By Cody Wetmore on October 8th, 2008 • Budgeting, Economy, Government, Life

Last week, Congress passed a $700 billion bailout of the financial industry. By most accounts this isn’t fixing our economy, but is merely shoring up its losses. If a recent Harris Poll is any indication, the economic stimulus plan enacted earlier this year, in the form of $300 rebate checks, has had a similar effect. It found that two-thirds of economic stimulus checks were put toward credit card payments and savings. Although it’s too early to tell if the original stimulus plan has had much of an effect on the economy, some have suggested we send out a second round of rebate checks.

Do you think this would have a positive effect on the economy, or will it merely offset the rising cost of commodities like fuel and food while we sink even deeper into debt? What are your thoughts in the wake of our government’s record setting bailout?

--Cody

The picture is taken from this photostream, and used with permission of a Creative Commons license.

By Jens Odegaard on October 6th, 2008 • Budgeting, Free, Internet, Life

Trust me, I know personal finance conjurs up visions of absolute boredom, punctuated by brief daydreams and the occasional doodle. But I'm here to prove to you that personal finance isn't nearly as boring as your Crocs wearing, sweater vest donning, toupee wearing math teacher made it sound. There aren't many better ways to save money than by getting something for free (and if there are better ways, let me know). So, in consultation with some other brass staffers, I've put together a list of fantastic websites to help you get your FREEk on:

You might be asking yourself, "Ya, but is there a catch." Of course, what doesn't have a catch these days? Most of the free offers require you to fill out a survey(s) and/or provide your email and address. I keep one email address that is strictly designated for junk email, and I figure I can always toss out any real junk mail I receive. In my opinion, a quick survey is a small price to pay for a free subscription to U.S. News & World Report (see, the free offers aren't all just random stuff). Maybe you're looking for something a little more substantial than just a free magazine or USB thumbdrive. Don't worry, I talked to Big Suit, one of our resident computer geek... er, champions, and he pointed out these sites to me:

Take advantage of free stuff. That's a motto that even your math teacher can get behind. If you have a favorite free-stuff site, leave me a comment. Oh, and this is where I sound like the uncool guy: don't forget to use a little caution when it comes to free-stuff sites--scams are out there. Never give out personal info such as your credit card or Social Security number unless you completely trust the site. If the site looks about as legit as your math teacher, then steer clear.

The picture is taken from this photostream, and used with permission of a Creative Commons license.

I officially just had my mind blown (in a good way, like: "Dude, that was an amazing rodeo flip, you just blew my mind) On Monday, the Dow dropped 777.68 points, the S&P 500 lost 8.4% of its value, and here's the slap shot to the unprotected pearly whites of the stock market--overall the market lost $1 trillion

Here's how much $1 trillion is: if you spent a million dollars a day, it would take you 2,739 years to spend a trillion bucks. That hurts. The reason that the market fell faster than a lead balloon filled with velcro aerobic weights was because Wall Street thought they might not get bailed out. Panic time. Now here's where your faith in the logic of the stock market really takes a beating. On Tuesday, the Dow went back up almost 500 points.

Talk about a roller coaster ride; this was more like riding out a hurricane in an ultralight aircraft. The volatility in the market spurred the Senate to pass a version of the bailout yesterday. And today, the House, which had previously slammed the door on the bailout plan, passed the bailout.  Evidently, it had become more clear that the original bill had been updated to provide more protection for taxpayers. Also, it was more apparent that a bailout plan was needed to open up credit. But, even though the bailout passed and was signed by President Bush, the stock market still fell due to ongoing fear about the credit market. You see, credit is frozen more solid than a Canadian duck pond. Even qualified people can't get a loan. It's the backlash to those high-risk mortgages that got us into this whole mess in the first place. Check out this video to see the consequences of buying what you can't afford.

Leave a comment with your thoughts, and stay tuned for more updates next week. If you want to catch up on our recent coverage of the financial disaster, go here and here.

We've covered a lot of topics in the brass Ridiculous column, from refurbished missile silos to uncommon funeral techniques. Last year, columnist Stephen Ullmer uncovered outrageous CEO compensation. But that story is never over, and with the Wall Street crisis front and center in the news these days, so are executive paychecks. According to Newsweek, the CEOs who had a hand in this year's financial crisis have been dropping left and right. Lehman Brothers was the company that started the most recent chain reaction. Its CEO Richard Fuld walked out the door with $22 million in his pocket, after saying "the worst is behind us" in April 2008. Oops. Fannie Mae and Freddie Mac were in trouble earlier this year when they were nearly forced to declare bankruptcy. When Uncle Sam finally stepped in, Fannie had racked up $800 billion in debt, and Freddie had $740 billion. At least we can be reassured by the fact that regulators stepped in to keep Fannie and Freddie CEOs Daniel Mudd and Richard Syron, respectively, from receiving their multimillion dollar exit bonuses. Alan Fishman of Washington Mutual heads for the door with $11.6 million in severance cash. Oh, but he was just hired three weeks ago with a nice $7.5 million hiring bonus. Not bad. Granted, three weeks is hardly enough time to run a company into the ground (though Duncan from the Buried Life got fired as CEO of eBay in just a day). That dubious distinction belonged to Kerry Killinger, who left a month ago and is eligible for $20 million in severance pay. The only bright light? At least AIG's former CEO Robert Willumstad refused his $22 million severance package, which seems only fair considering that he started in July and the company tanked in September. I have to give him credit--he probably didn't have a whole lot to work with. We can hope, but whether or not the bailout bill will be able to limit compensation for CEOs is still up in the air. --Jennie

Well, we’re in quite an economic pickle, aren’t we? The goings-on of the past few weeks have left me feeling an unfamiliar mixture of outrage, disbelief and frantic optimism. The upside to all of this financial turmoil is that it has propelled me to become more politically active and engaged than ever before (granted, I’ve only had one other presidential election under my belt, so there’s not a lot to compare).

Last week I watched my first ever presidential debate and actually paid attention. I believe I should be receiving some sort of medal shortly… We should see this year’s elections as an opportunity to wield some control over our current dire situation. Young people have always had the power to swing an election, and although we like to talk, sometimes our bark is bigger than our collective bite. It always seems like we were busy that day. But no more! Just mosey on over to sites such as canivote.org, declareyourself.com or rockthevote.com and make sure you’re registered to vote. If that doesn't suit your fancy, you can find links to voting sites everywhere, including Facebook, MySpace, and local organizations like public libraries or courthouses. The deadline for registering is approaching (it varies by state) and the elections themselves are just over a month away. Say it with me: “I am going to vote on November 4th.” I promise you won’t regret it.

--Erin

The picture is taken from this photostream, and used with permission from a Creative Commons license

By Jens Odegaard on September 29th, 2008 • Cost Saving, Travel, Life

Clear water. Palm trees. Sea turtles. Honolua Bay. Waikiki. Ten days in Hawaii (Maui and Oahu). Yes, I'm that cool (not really). No, I'm not that rich (my mother-in-law--thank you--paid for the whole trip).

So, ya I got a free ride to Hawaii, which in some ways is better than a free ride to college (no homework), but just because I wasn't paying out the bucks for the airplane tickets, the condo, or the meals, didn't mean I wasn't keeping my eyes peeled for good deals.

Tip #1: Watch out for cute tourist stores  that overcharge for just about everything. Odds are that the ABC Stores (Hawaii's answer to 7-Eleven, with a location on nearly every corner) will have the same wiggling hula girl, hand-carved (?) tiki keyring, and irreplaceable tropical Santa Christmas ornament for a lot less. Or, and I know this doesn't sound very paradise-like, get your gifts at Wal-Mart. Seriously, it really is "Always Low Prices," and they have a surprising selection of Hawaii-related items (like the hats in the picture, $1.98 each).

Tip #2: Get yourself a hotel or condo with a kitchen and cook your own grub. We went to Costco on day one and saved a whole mess of money. My favorite meal in Hawaii was the grilled tri-tip, baked potatoes, and fresh salad we made one night and ate on the roof of our condo (there was a dining area complete with Weber grills and patio furniture). Okay, I did eat some really good local food too. Mixed plates are onolicious (local word for super-delicious) and relatively cheap ($5 to $13 depending where you go).

Tip #3: My mother-in-law made our ticket purchases, car rentals and our lodging reservations through priceline.com. We stayed at the Hyatt in Honolulu for $150 per night. A flyer in our room said that the room usually went for over $350Kayak.com and travelocity.com are other good discount options.

Tip #4: Don't get eaten (or bitten) by a shark. Okay, this isn't a money tip, but it could be (hospital bills are expensive). When I was out surfing at Waikiki one evening, a shark about my size (6' 2") jumped out of the water and ate something about 20 yards away from me. The locals kept surfing, so I did too. Hey, what can I say--the waves were good.

The beach photo is from this photostream, and used with permission from a Creative Commons license.

By Jennie Bartlemay on September 26th, 2008 • Video, Life

Everyone met Keo Farm in the August issue of brass|MAGAZINE. Keo is a huge Lakers fan, and was an excellent designer here at brass. In fact, you'll see some of his awesome layouts in the upcoming November issue. Unfortunately, Keo got traded to another magazine. See what happens when he finds out: *Ironically, after this video was shot, Keo really did leave brass for another job opportunity. I suppose life imitates art. We'll miss you Keo! --Jennie

By Jens Odegaard on September 25th, 2008 • News, Recession, Investing

Wall Street is in big trouble and needs a big bailout.  Here's a special Thursday update: The effects of Black Sunday aren't over. On Monday, I  explained how the biggest bankruptcy in history started a chain reaction that resulted in the government proposing a $700 billion bailout plan. Though there has been some hot debate in Congress, it looks as if that bailout plan is going to happen mainly because, as President Bush said, there is fear that without action "major sectors of America's financial system are at risk of shutting down." "This rescue effort is not aimed at preserving any individual company or industry -- it is aimed at preserving America's overall economy," President Bush said last night.

That's right, without the bailout America's economy is in danger of non-preservation (destruction).  Because of this, it appears that the bailout will happen. In effect this will make the U.S. Government a gigantic investor in Wall Street, and the government is going to play the market. This was all explained in the President's Address To The Nation last night.

Today, Congress laid out a plan that modified the original bailout, but kept the basic principles. Up to $700 billion could still be spent, but the Treasury would only get $250 billion now, $100 billion later (if there is still an emergency), and $350 billion in May 2009 if needed. Executive pay for the rescued companies could also be capped and the government would have a financial stake in the companies. This proposal is pending votes by the House and Senate and approval by the president, but is expected to pass soon. Interesting times to say the least.

Keep this in mind, though the bailout is apparently needed, this will add close to $1 trillion to the national debt. What if the market doesn't play out the way everyone hopes it will? What will happen to the $700 billion in taxpayers' money that was put on the line? I don't know, but I'd like to hear what you have to say. Leave me a comment.   

The picture is taken from this photostream, and used with permission from a Creative Commons license.  

By Cody Wetmore on September 24th, 2008 • Stats, Life

Apparently our nation’s hearing loss won’t be too much of a problem. New data shows the average mobile phone user sends and receives more text messages than phone calls. From April to June 2008, Nielsen found the average mobile phone user sent/received an average of 357 text messages, as opposed to to 204 calls, per month. It's probably good news--when I lose my hearing, I can text instead of splurging on a deluxe earhorn.

--Cody

By Jens Odegaard on September 22nd, 2008 • Economy, Investing

Last week Wall Street took a kidney punch that had it coughing up blood in the form of bankruptcy and hemorrhaging with mergers, bailouts, and takeovers. It was so bad that the media took to calling it Black Sunday.

Here's what happened: Lehman Brothers (one of the nation's large investment banks) went belly-up--it was 158 years old. That's right, it made it through the Great Depression, but went bankrupt during the mortgage market crisis (PS: it was the biggest bankruptcy in history).  Following LB's downfall, Merrill Lynch (another huge investment bank) sold out to Bank of America to keep from going under.  

Then AIG ("one of the world's largest insurers") had to take an $85 billion loan from the federal government to keep from kicking the bucket--the government now owns 80 percent of the company, a situation that shareholders are not happy about. In other words, things are pretty bad right now. So bad that the government is having to step in to save the day.

Right now, Congress is processing a $700 billion bailout plan for Wall Street. This means that the government is becoming more and more involved with numerous aspects of the U.S. financial system, which in turn means that the government is being granted more and more power. In fact, the government's introduction into financial areas typically free from government influence is so radical that it even has Democrats (traditionally the champions of bigger government) worried.  

Whether you think big government is good or bad is a personal matter, but it's sad that the government has to step in in such a big way in the first place. As this blog points out, these symptoms of collapse have been brought about by a widespread failure of economic practices by both unscrupulous lenders and ignorant/greedy "have to have it now" borrowers.

The financial system is reaping what it sowed. It's time to start replanting wisely. If we live and spend responsibly we won't find ourselves in these kinds of situations. For now, wish Wall Street luck, spend wisely on Main Street, and work towards a return to a financial Easy Street.