First time home-buyer tax credit extension bill passage on November 3rd. Let’s hope.

If Senate Majority Leader Harry Reid’s (D) prediction last week is correct we will have a new bill tomorrow or by this week.  It will extend the tax credit to April 30, 2010.  The original bill expires at the end of November 2009.   In February 2009 the $8000 first-time home buyer credit for married couples (individuals $4000) was put into law in an effort to provide the economy with an economic stimulus.  The extension if approved will allow, more Americans to qualify for the tax credit including those with higher incomes and even those who currently own homes.

A credit of $6500 is provided, if you are a homebuyer and lived in your previous residence for five years.  Additionally, for high income earners, individuals earning up to $125,000 annually and couples earning up to $225,000 annually now qualify.  The limits under the present bill are $75,000 and $150,000 respectively.

In case the bill is not passed, then you would need to purchase your home by the end of November.  Regardless of whether there is an extension, the bill has no provision for vacation or rental properties.  This is strictly for your primary residence.

If you are feeling confident about the future and can afford to buy a house at these historically low prices join the more than one million people who have claimed their share of the tax credit.

Online Assets and Estate Planning

With the increasing use of online services such as banking, paypal, and the acquistion and accumulation of internet businesses, it’s easy to forget that these are tangible asset and may often be overlooked for one reason or another. Perhaps the oversight could be as simple as privacy, didn’t think it was a big deal, your estate planning/will/trust questionnaire didn’t include them in the planning process or whatever…

Well, these online assets could represent a positive dollar contribution to your estate. This is especially in the case of online businesses that begin to generate passive income and the money perhaps directed deposited into an online/internet only bank such as ING. What about that .com domain name that is now worth thousands or even millions of dollars because of the brand recognition it has received. Or, even, what about that ebay/paypal account that has a chunk of money in it from the sales of your household “treasures”?

Many times spouses are not aware of the online accounts and passwords even for the bank that is right down the street. Certainly, having these types of assets should be included when planning for the eventual transfer of property to your beneficiaries. Of course this would be for the accounts that are worthy.

Mallory Simon of CNN.com discusses this subject in the Technology section. Here is the link to the original article.

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New services promise online life after death

Story Highlights:
New services are helping people organize their digital assets after their death.  Customers can designate loved ones to access their posthumous online accounts.  Legacy Locker allows users to set up a kind of online will, with beneficiaries. Eternal Space lets loved ones create customized online grave sites.
By Mallory Simon, CNN

(CNN) — Your husband, an avid gamer and techie, dies of a heart attack, leaving his vast online life ­– one you don’t know much about ­– in limbo.

His accounts, to which you don’t know the passwords, go idle. His e-mails go unanswered, his online multiplayer games go on without him and bidders on his eBay items don’t know why they can’t get an answer from the seller.

Web site domains that he has purchased, some of which are now worth hundreds of thousands of dollars,­ will expire, and you may never know.

It’s a scenario that’s becoming more likely as we spend more of our lives online. And it’s raising more questions about what happens to our online lives after we log off for the final time.

The answer, until recently, was nothing.

But now, as online usage increases and social-media sites soar in popularity, more companies are popping up to try and fill that void created in your digital life after death.

Jeremy Toeman, founder of the site Legacy Locker, recognized that when he was on a plane and wondered what would happen to his online life if it crashed. While his will leaves everything to his wife, including all of his digital assets, Toeman realized how difficult it would be for her to access his accounts.

“My GoDaddy account would belong to her, but it doesn’t solve the practical reality of how she would get access to it,” he said. He experienced a similar scenario after his grandmother died, and he tried to get the password for her e-mail account — only to give up because of the hassle.

So Toeman built his company to change all that. Legacy Locker allows users to set up a kind of online will, with beneficiaries that would receive the customer’s account information and passwords after they die.

“We know it’s a hard thing to think about — to get people to face mortality. We know it’s kind of morbid, but for those who live their entire lives online, it’s also very real.”

A Legacy Locker account costs $29.99 a year. Users can set up their accounts at www.legacylocker.com to specify who gets access to their posthumous online information, along with “legacy letters,” or messages, that can be sent to loved ones.

If someone contacts Legacy Locker to report a client’s death, the service will send the customer four e-mails in 48 hours. If there’s no response, Legacy Locker will then contact the people the client listed as verifiers in the event of his or her death. Even then, the service would not release digital assets without examining a copy of the customer’s death certificate, Toeman said.

Eddie Lopez is the kind of tech-savvy guy for which a service such as Legacy Locker was made. The St. Paul, Minnesota, man has three online banking accounts, a PayPal account, domain names, Web-hosting accounts, multiple e-mail addresses and many social-networking accounts.

“I do think this is something people should be really considering these days,” Lopez told CNN when asked about services such as Legacy Locker. He wants to hire a service to handle his digital assets but is concerned about privacy.

“Although I’m glad there’s people breaking ground in this area, I don’t think I would jump at the first opportunity to sign up,” Lopez said. “My concerns are turning over such an exhaustive list of user names and passwords to a single business. That’s one-stop shopping for any hacker to get access to just about every detail of my life.”

Lopez would prefer to entrust half of his digital-security information to a service such as Legacy Locker and the other half to family members, so that each side’s information would be useless without the other’s.

“I hope Legacy Locker and similar services can address these privacy-security concerns with some real-world solutions,” he said. “I just don’t feel comfortable turning over my digital life — built over 15 years — to a kind promise.”

Legacy Locker isn’t the only new company helping techies plan for death in the digital age.

AssetLock (formerly YouDeparted.com) offers a “secure safe deposit box” for digital copies of documents, wishes, letters and e-mails. Deathswitch and Slightly Morbid also offer similar services in a variety of prices and packages, depending on how many accounts are involved.

Not all of these services deal with online assets. There’s also a growing trend towards giving all aspects of death –­ the grieving process, the funeral, the memorial and even the grave site –­ a digital makeover.

FindaGrave.com claims to have cemetery records for 32 million people in its searchable database, while EternalSpace.com offers a new spin on the traditional grave site by offering virtual memorial pages ­full of videos, pictures and tributes.

On Eternal Space, loved ones can choose from different headstones and bucolic landscape backgrounds — the mountain lake is a popular option — to create a customized online grave site. Loved ones can add “tribute gifts” such as roses, candles, stuffed animals and other items, while mourners can access photos and videos in a “Memory Book” and leave remembrances of their own.

Jay Goss, president of Eternal Space president, is trying to bring the funeral experience to anyone who can access the Web. In that way, he hopes to provide a gathering place, and a voice, for mourners who may not be able to attend the real-life memorial service.

“It’d be the equivalent of a funeral where everyone can attend and everyone can spend 30 minutes behind the podium,” Goss said. “It gives everyone a chance to put a 360-degree wrapper on the life the person lived and celebrate that life from how every person knew them.”

Eternal Space’s virtual memorial sites are currently only being offered through select funeral homes, cemeteries and crematoriums. Goss’ hope is that the site will help allow the deceased’s memory to be “eternally” passed on.

“All of these stories and videos are being left, in essence, to this Eternal Space Web site so that everyone can share, not just that day, not the days after, but the weeks after and years after,” he said.

Some funeral-industry professionals believe these online memorials and virtual grave sites provide a valuable service.

“Assuming the site is handled with respect, virtual memorials respond to a basic human need to remember our deceased family, friends and colleagues,” said Robert M. Fells, general counsel for the International Cemetery, Cremation and Funeral Association.

“Based on our members’ feedback, I’d have to say that virtual memorial sites are gaining popularity with the public as a very practical alternative to being present at the grave site,” he added. “There’s nothing ‘weird’ about them as far as we have seen.”

“There are funeral homes out there that will help families create virtual memorials, but … we’ve also seen Facebook and MySpace profiles of deceased persons being turned into memorials,” agreed Jessica Koth, spokesperson for the National Funeral Directors Association. “Consumers have become increasingly comfortable with expressing their grief online.”

“While not a replacement for a funeral, online memorialization can help people work through their grief after the funeral,” she added. “We’ve all become accustomed to communicating and expressing ourselves electronically — via e-mail, Facebook, Twitter. Expressing one’s grief online is an outgrowth of what’s happening in other areas of our lives.”

CNN.com’s Brandon Griggs contributed to this story.

Links referenced within this article

www.legacylocker.com
http://www.legacylocker.com

The Golden Years, Tarnished

Many retirees had planned on retiring this year based on the bull market of 2007.  Once again, I recall a conversation with a lady who had just those plans in December 2007.  I counseled her to have her advisor move assets into something safer for two reasons: 1) she had no business in that asset allocation, 2) while I didn’t predict the magnitude, I felt the market was in for a correction. Her portfolio was highly leveraged, because she was convinced that “you gotta have growth”.  Problem is that in our conversation she didn’t qualify it.  She got growth, all 43% – negative.

Here is an article sourced from the NY Times, Clifford Krauss, November 13, 2008 and linked by the AARP Bulletin Today.  It discusses the very fear that retirees have and worries of lifestyle changes, and having enough money to see them through retirement. 

DELRAY BEACH, Fla. — Since the stock market began to fall, friends have been coming to Barbara Goldsmith to talk about their depression, loss of appetite, insomnia and cravings for hot fudge sundaes.

“People are grieving,” said Ms. Goldsmith, a semiretired psychotherapist who counsels fellow residents of the Gleneagles Country Club, a gated community here. “There was a death. Their money died.”

In communities like Gleneagles and in the homes of retirees across the country, these are days of fear and uncertainty. In theory, retired people are not supposed to invest much in the stock market; in reality, many millions of them do. With the economy in free fall and stocks down about 40 percent this year, legions of middle- and upper-middle-class people are suddenly worried about having enough to carry them through.

To be sure, no bread lines are forming at places like Gleneagles. The community remains placid and, on the surface at least, highly prosperous. Retirees play golf, tennis and cards amid peach-colored condominium villas, ornate fountains, and manicured palm trees and violet bougainvillea.

But sustaining that comfortable life for another two or three decades, as many retirees hope to do, requires money. People with investments that were worth $1 million or $2 million a few months ago are suddenly canceling cruises, clipping supermarket coupons, eating at home rather than at restaurants and cutting back on contributions to their grandchildren’s college educations.

Like retired people everywhere, residents here knowingly juggled what they saw as competing risks.

They all heard the standard advice to move their assets out of stocks and into supersafe investments as they neared retirement. But, with interest rates so low, the returns on safe investments like government bonds were meager, and many of them saw a risk in not keeping some money in stocks. To finance a long retirement, they figured they needed the gains characteristic of the stock market.

Keeping money in stocks left them exposed, of course, to the risk of a once-in-a-lifetime market meltdown. Now, that day is at hand.

“Every television monitor in the card room and locker room is on CNBC, so we can get aggravated all day,” said Jerry Rivkin, 75, a retired appliance store owner. “We’re playing for nickels and dimes while we watch ourselves losing tens of thousands.”

To cope, some people are selling their homes up North, so they will have the money to stay here. A handful of condominiums in Gleneagles have gone into foreclosure, something that was almost unheard of until recently. Humor is becoming darker as residents tell jokes about their shrinking “301(k)’s” and the sorry inheritances their children will be surprised to receive.

For years, retirement and financial advisers have said that elderly people should be lightly invested in stocks, putting most of their assets in bonds, certificates of deposit and other conservative investments. But even some of the experts acknowledge that such a strategy does not always work for retired people in good health who can live to be 90 or older, unless they have a lot of money or move to a place with a low cost of living.

“With life expectancies being what they are, and medicine getting better and better every year,” said Joseph La Scala, a senior financial consultant at GunnAllen Financial, “someone who is entering retirement now needs to be a long-term investor, and that means there needs to be more of an allocation to growth investments such as equities.”

According to government statistics, a third of retirees have almost no stock exposure. But those are mostly poor or lower-middle-class people who rely on Social Security for income. Others are shielded by pension benefits, although those have been shrinking in recent years, especially for younger retirees.

Retirement experts say a majority of people in the middle and upper-middle classes have portfolios that are far more weighted with stocks, and therefore are more risky, than is commonly recommended. According to a recent survey by the University of Michigan that was sponsored by the National Institute on Aging, in the wealthiest 40 percent of the population age 75 and older, more than half had at least a third of their accumulated savings in stocks.

“Older middle-class people have made plans based on a set of assumptions of how the world works, and the world has gone crazy,” said Alicia H. Munnell, director of the Center for Retirement Research at Boston College. Those assumptions once included the notions that bank accounts and corporate bonds were secure, and blue-chip stocks were the best long-term investments.

“If you call my mother,” said Jason J. Fichtner, acting deputy commissioner of the Social Security Administration, “her goal was $1 million to retire on in stock equities. She had that for a weekend, and now it’s worth $600,000.”

At Gleneagles, people still play cards, swing 9-irons and take painting classes. But the anxiety in the community is palpable, and rising.

“I feel terrible,” said Harry Pure, 80, retired athletic director at Philadelphia University, who has lost 25 percent of his savings.

While taking a break from a painting class, he said, “It was nice to put your head on the pillow at night and know you felt secure. Now I put my head on the pillow and the brain cells are not going to sleep. All different scenarios are playing in my mind now: What to do? What to do? What to do?”

Even those with relatively large portfolios are feeling the pain.

“This threatens our lifestyle,” said Sid Freedman, a 74-year-old former owner of a textile company who divides his time between Gleneagles and Great Neck, on Long Island. With more than $2 million in assets, he said, he thought he and his wife were set for a long, secure retirement.

But he said his portfolio was down 30 to 40 percent. Without a pension, he said he might have to start contemplating his “safety net” if the market keeps falling: the unpleasant thought of selling his house on Long Island, even though that would mean less time with his children and grandchildren up North.

Uppermost on Mr. Freedman’s mind is his divorced daughter who has two children and a good job, but no support from her former husband, he said. Mr. Freedman had put aside enough money in a fund to pay for a year and a half of college for her oldest son, but that investment was down 20 percent, and he was to start school next year.

“We’re looking at a totally new ballgame,” Mr. Freedman said after playing tennis. “My mother lived to be almost 101 and her mother lived to be 90, so what it means is, if conditions get worse, we could outlive our money.”

Charles Mailman, 77, a retired zipper manufacturer, said he had accumulated a portfolio worth more than $1 million, 70 percent in stocks, and lost $300,000 in September and October. He said the days of yearly cruises for him and his wife were over for now.

“No more decorating, no more vacations, no more heavy-duty spending,” he said with a sigh. “If the market has hit bottom and it’s on the way back, I can live with that; the question is, what happens if it hasn’t?”

As for his broker, Mr. Mailman said, “He still says, ‘Sit tight. You have good stuff.’ They all say the same thing.”

Many people believed in stocks, they said, because the stock market had been good to them for years and represented the best way to keep their portfolios intact or growing.

“We stayed in stocks because they were so wonderful,” Jack Leinwohl, 67, who owns a U.P.S. store here to keep up his income, said. “I sold out everything two weeks ago so I can sleep.” He said he was looking to return to the market, though, because “I could be out of money in 10 years.”

Others say they do not dare to look at their portfolios anymore, or ask their spouses how things are going, for fear of the answer.

“There is no need for George and me to be crazy together,” said Ms. Goldsmith, 71, the psychotherapist, speaking of her husband. “I sleep, but George doesn’t.”

As for her three children, Ms. Goldsmith added, “I am getting them ready. If they are counting on their inheritance, they are in deep trouble.”

Taxable Equivalent Yields

Here is a chart that shows a taxable equivalent yield for various interest rates and tax brackets.  For instance, if you are earning 5% tax free with an annuity or a muni bond you would have to earn at 6.94% in a bank CD according to a 28% tax bracket.  Many people thumb their nose at what appears to be relatively low rates for annuities until they are fairly compared to a CD that is taxed annually.Why pay taxes on money you don’t need when you can get the benefits of triple compounding?  What is triple compounding?  It is interest that is compounded on your principal three ways:

1. Interest on principal
2. Interest on interest and
3. Interest on tax savings…because the interest earned is free from current income tax.  Instead of being paid on taxes due to the 1099, it will continue to compound as long as it is deferred.

Tax Free Interest Rate	Income Tax Brackets*
	15%	25%	28%	33%	35%
3.00%	3.53%	4.00%	4.17%	4.48%	4.61%
3.50%	4.12%	4.67%	4.86%	5.23%	5.38%
4.00%	4.70%	5.33%	5.56%	5.97%	6.15%
4.50%	5.29%	5.99%	6.25%	6.72%	6.92%
5.00%	5.88%	6.67%	6.94%	7.47%	7.69%
5.50%	6.47%	7.33%	7.64%	8.21%	8.46%
6.00%	7.06%	7.99%	8.33%	8.96%	9.23%
6.50%	7.65%	8.67%	9.03%	9.71%	10.00%
7.00%	8.24%	9.33%	9.72%	10.45%	10.77%
7.50%	8.82%	9.99%	10.42%	11.20%	11.54%
8.00%	9.41%	10.66%	11.11%	11.94%	12.31%
8.50%	9.99%	11.33%	11.81%	12.69%	13.08%
9.00%	10.59%	11.99%	12.50%	13.44%	13.85%
9.50%	11.18%	12.66%	13.20%	14.18%	14.62%
10.00%	11.76%	13.33%	13.89%	14.93%	15.38%

Taxable Equivalant = (Tax Deferred Interest Rate) X [1 ÷ (1 - Your Tax Bracket)]

Anatomy of a Bank Takeover – This American Life & All Things Considered

Usually when you read about yet another FDIC bank takeover, the absence of emotion, the impact on the lives of bank employees, and the on the ground view of what happens on that fateful Friday is almost never portrayed as it is in Episode 377: Scenes from a Recession where a compellling audio story of the Bank of Clark County, Vancouver, WA is told. After all, who cares.  As long as my money is insured by the FDIC, I’m good!

In this episode, the story of a Circuit City store closing is also told.  This post will direct you to the All Things Considered resource.  The story was written by Chana Joffe-Walt.  The audio can be found here.  The abridged article transcript is here. I hope you get to listen to it.  It may not be completely objective or able to tell the entire story.  It is only 12 minutes.  But, you will see some criticisms of the piece from comments posted by readers on the article’s web site.

Anatomy of a Bank Takeover

by Chana Joffe-Walt

On a mid-January night, some 80 agents of the Federal Deposit Insurance Corp. pull into Vancouver, Wash. Their rental cars are generic, their arrival times staggered. One by one, agents check into a hotel, each quietly offering a pseudonym to the guy at the desk.

They’re here to take over the Bank of Clark County, which the FDIC has decided is insolvent. It’s the agency’s job to insure American bank deposits and to step in when a bank fails. The FDIC tries to keep the planning for its operations top secret, to avoid sparking a panicked run on the bank.

At 9 o’clock on this particular Thursday night, FDIC agents call another bank nearby, Umpqua Bank. They tell executives there that Umpqua has been selected to take over the Bank of Clark County. They order them not to tell anyone. Come to a meeting tomorrow at noon, they say, and we’ll fill you in on everything you need to know.

The next day, Ric Carey, an Umpqua vice president, heads into that meeting. “The FDIC had taken a location approximately two miles from the main office of the bank in a hotel under a different name,” he says later. “And they’ve been through quite a few of these. I think one of the gentlemen leading the discussion said, ‘You know, I’ve done over 200 of these over my 25 years, and let me tell you how it’s going to work.’ ”

He agrees it almost feels like a spy movie. “They’ve done this before — quite a production,” he says.

Breaking The News

Todd Zalk is what you’d call a team player, a total bank loyalist to the end and beyond.

Zalk works at the Bank of Clark County — “the best community business bank,” he says, “because we’ve changed the game in business banking and we were winning.” He laughs at himself, but a month after the failure he’s still wearing his Bank of Clark County nametag, still passing out his bank business cards with a warm handshake and calling people by name whenever possible.

Zalk says he had no idea the FDIC was in town and his bank was about to fail. On Friday afternoon, failure day, he was bringing in new business. “I had people that wanted to open accounts,” he says, adding that he opened more than 55 new accounts in the fourth quarter.

He knew the bank was going through a rough time — everyone knew that. The CEO had been saying that the bank was like a ship. The bank had taken on some water in the recent storm and might need a bigger ship, meaning a larger bank, to take it on. But things were basically under control.

On that Friday afternoon, Zalk is out meeting with potential clients.

At 5:01 p.m., a small team enters the Bank of Clark County. They’re a casual group, just two FDIC agents and a Washington state regulator, and they head straight for the CEO’s office. And this is when it happens: They deliver the news. They tell him his bank is undercapitalized and has failed.

At 5:03 p.m., an agent positioned by the CEO’s office door, types the news into a BlackBerry. It is received by everyone on the FDIC takeover team, including the FDIC’s manager on location, Ron Hodges.

“At 5:04, we receive the notification that the bank had been declared failed,” Hodges says. “It’s that simple.”

A minute later, FDIC agents begin closing in on the bank. A few are already inside, quietly and discreetly securing the cash and the vaults.

Carey, with Umpqua Bank, has assumed a position down the street. He’s sitting in his car, waiting and watching.

Gone In A Flash

Zalk, oblivious to all this, heads back into the office after a long day of work. And it’s weird, he says, how tense everyone seems. A teller mentions that there’s a staff meeting at 6 p.m.

“By this time it was quarter to 6, and I went up to someone who was senior vice president at the bank and I said, ‘How are you doing?’” Zalk says. “And they said, ‘Oh I’m doing all right.’ I could tell something was going on and they didn’t want to say. We looked across to the other side of the bank and there were two employees adjusting pictures on the wall. And he kind of laughed and said, ‘Wow, that reminds me of adjusting the chairs on the Titanic before it sank.’ And that really told me something was going down.”

The Bank of Clark County staff gathered in the lobby at 6 p.m. The group included a couple of people in suits whom none of the bank staff recognized.

“Mike Worthy, our CEO, came out,” Zalk says. “It was very short. He stood up and said, ‘Well, I’ve used the analogy that we were a ship that was taking on some water and we needed to pull up next to a bigger ship, and we thought we had a few buyers for that. And now the biggest ship that sails the seas has come alongside us, and they are going to be taking us over — and that is essentially the federal government.”

At 6:03 p.m., down the street in his car, Carey notices his BlackBerry vibrate. He was getting the signal, an e-mail: “It’s time. Come in.”

Two minutes later, Carey gets out of the car and starts walking toward the bank. Meanwhile, in the lobby, a woman from the FDIC takes the stage.

“She said within the next 10 minutes there will be 80 FDIC employees coming into the bank. And I looked out there, and it was dark so I couldn’t really see,” Zalk says. “Then all these people, mostly in suits and professional clothing with attorney-type briefcases, start entering the bank, just flooding into the bank. I was so awestruck at them coming in — and so many of them coming into the bank, that I turned around and looked over there, and just kept watching them, and they just continued to come. I mean 80? I mean, our bank had, like, 100 employees.”

Out in the parking lot, he noticed a flash. It was a photographer for the local newspaper taking a photo for the front page of Saturday’s edition.

Keeping The Doors Open

At 6:08 p.m., Carey enters the bank he will own in just a few days. He finds the staff members are standing in their closed bank headquarters trying to digest the news. Some of them are crying. He remembers one of them saying, “My goodness, I just told one of our biggest customers yesterday, ‘Don’t worry, everything’s fine.’”

He says they seemed almost personally embarrassed that they now had to face those customers.

It’s now around 6:10. The Clark County people have a bunch of questions running through their heads — first among them: Do we get to keep our jobs? Carey can’t answer that. Umpqua will need only about a third of the Bank of Clark County staff. But it’s too soon to let individuals know whether they just lost a job.

The Bank of Clark County no longer exists. It’s not quite Umpqua Bank yet. The FDIC is in charge. The bank has to open its doors Tuesday morning — Monday is Martin Luther King Jr. Day.

The FDIC agents announce that, through the weekend, the staffers will be temporary employees of the FDIC. Stay and help us, the agents say.

“Most of us were planning on leaving at the end of the day,” says Ken Moody, the bank’s vice president of information systems. “My daughter had a seventh birthday that we were going to go to.”

Like An Autopsy

At 6:20 p.m., the FDIC agents spread out into offices, storage rooms, hallways, into any space available. They tape handmade signs to the doors, labeling rooms with functions like “audit,” “security” and “investigations.”

The agents begin going through files. They change the Web site and count all the cash by hand, a task that takes three hours. They check the safe deposit boxes, go through desk drawers and toss out bank letterhead.

From all the paperwork and computer hard drives, the FDIC has to reconstruct the bank’s entire balance sheet. It has to know what it’s selling to Umpqua.

The agents’ work includes checking every single account. Ones with a balance under $250,000 are fully insured by the FDIC. But some people have more than that, and there are business accounts and loans and it gets complicated. Some of the accounts are covered, some aren’t.

While the agents are sorting all this out, they can’t have customers going online and moving money around. They need to shut down the bank’s computers for a short while, maybe an hour. “Things started happening very quickly and with what seemed to be a lot of precision,” Moody says.

At 6:25 p.m., Moody sees three agents approaching. They hand him a thumb drive and ask him to plug it into a computer. The drive contains all the instructions about all the computer systems.

“It was like watching an autopsy being performed by a really skillful surgeon,” he says. “They just came in and sliced and diced and broke the bank up into a bunch of different pieces, threw them into different buckets — and did it with great efficiency.”

It was like an autopsy, he says, of all the work the bank employees had done together for a decade.

‘They Were Really Nice’

Many workers at the Bank of Clark County said one thing about the FDIC that you don’t often hear about a government agency — that it did a really good job. They describe the agents as kind, courteous and efficient. Everything was structured, even how and when to grieve.

“Many of the people who came in from the FDIC got to where they were because they were part of a bank that was failed,” says Lisa Stapleton, an assistant loan officer. “And they were like, ‘You know what? We’ve been where you are. And we understand and it’s going to be fine.’ So they were really nice. Having that empathy helped it kind of make it a little more pleasant.”

The Bank of Clark County had 100 employees and assets of $446 million — it was a really small bank. But the federal takeover kept 80 FDIC agents, about 50 Bank of Clark County staff, and 100 Umpqua employees, working round the clock for three days.

Most of the largest banks in trouble right now — Citibank, Bank of America — are about 6,000 times the size of the Bank of Clark County and much, much more complicated.

Considering the scale involved, it’s not surprising the U.S. Treasury secretary’s latest plan does everything it can to avoid using this process on those big banks. When you take over a little bank, it’s called receivership. When you do it to a big bank, people throw around the word nationalization.

But on the other hand, check these FDIC folks out. They know what they’re doing. And every week they get more experience. In the 10 weeks since the FDIC took over the Bank of Clark County, 18 more banks have failed. That brings us to a grand total of 20 since the start of this year — a number that will likely grow tomorrow.

FDIC Alert: Level One Bank Acquires Michigan Heritage Bank

Friday was a busy day for the FDIC.  On Friday, three other banks were taken over in addition to the one headlining this post.  The notices can be found on the following links:

• First Bank of Idaho – Ketchum, Idaho
• First Bank of Beverly Hills – Calabasas, CA
• American Southern Bank – Kennesaw, GA

Here is one of the most recent FDIC bank closures which was achieved by Level One acquiring Michigan Heritage Bank on Friday, April, 24. The article posted below is rom PRNewsWire via Comtex and appears on foxbusiness.com.

FARMINGTON HILLS, Mich., April 24, 2009 /PRNewswire via COMTEX/ —-Level One Bank of Farmington Hills is pleased to announce the acquisition of all deposit accounts and select consumer loans of Michigan Heritage Bank, also of Farmington Hills, from the FDIC as Receiver following its closure on April 24, 2009. Level One Bank was selected by the FDIC, after a competitive bidding process, to assume these deposits and purchase these selected assets.

All Michigan Heritage Bank offices will open for business as branches of Level One Bank beginning Monday morning, April 27, 2009. Michigan Heritage Bank depositors will automatically become customers of Level One Bank and will have uninterrupted access to their funds, all of which will continue to be insured by the FDIC to the FDIC’s limits with no loss of any depositor money.

Level One Bank is a locally owned, full-service commercial and consumer bank which strives to exceed customer expectations at every point of contact. Level One Bank continues to take banking to a higher level with the most qualified and enthusiastic bankers in the market and the technology and infrastructure to make banking easier and more convenient.

“As a bank committed to the success of our local community – both its residents and businesses – we are thrilled to welcome the Michigan Heritage Bank customers into the Level One family. We pride ourselves on making a difference for each of our customers by providing a superior level of attention, treating each family like a business, and each business like family. We truly believe the transition will be a smooth, enjoyable experience for all our new customers. And we believe by keeping these deposits local, we’ll continue to positively support our communities and state,” said Patrick J. Fehring, President and CEO of Level One Bank.

Level One Bank’s Consumer Division offers personal savings and checking accounts including free checking and competitive interest-bearing accounts such as Money Markets, IRAs, and CDs. The bank also provides a complete array of consumer loan products including first mortgages, home equity, personal lines, auto, recreational vehicles and credit card services. The Commercial Division provides a complete menu of products including lines of credit, term loans, commercial mortgages, SBA loans and a full suite of Treasury Management Services.

   Level One Bank locations will be:
   30201 Orchard Lake Road, Farmington Hills
   28300 Orchard Lake Road, Suite 200, Farmington Hills
   21211 Haggerty Road, Novi
   28345 Beck Road, Suite 102, Wixom

The official fdic.gov press release can be found here: PR09058.

Consumers Turn to Money-Saving Web Sites

NewsUSA – As the economic recession continues, Americans look to pinch their pennies. And while a good pair of scissors and sales flyers can go a long way toward cutting expenses, many people are printing, rather than clipping, their coupons.

Here are some top Web sites that consumers are using to find deals on items ranging from prescription drugs to home furnishings:

BidRx.com. Here, the pharmacies bid for your business. This Web site allows registered users to access an auction, where they can view different pharmacies’ rates for prescription medications. If a user notices that a pharmacy in another state charges less than their local pharmacy, they can place a mail order to receive their medications at a lower cost. BidRx.com also lists similar drug options that fulfill the same function as their current medications, but at a lower price. When registering, enter M4E014 in the referral code box for immediate savings.

Bradsdeals.com. Basically a savings tracker, the Web site bradsdeals.com tells users when their favorite stores and companies offer sales, bargains and other promotions. Users can print out coupons or access codes that save them money online. Products range from groceries to electronics to clothing. The site updates daily.

Pricegrabber.com. If a user knows what item they want to buy, they can search for the item at www.pricegrabber.com. The Web site will show the price of the item as it is sold by different vendors, so users can quickly hone in on the best deal.

Bookfinder.com. Whether a user needs text books or a pleasure read, bookfinder.com will show what different vendors charge for the same used or new titles.

Mint.com. If an Internet user struggles to keep track of their online spending, they can create a free account at mint.com. Users enter financial information, including credit and debit cards, bank accounts and budget information. The Web site will then help users track and categorize their spending. Mint.com also alerts its users when they receive paychecks or when they exceed a preset budget.

A Christmas Card From The Stock Market

One of my colleagues sent me this just before Christmas. According to the email link, the source is from http://www.ritholtz.com/blog/. Lately, in this business you need to have a sense of humor. Since I do have a sense of humor, and since my clients DID NOT experience the ‘Christmas Tree Curve’ depicted in the greeting because we only work with guaranteed products in our planning, I thought I would share it. I hope your Christmas was very merry, and I hope your plans for asset proctection in 2009 are bright.

The Security or Insecurity of Retirement

There has been much written about the affect of the current storm of financial issues and its impact to what I call personal economies.  Recently in the newspaper a feature was written highlighting local citizens.  The article found two particular individuals of retirement age who are working not just because of tough economic times to make ends meet, but also for the fact that they enjoy working and have no intentions to quit yet.  They are fortunate to have the choice so to speak.  Everyone regardless of their age is feeling the pinch.  Not everyone works because they like to, as these individuals.

Their experience is confirmed by a study conducted by AARP in 2007.   Over 2/3 of seniors indicated  that they planned to continue at least part time, even after they reached retirement age.  This study  attributed the reasoning to enjoyment of work – which is good news, and also needing to meet financial needs.  The latter is not so good because this study named ‘Work and Career Study’ was done in the spring 2007 when the market and economy were buzzing.

What is distressing is, now, according to the AARP report released in October called ‘Retirement Security or Insecurity’ it is revealed that due to the current economic climate, 20 percent of those interviewed have stopped contributing to their retirement savings, and over 10 percent are having to take money from their retirement savings to meet daily expenses.   AARP telephone surveyed over 1600 participants aged 45 and older who are currently employed.

Some KEY findings in the October report are that respondents -

• will work more hours and stop contributing to retirement accounts such as IRAs and 401Ks.
• will work longer, delay retirement, and spend less money in retirement.
• feel that their retirement efforts are/were not on track BEFORE the economy slowed down.
• are not saving enough for retirement, due to lack of money or not starting a plan.

For details and actual percentages, the study can be found here – http://assets.aarp.org/rgcenter/econ/retirement_survey_08.pdf.

As one lady quipped while lamenting the decline of her retirement balance, and having to work longer, “it is all in God’s plan and she’ll take life as it comes”.  We all can take comfort in that. Amen, sister.

It is hard to imagine anyone in the modern world not affected by today’s money headlines and whose experiences are not confirmed by the AARP study.  If your personal economy and retirement are threatened by assets in your portfolio that have lost money, then your current and future retirement security can perhaps benefit from a second opinion by giving us a call on 304-267-9797.