loan consolidation

Law School Final Exams

2008-12-02T11:02:00.000-08:00

Since professors won't tell you how to do well on your exams, I will. Because you cover so much material, you need to make an outline for each class. You can do this alone, assuming you have about an extra thousand years to kill. An easier way is for your study group to divide up the classes, with each person outlining one class. This differs from the prior approach in that it is humanly possible. You are likely, however, to open up your study group's contracts outline the night before the exam and find a sentence like this: "An offer is the manifestation of gooberness to enter into a something or other (I didn't catch what the professor said here) so made as to justify another person in understanding that [illegible] is invited and will gyre and gimble in the wabe. Or something like that." You then realize that the classmate who wrote this dropped out six weeks ago and is inaccessible by telephone, and you run around the room screaming like the lunatic that you are. So it's really better just to buy the commercial outline and forget it.

Studies have shown that the best way to learn is to have frequent exams on small amounts of material and to receive lots of feedback from the teacher. Consequently, law school does none of this. Anyone can learn under ideal conditions; law school is supposed to be an intellectual challenge. Therefore, law professors give only one exam, the FINAL EXAM OF THE LIVING DEAD, and they give absolutely no feedback before then. Actually, they give no feedback after then, either, because they don't return the exams to the students. A few students go and look at their exams after they are graded, but this is a complete waste of time, unless they just want to see again what they wrote and have a combat veteran-type flashback of the whole horrific nightmare. The professors never write any comments on the exams. That might permit you to do better next time, which would upset the class ranking.

Another reason that law professors give only one exam is that, basically, they are lazier than three-toed sloths. They teach half as many hours as other professors, are paid twice as much, and get promoted three times as fast. Then, they whine like three-year-olds because they have to grade one exam per class. I mean, this is every single semester, year in and year out. The constant grind is enough to kill a person, I tell you.

Then, memorize the outline. As you pour it in the top of your head, most of it will run out your ears. Keep scooping up the stuff that runs out your ears and pour it back into the top of your head. Eventually, a little of it will begin to stick. You should also use acronyms, or "pneumatic devices," to help you memorize. For example, the prima facie case of a tort action for negligence has several elements: an Act or omission, a Duty, a Breach, Actual cause, Proximate cause, and Damages. The first letters of these elements are A, D, B, A, P, and D. Now, think of a sentence using words beginning with those letters. For example, Ann Drop-kicked Bunnies And Pretty Duckies. See? You will never forget the elements of negligence again. You can use this technique to remember everything you learn in law school. Using this method, one student was able to reduce his entire civil procedure outline to one word, and finally, to one letter. Then he forgot the letter.

Next, get some of the professor's old exams from the library and try to answer them. As you read them, note that you don't have the foggiest idea what they are asking. You can't even tell what the subject matter of the class was. Put the exams away. This year's test will probably be easier.

Then the two-week exam period begins in earnest, and the typical student begins to feel like a nine-lived cat run over by an eighteen-wheeler. To take their minds off the crush of exams, students engage in a variety of activities, such as:

Trying to concentrate while panicking.

Having anxiety attacks while panicking.

Having diarrhea while panicking.

Panicking while panicking.

I strongly recommend that you type your exams instead of writing them. There are several advantages to typing. For instance, you can bring a "memory [*1694] typewriter," and when the exam begins you can push a button and your typewriter will reproduce your entire outline. This is very handy.

You might find it a little difficult to concentrate in the typing room, because all those typewriters pounding together sound like a herd of elephants doing an impersonation of Gregory Hines. If somebody starts typing before you have even finished reading the first paragraph, don't get upset. It probably means nothing, except that someone is a genius and how are you supposed to compete with a genius and what are you doing in law school anyway! ! Take a deep breath. Take several deep breaths. Now you are hyperventilating and are going to pass out. Cease breathing.

The sound of the typewriters is not the only reason you're having trouble concentrating. You have not slept or eaten for two days. Also, you have not changed you clothes or bathed for a week, and things are beginning to get a little bit itchy. You are wearing a hat to hide the fact that your hair looks like the La Brea tar pits.

Try to hum a tune (to yourself, so that the person next to you doesn't bash you on the head with his typewriter) to help yourself relax. Suddenly -- and you have never noticed this before -- you realize that "La Bamba" has exactly the same chord progression as "You've Lost That Loving Feeling" and "Twist and Shout." This will probably be hard to do, but let it go for now. You can think about it later -- like during your next exam. Twist a little closer to your typewriter, and try to write something quasi-intelligent. Do not shout.

If there is a power failure or your typewriter breaks, don't panic. Calmly remove the paper from the typewriter, gently pick up a pen, and scrawl across the page in ink mixed with blood: "TYPEWRITER BROKE! ! I WRITE NOW! ! " Then pass out. To avoid power and equipment failures, you might want to bring in a wheeled cart with about seventeen extra typewriters and a twelve-volt car battery. Better yet, drive a pickup truck full of typewriters into the exam room and open the hood for access to the battery. It would be thoughtful to place a drip pan under the transmission. Also, be sure that the carriage on your typewriter is working, so that you don't end up typing 2,000 letters in one very black spot. This can make your answer hard to read.

The exam questions are usually absolutely hilarious fact situations that just slay students and send them into paroxysms of helpless laughter. Law professors learn how to write these witty exams at a seminar for new professors, "How to Make Up for Your Humorless Teaching Style on the Final Exam." Try not to let the laughing get out of hand.

If your professor has stressed theory all semester and has insisted that there are no legal rules and that only an idiot would believe that there are rules,her exam will test you on the rules and the rules alone. These rules are printed in heavy black typeface in the commercial outlines, and are therefore called "black letter law." Do not confuse them with black letter theory, which will do you no good whatsoever on the exam.
You should use the "IRAC" method on the exam. "IRAC" stands for Issue, Rule, Application, and Conclusion. Be sure to discuss each part of the formula, except that you can skip the Conclusion, because it doesn't matter which way you come out. Also, there is no time to do the Application, because the exam is so chockful of issues that you barely have time to list them and try to state some semblance of a rule using only key words. It shouldn't really be called the "IRAC" method, but "IR" looks kind of stupid and makes it sound like law school exams test only memorization skills. Which, of course, is what they do.

Be sure to confront any ambiguities in the exam. They probably wound up in there accidently, but the professor will never admit this and will insist that they were deliberately placed there for pedagogical purposes (a phrase you will hear a lot). For example, suppose Don throws acid at Pat. (Notice that "Don" begins with a "D," as does the word "Defendant," and that "Pat" begins with "P," as does the word "Plaintiff." These professors are geniuses.) The exam doesn't tell you whether the acid made contact, a harmful or offensive "touching" (what a moronic word) with Pat. You should confront this ambiguity and write the following:

The facts don't say whether the acid touched Pat. If it did not, it was an assault. If it did, it was a battery. Of course,it was clearly a battery if it was battery acid! !

Professors just love humorous asides like this, and will probably give you several points of extra credit. n24

After the exam, do not review or "post-mortem" the exam with other students. This is very depressing especially if you can't even agree whether it was a torts exam or a contracts exam. On the other hand, if some persistent bozo absolutely insists on reviewing the exam with you, be sure to point out several issues that were not on the exam. This will cost him several days' sleep and, probably, thirty pounds.

Lemon Law Cases and Car Companies

2008-11-21T14:48:00.000-08:00

Here's a secret tip that should be obvious. Car companies do not want to go to court on a lemon law case. The risk of going to court far outweighs the cost to settle. Here is why:

1. Defending a lemon law case is expensive for these companies. By the time a lemon law trial is completed, the car company can easily spend $20,000 defending itself from your claims. These cases are rarely completed with their own attorneys so it is really all money out of pocket to them. With that much money at risk, defending a lemon law case is already very expensive, even if they win.

2. In most cases, the lemon law lets you collect up to three times the damages that you are owed. That means that if your car originally cost $25,000, they can risk losing $75,000 due to a jury decision, plus their own attorney fees, plus the possibility of having to pay your attorney fees. Since they can replace your car at cost AND still recover some of their loss by selling your old car, it makes more sense to replace your $25,000 car with a new one that can cost them as little as $10,000. Their choices are really simple, they can risk losing $100,000 or more or settle with you at their cost for $10,000.

3. Car companies do not want to have to deal with the bad publicity from dealing with a lemon law case. Obviously, your case is likely not going to make headlines in the NY Times, but it still registers as newsworthy and could be picked up locally. Public attention to a lemon law case risks more than a loss in court for these companies. It can also represent a loss of their public image which can result in a significant loss of sales.

Sell Life Insurance

2008-11-21T09:09:00.000-08:00

Every day hundreds of people visit Web site or call in search of sales tips on "how to sell life insurance," especially cash-value life insurance. They want to know how to convince people to buy cash-value life insurance at a time when most people are very reluctant to spend any of their hard-earned money because of the current economy. Unfortunately, when lay it all out for them, they don't want to hear it. They still want to believe there's a quicker solution that doesn't involve taking the time to read and study. They want a simple idea that will magically attract hundreds of people to them who already want, can afford and can medically qualify for cash-value life insurance. These are the same people who will spend thousands of dollars each year on Internet leads or on a sales system that makes outrageous claims, like promising overnight success while selling from home in your underwear. I hope you are not one of those people.

The vast majority of agents out there are buying Internet or mortgage leads, sending out sales letters or term flyers, cold calling, etc., to identify those people who need life insurance. Once these agents find a prospect who needs the protection for their family, business, etc., they'll jump right in and try to convince the prospect why they should consider buying cash-value life insurance. They'll tell the prospect about how much money they'll save by purchasing cash value life insurance while they are young, and the premiums are low. They talk about the merits of owning instead of renting their life insurance. They'll explain to the prospect how they'll get all of their premiums back, with interest, so they'll be able to use that money to fund a college education for their children or have more money in retirement. And, how their money will grow tax deferred and how they can access the money tax free, without any IRS penalties. They'll try to convince the prospect that they'll need the insurance in their retirement years, and that term insurance won't be there when they need it most. All of the things these agents are telling their prospects are very true and logical reasons to own cash-value life insurance; however, in the majority of cases, the agent is indeed lucky if they are able to walk out with a term insurance sale, let alone a sale for cash-value life insurance. Why?

Then, there also are the few agents who will spend much more on an advanced cash-value life insurance selling system. Their objective is to find and attract people who want to hear more about these exciting new concepts, and to set an appointment with them. So, they send out their books and free reports, and they run ads in the newspaper offering a dinner seminar. Once they set an appointment with someone who wants to know more, they'll explain how great the concept is and how much better off they'll be financially. The concepts they are presenting are terrific, and they work. And yet, most agents are lucky if they are closing 10 percent to 20 percent of the people they are meeting with. Why?

The reason both these groups of agents are struggling with selling life insurance is they are telling the prospect how great the product is and logically explaining why they should buy it. and barely more than a hamburger special. The good thing about it being 10 bucks is barely anyone will have any say on how it’s spent because 10 dollars alone doesn’t buy you to much.

Solution: It doesn’t take much to change things. Everyone is always looking for some SBA loan, or some rich person to walk out and build a community center, or maybe some corporation to sponsor your kids trip to Six Flags. Our have the power Sell Life Insurance to do this without ever worrying about the government intruding, some outside group offering thier advice and even your local do nothing know nothing politician trying to take credit for it. Our have a lot more power than you think, just stop thinking about changing the world and just change yourself.

Different Options Online Banking

2008-11-19T04:46:00.000-08:00

More people are getting motivated to save money because the online banking options are more appealing. People have found that they can open a checking account at an online banking site and enjoy all of the conveniences that they already enjoy at a land-based bank in their local community. People can enjoy online savings too when they do their banking online because online banking institutions do not charge any fees to open an account with their firm.

The online banking options all people to get cash whenever they need it too. People have the option of paying an annual fee for a name brand credit card, or they can use the debit card awarded when the online banking account was established free throughout the year. People are finding that they can use the debit cards to withdraw cash from any automatic teller machine in the country and the available cash limits are very generous and allow people to earn money at the same time.

The small fees charged by ATMs add up over a year and some online banking options will reimburse customers for that expense if it is one of the options they select when the account was opened. The online banking options allow banking customers to establish checking and savings accounts that accrue interest at rates that are above what is offered by land-based banks. Online banking customers do not have to worry about idle cash because the online banking options are constantly working on their behalf to make their money and businesses grow.

People enjoy the convenience of making purchases online with the online banking options they have established. Since all funds in an online bank are fully insured, online banking customers know that is safe and secured 24-hours a day. Online purchases are protected by many Laws, and the threat of any fraud occurring is very minute. Online banks are just as safe as the commercial banking institutions around town because encryption software protects personal information provided online.

The best online banking options can be enjoyed all the time because the online banks never charge fees for the online banking options they offer. People can pay bills online and not worry about paying late fees ever again. They can use the online banking options to save money in savings account and through investment portfolios. Whichever online banking options are selected, online banking customers know that they will reap greater rewards by banking online. All of the money in any account is assured of growing in size because each account earns a daily interest rate for all money that remains in the account.

Some of the online banking options will help people save for retirement. One of the online banking options allows customers to open certificate of deposits which accrue interest over the period of a year, or in as little as six months. People can build an attractive nest egg through U.S. money market accounts and people can also enjoy using those funds when retirement time finally rolls around. The online banking options allow people to track interest rate averages for CD accounts and make elections online which saves people a lot of personal time.

Auto Insurance Quote

2008-11-17T06:08:00.000-08:00

The best option to get a free auto insurance quote is through online. Auto insurance is a must have and any body who owns a vehicle needs to get an insurance. Auto insurance has become mandatory in many states and people without insurance are risking their fortune. Premiums depend on the type of car, mileage used and your driving license records. A flashy sports car can draw a higher premium than a mid size family car. A car with lesser mileage can attract lesser premiums when compared to one than have higher mileage rates. An auto insurance company is very sensitive about accident records, a person with clean driving records are liable for small premium and a person with bad driving record can exert a higher premium. There are number of coverage available along with the auto insurance plan, one can select coverage that suits them best. Some of the coverage offered is Collision, property damage, injury protection, bodily injury, comprehensive and uninsured coverage.

Whether new or old, auto insurance is must for any type of vehicle. Select a trustworthy online auto insurance company after adequate research, check if they offer competitive premiums. Do not settle for lower premium as they may have some hidden cost, so check thoroughly before signing your documents.

Federal Loan Consolidation

2008-11-16T03:42:00.000-08:00

Federal loan consolidation allows you to consolidate your outstanding federal education loans into a single new loan, even if your loans are currently held by more than one lender and are of different loan types. By consolidating your student loans, you can significantly lower your monthly payments by lengthening the term of your loans and locking in a low fixed interest rate. Most importantly, you can save thousands of dollars during the entire repayment term.

Additional Federal Loan Consolidation Benefits:

Fixed rates as low as 6.75%
Extended repayment term with lower monthly payments
No fees
No credit checks
No prepayment penalties
Seven flexible repayment plans
Turn several monthly payments into one
Deferment and forbearance available

Fixed rates as low as 6.75%. By locking in the current low rates, you can lock in a fixed rate as low as 6.75%!. Extended repayment term with lower monthly payments. By consolidating your loans you can extend your repayment term up to 30 years, depending upon your loan balance. This has the added benefit of lowering your monthly payments, so you are left with more money in your pocket each month.

No fees. There are no fees or costs whatsoever for a federal loan consolidation with EdFed.

No credit checks. There are no credit checks whatsoever for a federal loan consolidation with EdFed. As a matter of fact, consolidating your loans can actually improve your credit rating, as a result of having lower monthly payments. This can actually make it easier for you to qualify for mortgages and other major loans.

No prepayment penalties. Although you have the option of extending your repayment term, you will not be charged any fees or penalties for paying off your loans early. This means that if you take advantage of the low consolidation interest rates, you can save thousands even if you pay down your loan early.

Seven flexible repayment plans. EdFed offers seven different repayment plans for your consolidation loans, giving you extreme flexibility for your repayment. We offer the following plans.

Equal Payments: This option provides equal monthly payments over the term of the loan.

Select 2/Graduated Payments: This option allows for interest-only payments for the first 2 years of repayment. In the third year, payments increase to level installments of principal and interest payments for the remaining term of the loan.

Select 5/Graduated Payments: This option allows for interest-only payments for the first 2 years of repayment. In the third through fifth years, payments increase to include a portion of principal. In the sixth year, payments increase to level installments of principal and interest payments for the remaining term of the loan.

Income-Sensitive Payments: This option provides for payments to be adjusted annually, based on your expected total monthly gross income from employment and all other sources. Your account will initially be disbursed at the Select 2/Graduated repayment plan. After the consolidation loan is disbursed, you must contact your servicer to qualify. Once eligibility is determined, your servicer will calculate your new payment.

Extended Equal Payments: This option allows up to a 25-year repayment term of equal payments.

Extended Select 2 Payments: This option allows up to a 25-year repayment term with the Select 2/Graduated Payment plan.

Extended Select 5 Payments: This option allows up to a 25-year repayment term with the Select 5/Graduated Payment plan. All extended repayment plans are for qualified borrowers with more than $30,000 in eligible loans. Applicants interested in any of the extended repayment plans should contact one of our counselors to determine eligibility.

Combine several monthly payments into one. If you are currently making payments to more than one lender, consolidating your loans allows you to eliminate the complications of having to make multiple payments. Instead, you can combine those payments into one easy monthly payment.

Deferment and forbearance available. Loan consolidation with EdFed is done through the federal loan consolidation program, and thus you retain government benefits such as deferment and forbearance. Like your current federal loans, federal loan consolidations are guaranteed and insured by the federal government. A deferment is a temporary suspension of loan payments for specific situations such as reenrollment in school, unemployment (up to 3 years only), or economic hardship (up to 3 years only). Forbearance is a temporary postponement or reduction of the payments on your consolidation loan for a period of time due to financial difficulty.

The Banks Massive Government Bailout

2008-11-15T04:35:00.000-08:00

The news has been dominated in recent weeks by talk of the massive government bailout of the commercial banking industry. The government didn’t just throw this money around aimlessly, though. Instead, they have slotted the funds for the 9 banks of the bailout, which are all in desperate need of federal help in order to keep their operation viable. So who are these 9 banks of the bailout and what is their current situation looking like? This article will detail each of them.

Bank of America. Bank of America received a $15 billion investment from the federal government. This is one company that has been in trouble for quite some time, as they have seen their entire operation saved by the money provided with the bailout plan. Though they did not get as much money as some of the other banks out there, Bank of America did get enough to survive. What the bailout means for them is that they will have the ability to operate and probably dominate the changing global economy over the next few years.

Wells Fargo. This is one bank that benefitted from a large federal investment. They received $25 billion from the government in an effort to hang on for dear life. Wells Fargo recently purchased the assets of Wachovia when that bank went bad during the last month and the economic bailout has put them in a position to succeed relatively well in the near future. They did not seem to have as many bad loans out there as some of their competitors.

Citigroup. This is a company that, when compared to some of the others, made out pretty well in the economic bailout plan. They got a $25 billion investment from the treasury, which came as a result of their position within the market. While other banks were dropping like flies, Citigroup has been there to purchase them. They stand to survive this financial crisis and hang on into the future.

JP Morgan Chase. This huge banking conglomerate has also been in the business of buying up assets from other banks that are going down the drain. They got $25 billion in help from this bailout plan and seem to have gotten back on solid footing. There was some speculation that this bank would fall under with the economic crisis, but they have managed to do relatively well for themselves since that time.

Goldman Sachs. This bank did not need as much help from the federal government, as they only received $10 billion in the help package. They are prospering, however, as executives announced that more than 400 of the company’s top employees would be receiving huge bonus checks valued at a total amount of $7 billion in the coming months.

Morgan Stanley. The economic buyout has had an interesting impact on Morgan Stanley. They were one of only two investment banks remaining in the United States, but announced along with Goldman Sachs this fall that they would turn into a traditional bank. The bailout has forced them into another mode of operation, but it has not stopped the company completely.

Bank of New York Mellon. This bank received $3 billion in federal assistance and it looks as if they are going to survive the financial crisis. They have a particularly strong position for such a small bank and this money only helped them get on even stronger footing. They are poised to become a player in the commercial banking scene to an extent even greater than what they were.

State Street Corp. This bank received an even smaller amount, getting only $2 billion in money from the federal economic bailout. They were hit particularly hard in some areas because of their focus on industrial banking. Still, this company is global enough that with the help of the government, they are currently in pretty good shape regarding their future.

Merrill Lynch. This bank went into the tank as a result of the financial crisis. They received $10 billion from the federal government, but their assets were purchased by Bank of America for stock in September. They are currently completely under the control of Bank of America.

National Bank Banking Crisis

2008-11-14T06:50:00.000-08:00

Many years ago, state attorneys general were suing banks over their lending practices. The now disgraced Eliot Spitzer, then attorney general for New York, in 2001, stated: "For far too long, the subprime market has been a feeding ground for unscrupulous lenders looking to gouge the most vulnerable consumers."

The Banking Industry did not take state oversight lightly and the case went all the way to the Supreme Court which, of course, sided with the banks. In a dissent by Justice Stevens (joined by Chief Justice Roberts and Justice Scalia), he explained:

Congress has enacted no legislation immunizing national bank subsidiaries from compliance with nondiscriminatory state laws regulating the business activities of mortgage brokers and lenders. Nor has it authorized an executive agency to preempt such state laws whenever it concludes that they interfere with national bank activities. Notwithstanding the absence of relevant statutory authority, today the Court endorses an agency's incorrect determination that the laws of a sovereign State must yield to federal power. The significant impact of the Court's decision on the federal-state balance and the dual banking system makes it appropriate to set forth in full the reasons for my dissent. [which he proceeds to do in excruciating detail which makes so darn much sense right now ... truly a must read opinion] Watters v. Wachovia Bank, N.A. 127 S.Ct. 1559, 1573 (2007).

Hmm... isn't Wachovia now owned by Wells Fargo? They really won that case.

Life Insurance National Bank Insurance Clients Market Wire

2008-11-13T03:08:00.000-08:00

National Bank Insurance to Offer Truly Me Coverage to Clients Market Wire
MONTREAL, QUEBEC–(Marketwire - Oct. 20, 2008) - (TSX:NA) - As part of Breast Cancer Awareness Month, National Bank Insurance is pleased to introduce Truly Me insurance coverage, which protects women if they are diagnosed with the seven most common

FDIC Bank Deposit Insurance Temporarily Increased Inside Indiana Business. The Emergency Economic Stabilization Act of 2008 contained multiple provisions in addition to the Troubled Asset Relief Program. One of those provisions is intended to reduce concerns that depositor money held at banks could be at risk. The FDIC

ING sells Taiwan life insurance unit Financial Times. ING , the Dutch banking and insurance group, on Monday agreed to sell its Taiwan life insurance business to Fubon Financial for $600m ( 447m). The sale announcement came after ING accepted a 10bn capital injection from the Dutch government.

Taiwan bank buys unit of Dutch ING for $600M - Boston Globe. TAIPEI, Taiwan Taipei Fubon Financial Holding Co. announced Monday a $600 million plan to acquire the Taiwanese subsidiary of Netherlands’ ING Groep NV . Fubon Chairman Daniel Tsai said Taiwanese ING Life Insurance will merge with Fubon Life

Dutch government invests 10B in ING - CNN. AMSTERDAM, Netherlands (AP) — The Dutch government will invest 10 billion ($13.4 billion) in ING Groep NV to boost the bank and insurance company’s capital position, officials said. Dutch Finance Minister Wouter Bos said the state would sell its

Bank Insurance Buffet Begins Pull Out

2008-11-13T02:58:00.000-08:00

Banks Insurance are not the only ones struggling in the growing financial crisis. The fund established to insure their deposits is also feeling the pinch, and the taxpayer may be the lender of last resort.

The Federal Deposit Insurance Corp. whose insurance fund has slipped below the minimum target level set by Congress, could be forced to tap tax dollars through a Treasury Department loan if Washington Mutual Inc., the nation's largest thrift, or another struggling rival fails, economists and industry analysts said Tuesday.

Treasury has already come to the rescue of several corporate victims of the housing and credit crunches. The government took over mortgage finance companies Fannie Mae and Freddie Mac, and helped finance the sale of investment bank Bear Stearns to J.P. Morgan Chase & Co.

Eleven federally insured banks and thrifts have failed this year, including Pasadena, Calif based IndyMac Bank, by far the largest shut down by regulators.

Additional failures of large banks or savings and loans companies seem likely, and that could overwhelm the FDIC's insurance fund, said Brian Bethune, U.S. economist at consulting firm Global Insight.

"We've got a retail bank run forming in this country," said Christopher Whalen, senior vice president and managing director of Institutional Risk Analytics.

Treasury Secretary Henry Paulson said Monday that the country's commercial banking system "is safe and sound" and that "the American people can be very, very confident about their accounts in our banking system." FDIC officials also have said 98 percent of U.S. banks still meet regulators' standards for adequate capital.

But fear is growing on Main Street as well as Wall Street about the likelihood of multiple bank failures and the strain that would put on the FDIC.

The fund, which is marking its 75th anniversary this year with a "Face Your Finances" campaign, is at $45.2 billion — the lowest level since 2003. At the same time, the number of troubled banks is at a five-year high.

FDIC Chairman Sheila Bair has not ruled out the possibility of going to the Treasury for a short-term loan at some point. But she has said she does not expect the FDIC to take the more drastic action of using a separate $30 billion credit line with Treasury — something that has never been done.

The FDIC's fund is currently below the minimum set by Congress in a 2006 law. The failure of IndyMac Bank in July cost $8.9 billion.

Next month, Bair plans to propose increasing the premiums paid by banks and thrifts to replenish the fund. That plan is likely to be approved by the FDIC board, which consists of her, Comptroller of the Currency John Dugan, Thrift Supervision Director John Reich and two other officials.

Bair also is considering a system in which banks with riskier portfolios would be charged higher premiums, raising the possibility those costs could be passed on to consumers.

A Washington Mutual failure would dwarf the largest bank collapse in U.S. history — Continental Illinois National Bank in 1984, with $33.6 billion in assets.

By comparison, WaMu and its subsidiaries had assets of $309.73 billion as of June 30 and IndyMac had $32 billion when it shut down.

Arthur Murton, director of the FDIC's insurance and research division, said that when large institutions have failed in recent years, the hit to the fund has been about 5 to 10 percent of the company's assets.

Standard & Poor's Ratings Service late Monday cut its counterparty credit rating on WaMu to junk, action that followed downgrades by both Moody's and Fitch last week. Concern about the Seattle-based thrift, which has significant exposure to risky mortgage securities and other assets, has grown in recent weeks, and the company's stock price has plummeted.

WaMu responded Monday by saying that it did not expect the S&P downgrade to have a material impact on its borrowings, collateral or margin requirements. The bank said its capital at the end of the third quarter on Sept. 30 is expected to be "significantly above" required levels and that its outlook for expected credit losses is unchanged.

Some analyst estimates put the cost of a WaMu failure to the FDIC at more than $20 billion, but other experts say it is very difficult to predict. Unknown, for example, is the amount of advances that institutions may have taken from one of the regional banks in the Federal Home Loan Bank system. Banks and thrifts have significantly increased their requests for advances, or loans, from the 12 regional home loan banks since the mortgage crisis began last year.

These amounts aren't publicly disclosed but must be repaid if a bank or thrift fails, notes Karen Shaw Petrou, managing partner of Federal Financial Analytics.

If the FDIC doesn't have enough cash to cover the initial costs of a bank or thrift failure, one option would be short-term loans from the Treasury. That last happened in 1991-92, during the last part of the savings and loan crisis, when the FDIC borrowed $15.1 billion from the Treasury and repaid it with interest about a year later.

Based on projections of possible scenarios of bank failures, "between the (insurance) fund that we have now and our ability to draw on the resources of the industry ... we do have the resources" needed, Murton said Tuesday.

Though short-term borrowing from Treasury for working capital may be possible, he said, tapping the long-term credit line is unlikely.

But Whalen said the Federal Reserve, the Treasury and Congress should "immediately devise" and announce a plan to backstop the FDIC with up to $500 billion in borrowing authority to meet cash needs for closing or selling failed banks.

"While the FDIC already has a credit line in place and this figure may seem excessive — and hopefully it is — the idea here is to overshoot the actual number to reinforce public confidence," Whalen wrote in a note to clients. "Simply having Treasury Secretary Hank Paulson or Ben Bernanke making hopeful statements is inadequate. Like it says in the movies: 'Show us the money.'"

Before Congress passed the law overhauling deposit insurance in 2006, about 90 percent of all insured banks and thrifts — considered to have adequate capital and to be well managed — paid no premiums to the FDIC. Today, all of them do.

There were 117 banks and thrifts considered to be in trouble in the second quarter, the highest level since 2003, according to FDIC data released last month. The agency doesn't disclose the names of institutions on its internal list of troubled banks. On average, 13 percent of banks that make the list fail. Total assets of troubled banks tripled in the second quarter to $78 billion, and $32 billion of that coming from IndyMac Bank.

Last month, Bair called those results "pretty dismal," but said they were not surprising given the housing slump, a worsening economy, and disruptions in financial and credit markets. "More banks will come on the (troubled) list as credit problems worsen," he said. "Assets of problem institutions also will continue to rise."

Student Loan Consolidation Program

2008-11-12T07:56:00.000-08:00

Loan Consolidation Program all of student debts into one loan can either be a great idea saving student money, or the opposite in that it costs student more money and stress. Debt consolidation is getting one loan, at a lower interest rate, and paying off all of student debts with this one loan. Often people will get a personal loan which will generally have a lower interest rate than the rate student pay on student credit cards. They have more strict repayment plans, whereas on student credit cards, student decide on student repayments providing student pay at least the minimum, which is usually quite low.

Loan Consolidation have mixed views on whether debt consolidation works or not. It can definitely save student money due to the lower interest rate student pay, but in my experience it just moves the issue sideways for many people. By that I mean they consolidate all their debts into one personal loan, but then go and put more money on their credit cards.

If student are going to loan consolidate, student need to be totally committed to paying off student debts and have a plan in place to do so. Follow the steps in the previous two chapters to ensure student get a good result from consolidating student debts.

What about using student mortgage to pay off debts?

If student have enough equity in student mortgage to do so it can be a good idea. Mortgage interest rates are let's say between 7-10%; this is a lot lower than student would get a personal loan for. However the key thing student need to bear in mind is that student mortgage is usually over a 25-, or more commonly 30-year period. So even though the interest rate is lower student will pay more because student will pay student debt off over a longer period of time.

So as student can see, consolidating student debts into student mortgage can lower student interest rate and payments but because student will typically pay over a much longer period in the end student pay back a lot more in interest. This is what I mean by moving the problem sideways. It gives student a reprieve in student payments but in the end it costs student a lot more.

If student are disciplined with student money (one has to wonder if student are, otherwise student may not be in the situation of having too much debt) and do decide to consolidate student debts, make sure student stick to student plan and pay off student debts. If student do and stay away from the shops and getting into more debt - absolutely yes, student can save money. Just be honest with studentself and aware of what student are doing.

Google gets frugal and profits soar

2008-10-17T09:43:00.000-07:00

The company reported sales of $4.04 billion, a 34% spike from the year-ago quarter, and in line with the Street’s estimates of $4.05 billion.

CEO Eric Schmidt reassured investors that Google’s disciplined outlook would help the company weather an economic downturn. “There’s an awful lot of stuff going on in the world,” he said during an hour-long call with analysts Thursday. “We have a duty and responsibility to run Google well.”

The company scaled back spending on its biggest costs in the third quarter. The company’s capital expenditure for servers and networking equipment was $452 million, its lowest since the first quarter of 2006.

Meet Google 2.0. Gone are the search giant’s free-spending ways - at least for now. The prospect of a severe economic slowdown has forced Google to do something surprising: act fiscally responsible.

The company toned down costly expenses like data centers and new hires and reported profits Thursday of $1.35 billion for the third quarter, up 26% from a year ago. Earnings per share were $4.92, which crushed Street estimates of $4.75 a share.

Google (GOOG) shares rose nearly 11% in after-hours trading to $390. “This is very encouraging to hear that they’re reigning in costs and not acting like the drunken sailors that they once were,” said Jefferies analyst Youssef Squali.

Google also has been trimming general and administrative costs. For the quarter, the company’s expenses grew 28% to $412 million from the same period a year ago. Google, which drew criticism last year for growing too quickly, added 519 employees for the quarter. Last year, the company averaged 1,500 new hires each quarter. “We’ll continue to hire in many areas, but we will do it responsibly,” said Patrick Pichette, Google’s new CFO.

Though many analysts and investors fear that advertisers will sharply scale back on online advertising for the current quarter, Google executives argue that the company could potentially benefit from a recession. Unlike Yahoo (YHOO), which relies heavily on banner-based advertising, Google makes 97% of its revenues from search-based advertising. Google’s chief economist Hal Varian noted that when consumers are “counting their pennies,” they’ll spend more time researching online. More bargain-hunting users will lead to more advertisers, thus creating a “Wal-Mart effect,” according to Varian.

Analysts say they are optimistic about Google’s growth during an uncertain economy. The number of clicks for Google’s paid search ads on third-party sites rose 18% in the third quarter from the same period a year ago. Said Squali: “They don’t seem to be experiencing the weakness you see with a lot of other online players.”

Google Chrome Will Support Add-Ons, User Scripts

2008-09-21T05:23:00.001-07:00

InformationWeek confirms that Google Chrome will have add-ons, a move that could have an enormous impact on Chrome's viability among the power users and early adopters in the Firefox camp. In addition to regular extensions, Chrome will also support scripts à la Greasemonkey:
"There's two different kinds of add-ons," [Google engineer Ojan] Vafai said. "The Firefox things extend your browser, so to speak, and then there are user scripts. We intend to do both of those in Google Chrome." Greasemonkey's founder, Aaron Boodman, actually works on the Google Chrome team.

Additionally, Vafai says Google will work to ensure its extensions are more stable than Firefox, where "there are problems with instability." That statement may sound like slap in the face to Mozilla, but Chrome will likely be a boon no matter which of two browsers you prefer.

Mozilla CTO Brendan Eich, joining the panel along with Vafai and Microsoft Internet Explorer platform architect Chris Wilson, said that Mozilla was looking at how Google treated tabs as a potential way to improve stability when dealing with browser add-ons. "There are good process-isolation tricks that Chrome does that we're looking into, so we're simply going to look at better isolation techniques for security and integrity," he said.

The upshot: No matter which browser you choose in the end, Chrome and Firefox will push each other into innovative, fast, and hopefully more stable territories with each release.

Google co-founder Serge Brin begins blogging

2008-09-21T05:21:00.001-07:00

Google co-founder Serge Brin has started a blog, candidly telling of being at risk for Parkinson's Disease and plugging his wife's genetic testing start-up firm.

While Brin is no stranger to news-making webcasts and online press announcements, he made a blogging debut yesterday by sharing personal musings in a post at the Blogger weblogging website Google bought in early 2003.

Brin wrote of his mother being diagnosed with Parkinson's Disease and how testing by 23andMe, a company started by his wife Anne Wojcicki, shows he has a gene mutation that “markedly“ increases his chances of getting the illness.

“This leaves me in a rather unique position,” Brin wrote.

“I now have the opportunity to adjust my life to reduce those odds. I also have the opportunity to perform and support research into this disease long before it may affect me.”

Brin told of working with The Parkinson's Institute and the Michael J Fox Foundation to combat the disease and provided links to the organisations' websites.

“I feel fortunate to be in this position,” Brin wrote.

“Until the fountain of youth is discovered, all of us will have some conditions in our old age, only we don't know what they will be. I have a better guess than almost anyone else for what ills may be mine and I have decades to prepare for it.”

Brin wrote of comparing his genes with those of relatives and of checking whether his DNA links him to others with his family name.

Google phone to debut this week

2008-09-21T05:12:00.000-07:00

A mobile telephone tailored to run on Google's Android software is to debut next week in New York City.

US telecom carrier T-Mobile is slated to unveil a "Google phone" built by Taiwanese firm HTC on Tuesday and to have the device for sale in US stores as early as October.

Google is hoping Android will become the dominant operating system for mobile phones. It is designed to improve the speed and quality of using the Internet on handsets.

Android is being developed as an "open source" platform, meaning anyone is free to use the technology to make mobile telephones compatible with the networks of multiple carriers.

Google announced Android plans late last year and analysts reacted by saying it could potentially transform the mobile telephone market by providing service supported by advertising instead of subscription fees.

"We are seeing a number of technology companies demonstrating how Android will operate on their technology," Google spokesman Barry Schnitt told AFP at a Mobile World Congress gathering in Spain early this year.

"Clearly momentum is building."

Google announced a 34-member group called the "Open Handset Alliance" in November of 2007 to develop Android, including China Mobile, HTC, Intel, Motorola, Qualcomm, T-Mobile, Telefonica, LG and eBay.

ARM, Marvell, Texas Instruments, Qualcomm, NEC, ST Microelectronics were reportedly among companies that demonstrated Android phone prototypes at Mobile World Congress.