Common-sense money lessons from 2008

Saving trumps spending for financial healthIt is easy to think of 2008 as a terrible year for your finances, but there is a silver lining – lessons learned.

Writing in the Wall Street Journal, Brett Arends suggests that the past year has caused people to realize that they need to take control of their own wealth, rather than relying on so-called experts.

Investors should always understand the systems in which they are investing their funds, he argues, pointing out that even the CEOs of Fannie Mae and Freddie Mac seemed to not completely comprehend their money-making strategies.

"Simple stocks, like Amazon or Anheuser-Busch, rarely embarrass you in this way," Arends writes.

He also points out that 2008 was another year in which some of the most popular investment sectors fell apart, which underscores the principle of taking charge of your own finances – and having the guts to stray from the pack.

Arends suggests that another lesson from the past year is that saving for the future is a better financial strategy than spending beyond your means in the present – something that may sound obvious but has largely been ignored by many Americans for the past several years.

We probably don’t have long to wait to see if 2008’s lessons have an impact on the coming year.
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Concerns about Napolitano’s use of security technology

What will Homeland Security implement next?Governor Janet Napolitano will soon be stepping into a lead role with the Homeland Security Department, which has caused various civil liberties groups to examine her previous record on the balance between privacy and security.

For example, Alessandra Soler Meetze of Arizona’s American Civil Liberties Union chapter has raised concerns about Napolitano’s implementation of security technology, USA Today reports.

"She sees technology as the panacea of all our law enforcement problems and immigration issues. It’s like she’s embracing these technologies without taking the time to appreciate the privacy implications," she told the news provider.

In the six years that Napolitano has been governor of Arizona, she has encouraged the use of cameras to scan the license plates of moving cars, signed a bill to collect DNA samples from anyone arrested for certain crimes and proposed an optional ID – with a radio-frequency chip – for citizens who reside in the state.

The governor said the ID cards, which could be easily scanned by law enforcement officials, would help speed up border crossings.

Arizona John Birch Society president Bryan Turner suggested that the optional cards could lead to situations in which anyone who didn’t have one could be suspected of being illegal.
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Special interest groups compete for economic stimulus

Who will get a piece of Obama's stimulus money?Ahead of the finalization of President-elect Barack Obama’s proposed economic stimulus bill, a number of groups have been lobbying for a share of the money.

According to an article in USA Today, the high level of interest in bailout funds could create some difficulties for the incoming administration, which has promised there will be no waste included in any stimulus package.

Groups including Taxpayers for Common Sense have questioned how this aim could possibly be achieved with so many groups jockeying for funds.

"When Congress has got a pocketful of walking around money, there’s a lot of people who are trying to take them for a ride," Steve Ellis of Taxpayers for Common Sense told the news provider.

"If you’re a lobbyist in town and you’re not trying to get a piece of the bailout, you should be fired."

Among those looking for a role in the stimulus plan are the American Apparel and Footwear Association, the Natural Resource Defense Council and the National Air Transport Association.

Each group claims that their contribution could help create or protect jobs, boost consumer spending or otherwise benefit the economy as a whole.

Obama has forecast that the entire stimulus plan could cost as much as $775 billion.
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Food additives linked to tumor growth

Phosphates added to food may promote cancerA diet high in inorganic phosphates – commonly found in processed food – can contribute to the risk of lung cancer among those already predisposed, as well as accelerating tumor growth, new research suggests.

Scientists at Seoul National University say that inorganic phosphates have a strong connection to the development of lung cancer among rodents and that limiting these additives can help treat the disease when it is already present.

In the past few decades, inorganic phosphates have been increasingly added to a number of processed foods, such as meats, cheeses, beverages and baked goods, explained lead researcher Myung-Haing Cho.

"As a result, depending on individual food choices, phosphorous intake could be increased by as much as 1,000 mg per day," he said, adding that in 1990s this level hovered around 470 mg per day.

Phosphates are usually added to food to boost water retention and improve texture.

The findings, which appear in the American Journal of Respiratory and Critical Care Medicine, indicated that rats with lung cancer who consumed more phosphates had larger and further progressed tumors.

Earlier this year, a study published in the Journal of the American Society of Nephrology linked high levels of phosphates in the blood with cardiovascular disease and atherosclerosis.
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Gold edges upward

Renewed international concern eases gold upwardGold prices moved past $870 per ounce in Friday trading after a week of steady rises.

Tensions in the Middle East and on the Indian-Pakistani border helped to boost the price of the precious metal – widely viewed as a safe haven investment – during an otherwise quiet week of trading.

Spot prices for February rose quickly from $850 to $870 over the course of Friday afternoon.

Meanwhile, concerns for the underlying strength of the U.S. economy – hit hard by growing unemployment and historically weak consumer demand – have led to renewed speculation over the future price of gold.

"Gold is solid as the dollar is under pressure because of a deepening U.S. recession and the Fed policy of keeping interest rates near zero," analyst Tatsuo Kageyama was reported as telling Bloomberg.

Some experts predict prices might rise as high as $2000 in the next year to 18 months in response to the global financial crisis and the possible worsening of relations in international trouble spots.

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Authorities advise over identity theft

Your identity may be at riskFederal agencies released a revised guide this week designed to tackle the ongoing issue of identity fraud.

The brochure – entitled You Have the Power to Stop Identity Theft – contains a number of steps individuals can take to reduce the chances of an invasion of privacy and possible financial loss.

For example, people should never disclose their Social Security number or other potential password over the phone or internet unless they initiated the contact, the guidance states.

"If you are unsure whether a contact is legitimate, go to the company’s website by typing in the site address or using a page you have previously bookmarked, instead of using a link provided by the email," the authorities advise in a reference to so-called phishing attacks.

If you do fall victim to an identity fraudster, contact your financial institution so that a note can be placed on your file. The guidance also encourages you to inform the Federal Trade Commission of any attempted attack.

As many as nine million Americans are the subject of identity fraud each year, according to FTC estimates.
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FDA takes Coca-Cola to task for nutrition claims

Diet Coke Plus claims to be nutritionalDiet Coke may contain ingredients such as the artificial sweetener aspartame and phosphoric acid, but the Food and Drug Administration is more concerned about its nutritional claims.

The FDA has sent a letter warning the soft drinks manufacturer that its Diet Coke Plus product does not have the appropriate ingredients to warrant the word "plus."

According to the agency’s standards, foods and drinks that carry the "plus" label should contain at least 10 percent more nutrients than similar items on the market. The FDA also said that adding vitamins and minerals to "snack foods" is not appropriate.

Coca-Cola introduced Diet Coke Plus in March 2007. It describes the drink as having extra vitamins and minerals, including vitamin B, zinc and magnesium, according to the Associated Press.

The AP suggests that the move could be part of a larger plan by the FDA to crack down on food manufacturers that exaggerate health claims on their labels.

However, some natural foods advocates have questioned why the agency has been focusing on nutritional claims rather than the testing and regulation of artificial ingredients.
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Questions remain about Obama stimulus plan

Will the U.S. create enough jobs in time?President-elect Barack Obama has promised a stimulus plan for the country that could create or save millions of jobs – but will it work?

Spending is a big part of the plan. Early in the new year, Congress could receive a request to spend between $675 billion and $775 billion in the next two years, Fox News reports. Around $350 billion could be directed at creating infrastructure projects.

Former director of the Congressional Budget Office Douglas Holtz-Eakin told the news provider that although the plan "sounds great on paper" it may be more difficult to achieve.

Part of the problem may be the timing. As the U.S. is already about one year into a recession, by the time the money works its way through the system and new jobs are created, it may no longer be necessary.

"Even if we have a pretty prolonged downturn, it could be the case that the recession is over by the time a lot of this money gets spent," Holtz-Eakin said.

Instead, he suggested that the government could help stimulate spending by suspending Social Security taxes for a year.

Holtz-Eakin, who advised Senator John McCain during his campaign, also said he supports the senator’s idea of purchasing and refinancing bad mortgage debt.

The country is likely to receive more details of the stimulus package when Obama takes office on January 20th.
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Pesticides discovered in fruit juice

Worries about pesticidesResearchers studying fruit juice beverages from 15 different countries have uncovered traces of pesticides in many products, it has emerged.

Scientists at the University of Jaen in Spain looked at more than 100 drinks purchased in the U.S., Russia, Italy, Germany France, the UK and other countries, the Sunday Times of London reports.

In particular, the UK was discovered to have fruit juices with the highest pesticide levels – approximately 34 times greater than what is considered acceptable in drinking water among EU nations.

Peter Melchett of the Soil Association told the news provider that "there needs to be more work on the cumulative effect of residues and this report provides further evidence of a laissez-faire approach."

In the U.S. the use of – and disposal of – pesticides has also been a hot-button issue for a number of years.

ABC News reports that Earthjustice has filed four federal lawsuits against the Environmental Protection Agency that focus on pesticide use.

The public interest law firm has raised concerns about pesticide contamination in groundwater being linked to cancer.

"There are several pesticides on the market that pose extreme risks to human health through the water, air and food," commented Joshua Osborne-Klein, an attorney for the Earthjustice. "Our lawsuits say that the EPA has not fully assessed these risks."
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Tamiflu no match for this year’s flu

Questions about TamifluA new flu strain that is spreading across the U.S. does not respond to the medication Tamiflu, according to the Centers for Disease Control and Prevention.

The CDC warned that this year’s most commonly noted flu bug, found in 12 states so far, is the one that is resistant to Tamiflu.

There are three different strains of flu that can affect humans: the A H3N2 strain, a type B strain and the resistant A H1N1 strain.

Still, Tamiflu is one of the most popular anti-flu drugs on the market, possibly because it can be administered to children in pill form.

But some have raised concerns about the medication’s safety. In 2005 and 2006, a number of cases – mainly out of Japan – reported that children and young people were experiencing mental health side effects after taking the drug.

This caused manufacturer Roche to add a warning to its label stating that "people with the flu, particularly children, may be at increased risk of self-injury and confusion shortly after taking Tamiflu and should be closely monitored for signs of unusual behavior."
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Where did I put that bailout money again?

Who is monitoring the use of bailout funds?After receiving billions of dollars in taxpayer bailout money, banks are unable to describe how they have used the funds, it has emerged.

An Associated Press investigation asked 21 financial institutions that have accepted at least $1 billion from the government how they have spent the money and what their plans are for any remaining cash.

According to the AP, not a single bank gave specific responses to the queries, raising questions about who is monitoring the banks’ use of bailout funds.

Some lawmakers have indicated that they intend to follow up on where the money has been used, but taxpayers may see it as a case of too little, too late.

The news comes after the Treasury Department announced that it has used up $350 billion out of the total amount included in the Troubled Asset Relief Program so far but will likely not touch the rest until January.

Meanwhile, a separate report from the Associated Press reveals that many executives at financial institutions receiving bailout money received salaries, bonuses and benefits that – if taken as a whole – nearly equal the amount the banks have accepted from TARP.
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EPA ‘should assess cumulative effect of hormone-disrupting chemicals’

Toys may contain harmful chemicalsWhen analyzing the effects of potentially hormone-disrupting chemicals, regulators should focus on the cumulative effects of exposure, a panel has claimed.

The National Research Council was specifically commenting on the Environmental Protection Agency’s attitude toward phthalates, which are added to plastic toys to make them flexible.

Animal studies involving these chemicals have indicated that exposure over time can disrupt the male reproductive system and affect testosterone levels, according to the council.

It suggested that the EPA should change its focus from analyzing these chemicals individually to looking at how people are affected when exposed to numerous toxins from food additives, cosmetics, toys, household cleaners and other products.

"If we don’t do this as a cumulative risk assessment focused on these adverse effects, we’re going to be underestimating risks," said panel chairwoman Deborah Cory-Slechta of the University of Rochester, according to Reuters.

The government has already taken steps to ban phthalates from children’s products, beginning February 10, 2009, although stores will be permitted to sell toys that contain the chemicals if they were manufactured before that date.

Phthalates are already prohibited in cosmetics and toys in the European Union.
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New credit card rules: Blessing or curse?

New rules for the credit card industryThis week, the Federal Reserve approved new regulations for the credit card industry which are aimed at protecting consumers.

The rules, which are set to go into effect in mid-2010, prohibit credit card providers from engaging in practices such as applying all of a cardholder’s payment to the balance with the lowest interest rate.

They also insist that issuers give customers 45 days’ notice before changing the terms of their credit card agreement, among other limits on industry behavior.

However, although consumers may cheer the new regulations, some industry experts fear they will actually have a negative effect on the economy.

Banking analyst Meredith Whitney raised concerns that the move will inhibit consumer spending, reduce the ability of lenders to offer credit and cause them to tighten their lending criteria, according to Reuters.

"This [credit] line reduction will strain credit quality not just for credit card loans but for all consumer loans," she said.

Whitney added that many credit card companies have already been forced to lower credit limits and cancel customers’ accounts, in order to protect themselves from risk.
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Are hospitals more dangerous over the holidays?

Hospital errors may increase around the holidaysThe holiday season should be a time for relaxation, but for people in the hospital – or their families and friends – the period can be fraught with chaos, one author claims.

Martine Ehrenclou, who wrote Critical Conditions: The Essential Hospital Guide to Get Your Loved One Out Alive, warns that medical errors can increase in late December and early January.

She places the blame on increased nurse-to-patient ratios, the presence of temporary staff and doctors who have headed out of town.

In order to help prevent disasters, Ehrenclou suggests that each patient request that a friend or family member keep a written record of the names of each healthcare professional involved, as well as diagnosis and treatment information.

She recommends that patients specifically request that physicians and nurses wash their hands and use gloves before touching them, in order to help prevent MRSA and other hospital-acquired infections.

Additionally, before any surgery is carried out, people should make sure that the surgeon marks the particular site where the operation takes place, to be confirmed with the patient’s family.

Statistics cited by the FDA indicate that between 44,000 and 98,000 people die each year from medical errors in hospitals.
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Request for taxpayers to fund Blagojevich defense

Who should pay for Blago's defense?As the hearings regarding the impeachment of Illinois governor Rod Blagojevich continue, the state attorney general has denied a request that state taxpayers fund his defense.

Blagojevich’s attorney, Edward Genson, sent a letter to Illinois attorney general Lisa Madigan this week, citing a state law that mandates the attorney general to represent state officials in court, the Associated Press reports.

However, because Madigan had tried to get Blagojevich removed from office she had a conflict of interest and the state should therefore pay for the governor’s lawyer of choice, Genson claimed.

However, Madigan chief of staff Ann Spillane responded in a letter by arguing that the impeachment proceedings are not being held "in court" and therefore the state of Illinois should not have to foot the bill.

She also suggested that because the governor is accused of "corruptly betraying the public trust for personal and financial gain," it did not make sense that taxpayers should pay.

It emerged last week that Blagojevich had been arrested by FBI agents for allegedly trying to sell the senate seat left vacant by Barack Obama.

Today, lawmakers are expected to hear testimony about past investigations of the governor that found evidence of improper contracts, incomplete records and careless use of tax money, according to the AP.
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New privacy guidelines for electronic health records

Electronic health records raise privacy questionsAs the government moves toward the adoption of electronic health records, the Department of Health and Human Services has announced new privacy guidelines for the treatment of these records.

The eight principles announced by the HHS this week cover patient access, record correction, transparency, patient choice, limitations regarding the records, data integrity, safeguards and accountability.

Announcing the guidelines, HHS secretary Mike Leavitt stressed the importance of the individual having control over their data and not being forced to accept "privacy risks."

"Consumers need an easy-to-read, standard notice about how their personal health information is protected, confidence that those who misuse information will be held accountable and the ability to choose the degree to which they want to participate in information sharing," he explained.

During his campaign, President-elect Barack Obama promoted the use of electronic health records as having the potential to reduce costs, as well as increasing efficiency and accuracy.

Some groups, such as the Privacy Rights Clearinghouse, have raised concerns about the possibility that such records could be misused by insurance companies, lawyers, advertisers and others if they gained access.
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FDA sticks to view that BPA is safe

BPA is in plastic packagingThe Food and Drug Administration has repeated its opinion that the chemical bisphenol A (BPA) is safe, but also says it will conduct further tests and keep analyzing studies.

BPA has made headlines in recent months, as studies have linked the ingredient, found in some plastic packaging and baby bottles, with a number of health problems – such as heart disease, cancer, hyperactivity and fertility.

However, the FDA has said that it has not found sufficient evidence of the chemical’s harm to prohibit it.

"At this moment, with all information in front of us, we do not believe we have the data on which we could base a regulatory ban," said Laura Tarantino, chief of the FDA’s Office of Food Additive Safety.

At the same time, the agency said it would keep studying the effects of BPA on humans, particularly infants and children.

Mike Schade of the Center for Health, Environment and Justice told the Milwaukee Journal Sentinal that the time to act is now, saying that "while the FDA continues to delay action, infants and women of childbearing age are being exposed" to this "highly potent chemical."
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Does the government operate Ponzi schemes?

Look into the future...will your investment be returned?Ponzi schemes – in which existing investors are paid with new investors’ money – have been in the news a lot lately, with the revelation of Bernard Madoff’s fraudulent investment fund sending ripples across the world.

Writing in Time magazine’s Curious Capitalist blog, Justin Fox makes the argument that the government also operates a program that functions on a similar model: Social Security.

"Today’s taxpayers contribute money that is funneled to today’s Social Security recipients – and hope that tomorrow’s taxpayers will put in enough money to fund their retirements," he writes.

He also suggests that the idea of government finance operates on such a principle as well. When people purchase Treasury securities and municipal bonds, they assume that there will be future investors and taxpayers who will support the system, allowing them to profit.

However, Fox finally points out that there is an important difference between Social Security and Madoff’s Ponzi scheme.

The former does not make any attempt to disguise how it works, while the latter involved fraudulent activities in which investors were kept in the dark about where their money was going – or coming from.

Ponzi schemes are named for New England resident Charles Ponzi, who convinced thousands of people to invest money in postage stamp speculation in the 1920s.
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Yahoo will hold user data for no longer than 90 days

Yahoo is aiming to lead the way in regard to certain privacy standardsYahoo is attempting to set the industry standard regarding how it manages user data by cutting the amount of time that it keeps information on individuals’ searches.

Under the new rules, the search engine giant announced that it will retain personal data for no longer than 90 days except in cases of "fraud, security or legal obligations." In those cases, it will be kept for up to six months.

Previously, Yahoo stored query information for 13 months before anonymizing it so that it cannot be traced back to an individual. Google holds this type of data for nine months and Microsoft for 18 months.

In addition to search data, Yahoo said it would purge information related to page views, page clicks, ad views and ad clicks.

"Responsible use of data is critical to establishing and maintaining user trust," explained vice president of Yahoo Anne Toth, according to AFP.

Internet search engines generally use such data to target advertisements toward what seem to be the searcher’s interests. But some have raised concerns about the potential for abuse with such data.
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Property value losses set to total $2 trillion

Many people owe more on their house than it is worthBy the end of this year, American homeowners could be facing a collective loss of $2 trillion on their properties’ value, new figures reveal.

Data reported by Zillow.com found that the value of U.S. homes declined by 8.4 percent annually during the first three quarters of 2008, compared with the same period in 2007.

The situation may be especially bad for the 11.7 million families who are considered to be "underwater" on their mortgage. This means they owe more on their home loan than their house is currently worth.

Zillow’s Stan Humphries said that the fourth quarter of the year is likely to bring even more difficult situations for homeowners, as other factors such as job losses wreak havoc on households’ financial stability.

"This year marked the acceleration of the market correction, and is likely to end with the eighth consecutive quarter of declines in home values," he commented.

The news comes after members of the House Oversight Committee took the CEOs of Fannie Mae and Freddie Mac to task for ignoring economic warning signs and making "irresponsible investments" that have ended up costing taxpayers "hundreds of billions of dollars."
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Concerns raised about online criminal records

You can see criminal records at the click of a mouseAt first, the idea of being able to access a person’s criminal record dating back several years may seem convenient – but what if there are errors?

That is just one of the privacy and civil liberties concerns that have been raised by groups and individuals, as more states move to introduce searchable online criminal records databases, the Associated Press reports.

These systems make delving into someone’s past easier than ever before. For example, Vermont’s system requires that you supply a person’s name, date of birth and pay a $20 fee.

But the records that are maintained online are not as comprehensive as those kept at the courthouse, prompting Allen Gilbert of the ACLU to argue that people accessing the database do not receive a full picture.

"There might be something about the conviction that if you looked at the court record, you’d better understand about what happened and what’s behind the conviction," he told the news provider.

Another concern is that of mistaken identity. Michigan warns users of its system that because it is based on name, it is not foolproof.

A recent story in the Fort Worth Star-Telegram drew attention to massive gaps in the state’s online criminal records database, which criminal justice professor Mike Vaughn attributed to human error.

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