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Personal Finance News 05/2011

An Empty Offer From the Super-Rich (The Daily Beast)
The Daily Beast - It’s easy for Mark Zuckerberg to say he’s "cool" with raising income-tax rates. Because it won’t affect him. In this week’s Newsweek, Gary Rivlin takes on America’s phony tax martyrs.

U.S. mulls making more firms pay corporate tax: group (Reuters)
Reuters - The Obama administration is considering a plan to force more businesses to pay the corporate income tax, an industry group said, in an overhaul package that could be unveiled as early as this month.

Don't Take Life Insurance Payouts for Granted (U.S. News & World Report)
U.S. News & World Report - Getting the desired life insurance to deal with estate considerations, heirs, and the financial protection of loved ones has long been a major goal advocated by financial planning experts. Yet, seldom is much attention paid to guaranteeing that beneficiaries actually receive their entitled death benefits. And if it's your life insurance that's involved, of course, you're not going to be around to check up on how things went.

Can Research In Motion Withstand the Apple Onslaught? (The Motley Fool)
The Motley Fool - BlackBerry maker Research In Motion (Nasdaq: RIMM - News) has priced its sleek new PlayBook in the same general range as the now-ubiquitous Apple (Nasdaq: AAPL - News) iPad. Though opening-day sales of the Playbook surpassed some initial estimates, analysts still wonder about the future of this impressive yet potentially forsaken device -- a mobile-computing David, up against Apple's Goliath.

J&J Attempts to Create Major "Synthes"-is (The Motley Fool)
The Motley Fool - Diversified health-care giant Johnson & Johnson (NYSE: JNJ - News) has kicked off this season with surprising cheers from investors. After its satisfactory quarterly earnings report, J&J has stolen the limelight by announcing plans to acquire medical-device maker Synthes for a whopping $21.3 billion in cash and stock. Let's check out the deal.

Thornburg trustee sues big banks for $2.2 billion (Reuters)
Reuters - The trustee for bankrupt Thornburg Mortgage Inc has sued Goldman Sachs, Barclays and other big banks for a combined $2.2 billion, blaming them for the former home loan company's bankruptcy.

US sues Deutsche Bank for mortgage fraud (AFP)
AFP - The US Justice Department sued German giant Deutsche Bank Tuesday for mortgage fraud, saying the bank illegally obtained government insurance for substandard mortgages during the US housing boom.

U.S. sues Deutsche Bank in mortgage fraud case (Reuters)
Reuters - The U.S. government sued Deutsche Bank AG for more than $1 billion, accusing the German bank of defrauding it by repeatedly lying to obtain federal insurance guarantees on mortgage debt.

House panel OKs new way to fund home mortgages (Reuters)
Reuters - A bill to create a new market for financing mortgages that would help wean the $10.6 trillion mortgage market off government support advanced in the House of Representatives on Tuesday.

Moody's cuts BofA mortgage servicing ratings (Reuters)
Reuters - Bank of America Corp's mortgage servicer quality ratings were downgraded by Moody's on Tuesday, because of a deterioration in the company's collections and loss mitigation on home loans.

AIG unit must pay $86.7 million in arbitration ruling: report (Reuters)
Reuters - A unit of bailed-out insurer American International Group must pay $86.7 million to a U.S.-based unit of a Belgian bank over a dispute involving an investor in life insurance policies, the Wall Street Journal reported.

Feds sue Deutsche Bank, alleging mortgage fraud (AP)
AP - The federal government sued Deutsche Bank Tuesday, saying the bank committed fraud and padded its pockets with undeserved income as it repeatedly lied so it could benefit from a government program that insured mortgages.

Mortgage applications rose last week: MBA (Reuters)
Reuters - Applications for U.S. home mortgages rose last week, helped by refinancing demand as interest rates fell for the third week in a row, an industry group said on Wednesday.

7 Biggest Money Mistakes College Grads Make (U.S. News & World Report)
U.S. News & World Report - Graduating from college and entering the "real world" can inflict total chaos on your life: Suddenly, you have to figure out how to feed yourself without the assistance of a 24-hour dining hall. Your closest friends, who used to be just a dorm-room away, are now scattered across the country. Your parents are less willing to send checks upon request. On top of that, you have to start paying rent, find and keep a job, and somehow convince yourself to start saving money for retirement, which is about four decades away.

Money Advice for My Sister, the Graduate (U.S. News & World Report)
U.S. News & World Report - As my sister gets ready to graduate from medical school next week, she keeps sending me her money questions. Should she try to pay off her massive student loans or save for retirement? Would it be better to save money in a bank account or a Roth IRA? Should she get her credit report, and what's the best way to make a budget?

Connecticut House OKs budget, widespread tax hikes (Reuters)
Reuters - Connecticut's Democratic-led House of Representatives has approved a new $40.1 billion, two-year budget with widespread tax increases on personal income and goods ranging from cigarettes to luxury items.

Deutsche Bank says hit by another US lawsuit (AFP)
AFP - German giant Deutsche Bank said Wednesday it had been hit by another lawsuit in the United States over property loans, a day after the US Justice Department sued it for $1 billion for mortgage fraud.

Freddie Mac loses $929 million (Reuters)
Reuters - Mortgage finance giant Freddie Mac on Wednesday said it lost just short of a billion dollars last quarter, though it did not ask taxpayers for more aid as the loss stemmed from interest payments to the government.

Freddie Mac reports 1st quarterly gain in 2 years (AP)
AP - Freddie Mac earned $676 million in the January-March quarter, the first time the bailed-out mortgage giant has reported a quarterly gain in nearly two years.

Housing financer Freddie Mac returns to profit (AFP)
AFP - The US government-controlled housing financer Freddie Mac reported its first quarterly profit in three and a half years Wednesday, after years of losses on its huge mortgage portfolio.

Summary Box: Fixed mortgage rates fall this week (AP)
AP - MORTGAGE RATES FALL: Freddie Mac said the average rate on a 30-year fixed mortgage fell to 4.71 percent and the rate on the 15-year fixed loan slipped to 3.89 percent. It was the third straight decline.

Mortgage rates for the past 52 weeks, at a glance (AP)
AP - Mortgage rates for the past 52 weeks, at a glance

The One British Bank You Can Bank On (The Motley Fool)
The Motley Fool - This article has been adapted from Fool UK, our sister site across the pond.

Don't Concentrate Your Portfolio in Dividend Paying Stocks (U.S. News & World Report)
U.S. News & World Report - Most individual investors engage in some form of active management, where their broker attempts to beat the markets. In order to justify their expertise, brokers have various strategies they believe will help them achieve this goal. These range from investing in commodities to overweighting your portfolio in a particular asset class, like large cap stocks or emerging market stocks. A popular strategy is investing in companies that pay dividends.

Credit Suisse subpoenaed by SEC: court document (Reuters)
Reuters - Credit Suisse was subpoenaed by the U.S. Securities and Exchange Commission this week for documents related to securitized home loans, according to court documents filed on Thursday by a bond insurer suing Credit Suisse.

Osama bin Laden Died a Fool and Has No Legacy (The Daily Beast)
The Daily Beast - Osama bin Laden thought he was launching a revolution, but by the time he died the Arab Spring and America’s mortgage meltdown made him irrelevant. Novelist Dana Vachon on the terrorist’s non-legacy.

Foreclosure Hits Las Vegas's High End (BusinessWeek)
BusinessWeek - In Las Vegas, which has the highest foreclosure rate among large U.S. cities, the wave of defaults that began with subprime borrowers and the unemployed has spread to upscale homeowners who see no point in staying, even if they can afford to. "You feel like a sucker if you're paying a $5 million mortgage on a house that's worth $2 million," says broker Zar Zanganeh.

Consumers borrowed more on credit cards in March (AP)
AP - Consumers used their credit cards more in March, marking only the second increase in the more than two years since the height of the financial crisis.

JPMorgan in talks with SEC to resolve probe (Reuters)
Reuters - JPMorgan Chase & Co is in advanced talks with U.S. regulators to resolve a probe into its role in selling subprime mortgage-backed bonds in 2007, a case that highlights a rare misstep by Chief Executive Jamie Dimon.

Fannie Mae seeks $8.5 billion from taxpayers (Reuters)
Reuters - Mortgage finance giant Fannie Mae on Friday said it would ask for an additional $8.5 billion from taxpayers as it continues to suffer losses on loans made prior to 2009.

Fannie Mae seeks $8.5 billion more in federal aid (AP)
AP - Fannie Mae asked the government Friday for an additional $8.5 billion in aid after declining home prices caused more defaults on loans guaranteed by the mortgage giant.

Majors Adding Acreage in the Marcellus Shale (The Motley Fool)
The Motley Fool - Whether or not last week's historic slide in global crude prices has slowed -- which appeared to be the case on Monday -- don't look for the ever-active Chevron (NYSE: CVX - News) to curtail its geographic spread and frenetic operational pace.

H&R Block tumbles on fears regarding mortgages (AP)
AP - Shares of H&R Block Inc. led the S&P 500 downward Monday on renewed fears that the company will be dragged back into a subprime mortgage mess.

BofA to slash $850 billion bad loan portfolio by half: report (Reuters)
Reuters - Bank of America Corp plans to reduce its $850 billion portfolio of troubled home loans by about half over the next three years, the bank's new mortgage unit head told the Financial Times.

H&R Block tumbles on fears regarding mortgages (AP)
AP - Shares of H&R Block Inc. lost nearly 8 percent Monday on renewed fears that the company will be dragged back into the subprime mortgage mess.

Overcoming the Mortgage Obstacle (U.S. News & World Report)
U.S. News & World Report - Despite historically low home prices and rock-bottom mortgage rates, tight lending standards continue to keep would-be buyers on the sidelines. Higher credit-score requirements and more extensive income documentation requirements have also played a role in discouraging consumers from becoming homeowners.

5 Things About Retirement You May Not Have Considered (U.S. News & World Report)
U.S. News & World Report - The sooner you start saving and investing for retirement, the more money you may accumulate for your golden years. Preparing for retirement is your most important financial goal, and it must be handled with care. Here are a handful of things to keep in mind (for more, see my previous post):

The 5 Biggest Biases We Fall Victim to (The Motley Fool)
The Motley Fool - Bruce Schneier, an author who writes about how we perceive danger, gave a great talk at TED recently, outlining five cognitive biases people fall victim to when making decisions about risk.

5 Common Mortgage Mistakes (U.S. News & World Report)
U.S. News & World Report - It's baffling that people spend more time researching a vacation or a car purchase than they do shopping for a mortgage, but they do. A recent mortgage survey conducted by Zillow Mortgage Marketplace concluded that nearly half of prospective home buyers don't understand essential mortgage information. If you need a mortgage and don't like throwing away your hard-earned money, learn from these common mistakes below.

Pros and Cons of Eliminating State Income Tax (ContributorNetwork)
ContributorNetwork - What if Ohio eliminated the state income tax? Would the state go broke or would the economy flourish? Even though Gov. John Kasich has not introduced any bill, measure or initiative related to eliminating Ohio's income tax that has not stopped liberal-leaning publications from insinuating such a move is hovering behind the next corner. If Ohio's fiscally responsible governor is interested in exploring the idea, it would be more than a little out of character for him to jump in with both feet and not conduct extensive research on the economic impact. Liberals often have a difficult time understanding the difference between being a man of action and making rash decisions.

Charlie Munger on Berkshire's Future, Taxes, and the Debt Ceiling (The Motley Fool)
The Motley Fool - The Wesco Financial shareholders' meeting was canceled this year, ending an event hundreds flocked to in the past: a three-hour unscripted rant by Berkshire Hathaway (NYSE: BRK-A - News; NYSE: BRK-B - News) Vice Chairman Charlie Munger. (I've covered the event in the past, here and here.)

McDonald's Is Betting Big on China (The Motley Fool)
The Motley Fool - There's good news for the fans of McDonald's (NYSE: MCD - News) in China. Now they all can enjoy burgers, fries, and shakes from their favorite international food chain, as the company has decided to open more stores in the country. While fans of the Happy Meal are probably happier now, how should investors feel?

Wal-Mart Pins Hopes on Brazils Mighty Potential (The Motley Fool)
The Motley Fool - Amid the global economic slowdown, Brazil has emerged as one of the world's top developing markets. Naturally, companies have been making a beeline to the largest South American nation as it offers them a huge and largely untapped market.

Banks float $5 billion deal to settle foreclosure probe: report (Reuters)
Reuters - Major banks are willing to pay as much as $5 billion to settle claims by federal and state officials of improper mortgage foreclosure practices, the Wall Street Journal reported, citing people familiar with the situation.

Mortgage applications surge as rates fall: MBA (Reuters)
Reuters - Applications for U.S. home mortgages surged last week at the fastest pace in two months as interest rates dropped for a fourth week in a row, an industry group said on Wednesday.

BofA working through mortgage problems: CEO (Reuters)
Reuters - Bank of America Corp is working to improve profits by reducing its number of problem mortgages and cutting other expenses, Chief Executive Brian Moynihan told shareholders on Wednesday.

April budget gap narrows sharply from year ago (Reuters)
Reuters - A surge in income tax receipts helped cut the U.S. monthly budget deficit in half in April compared to a year ago, figures issued by the Treasury Department on Wednesday showed.

Banks and states meeting on foreclosure probe (Reuters)
Reuters - U.S. state attorneys general are pressing five large banks to reduce loan balances for troubled borrowers as part of a settlement over mortgage servicers' foreclosure practices.

Class of 2011: More Debt Than Ever (U.S. News & World Report)
U.S. News & World Report - It's official: This year's class graduates with a record amount of debt. The Wall Street Journal reports that total student loan debt taken on by parents and students adds up to an average of $22,900, 8 percent higher than last year. That's scary stuff, especially considering how hard it is for new grads to find jobs right now.

Mortgages, foreclosures top agenda at BofA meeting (AP)
AP - Foreclosures and home mortgage modifications took center stage at Bank of America Corp.'s annual meeting Wednesday.

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