2009's top foreclosure cities

CNNMoney.com is reporting today that foreclosures in 2009 were tied more to the economy than banking failures and bad mortgages. So, the foreclosures are spreading to cities previously unaffected. Top of the list? A surprising choice: Boise, Idaho. There are a few large cities on the list, but for the most part, it's smaller cities spread across the country, with several in the South.

You can read the full story below - keeping in mind that one person's crisis is another person's opportunity.

http://money.cnn.com/galleries/2010/real_estate/1001/gallery.New_foreclosure_hot_spots/index.html

Cash for clunkers turns to appliances

By Robyn Davis Sekula

We've mentioned before that a Cash for Clunkers deal may be coming for household appliances. Well, it's here now, in some states, including Kansas. It's complicated, as most things involving the federal government usually are. The official site for information is here: http://www.applianceclunkerrebates.com/

We ran across a great article today on walletpop.com that explains the Cash for Clunkers program, and who can participate. First thing you need to know is that states are being phased in gradually. People in Kansas (nearby us) can participate already. Other states will be added in February, March and April, and some states will even get a second chance later this year.

Most important point: if you do not need a new major appliance, don't buy it. Americans get very confused when choosing needs and wants. If it works well, but you don't like the color, you do not need a new one. Period. I have a broken freezer shelf and a broken drawer in my refrigerator. I'm thinking it might be time for a new one, if I can find a good enough deal and pay cash. That's the second important note: don't finance this stuff. Once you pay a little interest, you've wiped out any savings from the Cash for Clunkers deal. And watch the delivery fees - use that as a negotiation point when purchasing.

Read more about the program here:

http://www.walletpop.com/blog/2010/01/26/cash-for-appliance-clunker-rebates-the-when-where-how-and-bes/?utm_source=twitterfeed&utm_medium=twitter

Confirm Ben Bernanke now

Editor's note: Dr. Jason White, our director of investments, writes a weekly column for the Maryville Daily Forum. We've posted this week's column, which focuses on why he thinks Ben Bernacke is a rock star, here. Disagree? Tell us why in the comments. We love a good discussion.

By Dr. Jason White

The Senate is scheduled to vote on the nomination of Ben Bernanke as Federal Reserve Board Chairman today. Like so many things in Washington, Bernanke’s confirmation has been bungled by both Republicans and Democrats who appear more interested in grandstanding to build their own political capital than in ensuring swift and deserved reappointment of the Chairman.

Bernanke has been the perfect leader of monetary policy initiatives designed to combat the financial meltdown and subsequent Great Recession which still plagues many parts of the economy.

It is well known that Bernanke is the preeminent living scholar of the Great Depression and the policy missteps that kept the United States, and the world, mired in economic misery from 1929 until the beginning of World War II. As an aside, the field of economics is oft referred to as the “dismal science” because those of us who practice it sometimes reach dark conclusions like war is a wonderful economic stimulus and jobs program, provided the conflict is not fought on our own soil. Twisted.

Sure, we’ve got problems in our economy – big ones! Some fear a double-dip recession. Others are concerned about the unemployment rate. A few are sniping about inflation risks. Still more are worried about the relative value of the dollar and the tsunami of Federal spending. Most of us are concerned about all these economic issues and more.

I support Ben Bernanke and call on the U.S. Senate to unite and confirm this worthy leader now!

Senators are the worst when it comes to Monday morning quarterbacking. Everyone now knows that Brett Favre should have run to set up a Minnesota last-minute field goal attempt in the NFC Championship game, but instead he threw an interception. If Congress were asked to confirm Favre as next year’s “Chairman” of the Vikings, you bet your last nickel that hearings would be held and that the focus would not be on the accomplishments of the team.

Similarly, Bernanke has endured grilling, belittling and second-guessing that has been unfair and ignored many of the game-winning plays he has called. In the fall of 2008, we were literally staring directly into a financial abyss that almost swallowed us whole. Bernanke pulled the economy back from the edge using extraordinary play-making ability, finesse and quiet confidence.

Markets have become understandably nervous as the Bernanke vote nears. The Dow fell about 4 percent just last week as political criticism of the Fed Chieftain roiled. As a student of Federal Reserve policy actions, it is clear to me that Bernanke’s economic policy calls have been mostly correct and mostly helpful. Apply the “but-for” test to the situation. But for the leadership of Ben Bernanke during the Great Recession, we would find our economy in much worse shape than it currently stands. We are on the right road, and we have the right driver behind the wheel.

Dr. Bernanke’s confirmation should be a slam-dunk. If there was a medal of honor for financial economics, he would have my vote.

Don't count on inheritance

Editor's note: Every week, we post a question and answer from a reader. This week's question deals with inheritance. If you have a question, please e-mail it to the blog administrator, Robyn Davis Sekula, at robynsekula@sbcglobal.net, or post it in the comments section.

QUESTION FROM A READER: My father recently expressed that he wants his savings to go to my children for their college education. But he’s in a nursing home, and has no long-term care insurance. Since he’s suffering from dementia and my mother will likely survive him and need their money, I’ve chosen not to really talk about this with him but just nod and agree. I have been saving for years on my own for my kids’ college, and I think we will be able to afford it anyway. Do you think that anyone the next generation down should ever count on getting an inheritance to pay for necessary things, such as college or retirement? That seems foolhardy to me.

ANSWER FROM DAN DANFORD: There used to be a saying about "counting on chickens before they hatch." It's always dangerous to assume things before they happen. There are just a lot of variables that are beyond our control and almost anything can happen. One of the ironies of life today is that people are often elderly themselves when they inherit money. In an earlier age, heirs might expect to inherit their fortune during middle age. Now, with people living long into their 90s (with hundreds of thousands over 100!), the "kids" might be 75 before they lose their parents and inherit money. That's not much help for college, or travel, or retirement.

My suggestion is to help the grandkids along the way, when they really need it and when you can watch them enjoy it. Everyone wins, and it's a good thing to do anyway.

Last, the notion of an inheritance is another form of entitlement for many people. Fact is, we're only "entitled" to the fruit of our own efforts. It's nice to land a windfall occasionally, but if we didn't earn it, we shouldn't count on it.

Haiti gifts may be tax deductible for 2009 tax year

Every now and then, Congress does something really simple that makes sense. It's rare, so we like to highlight it. This week, the House of Representatives passed legislation that will allow anyone who makes a gift to Haiti relief efforts by the end of February to deduct it on their 2009 taxes. It's a great idea, as many have been moved to give, and it may encourage more gifts.

However, this is just the House bill - for this to become law, it has to make its way through the U.S. Senate, and then be signed by President Obama. So, don't count on it just yet.

Either way, this is a worthwhile cause. Give - but only to organizations that are well-established and in ways that are familiar to you. If you ask us, texting to give from your cell phone isn't a good idea - it's too easy for that to be fraud.

If you want to give, click here:

http://arc3.convio.net/site/PageServer?pagename=ntld_main&s_src=RSG000000000&s_subsrc=RCO_FrontPagePanel


Read more about the House of Representatives action in The Washington Post:

http://www.washingtonpost.com/wp-dyn/content/article/2010/01/20/AR2010012002092.html

The American Dream is not dead

Is the American Dream dead? No - says our own Dan Danford. He recently presented his thoughts on that topic on his regular podcast on Dad'sDivorce.com.

Watch now:

Principles trump predictions

By Dr. Jason T. White
Director of Investments
Family Investment Center

January is a popular time of year for knowledgeable finance folks to take to the airwaves and print media making prognostications about where the economy may be headed over the next 12-months and at what level the Dow or S&P 500 might end the year. The more outlandish these short-term forecasts, the more attention these traders garner for themselves and the media outlets distributing their projections.

As exciting as it may be to engage in such frivolity, basing one’s investment goals and plan on educated speculation is a fool’s game. If you want to place a bet on the foresight of these handicappers, you might have a much more enjoyable time throwing dice at the craps table on a weekend trip to Vegas or an area floating casino.

While traders may salivate over the latest tip from a screeching ex-hedge fund manager on the tube, true investors tune in to such rants more for the entertainment value of the host than for financial strategy advice.

Were any of these pros even close to presaging the market nadir last February, or the bull market run that followed and continues into the beginning of this new decade? Not even close.

Recognizing the incentive the media pros have for personal financial gain from attracting and retaining audience, I believe that most of these guys have a greater interest in maximizing their book royalties and Nielson ratings than ensuring your financial success. Trying to base a prudent family investment strategy on the minute-by-minute meanderings of the financial press is a sucker’s game. Not only will this inevitably result in the need for acid-reduction potions and the occasional antidepressant prescription, it simply does not work to try and outfox the market. I can’t. You can’t. No one can.

Professional gambler/traders may hit a hot streak from time-to-time, perhaps even lasting a few years, but the only certainty from such short-lived success is that a cold streak is bound to follow. Trading stars may temporarily soar brightly in the evening sky, but the simple law of gravity invariably drives them into meteoric craters sooner or later. Statisticians refer to this as reversion to the mean. In finance, we like to talk about efficient pricing in markets. The long-term results are the same.

So, how does one avoid the heartburn and despair of the trader’s game? Don’t play! Choose principle over prediction.

Investors, stubbornly and properly focused on the long-term, practice their craft with resolute calm and steadfast commitment. Investors recognize that markets are consistently unpredictable over short periods of time, focusing their strategy on decades rather than days, months or even years.

Investors don’t wake up in a cold sweat in the middle of the night wondering how Asian markets opened or worried about the depreciating euro. Investors are plugged in to the events of the day, but investors process economic and political developments with a forest versus trees perspective. Investors have goals and an investment plan they believe in – and they stick to it knowing that market downturn, recessions, currency fluctuations and the like are transitory events. Investors allocate their assets consistent with financial targets: retirement, college education, or income production. Investors diversify to their holdings to reduce risk. Investors are rocks in the hurricane. Investors feel fear and greed but understand that contrarian financial behavior is proven to outperform running with the herd.

Principles trump predictions – always.