Though defaults increase, delinquencies on credit card debt decline in January

February 24th, 2010

Difficulties with being able to pay off credit card debt continue to be an issue with some consumers, according to a recent report from Moody’s Investors Services.

The firm noted that the number of defaulted credit card accounts increased to 11.15 percent during January, which marks a percentage point climb of 0.83. Given forecasts for unemployment, Moody’s said it expects the charge-off rate to hit a high of 12 percent in the coming months.

Though the number of charge offs did increase during the first month of the year, the report from Moody’s did have a positive note about early-stage delinquencies, which are often a harbinger of later defaults. Read more…

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Meet the New Money, Same as the Old Money

February 22nd, 2010

This month, Wired Magazine is running an interesting cover story entitled The Future of Money: It’s Flexible, Frictionless and (Almost) Free. The article was quite thought provoking, but the general focus of the article was pretty deftly summed up in the final paragraph:

A generation ago, when people made the choice to switch to plastic, credit cards did not just replicate cash; they fundamentally changed how we used money. The ease with which people could make purchases encouraged them to buy much more than they had in the past. Entrepreneurs suddenly had access to easy — though high-interest — loans, providing a spark to the economy. Now,

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UV windscreen myth busted

February 22nd, 2010

DRIVING carefully may not be enough to protect you in your car. Many drivers often forget about the potentially harmful effects of UV radiation through windscreens and window glass.

How much UV protection do your car windows or windscreen provide?

Ultra-violet radiation (UVR) is comprised of UVA, UVB and UVC rays. UVC is scattered by the atmosphere, but UVA and UVB reach the earth’s surface and are of particular concern, because they can cause skin cancer. Two thousand Queenslanders are diagnosed with melanoma each year(1), so it’s not an issue to be taken lightly.

UVR levels inside your car can vary depending on factors such as whether the side windows are open or closed and the car’s orientation to the sun. Altho

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Getting Paid to Do What you Love: A Close Look at Marketable Hobbies

February 20th, 2010

There was a really positive response to the ‘marketable hobby’ concept in my post about shifting the perception of what retirement is and should be, so I thought it would be great to explore it a little further with everyone and give it a post of its own. What exactly is this ‘marketable hobby’ thing?

Marketable Hobby: A definition

Let’s first start off with the hobby part of the definition. Wikipedia defines a hobby as:

“An activity or interest that is undertaken for pleasure or relaxation, often in one’s spare time.”

I think that sums it up just about right. Doing something

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AIG: The Main CDS Insurer for Greek Government Debt?

February 20th, 2010

Yves Smith and I received a tip at the weekend from a friend who reads the German press regularly about credit default swaps (CDS) on Greek government debt. Read Yves’ piece based on that article here. Below is mine.

Previously, I had mentioned the CDS exposure of the hapless German Landesbanks (banks owned by the individual German states or Länder – hence the term Landesbank). These same companies lost enormous amounts of money in the subprime meltdown – and apparently they have all sorts of other toxic exposure like Greek CDS still on the books.

So I find it interesting that the German daily Frankfurter Allgemeine is focussing instead on the AIG CDS connection to Greece. Here’s

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Citi Warns of Withdrawal Gate

February 19th, 2010

Seen on a recent Citibank (C) statement: “Effective April 1, 2010, we reserve the right to require (7) days advance notice before permitting a withdrawal from all checking accounts. While we do not currently exercise this right and have not exercised it in the past, we are required by law to notify you of this change.”

Whoa. Is this an April Fool’s joke? A contingency plan to defend against the idea of what “would happen if thousands of [bank] customers pledge to withdraw their money from the bank on a certain day, unless the bonuses are capped?” A strategem cooked up by Citi’s new shareholders from the hedge fund industry, an industry in which such withdrawal gates are common?

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