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Keep Loans in Check

The unemployment rate is still high, and people continue to lose homes after failing to meet mortgage payments. Credit card debt also eats into their finances, leading them to borrow even more money from lenders. However, there still are people who have good jobs with better than average wages, no credit card debt or personal loans, and are looking for help in restructuring their finances. They have enough retirement and emergency savings, but they are worried that certain expenses may lead them into an undesired situation. These are not people who are looking for personal loans, but rather, they are trying to stay out of debt, but do not know what to do. Managing money is a skill that even those with extremely large salaries, such as executives or even actors, may not know how to do.

An Example

An example of this has been reported in the Washington Post (12/27/2009). The story starts out by profiling a couple, who are both federal employees who have saved nearly $160,000 towards their retirement and continues to contribute $1,700 a month towards this fund. They have one child as well. But they worry consistently about a large, but still affordable, mortgage payment each month, as well as a student loan of $22,000. Apart from that, they say they have a habit of dining out regularly, which takes a big chunk of their income. While they have thought about cutting down on their retirement contributions to finance their habit of dining out and keeping up with their mortgage payments, they realized that both options are unviable and they have sought counseling to see what can be done about their condition.

What a Situation to Be In!

Here is a couple who has everything they ever need in life, including a good job, a nice home, decent cars and all the luxuries. However their current debts are not such that they cannot be handled, as all they need to do is make some minor adjustments in their daily habits. Yes, they must give up on some of the luxuries and impulsive habits that they had developed over the years, which will mean more cooking at home rather than going out to eat. The money they save can go towards the student loan that they have. They could even cut down on certain other expenses that they may be indulging themselves in. A reduction in the contribution they are making towards their retirement is certainly not an option, as this is the last place they need to skimp on. What will happen if they get to retirement age, and all they have is enough to barely eek out an existence? Getting a personal loan that age would perhaps be a monumental task with higher interest rates. Instead, they could look at a loan modification for their mortgage and seek lower payments. As they have a good income coming in every month, a personal loan is not recommended. The problem they face is not the same that many others face, and they are not among the millions who are looking for loans from lenders, but rather, they have problems managing the money they have.

Apply Here for a Personal Loan!

Detroit Free Press

As newspapers continue to struggle with the bottom line, some organizations have finally come up with a new business plan. The Detroit Free Press and the Detroit News are changing to a hybrid approach to getting the news out.

Shrinking yet growing

Both newspapers are going to shrink a bit, meaning they will have fewer pages. The Detroit Free Press is heavily marketing freep.com and digitalfreepress.com, which are online sources of the newspaper’s content. Readers will be able to read and see the newspaper online every day instead of getting it delivered to their homes.

Why two sites?

The Detroit Free Press has two web sites because it is sharing news in two different formats. Freep.com is more like a traditional web site that most newspapers have. Digitalfreepress.com is a digital replica of the printed newspaper. Right now the sites are open to the public for free. However, if you don’t have any extra cash you might need to get a payday loan to view it in the future, when the Free Press will start charging for it.

Other changes

Both newspapers are also cut back home delivery to only three days a week. The Detroit News and the Detroit Free Press will only be delivered to homes on Thursday, Friday and Sunday.

Still daily

The newspapers will still print every day, but they will only be available in newspaper boxes and places of business on Monday, Tuesday, Wednesday and Saturday. The papers chose which day to deliver based on days when advertisers buy the most space. On the days when there is no home delivery, the number of copies printed will be cut from 500,000 to 200,000.

Other media changes

The Washington Post has made some changes, as well. Starting today the business section of the paper and the news section are one in the same. Instead of having a separate business section, the business news will appear in front section of the paper.

Getting together

The International Herald Tribune has merged its web site with the New York Times. Both newspapers have the same publisher. The Herald also redesigned its print edition.

It must be big

Ready to bust some banks, Barack?

Financial strategist and author David Smick’s recent Washington Post editorial  “Memo to the Banks: Lend or Else” suggests that the President-elect must make bold moves in order to help recapture consumer (and institutional) confidence in the U.S. economy. One of the best ways he sees to accomplish this is via a showdown with the country’s afflicted banking system. Something like this would be much more important (and much less destructive) than cracking down on faxless payday loans that actually aid consumers.

At one time, banks were considered “too big to fail.” Clearly that is no longer the case, though, as massive bailouts from the Bush administration have shown.  Did you know, however, that current post-bailout cash reserves for America’s banks sit at over $800 billion? What are they doing with the money? They’re sitting on it! Smick blasts American banks, for they have shifted from reckless abandon to static safety. The result of this is that they are tightening their belts so much that credit has been unable to flow as it needs to.

The economy suffers

Banks have been doing something with the money. Unfortunately, it’s nothing good. The cockeyed leadership of these financial dumps have taken it upon themselves to send their executives on spa vacations and double their investment in Chinese banks. Common sense or a drive to tackle issues at home head on are nowhere to be seen.

The mortgage crisis is tightly wound up in this, too. Smick points out that giving loans to people who could scarcely repay them was one thing, but the banks made things even worse by burying their errors in off-the-books ventures. We may never know exactly how big a hole the banks dug for themselves, or whether they needed as much money as they received from an all-too-eager government in the first place!

Obama had better bring a shovel

If banks won’t lend, Smick suggests that Obama ride a hard line with these deeply diseased behemoths. He should insist that their Troubled Asset Relief Program (TARP) funds be used to buy Fannie Mae and Freddie Mac debt. Since it is now federally guaranteed, bank executives have no excuse. They cannot sit on their freshly manicured hands, they cannot pass Go and they cannot go on any more “team-building” retreats. It’s time to act like big boys and girls now, or else.

Some bankers are saying they’re confused by the government’s efforts, that some are telling them to demand more capital and lend less money, while others say they’re receiving the opposite message. Poppycock. You know that increased lending will improve liquidity and get this economy on the right track again. You want to make excuses, Mr. and Mrs. Bank.

Wow. Now.

America is in a financial crisis. This is not a test, but the real thing. As Smick sees it, Obama’s only move is to take banks to the carpet and make them heel. Busting banks for their misdeeds is what is needed, not punching payday loans in the mouth. Whether or not this will be possible remains to be seen, but what America wants to see is bold moves. They will appreciate the effort and (hopefully) savor the results.