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Dec 28, 2009

MarketWatch: Personal Finance Stories




Monday's Personal Finance stories

By MarketWatch

Don't miss these top stories:

With home prices and interest rates lower than they've been in years, plus an $8,000 tax credit still available, it's no surprise first-time home buyers are eager to dip their feet into the housing market. But just having money saved up for the down payment and confidence that you can cover the monthly mortgage expense may not mean you're financially ready to own a home. A lot of online mortgage calculators don't take into account annual maintenance costs -- and those can run into big numbers.

Not that I speak from personal experience. I just sold my almost-new condo, where all the maintenance was taken care of either by the friendly on-site handyman or contractors called in by the homeowners association. All I really had to worry about (at least, when I was no longer on the association's board) was paying my monthly dues on time.

Now I'm in the market to buy a single-family home. Some of the places we've looked at would require tens of thousands of dollars simply to return them to a livable condition, not even counting annual maintenance costs. But luckily, we found a place that we can afford that was recently renovated, complete with a new roof. And, while we are stretching a bit more than we wanted to on the price, we do have savings to cover a 20% down payment plus our estimated annual maintenance costs.

Now all we have to do is knock on wood -- redwood frame and all -- that the deal goes through and we get the place.

-- Andrea Coombes , assistant personal finance editor


Before buying your first home, brace yourself for extra costs

On his road to homeownership, Scott Leibfried has learned one thing: Expect the unexpected.
See Real Estate.

Should you walk away if your house is under water?

When it comes to their mortgages, many Americans are asking themselves whether it's better to stay or walk away. As the housing market continues to drag, a growing number of homeowners in Arizona, California, Florida, Nevada and Michigan, where home prices have plunged, are considering what's called a "strategic default," walking away from their mortgages because they believe it's in their best financial interests.
See full story.

U.S. may prop up housing further via Fannie, Freddie

The government's decision to provide unlimited support to Fannie Mae and Freddie Mac probably presages more aggressive action to prop up the U.S. housing market.
See full story.

Fannie, Freddie exec pay suggests stock worth nothing

Shares of Fannie Mae and Freddie Mac surged Monday after the government announced unlimited taxpayer support for the mortgage giants. However, recently disclosed pay packages for Fannie and Freddie executives suggest the shares are worthless, Bose George, an analyst at Keefe, Bruyette & Woods, wrote in a note to investors.
See full story.


The mystery of the missing cash

Where does our spending cash go? Often, it's a mystery.
 Listen to Radio Report.

Extra day boosts holiday retail sales

An extra day in the holiday shopping season helped boost Christmas spending, according to a retail survey released Monday. MasterCard Advisors' SpendingPulse, which tracks national retail and services sales, reported year-over-year growth for the period between "Black Friday" and Dec. 24 in all the sectors it measures, although without the extra day, the season's growth could have been down by 2% to 4%.
See full story.

How to keep your finances on track in 2010

There's no way to put a positive spin on what happened to most investors' retirement portfolios in 2008 and early this year. Simply put, the losses were brutal, and in some cases ruined long-held retirement plans. Yet if there's any consolation to be taken from the past 18 months, it's that many people now pay more attention to their total financial picture -- not just stock and bond investments, but saving and spending habits as well.
See Weekend Investor.

Five ways to get a good start to 2010

The turning of the calendar is both arbitrary and powerful. Each day is just another day, but when the year resets we feel like the slate is cleaned and we can begin anew. That's especially true for our finances. For many of us, the holiday season may leave us a bit stretched, and not just at the waistline. Here are five ideas to help you get a good start for 2010 -- not just a new year, but the start of a new decade.
See Dave Kansas.

Commentary: The two-paycheck effect

The end of the holiday shopping season reminds us of the importance of the consumer to the U.S. economy. Looking beyond the current recession, most economists worry about future consumption trends for good reason. The wealth destruction of the past two years, rising commodity prices eroding disposable income, enormous household debt, and a subdued "spirit of the times" all suggest that spending may be restrained for years to come.
See Outside the Box.


College aid: There's more out there if you ask

The kids are home from school, hanging out with friends, borrowing your car again, and you're spending quality time with their dirty laundry. Is college worth the cost? After a year marked by layoffs, battered college funds and shrinking private-loan availability, more families are struggling to cover the cost of a higher education. But there is help out there -- and more of it in some instances.
See full story.


You can be happier at work

Just before the current recession set in, 35-year-old Samuel Peery quit a stable job as a vice president of marketing to start his own social-networking company. Unable to secure funding for his start-up, Mr. Peery, of Lehi, Utah, was left unemployed, with an unrealized dream.
See full story.


Health-bill benefits

Consumers could see some immediate gains from health-overhaul legislation in Congress. But most benefits would take years to kick in. The impact of the health bill hangs on how the final version is written, and lawmakers will have to merge the Senate and House bills. Democrats still face fierce Republican opposition, and they don't agree among themselves on controversial issues such as a government-run insurance plan.
See full story.

Time to pick a Medicare drug plan

As the year comes to a close, so does the open-enrollment period for Medicare prescription-drug plans. The deadline to make changes to Medicare drug plans is Dec. 31, except for people who qualify for a special enrollment period like those in a low-income subsidy program.
See full story.


Workers get lower mileage rate in 2010

Millions of workers who use their cars for work will get a smaller tax deduction next year. Under tax rules, they can choose to deduct their actual expenses, or they can use the Internal Revenue Service's optional standard mileage rate. Using the IRS rate generally is simpler and saves recordkeeping hassles.
See Tom Herman.


Commentary: Shed no tears for mutual funds that died in 2009

Mutual funds do not die "untimely" deaths. Typically, when they go, investor emotions run to "It's about time." More than 2,000 funds were liquidated or merged out of existence in 2009, the biggest pruning of the fund industry in years. The extinct are a mix of the uninspired, the mediocre, marketing failures and big mistakes, plus a few good ideas that didn't click.
See Chuck Jaffe.

Corporate bonds pegged as winners in 2010, Pimco says

Corporate bonds, especially those sold by banks, are likely to be big winners in 2010, benefiting from a combination of stronger balance sheets, growing demand and shrinking debt issuance, a Pimco fund manager said.
See Credit Markets.

A savvy bond man bets on inflation

Bill Tedford is encouraging investors to bet against remarks by Federal Reserve Chairman Ben Bernanke, who told a group of Washington-area business leaders this month that "inflation could move lower from here."
See full story.

Commentary: The top 10 investment letters of 2009

It's a funny old world, British Prime Minister Margaret Thatcher once remarked. For stocks, it's been a funny old year. A good year, of course. The dividend-reinvested Wilshire 5000 Total Stock Market Index gained 27.10% through November.
See Peter Brimelow.


2010 Lincoln MKS: No bang for the buck

The big news for the big Linc in 2010 is the addition of Ford's much talked about EcoBoost engine. While I'm not so sure about the Eco, it certainly has the boost.
See Auto Review.


Napolitano acknowledges airline security failure

The U.S. air-security system failed when a Nigerian man on a watch list was allowed to board a Christmas Day flight from Amsterdam to Detroit, U.S. Homeland Security Secretary Janet Napolitano acknowledged Monday.
See full story.


Online sales of iPhone halted in New York

Being the only U.S. company allowed to sell the popular Apple iPhone isn't always peaches and cream. In a holiday-shortened week, AT&T has spawned a raft of headlines on the Internet after the company halted online sales of the iPhone in New York City, at least temporarily. The phone is still available to New Yorkers in Apple and AT&T stores, however.
See full story.

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From the desk of Nick Nicolaas: Adam Hamilton Report

Nick sends us the report of Adam Hamilton that he  sends us every Friday, but due to
 Christmas time he postponed this great report for today.

Fernando Guzmán Cavero

Dear Friends:

Adam Hamilton has posted his weekly Zeal Intelligence Newsletter on the Mining Interactive Website. Click here:
Have a great weekend and - - - Stay Tuned!!


Nick L. Nicolaas
Mining Interactive “Ahead of the Pack”
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Mining Interactive Corp.

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FORBES. COM : From Outsourciing from outsourcing

One On One

From Outsourcing To Multi-Sourcing

Ed Sperling, 12.28.09, 06:00 AM EST

Much has changed since outsourcing was introduced.


Jamie Erbes

IT outsourcing has been around for decades, but in the past it was a one-for-one handoff. Either a company ran the IT department or an outsourcing contractor did it for them.
Much has changed. Companies are choosing from a menu of options and a list of competitive offerings, with results that still aren't fully understood. To help shed light on what's changing, Forbes caught up with Jamie Erbes, chief technology officer for Hewlett-Packard ( HPQ - news - people ) Software and Solutions.
Forbes: Outsourcing IT is hardly a new concept. What's different this time?
Erbes: We've certainly seen this outsourcing trend in the past, but what we're seeing now is uptake of more selective sourcing. The CIO and IT organization are looking at sourcing some of their operation to cloud providers, but not all of it. They're also looking at ways to keep tabs on the integrity of IT as it all blends back together into the business services that they need to offer back to the business units.
What's driving that change?
A lot of conversations I've had recently with customers is how they can capitalize on the resources from various providers including the Amazons and Rackspaces of the world or enterprise services from companies like HP. How can they take advantage of that sourcing model and put an effective framework above it--one that comprehends IT financial management, for example, or service-level aggregation and management? Those are the questions we're starting to hear.

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Reader Comments

So there's more CIO involvement in the outsourcing?
Yes. If you go back 20 years, the message behind outsourcing was, "Come and take over my IT." The IT organization handed over responsibility for everything including interaction with the business units. It was not just a portion of IT or a piece of the data center. It was all of IT, and in some cases that included the CIO. The change that we've seen is there's a step toward multi-sourcing. There may be a line cut, for example, between infrastructure outsourcing and applications development. Some of these services are best-of-breed outsourcing selections and a lot of analysts are encouraging clients to do multi-sourcing. But when they outsourced to a sole provider, the management level on top and the reporting and transparency was intact. With multi-sourcing you have silos of management and reporting, limited visibility and service-level agreements in silos.
What's the best way to deal with that?
The next step will be to pull all of that together into business services. There's a layer of service management at the enterprise level that is necessary to do all of the translation from the intricate specific detail around service levels, availability and outages, for example.
What does the corporate IT department do in the future?
Before we used to counsel the client on how to be the best they could be at planning, designing, building and running IT. There's still some of that activity, but they need more of a skill set for sourcing, integrating and managing. That's an evolutionary need now within IT.
And it's no longer just about data, right?
That's correct. The whole concept of portfolio management is taking on a new life in these organizations. It's almost like a product manager role that's evolving within IT. One CIO told me he needs a sales and marketing team--and a product management team. They have to understand what they're crafting in terms of cost models and pricing models back to their business. If you look at the aptitude of the type of person that takes, it is like a product manager. You have to be able to talk about the IT capabilities you have and what you can offer to the business because now the business has choice. The last thing you want is for them to avoid IT. If IT is a hidden-cost overhead that's a pain to deal with, it's going to be avoided. The IT organization has to draw the client in with products and services their business wants to consume. That mitigates the desire for businesses to go out and directly obtain these cloud services or software-as-a-service--basically an end-run around IT.
It used to be a matter of assessing technological capabilities and applying them to a business. Now it appears to be less about the technology.
IT always will have to have a competency for understanding the technology, but it's unlikely they'll have to be the expert on server technology in the future. If they do a smart sourcing strategy, they don't need the server experts. But they will need the platform expert to blend the server and storage and the application types to make sure the outsourcing decision they make around the infrastructure-as-a-service fits well with their application strategy.
Who are you selling this stuff to? Is it the companies or the cloud providers?
Our strategy has three prongs. The first is we are a cloud service provider. The other two are in terms of aligning products and consulting and enablement services for the service provider. We helped Verizon ( VZ - news - people ) craft their compute-as-a-service strategy set, for example. We also help the enterprise business to be a better and wiser consumer of services, and to be a better provider of services internally.
Will the software in a cloud be customized, and if not, what is the penalty?
We think the question should be, "What is the cost of all that choice and heterogeneity in the data center?" The penalty you pay is one of the concerns. Customers need to understand application or workload characteristics and to be able to construct private clouds or pooled infrastructure within their own data centers. They need to manage workload against that target, as well as provision applications out to other cloud providers such as Amazon. If you have several choices, each with different compute styles, that should give you the right granularity so you can run them where they should be run. But too much choice and variety is a bad thing. There are some specialized applications such as airline systems where that's required, but for most it is not.
Aside from those specialized cases, is there a difference from one organization to the next?
Some of the mature organizations--those with a concept of ruthless standardization--have normalized their hardware platforms and their networks and their compute styles. They have a handful of compute styles. That's compared to the immature organizations, which may have grown by acquisition or decisions that were made without a clear sense of architecture. Those are very messy environments. Our challenge is to span both environments and hide some of the complexity.
Ed Sperling is the editor of several technology trade publications and has covered technology for more than 20 years. Contact him at
See Also:
Why Regulation Is Irrelevant
Building Your IT From Scratch
The Data Center Of The Future

Reader Comments

Money Morning : December 28,2009

December 28, 2009
Why Gold Will be the "Greatest Trade Ever"

By Peter Krauth, Contributing Editor, Money Morning

Forget about all the forecasts being made for 2010. Here's my prediction for 2015: An entirely new name - John A. Paulson - will grace the coveted top of the annual Forbes billionaires list.

And the gap between Paulson and the runner-up billionaire will be huge.

Everyone knows that Bill Gates and Warren Buffet are America's - and the world's - two richest men. But the financial crisis of 2008 and 2009 was not kind to either of them, eradicating $17 billion of their combined net worth.

On that famed list, at No. 33, is where you'll find Paulson today. The hedge-fund manager's financial acumen led to what is now being called the "the greatest trade ever." By shorting the subprime mortgage market, Paulson & Co. Inc. generated a $15 billion gain.

Paulson's personal net worth of $6 billion is impressive in its own right. But over the next several years, I believe that Paulson's trading savvy will vault him into the top spot.

And the vehicle that will take him there is gold.

Let me explain...

Krauth on...
- 7 Reasons Gold Will Surpass $2,500 - And Inflation Isn't One of Them
- The Index That Thrashed the S&P 500

20 Picks. 20 Wins.

100% Perfect Record.

What more can we say? Since launch, the Geiger Index has made 20 picks and ALL of them were winners. Zero losses. Here's how you can get in on the next pick. Just click here...

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The Real Story Behind Solar Energy in 2010

By David Fessler, Contributing Writer, Money Morning

By the time 2009 is in the books, the record will show that solar energy stocks endured a tough year. That's hardly a surprise, given that so many Wall Street analysts (yours truly not among them) lambasted the sector for much of the year.

Analysts also expect the carnage to continue into 2010, and are predicting losses for as many as half of the world's solar companies.

The "thought process" of a Wall Street analyst - and I use that title loosely - goes something like this:

  • Analysts first suggest that a "huge" oversupply of polysilicon (the raw material used to make silicon-based panel assemblies) exists. But this is only partially true, as increasing panel sales are rapidly eating into this oversupply.

  • The analysts' next miscue is over new thin-film panel technologies. They predict companies producing panels based on the new thin-film designs are doomed because the oversupply of polysilicon will keep poly-based panel prices too low for the thin-film guys to compete.
Talk about a myopic view if there ever was one. I suspect many of these analysts will be eating crow instead of turkey for Thanksgiving dinner next year.

In the meantime, allow me to outline the real story on the solar energy sector...


China's Exports to Return to Growth Next Year, but How Much Will It Matter?

By Bob Blandeburgo, Associate Editor, Money Morning

Shipments from the Red Dragon were hit hard in the first 11 months this year, falling 18.8% compared to a year earlier, but are expected to bounce back and grow 6% in 2010, China's State Information Center said today (Tuesday).

However, exports from China, which is largely considered to be the world's manufacturing floor, are becoming less and less relevant as the Red Dragon moves toward a more balanced economy.

For instance, imports are expected to grow 11% next year, reflecting a shift toward more domestic consumption. And while the country is known for its massive spending on infrastructure, its service sector is growing twice as fast as its construction and infrastructure sectors, according to Money Morning Chief Investment Strategist Keith Fitz-Gerald, who says exports account for only 20% of China's gross domestic product (GDP).