correcting misconceptions Suze imparted to viewers. Investors and Savers are frightened enough without inaccurate or partial information being spread over the airwaves. I'm not so protective of Speculators. I have, however, heard some of these misconceptions spouted on economic shows on the radio, too, so Suze isn't the only source of inaccuracy. I've even heard Mr. President Bush say, "You are insured UP TO . . ."
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Post by doctork on Feb 4, 2009 12:33:39 GMT -5
I didn't know that boatbabe. I'm pretty sure that at least one of my banks (WaMu) recently told me the insurance was "up to" $250,000. Not that it's a problem for me, having so many amounts of invested assets so much over $250,000 that I worry about it. It's each bank and each account right? And one can have multiple accounts at multiple "banks" - there are many places besides banks to put investments.
On the mortgage and housing problems, I watched a news report a couple nights ago about the rise in homelessness, especially among families where there has been a recent job loss. I wonder why there is not an effort to place homeless people in abandoned/foreclosed properties. They could pay some rent and maintain occupancy in the home, lessening vandalism and lowered property values. Seems to me it would be win-win. The permanently homeless by choice might not be suitable, but many of these people have a history of responsible home ownership and maintenance of their property.
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Post by ozski on Feb 4, 2009 22:28:12 GMT -5
FDIC Deposit Insurance Coverage From Financial Institution Letters-------------------------------------------------------------------------------- FDIC Deposit Insurance Coverage The Federal Deposit Insurance Corporation (FDIC) is an independent agency of the United States government that protects against the loss of insured deposits if an FDIC-insured bank or savings association fails. FDIC deposit insurance is backed by the full faith and credit of the United States government. Since the FDIC was established, no depositor has ever lost a single penny of FDIC-insured funds. FDIC insurance covers funds in deposit accounts, including checking and savings accounts, money market deposit accounts and certificates of deposit (CDs). FDIC insurance does not, however, cover other financial products and services that insured banks may offer, such as stocks, bonds, mutual fund shares, life insurance policies, annuities or municipal securities. There is no need for depositors to apply for FDIC insurance or even to request it. Coverage is automatic. To ensure funds are fully protected, depositors should understand their coverage limits. The FDIC provides separate coverage for deposits held in different account ownership categories. The coverage limits shown in the chart below refer to the total of all deposits that an accountholder has in the same ownership categories at each FDIC-insured bank. The chart shows only the most common ownership categories that apply to individual and family deposits, and assumes that all FDIC requirements are met. Basic FDIC Deposit Insurance Coverage Limits* Single Accounts (owned by one person) $250,000 per owner Joint Accounts (two or more persons) $250,000 per co-owner IRAs and certain other retirement accounts $250,000 per owner Trust Accounts $250,000 per owner per beneficiary subject to specific limitations and requirements Corporation, Partnership and Unincorporated Association Accounts $250,000 per corporation, partnership or unincorporated association Employee Benefit Plan Accounts $250,000 for the non-contingent, ascertainable interest of each participant Government Accounts $250,000 per official custodian Non-interest Bearing Transaction Accounts Unlimited coverage – only at participating FDIC-insured banks and savings associations ** * On January 1, 2010, the standard coverage limit will return to $100,000 for all deposit categories except IRAs and Certain Retirement Accounts, which will continue to be insured up to $250,000 per owner. ** Unlimited deposit insurance coverage is available through December 31, 2009, for non-interest bearing transaction accounts at institutions participating in FDIC’s Temporary Liquidity Guarantee Program. If you have questions about FDIC coverage limits and requirements, visit www.myFDICinsurance.gov, call toll-free 1-877-ASK-FDIC or ask a representative at your bank.
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Post by ozski on Feb 4, 2009 22:37:51 GMT -5
I just spent the day at a Bank Compliance conference, updating all us compliance people on recent and soon-to-come changes in banking regulation. The emphasis was on real-estate lending; HUD, Flood, Real Estate Settlement Procedures Act and Truth In Lending. My head is spinning. And my thanks go out to all the unethical mortgage lenders who have made this all necessary. Problem is, regulations are no good without diligent, knowledgable and ethical regulators to oversee them. (Does anyone know where the regulators were during our recent Wall Street and big banking fiascos???)
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