People who need pay day loans are being singled out in a financial reform bill created to reign in greedy Wall Street banks. Flickr photo.

Pay day loans have been targeted by Congress in its financial reform bill. Pay day lenders wonder why a financial reform bill made to stop the crimes of filthy rich Wall Street bankers goes after a financial service that helps ordinary people. The fact that pay day loans are part of the financial reform bill shows that the cash industry is looked on with disdain by politicians, bankers and a lot of overpaid people with cushy jobs who vote. Most of the rest of us might feel the same way about pay day loans — most of the time. But if you’ve ever needed a pay day cash advance, for any good reason, you were probably glad you could get one.

Credit when you need it most

Pay day lenders have provided a lifeline to working people when no one else will. Used responsibly, pay day advances can get people out of a financial jam and  help them preserve their good credit and start building a good credit history. Greedy banks and wealthy speculators that triggered our most recent recession have made life very difficult for most Americans. They’re making it worse by ensuring that credit is nearly impossible to get for the average working person. Even in better times, the more one needs credit, the harder it is to get. People who make plenty of money to live on and then some get invited to borrow money by banks every day.

Cheap pay day loans under fire

What’s interesting about financial reform is that politicians don’t necessarily want to regulate the pay day lenders. Believe it or not, they’re going after the borrowers. Proposed federal regulation would limit consumers to six loans in a 12-month period. Another provision would require lenders to offer extended repayment plans, which they already do with installment loans. The Salt Lake Tribune reports that a counter proposal has been submitted to exempt payday lending from federal oversight, so it’s unclear whether the six-loan limit measure will succeed.

Responsible payday lending

Federal regulators want to go after pay day lenders. But the industry promotes its own best practices with the Community Financial Services Association of America. CFSA member companies are required to comply with Industry Best Practices that ensure consumer protections and responsible payday lending to all customers. Another group committed to preserving affordable access to short term credit for millions of Americans is the Online Lenders Association. Before you arrange your cash til payday loan, make sure your money lender is a member of either the CFSA or the OLA.

Responsible debt survival

If you do your homework, pay day loans can be the difference in debt survival. By planning ahead, you can be certain that you can pay your bills and pay the loan in full with your next paycheck. If that’s not possible, consider an unsecured personal loan for debt survival. An unsecured personal loan allows you to pay back your loan amount in monthly installments rather than with your next paycheck. Be sure to take advantage of the resources provided to consumers by the CFSA and the OLA. The CFSA offers helpful tips on making a budget, saving money and building credit. The OLA offers a step-by-step approach on how to use pay day loans the right way.

Insight Communications techs are working to restore cable service. Image from Flickr.

Insight Communications — cable, broadband, and telephone service provider for Indiana, Kentucky, and Ohio — is experiencing a cable service outage. With 716,400 basic cable customers and 509,400 digital cable customers, Insight Communications is working to restore cable service as soon as possible. As of 8:48 a.m. local time on Tuesday, the Insight Communications call centers are also overloaded. Insight Communications will have to do quite a bit of debt survival work to keep customers after this outage.

Insight Communications frozen signal

This morning, many Insight Communications customers, especially in central Kentucky, were greeted with a frozen picture. Insight Communications cable signals were interrupted due to a malfunctioning server in Louisville. Some customers were only getting a selection of digital cable channels. Others were seeing a frozen picture from broadcasts that were on at 11 p.m. last night.

Request to not call the Insight Communications call center

On the Insight Communications’ blog, the CEO of Insight requests that customers not call the call center. Insight Communications only has two customer-support numbers. Even with a fully staffed customer service call center, calls from hundreds of thousands of customers are collapsing the Insight Communications phone lines. The company claims to be “working diligently” to fix the problem as soon as possible.

Insight Communications phone, internet service

Insight Communications’ cable service appears to be the only service directly affected by the server issues in Louisville. Some Insight Communications internet and phone service users are reporting intermittent outages of their service – though it appears that the internet and phone services return to normal after only a few moments. Most likely, the outage of Insight Communications phone and internet service is due to attempts to fix the cable service outage.

No estimates for return of Insight Communications cable

Insight Communications has not currently offered any estimates of when cable service might return. Some customers are reporting outages that have lasted as long as 5 to 7 hours. You can keep updated on the status of Insight Communications on the CEO blog at http://www.michaelsinsight.com/2010/05/insight-video-service-interruption-notice.html or with local news websites.

Ford stock has been soaring in 2010 and the Ford earnings report issued Tuesday showed a net profit as the auto maker plans to increase production. Flickr photo.

Ford stock is blowing up and the Ford earnings report released Tuesday shows its best quarterly performance in six years at $2.1 billion. The Ford Motor Co., the only Detroit automaker not bailed out of bankruptcy with money loans from the Federal government last year, has earned a profit for four consecutive quarters while its domestic rivals flounder. By slashing costs and increasing sales, Ford stock price and Ford earnings report numbers have shifted from negative to positive a year ahead of schedule, even as the market for new cars has yet to recover.

Ford stock price soars

Ford stock hit a five-year high Monday at $14.57. The Ford earnings report showed net profit equaling 50 cents a share, blowing away Wall Street expectations of 32 cents a share. One year ago, Ford stock traded at $1.91 a share, and the Ford earnings report showed a loss of $1.4 billion–a net loss of 60 cents a share. Introducing new products, closing plants and eliminating tens of thousands of jobs is working like Ford boss Alan R. Mulally said it would when he took over four years ago. Presenting the Ford earnings report, Ford executives said the company expects to continue selling cars for positive cash flow in the immediate future.

Ford earnings report fuels production

Ford said it planned to build 625,000 vehicles in the United States and Canada in the second quarter, 9 percent more than the first quarter and 39 percent more than same period a year ago. It plans to introduce new models later this year with the aim to capture a bigger piece of the growing market for smaller, more fuel efficient cars. Ford fans will be getting auto financing for new versions of the Fiesta and Focus, plus a retooled Edge crossover and a more fuel efficient Explorer SUV.

Ford stock analysis

A Ford stock analysis shows an increase in price of more than 40 percent so far in 2010. Ford’s market share in the United States rose to 16.6 percent in the first quarter, up 2.7 percent from the first quarter 2009. It outsold General Motors in February for the first time in 50 years. In addition to draconian cost cutting and increased focus on quality, Ford’s gamble to forgo the government bailout appears to have paid off in spades as the images, and sales, of GM and Chrysler have suffered. Toyota’s recall of more than nine million vehicles and the resulting publicity nightmare of the past six months probably hasn’t hurt Ford stock either.

Ford stock outlook

The Ford stock outlook hints that the Ford stock price may not sustain its current rally. The New York Times reports that Ford’s chief financial officer Lewis W.K. Booth said the company does not necessarily expect each of the next three quarters to be as strong as the first, particularly if an improving economy leads to higher interest rates later in the year. As if on cue, Ford stock was falling Tuesday after the company’s earnings report was released. As of noon eastern time the Ford stock price was down about 6.5 percent at $13.50 a share. Monday’s closing price for Ford stock was the highest since January 2005. Debt survival may be an issue in the Ford stock outlook. The company still has much more debt $34.3 billion, than cash, $25.3 billion.

An ash cloud over Europe from a volcano in Iceland is disrupting air travel and may cost airlines billions over the course of the eruption. Flickr photo.

An ash cloud over Europe spewing from a Volcano in Iceland is wreaking havoc on air travel as it spreads eastward toward Russia. For two days the volcano has been cloaking the continent, and scientists expect the eruption to last for weeks. Eurocontrol, the agency managing air traffic in Europe expects only 11,000 of about 28,000 flights that normally pass over Europe to happen Friday. Cancellations and delays will no doubt complicate debt management for the airline industry. ABC News reports that the ash cloud over Europe won’t cause problems for domestic flights in the U.S., although grounded planes in Europe are affecting U.S. flights because of  international fleet scheduling practices.

Ash cloud over Europe considered mild

The ash cloud over Europe is a result of the most recent eruption of the Eyjafjallajökull volcano– pronounced “AYA-fyatla-jo-kutl,” in southern Iceland, which began erupting last month for the first time in nearly 200 years. Experts say the eruption and ash cloud from Iceland is mild compared to recent volcanic catastrophes such as the Mt. Pinatubo in the Philippines, which ejected more than 5 billion cubic meters of ash and debris up to 30 kilometers into the atmosphere. However, its effects on air travel, as well as climate could last for months.

Ash cloud from Iceland carried over winds

Air travel problems caused by the ash cloud over Europe are mainly a result of prevailing winds rather than the eruption of the Eyjafjallajökull volcano itself. Most of Europe’s major airports were closed. Millions of passengers have been stranded or delayed from North America to Asia. The New York Times reports that normal air-traffic conditions would not resume until Saturday at the earliest, raising questions about a wide range issues from the economy and business to family vacations and even to whether President Obama would be able to fly to the funeral of the Polish president and his wife, killed in an unrelated air crash last week.

Ash cloud from Iceland costing airlines

Thanks to the ash cloud over Europe, airlines may lose $1 billion according to the Centre for Asia Pacific Aviation. That’s money now. But the economic mayhem could just be getting started. The last time the Eyjafjallajökull volcano erupted, in 1821, ash clouds affected air quality and climate in Europe as it erupted sporadically until 1823. Although invisible from the ground, satellite photos show the plume drifting southwest over Europe and north into Russia. How far the ash clouds will spread before the dust settles depend on how long the volcano continues to erupt and which way the wind blows.

Ash clouds endanger airliners

Airlines have a zero-tolerance policy for ash clouds. The particles virtually sandblast the plane, foul engine turbines and frost windows. The last time ash clouds affected debt survival for airlines in the U.S. was early 2009, when Alaska’s Mt. Redoubt  erupted 19 times over several weeks, sending ash clouds  as high as 65,000 feet. Hundreds of flights were diverted from Anchorage.

Slickdeals offers sale specials and deal tracking for anybody on the internet. Image from Flickr.

Slickdeals may sound a bit greasy, but it’s a coupon web site that can actually get you pretty good deals. Slickdeals relies on other customers to share the deals and coupons that they have already found, vetted and used. Slickdeals is a free service, and can get you free, cheap, or reduced prices on everything from TCBY ice cream cones to internet loans.

Slickdeals | How it works

The system that Slickdeals uses to find and report  coupons is relatively simple. Users sign up for accounts on Slickdeals.net Any user can post a deal that they find anywhere on the web or in real-life shopping. You can also get Slickdeals sent to your phone or on a feed to help you find a deal on something you are shopping for. As users post and report deals on Slickdeals, they can gain or lose reputation points. The better the user, the more reliable the reported deal.

Are Slickdeals real?

The biggest question most people ask is whether the deal they find on Slickdeal is real. Some of the deals just seem too good to be real. The answer is, most of the time. Slickdeals are user-reported deals, which means that sometimes they expire, and sometimes they are inaccurately reported. Slickdeals’ reputation points are the first line of defense. If a deal seems too good to be real, then you can flag or comment on the Slickdeal to report it as functioning or not.

Slickdeals a part of the couponing blitz

Using coupons is quickly re-emerging as a popular cost-savings move. Many people use coupons for everything from debt survival to saving cash for a big purchase. There are many free and low-cost coupon web sites. Web sites such as Slickdeals offer coupons that help customers save money. Many people also double or triple up on coupons, doing everything from matching manufacturer’s coupons with store coupons to simply organizing their shopping list based on the deals they can get. Slickdeals.net is only one coupon web site – but it offers deals that are already tested, which is very useful.

Best overall vehicle

Despite Toyota’s recent recall disasters, the influential magazine has named the Toyota Lexus 460L best overall vehicle. With gas mileage of 24 on the highway and 16 in the city, the full-size luxury sedan scored 99 on Consumer Report’s 100-point scale. The $70,925 price tag means that you’ll probably need a loan to buy one of these cars, even if you have plenty of cash now for a down payment.

Best family sedan

Top honors in the family sedan category went to the Nissan Altima which may be good news if your payday cash doesn’t always flow like wine . The Altima carries a manageable price tag, somewhere in the range of $19,900 $29,600, and gets reasonable gas mileage, too (32 hwy, 23 city).

Best small sedan

The Hyundai Elantra SE took the award for best small sedan. Priced at a mere $17,845 that plenty of people could finance with just a small loan, the Elantra gets decent gas mileage (34 hwy, 26 city) and comes equipped with electronic stability control, a proven life-saving feature not available on many other small cars.

Best sporty car

The Volkswagen GTI, a turbocharged version of the VW Golf hatchback was named best sporty car. Without completely sacrificing gas mileage (31 Hwy, 21 City) and without a price so high that you need your own personal money lender ($23,465-$24,070), the four-cylinder engine offers 200-horsepower and performance –oriented suspension.

Best small SUV

The Subaru Forester came out on top in this category, with fairly impressive fuel economy (27 hwy, 20 city) and a moderate price range of $20,295 – $28,495. Consumer Reports temporarily suspended its recommendation for the Toyota Rav4 as its top choice in this category following the manufacturer’s recall and stop-sale order, but it’s back now and affordable with the help of a good loan company.

Best family SUV

With its roomy interior, easy ride and responsive handling, the Chevrolet Traverse took the prize for best family SUV. With a fairly steep price range of $29,224 to $39,985, the Traverse offers less-than-optimum gas mileage (24 hwy, 17 city) and may not be the best automobile choice for if you already need money now.

Best green car

Not surprisingly, for the seventh year in a row the Toyota Prius took the prize in the green car category. The price of the new redesigned version remains reasonable $21,400 – $28,070 and at 48 hwy, 51 city its gas mileage is hard to beat. Described by the magazine as safe, reliable, and easy to handle, sales of the Prius were not interrupted by the recent recall, allowing it to remain on the Consumer Reports top-10 list.  It shouldn’t take credit counseling to figure out that this car makes good financial sense.

Best sports sedan

The Nissan Infiniti G took the title in the sports sedan category the fourth year in a row. Priced between $33,250 and $40,400, the Infiniti G offers agility and luxury with plenty of power and gas mileage of 27 hwy/19 city.  Not a bad choice, especially if you qualify for low interest loans.

Best family hauler

Yes, “family hauler” really is the name given to this category, and the winner is a microvan, the Mazda5. With gas mileage of 28 on the highway and 22 in the city, this small and maneuverable family hauler (I just really like saying that again) is economically priced between $17,995 and $23,005.  If you’re already a candidate for cheap payday loans and need to buy a car, this is a model to consider.

Best pickup

Stripped down at $20,850 or souped up at $41,775 20, the Chevrolet Silverado offers the fuel inefficiency typical of even less worthy pickups (20 hwy, 15 city), plus optional interior comforts and a measure of dependability. If you’re in the market for a pickup but find yourself short of cash today, a basic version of the Silverado may be just the ticket to debt survival.

Do jokes that put Trig Palin in or near the crosshairs bother you? They’re nothing compared to this.

Renee Bowman, 44, is not the first person to adopt children for the state stipend. Debt survival is tough, and people of limited means have to scratch and claw. Sadly, she is also not the first foster parent to abuse her children. But you don’t often see a “mother” who is such a clear sociopath. The Washington Post reports that after two hours of jury deliberation, Renee Bowman was convicted of two counts of first degree murder and three counts of child abuse. The two young girls who died (estimated in 2006 or 2007) were stuffed into a freezer that Bowman carried with her as she moved from place to place around the D.C. area.

No emotion after the verdict

The Post indicates that the woman “showed no emotion” following the jury’s decision. “Cold as ice” is grimly appropriate here. State’s Attorney John McCarthy said “This woman was in it for the money. And by killing the children, keeping them literally on ice, the money continued to flow.”

Alan Drew, attorney for Renee Bowman, claimed that “at least one” of the two actually died of “natural causes,” as if such a thing were perfectly normal for a pre-teen. The legal wrangling was designed to try to get the first-degree murder charge knocked down to second-degree, but it’s all murder in the end, isn’t it? You can spread your jam over as many pieces of bread as you like. It quickly wears thin.

The surviving child testified. She is nine years old.

I can’t imagine what life must have been like for Renee Bowman’s three young torture subjects. Here’s a sampling of what the surviving child had to reveal on the witness stand. I weep for her peace, when she may find it. Her life is what matters now. Renee Bowman’s macabre debt survival is a twisted monument to disease and total lack of compassion. What the surviving girl deserves is the kind of love that her sisters never received.

Related Video:

Underwater on your mortgage? You're one in four.

As the nation’s housing crisis enters its fourth year, the option of walking away from mortgages on over-encumbered homes is gaining social acceptance.  Recently, University of Arizona law professor Brent White published a paper about the tactic of abandoning a home, (“Underwater and Not Walking Away: Shame, Fear and the Social Management of the Housing Crisis,” University of Arizona, Discussion Paper No. 09-35 November 2009).  While it’s not the first time the subject has ever been broached, debt survival is a sensitive topic today, and White’s suggestions have hit a nerve.

It’s crowded underwater

According to First American CoreLogic, some 10.7 million Americans are presently underwater on their mortgages, meaning that their mortgage balances exceed their home values.  White states:

As of June 2009, more than 32% of all mortgaged properties in the U.S. were “underwater,” meaning that the homeowner owed more on their mortgage than their home was worth. This percentage is expected to increase to 48% by the first quarter of 2011, by which time housing prices in the largest 100 metropolitan areas are predicted to have dropped 42% from their peak.

One in four homeowners would be better off renting

Walking away from over-mortgaged homes is a move that can save people money if they’re willing to take personal financial risks.  One of those disconcerting risks, of course, is that a foreclosure remains on an individual’s credit report for seven years, making it difficult to obtain new credit.  Although it’s possible that people with otherwise good credit might begin to overcome lending hurdles sooner than that, people in general are hesitant to wreck their credit. This hesitancy is borne out by the fact that millions of people – about one in four — would be much better off financially if they walked away from their mortgages, and yet, they do not.

Homeowners tend to take the highroad

If all owners of over-mortgaged homes walked away, economic havoc would no doubt ensue.  Home prices would take a deeper plunge, and banks would become even more hesitant to make loans to both individuals and businesses.  Still, it’s odd that in the midst of a severe housing crisis, borrowers have taken the high road and struggled to honor their mortgage commitments, while the lenders that doled out high-risk mortgages in the housing boom have eagerly taken in billions of taxpayer dollars.  These are the same lenders that now shamelessly resist the modification of troubled mortgages.  As White points out, this is a double standard involving contradictory lending moralities.

White, who is a scholar of both behavioral economics and law, just may know what he’s talking about. Clearly, the norms governing borrower behavior are at odds with those governing the tactics of lenders.  Lenders, as recently demonstrated in stark relief, seek to protect the bottom line without concern for morality or social responsibility. “Wall Street gets to maximize profits and minimize losses irrespective of concerns about morality,” he says.

Homeowners, on the other hand, are expected to honor their promises, however unmanageable a change of circumstance may be. This moral asymmetry, White concludes, results in a distributional inequality with homeowners bearing a disproportionate burden from the housing collapse.

Emotional constraints deter strategic defaults

White suggests that the choices of most homeowners not to strategically default are the result of two emotional constraints.  The first is a desire to avoid the shame and guilt of foreclosure and the second is an exaggerated anxiety about the perceived consequences of a foreclosure.  These emotional forces, he continues, are “actively cultivated by the government and other social control agents in order to encourage homeowners to follow social and moral norms related to the honoring of financial obligations – and to ignore market and legal norms under which strategic default might be both viable and the wisest financial decision.”

Suboptimal economic decisions are irrational

White believes that shame and an exaggerated anxiety about the effects of a foreclosure may be keeping homeowners from walking away in droves.  Even in non-recourse states such as California and Arizona where foreclosure is the lender’s only remedy and personal deficiency judgments cannot be obtained against borrowers, “the vast majority of underwater homeowners continue to make their mortgage payments – even when they are hundreds of thousands of dollars underwater and have no reasonable prospect of recouping their losses.”

While such behavior may appear irrational on its face, behavioral economists liken the behavior of underwater homeowners to the irrationality that leads people to make other suboptimal economic decisions.  “Underwater homeowners aren’t knowingly making bad choices, they just can’t cognitively grasp that they would be better off if they walked away from their mortgages,” White explains.

The moral playing field requires leveling

Walking away from over-encumbered homes may well undermine the basic tenants of mortgage lending, but no more than does taxpayer assistance for lenders who remain unwilling to make interest-rate or other concessions.  Rewriting interest rates on existing mortgages would keep many of distressed borrowers in their homes, but lenders have little incentive to make any concessions. Over the last couple of years, we have seen that banks cannot be shamed into action.  Congress briefly considered a bill that would have allowed bankruptcy judges rewrite mortgages, but even that relatively modest proposal languished and died last spring.

Walking away may be the most financially responsible choice

Struggle as they may against the emotional constraints pinpointed by White, plenty of homeowners arrive at turning points where they have no choice but to walk away.  With 10.7 million Americans underwater on their mortgages, it may be time to reconsider the prevailing lending morality.  Walking away just may be the most financially responsible choice a distressed homeowner can make, when doing so makes it possible to meet other, unsecured credit obligations and provide a stable income for his or her dependents.

Feel like the government is rolling the dice when it comes to debt relief? Don't forget how much must be factored in! (Photo: flickr.com)

The global recession continues to batter our financial shores, and world governments are working non-stop to implement programs designed to restore the financial viability of borrowers and promote debt relief. There are numerous theories regarding just how government should go about assisting populations as they progress toward debt relief. Whether their action should be a) measured and look toward long-term stability or b) immediate in order to quell the pain the general population is facing and jump-start the economy through multi-billion dollar stimulus is being debated across the globe.

A June 2009 study by Luc Laeven and Thomas Laryea of the International Monetary Fund entitled “Principles of Household Debt Restructuring” (see http://www.cnbv.gob.mx/recursos/fmitsr24.pdf) states that any government-sponsored program to promote debt relief should help individual borrowers while at the same time minimizing fiscal cost, reducing the possibility that banks will fail and establishing the a clear plan for real recovery. Unfortunately, it is unclear for nations like the United States whether such a clear plan is in place.

What Should the Structure of Government Aid Be?

Laeven and Laryea suggest the following framework:

• Clear Objective: Troubled loans (bad debt) must be converted. Debt service requirements might be reduced for some borrowers who are suffering due to interest or currency exchange rate explosion.
• Scope of Debt Relief: Helping those who cannot satisfy their debt but would likely be able if debt restructuring were to occur. The criteria for choosing such borrowers would be difficult, and would have to be feasible within the envelope of public funds received to operate the debt relief program.
• It Must be Proportional: Bring the greatest aid to those who are in the greatest need.
• Voluntary Participation: Banks should not be forced to restructure borrower debt, as this will give rise to legal challenges that will hinder the debt relief process.
• It Must be Simple: Household debt involves a large sample of loans, so simple rules are needed if systemic abuse is to be avoided. The government and banks must share information in order to conduct analysis of debt load.
• There Must be Transparency and Accountability: President Obama promised transparency during his tenure. This kind of openness is essential in order to perform the analysis necessary for debt relief using public funds. All organizations involved should know where the money is going, and if a mistake is made or there is an intentional infraction, those responsible should be required to stand accountable.

Unsustainable Debt Requires Swift but Sure Action

The world financial crisis has hit many countries hard. Household debts on the individual level (as well as the ability to service such problems) create a downward spiral from which it is difficult to escape toward debt relief. Financial institutions reel in the face of consumer financial paralysis, as their own balance sheets will with non-performing loans. As a result, banks tighten the rains on available credit, which in turn affects housing prices and the value of other assets. This lessening of collateral value comes back to hit households where it hurts. Consumption goes way down, which hurts retail and leads to unemployment. Greater unemployment contributes mightily to slackening income figures.

Turn Frowns Upside Down? How?

How will society effectively deal with the massive volume of distressed loans? Government involvement will necessarily bring costs; what we have to decide is whether the benefit of their involvement in debt relief outweighs said costs. Any government spending to affect debt relief should be tempered by the need to remain fiscally responsible, suggest the study authors.

The rise in personal bankruptcies and foreclosures presents an important hurdle for government involvement in debt relief. Working each case out individually through the court system is hardly efficient. A gridlocked system based on allowing the market to correct itself – while legal fees mount – suggests in the minds of the authors that a more organized debt relief approach from world governments is necessary.

Is Government Debt Relief Feasible or Credible?

This is an interesting question. If intervention can produce real gains in helping to alleviate public debt without abusing the will of taxpayers, perhaps governments should move forward. The study authors remind us that if debts are written down in value, banks will need their own recapitalization programs in place. These programs should be tuned toward establishing solvency for the financial institutions, rather than gross profits.

The Case-By-Case Approach

If government agencies can assess the current size of the financial problem they face by determining

• An accurate, current picture
• The problem’s evolution to this point
• How the financial burden has been concentrated across a sample of individual banks
• How debt relief via restructuring will help these lending institutions,

then Laeven and Laryea figure that the path for government involvement would be open.

The approach to the problem should advisably first focus on case-by-case debt relief (when numbers make such an approach feasible). Dealing with household insolvency through a framework that addresses collection enforcement, the value of collateral after debt is secured, loan modification that respects the capacity for debtors to pay and (in some cases) debt relief via discharge after a liquidation period. While this framework would address legal issues, the authors suggest that governments could also offer incentives and make loan restructuring easier by promoting such things as nonbinding private sector guidelines for the restructuring process.

Across-the-Board Government Subsidies

When a case-by-case approach isn’t feasible, the authors suggest government-sponsored debt restructuring for debt relief. This would involve direct financial support to debtors. Some or all loans could be covered, where the government would give funds to banks that agree to restructure loans. The creation of asset management companies that buy and resolve bad debt would be another approach. In addition, household subsidies along the lines of debt forgiveness or interest rate/tax rebates are options under this plan.

Ideally, only those who are honestly unable to repay their debt could take advantage of such across-the-board government debt relief programs. Determining a person’s ability to pay is tricky business. “Debt restructuring,” write the authors, “should not be regarded as an instrument that can displace sound macroeconomic policies.” Caution and close study would be needed.

A Restructuring Plan

This would include a variety of incentives and reforms, claim the authors. It begins with incentives for borrowers, where they are encouraged to restructure their loans with a series of subsidies. There would be subsidized refinancing, write-offs and insurance against being harmed by exchange or interest rate hikes in the future. In the area of bad mortgages, the authors state that shared appreciation mortgages might be one way to go. Repayment would then necessarily be related to the value of a home when it is sold. These mortgages could be written so that governments could share in the upside as value appreciates.

Lenders could also receive their share of incentives. Tax credits for those who agree to restructure loans or even access to low interest credit lines as a reward are not out of the realm of possibility in Laeven and Laryea’s plan. To help prevent an endless chain of recapitalization aid, the government could also create “an effective personal bankruptcy framework for addressing collective enforcement of creditor claims and rehabilitation of debtors.” Helping borrowers in that case could also help lenders.

Foreign Currency Loans

Considering that the authors compiled their study for the International Monetary Fund, it comes as no surprise that the issue of foreign currency loans is addressed. They suggest such loans could be converted to local currency, and when the exchange rate problem becomes too prohibitive, liquid assets denominated in the original currency could help make up the difference.

And as a Last Resort…

When the above measures aren’t enough, the authors believe that a new standard for modifying bad loans is needed, as well as temporary bans on foreclosure and repayment. Governments who delve into these areas do so at their peril, however, as lending contracts are superseded. The market could begin to view contract enforcement capability in a negative light, which would diminish investor confidence. In that instance, debt relief is not procured and incentives to default are unintentionally created because the danger of penalty is not so near.

Debt Relief Through Asset Management Companies

Of the ideas Laeven and Laryea present, debt relief through the use of asset management companies has the most promise in my eyes. Such companies would be better equipped to resolve bad debt than the already overtaxed lenders who require recapitalization. Then, on a case-by-case basis with banks, the government can be more selective as to where taxpayer dollars go to help. The relative strength of a financial would be taken into account.

Various Countries are Applying Variants of These Ideas

However, there is no one solution that works for all nations. Debt relief is necessarily a long, slow process, one that individuals may not be able to stomach as they stare down their monthly slate of bills to pay. But for lasting change, it appears that slow reform may be the only route for true debt relief.

Breakfast potatoes! Image from openphoto.net.

A propitious esculent, quite simply, is a potato. The potato is one of the least expensive and most versatile foods in the world. Potatoes were a form of debt survival during the Depression in the U.S. and a staple food for poor families in other countries throughout history.

Author John Reader last year released a book called “Propitious Esculent: The Potato in World History.” One review on Amazon says the book “Propitious Esculent” is an “impressively researched account.” So if you want to know all there is to know about the potato, check it out.

Tasty and tubular

To honor the propitious esculent for providing families with inexpensive food for so long, I looked up some great potato recipes to show how many creative ways you can  use a potato.

Irish Potato and Apple Pudding

Ingredients:

6 ounces mashed potatoes
5 medium baking apples, peeled and thinly sliced
2 tablespoons butter, melted
8 ounces self-raising flour
4 tablespoons Milk
Brown sugar or white sugar
2 whole cloves
Juice of half a lemon
3 tablespoons cider

Directions:

Stir melted butter into warm mashed potatoes. Add pinch of salt and flour. Mix well. Add enough milk to make a soft dough. Roll out potato dough and line a one quart bowl with part of it. Set aside enough dough for the top of the pudding.

Fill dough with the sliced apples, sweetened to taste with the sugar. Add  whole cloves, lemon juice and cider. Dampen potato pastry edges, lay on the top and press down.

Cover with foil. Steam or cook (set in a pan of boiling water up to the rim) for two to two and half hours. Cut pudding in wedges. Serve with cream or custard.

Greek Potato Salad

4 medium peeled potatoes, cut into half-inch chunks
8 oz green beans, cut into 1-inch lengths
3/4 c. buttermilk
2 TB extra virgin olive oil
1/2 tsp grated lemon zest
1 TB fresh lemon juice
1/2 tsp salt
Large cucumber, peeled, halved lengthwise, seeded, thinly sliced
1 c. cherry tomatoes cut in half
1 medium red onion, halved, thinly sliced
1/4 c. snipped fresh dill
4 oz crumbled feta cheese

Boil salted water in a large pot and simmer potatoes for 12 – 15 minutes or until crisp-tender. Add green beans. Cook 2 more minutes. Drain.

Combine buttermilk, olive oil, lemon zest, lemon juice, and salt in a large bowl. Add potatoes and green beans. Toss gently to coat. Add cucumber, tomatoes, red onion and dill; toss gently. Let cool to room temperature. Serve at room temperature, or cover and refrigerate before serving. Garnish with feta cheese.

Indian Potato Curry with Tomato

2 small potatoes
1 tomato
1 small onion
half a fresh, hot green chili
2 TB vegetable oil
1/4 tsp mustard/cumin/sesame seed mixture
1 dried hot pepper
2 TB cilantro
half a garlic clove
1/2 tsp lemon juice
1 tsp cumin/coriander powder
1/2 tsp tumeric
1/2 tsp salt
1/2 tsp masala

1/4 cup fresh or dry unsweetened coconut
Peel potatoes and simmer in a small saucepan until soft. Chop potatoes.
Chop and mix together tomato, onion and chili.

Heat vegetable oil, mustard/cumin/sesame seed mixture, dried hot pepper, chopped cilantro and diced garlic. When seeds pop, add tomato mixture cumin/coriander powder, tumeric, salt and masala. Add potatoes and lemon juice; toss gently.

Turn off heat and add more cilantro and coconut. Add water to make gravy.

Before 2007, Jack Whittaker was the biggest lottery winner of all time. He won in 2002. Photo url: www.bankrollmob.com/poker-news/2009716/americ...

The Mega Millions lottery jackpot has gotten huge since the Mega Millions winning numbers announced yesterday haven’t resulted in a winner yet. If the Mega Millions lottery results Friday end up in a win, the lucky lottery ticket holder will win $325 million, the third biggest mega millions jackpot ever.

From the Philadelphia Inquirer:

Last night, the Mega Millions jackpot rose by a whopping $73 million to its third largest prize ever: $325 million. The only bigger prizes left a lot of loot in Cape May County, N.J., in 2007.

The $325 million up for grabs on Friday is the total for 26 payouts over 25 years. Can’t wait? The cash windfall is $206.4 million (minus no small fortune in taxes).The numbers no one completely matched last night were 3, 12, 19, 22 and 40, with a Mega Ball of 2.

Smaller prizes from Mega Millions winning numbers

Though no one had the Mega Millions winning numbers, cash prizes were still handed out, as 24 lucky people won $250,000 a piece. The prizes went to people who had the first five Mega Millions winning numbers.

Even after taxes, the winners probably won’t have to worry about debt survival anymore.

Mass Lottery Mega Millions fever spreads

ABC News reports that tickets are selling even more than usual now as even non-gambling types are willing to spend $1 with the hopes of getting the Mega Millions winning numbers. From ABC:

The unusually high lottery prize has drawn in players in each of the 12 participating states as people dream of getting rich off their $1 investment.

“With jackpots of this size, you start to see people who don’t normally play a game like Mega Millions buying a ticket,” said Dominick DeMarco, a spokesman for the New Jersey Lottery. “They may notice it’s over 100 million, and they’ll say, ‘OK, I’ll take a shot at it.’”

Past Mega Millions lottery results

The Philadelphia Inquirer reports on the Mega Millions lottery results the times that the winner got an even bigger prize than this one.

In March 2007, the lottery, which is played in a dozen states, including Maryland, reached a record for any game: $390 million.

Elaine and Harold Messner of Woodbine, N.J., had one of the two winning tickets.

That August saw a $330 million prize won by four tickets, including one presented by John and Sandy Belawsky of Villas, N.J.

Playing Powerball

Lottery jackpots have been getting more attention than usual lately as they’re reaching very high numbers. The other major multi-state lottery in the U.S., Powerball, handed out a $260 million prize last week to a South Carolina man.

The largest Powerball prize ever was $365 million. That jackpot went to a group of workers at a Nebraska food plant . Stories like that, especially now with many people struggling financially, are what drive more and more people to buy lottery tickets in hopes of striking it rich.

Will Mega Millions lottery results be all good?

Of course, not everyone wants to win the lottery. That’s because of a widely known phenomenon, “the curse of the lottery.” Some people believe that money ruins people, and some are simply superstitious about lottery winnings. ABC News reports that there is some science behind this superstition, though.

Psychologist Steve Danish, a professor of psychology at Virginia Commonwealth University, has studied the impact instant wealth has on lottery winners.

“The dream you have about winning may be better than the actuality of winning,” he said. “There have been families that have just — just been torn apart by this process.”

Kenneth and Connie Parker were winners of a $25 million jackpot. Their 16-year marriage disintegrated just months after they became rich beyond their wildest dreams.

Jeffrey Dampier, a $20 million winner, was kidnapped and murdered by his own sister-in-law.

Who is Avi Ben Stella, and why does he want to infect your computer with malware?

When it comes to the welfare of children, there is literally nothing I prize more highly. I am a father, and my children are the most important thing in the world to me. That’s why I find it infuriating that the whole Avi Ben Stella car crash call to prayer is burning up the World Wide Web. Not only does it appear to be a hoax – creating a fictional child who has suffered grievous injury and making attempts to manipulate our emotions into feeling worry for the boy – but the scheme may even be an effort to infect your computer with malware. I haven’t tested that (and I’ll deal with prayer in a moment). A writer for the Examiner claims he followed threads until he found the hand behind the curtain, and I’m not sure what kind of credibility the Examiner actually has. As much as the news and insight you know and love from Personal Money Market? I can’t say. We know debt survival and easy cash loans… I’ll leave the “noble tradition” or journalism to those with a greater interest or faith in the purity of that endeavor.

Your serving of Avi Ben Stella car crash mischief

This is a viral story, and as such you may choose to guffaw at the earliest opportunity. There’s nothing cool about it and it is rightly a waste of your time, and yet you are drawn to it like a moth to the flame. Here’s how you may have been sucked in to this offensive time-waster:

1. You received an E-mail, Facebook request, Tweet, etc.
2. This message requests that you change your status message for one hour, in order to offer up prayers for 12-year-old Avi Ben Stella.
3. Why? Because he’s been in a car accident and is in a coma… supposedly.

What is this, some kind of joke?

Yes, and the joke is on you. Snopes, a Web site that attempts to prove or disprove various urban legends and myths online and off, remains undecided on the matter of the Avi Ben Stella car crash, but the evidence points toward “debunked.” Here’s the original message as it was relayed to them:

PRAYERS NEEDED for 12 yr old Avi Ben Stella who, after a serious car crash, is now in a critical coma. Pls. change your status for 1 hr so more people can become aware and add to the prayers. We would do it for your son, pls. do this for somebody else’s son. Thank you.

Snopes indicates this all started in mid-August 2009. There have been no news stories to corroborate this, and if a 12-year-old were in a coma following a car crash, it’s a safe bet at least a local media outlet would have caught wind of it.

Drink your bitter Bierce

As I’ve said, the Examiner claims its readers followed the online paper trail and supposedly directed to a site that attempted to install malware. While that doesn’t kill this case with 100 percent certainty, how much evidence do you really need to figure this one out? There is no Avi Ben Stella car crash and there is no coma; that seems most likely. As I imagine you aren’t a fan of infecting your computer with malware or viruses, I’d say it’s a good thing not to play along with this little call to prayer.

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Oh, a parting word on prayer. Peace of mind has a definite connection to wellness of body. But take a look at extensive studies like those conducted by the Templeton Foundation and see how science and religion do not necessarily correlate. Then consider what American editorialist, journalist, short-story writer, fabulist and satirist Ambrose Bierce had to say about prayer: “to ask that the laws of the universe be nullified on behalf of a single petitioner, admittedly unworthy.” Of course, people used to call him “Bitter Bierce,” but maybe he was onto something.

Hey… having money in the bank also brings peace of mind. On that note, easy cash loans are available here!

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