Website Asks Americans To Love Taxes

From The Crimson.com:

While many political pundits continue to emphasize the public’s frustration with taxation, Vanessa S. Williamson—a graduate student in government and social policy—started a website last August to take the conversation in a new direction.

The website, dubbed “I Heart Taxes,” was created as a way for individuals to showcase their pride in the “patriotic pro-tax movement,” according to Williamson.

“[If you are] proud to be a taxpayer, you could really show your pride,” Williamson said.

“I Heart Taxes” is a combination of a blog providing tax-related commentary with an online store selling merchandise that highlights how tax dollars are used to support government programs.

Williamson, who launched the website on the anniversary of Social Security’s creation this past summer, said that her inspiration sprung from her friends’ Facebook status updates around Tax Day that praised their monetary contributions to government programs.

Williamson said she wanted to create a site where people would be able to show similar enthusiasm.

The site’s merchandise is branded with sayings such as “Taxes Fight Fires” and “Taxes Feed Kids.” Williamson’s next product line will tout “Taxes Put Man on the Moon.

A Tax Cut Both Parties Should Love -- But Don't

Tax cuts and rebate checks to stimulate the economy have been discussed frequently in the media. However, some economists are now suggesting that a payroll tax holiday would be more effective. Even the nonpartisan Congressional Budget Office agrees that a payroll tax holiday would be more likely to increase consumer spending.

CNNMoney.com reports

The payroll tax is the amount paid by both employers and employees to fund Social Security. Each pay 6.2% of a worker's salary, up to the first $106,800 of income.

Because of that limit, the tax is one of the most regressive in place today, hitting the working poor and middle class much harder than the wealthy.

The nonpartisan Congressional Budget Office estimated earlier this year that eliminating payroll taxes was roughly two to four times more effective in spurring economic activity than a reduction in income taxes, the policy option that's getting most of the attention in Congress.

"This is a better tax cut than a general income tax cut," said Roberton Williams, senior fellow with the Tax Policy Center. He said getting more money to workers who earn less increases the chance that it will be spent rather than saved, a concept popular among Democrats.

Read more here

Taxpayers Face Oct. 15 Deadlines: Due Dates for Extension Filers, Non-Profits Approach

In their newest press release, the IRS reminded taxpayers of the upcoming October 15^th deadline for extension filers and non-profits. Taxpayers and non-profits that filed for an extension will have until then to file their late return.

“The Oct. 15 deadline is particularly important this year because it’s the last chance for many small charities to comply with the law under the one-time relief program the IRS announced in July,” said IRS Commissioner Doug Shulman. “And as always, it’s an important deadline for taxpayers who took an extension to file their returns.”

Don’t Miss Your 1040 Deadline

The IRS expects to receive as many as 10 million tax returns from taxpayers who used Form 4868 to request a six-month extension to file their returns. Some taxpayers can wait until after Oct. 15 to file, including those serving in Iraq, Afghanistan or other combat zone localities and people affected by recent natural disasters.

The IRS encourages taxpayers to e-file. E-file with direct deposit results in a faster refund than by using a paper return. Electronic returns also have fewer errors than paper returns. Oct. 15 is the last day to take advantage of e-file and the Free File program.

Continue reading at IRS.gov…

Where Are They Now? Seven Villains of the Financial Crisis

After the financial crisis, a lot of people were looking for someone to point the finger of blame at, but as this article from Daily Finance, there are multiple individuals that contributed to the bank collapse.

In 2008, as the economy seemed to be in free-fall, pundits, politicians and the public cast about in search of the ultimate villain, the Wall Street weasel who could assume the blame for massive foreclosures, skyrocketing unemployment, and plummeting stock values. While the disaster was too big to pin on any single schemer, a handful of likely candidates quickly emerged.

Some, like Ken Lewis and Jimmy Cayne, seemed merely inattentive and inept, while others like Angelo Mozilo and Fabrice Tourre appeared to be actively involved in cheating the public. Yet, whether their position was in Wall Street or Washington, the CEOs office or the analyst's desk, all seven of the people on our list carried some measure of the blame for the events of 2008.

Two years later, most members of the class of 2008 have moved on to new jobs, cushy retirements or fresh challenges -- often involving the Securities & Exchange Commission. Yet, regardless of where they go, all seven will continue to carry the marks of 2008, the end of a ride that gave them billions in salary, yet cost them their reputations.

Jimmy Cayne: Playing Bridge While Bear Burned

In the two and a half years since Bear Stearns went belly up, the company's chairman of the board James E. "Jimmy" Cayne has become famous -- indeed, notorious -- for two things: smoking weed and playing cards.

Winner of 13 national championships, Cayne is among the world's top masters at the game. In 1969, he was playing bridge professionally in New York when fellow player Alan "Ace" Greenberg hired him to be a stock broker at Bear Stearns. Over the next 32 years, Cayne rose to become president, CEO, and ultimately chairman of the company; along the way, he continued to play bridge, becoming famous both for his playing style and for the rumor that he smokes marijuana after tournaments.

The New Threat To Your IRA: An IRS Crackdown

IRS rules and regulations surrounding IRAs frequently confuse taxpayers, but until now minor slip-ups were often overlooked or forgiven with a small fine. However, the IRS has been cracking down on IRA account holders lately. According to this Forbes.com article, you should be careful to avoid excessive IRS penalties.

After years of haphazard enforcement, the Internal Revenue Service is starting to systematically search out violations of the convoluted rules governing individual retirement accounts. There's a lot at stake. Americans hold $4.3 trillion in IRAs, and the cost of even innocent mistakes can be steep; if you miss taking a required payout from your IRA, Uncle Sam will demand half of the amount you forgot to take as a penalty.

The IRS was prodded to act by the Treasury Inspector General for Tax Administration. In a report earlier this year it concluded that IRA violations have been growing and estimated that more than half a million taxpayers either missed required payouts or contributed more than allowed to IRAs during 2006 and 2007.

"No one was auditing this stuff. Now the IRS is cracking down,'' says Seymour Goldberg, a Woodbury, N.Y. lawyer who serves on a committee of tax pros who meet with the IRS on pension issues. Here are some IRS targets and ways to keep your retirement stash out of its sights.

Missed Required Payouts

You put pretax money into a traditional IRA, where it grows tax-deferred. But Uncle Sam wants his cut eventually. So the law requires IRA owners to begin taking "required minimum distributions" from traditional IRAs after they turn 701/2. Roths work in reverse. You contribute already taxed cash to a Roth, and distributions are tax free. Owners of Roths, no matter how old, don't have to take RMDs. Nonspousal heirs of both traditional and Roth IRAs must generally take RMDs regardless of their age. To complicate matters, Congress suspended all RMDs for 2009 to give retirement accounts depleted by the 2008 market crash time to recover. But RMDs are back for 2010. That change will likely trip up additional taxpayers in 2010.

Continue reading here…

No Estate Tax Due in 2010 but Beware of Cap Gains

As it gets closer and closer to the end of 2010, experts are beginning to wonder if Congress will make any changes to the estate tax or not. As you probably already know, there is no estate tax for people who pass away this year. Many had expected that Congress would impose a retroactive tax, but with only a few months left in 2010 it is unclear if legislators will tackle the estate tax before the end of the year. However, according to Boston.com that does not mean that large estates get a "free pass" this year.

Things might even be more complicated. That is because a "carryover basis" rule is in effect this year. In previous years, people inheriting property enjoyed a "step up" in basis. That is, the basis of the property they inherited was generally the value of the property when the previous owner died. In 2010 however, people inheriting property also inherit the decedent's tax basis. This means that if you are inheriting property this year, you have to hope the decedent kept very detailed records.

The executor administering the estate can, however, increase the basis of the assets by $1.3M plus any expiring loss carryforwards and the amount by which any asset is worth less than its original cost. The practical implication of this $1.3M is that any estate with untaxed appreciation of up to $1.3M will escape tax free. However, the executor is responsible for designating those assets that will receive the $1.3M. If he or she doesn't pick the assets you inherited, you could find yourself owing taxes upon the sale of the inherited property. However, the good news is that the gains will be taxed at capital gains tax rates.

It is important to note that assets that pass to a surviving spouse are entitled to another $3M in untaxed apprection so it is still possible to shelter as much as $4.3M in appreciation. If you are the executor of an estate for someone who died in 2010, be sure to seek the assistance of a CPA because the rules can be very complicated and you don't want to make a costly error. And if you inherit assets from someone who died in 2010 be sure you know the basis of the asset and if you might owe capital gains taxes be careful to time the sale to minimize any taxes.

How to Stop the IRS Machine

Taxpayers all over the country are receiving letters from the IRS with unsettling news. According to Forbes, the IRS has been sending out bills to taxpayers because of discrepancies between their 2008 tax return and income totals reported by employers and other sources. However, before you reach for your checkbook, be sure to take a careful look at the notice. Many of the letters are reportedly incorrect and/or misleading.

Forbes.com reports:

It's document matching time at the Internal Revenue Service. Millions of taxpayers are opening their mailboxes to find a boldly stated notice shouting "Summary of Proposed Changes" identifying an increase to their 2008 taxes, penalties, interest and a whooping Proposed Balance Due. These notices are often more than 10 pages long, and not until you've gotten to page five do you find out what the IRS alleges created the problem: discrepancies between the amounts reported to them by others and what you included in your return. This is the meat of the letter (known as a CP-2000 notice) and often where you will find what led to the notice "mis-match."

Do not reach for your check book in defeat. Do not immediately scream obscenities about your tax preparer. These letters are often wrong. They are directed at getting your attention. They are machine-generated, generally unseen or untouched by human eyes or hands until the taxpayer responds to the notice. Until a response is received and logged in by IRS personnel, the machine will control the process. Uninterrupted, this automation will lead the IRS to be legally entitled to collection of the balance being proposed. Here are a few examples illustrating the variety of issues on notices I've seen recently:

Shock and Awe Proposed Balance Due: $54,871; Actual Balance Due: Zero

The IRS computers concluded the taxpayer had an IRA distribution of $198,981, but showed a taxable IRA distribution of just $40,000 on the return. The real story is this: The taxpayer converted a pre-tax IRA worth $198,981 to a Roth IRA early in 2008, and he correctly reported this as an IRA distribution on his 2008 return. The stock market dropped dramatically toward the end of 2008. Not willing to pay taxes on an amount well in excess of the account value in early 2009, he properly "re-characterized" (returned to his traditional IRA before filing) all but $40,000 of the converted amount, reporting that amount as taxable on the return. He correctly disclosed this and included Form 8606 on his return. It was all explained, but the IRS machines had not checked for those entries. (For 10 Reasons To Convert To A Roth IRA, click here.)

Shock and Awe Proposed Balance Due: $524; Actual Balance Due: Zero

The taxpayer authorized $2,000 of her 2008 IRA distribution to be donated to her local church. Her tax return correctly indicated a $21,690 distribution with $19,691 taxable. As the IRS instructions dictated, the code "QCD" (for qualified charitable distribution) was indicated on the return. But the IRS' "automated underreporter" systems apparently did not notice the code.

Read more here

What Affect will the Wall Street Reform Legislation have on Taxpayers?

After a long battle in the Senate, President Barack Obama finally signed the Wall Street Reform bill into law on July 21, 2010. The historic legislation includes plenty of new laws that apply to large financial firms, but will also have a significant impact on U.S. taxpayers. The contents of the bill changed frequently as the legislation made its way through Congress, so I wanted to make sure and explain the impact of the new law to all of my readers.

Taxpayer Funded Bailouts

One of the biggest goals of the new law is to prevent any future taxpayer-funded bailouts. The President has promised that no big banks will ever be bailed out at the American taxpayers’ expense. In fact, federal regulators now have the ability to disassemble a financial institution that could pose a threat to the economy. This does not mean that they will go around closing random banks- experts predict the authority will only be used for situations that need a quick solution.

Credit Card Fees

Starting in 2011, a hand full of new rules will take affect that are going have a significant impact on credit card companies. The new restrictions aim to get rid of undisclosed fees and soaring interest rates. However, there is a provision in the legislation that will allow businesses to setup minimum purchase requirements of $10 for credit card transactions.

Consumer Disclosure

To provide additional protection to American consumers, the law will introduce a set of consumer disclosure laws. They will prevent banks and other financial institutions from misleading customers to enhance their own profits. This also means that as a consumer you now have the right to more information about your finances, such as easy access to a free credit report.

Bureau of Consumer Financial Protection

One of the most debated parts of the financial reform bill was a new division it created: the Bureau of Consumer Financial Protection. President Obama has not yet selected a person to lead the new bureau, which will have an impact on how the agency acts. The committee will have an annual budget of $500 million, and the ability to act without Congress approval. Front runners for the leader include Elizabeth Warden, chair of the Congressional Oversight Panel; Eugene Kimmelman, a Deputy Assistant Attorney General in the Justice Department; and Michael S. Barr, an assistant Treasury secretary.

Small Business Relief

A lot of small business owners have become frustrated as they watched large financial institutions get huge bailouts, while they had to struggle without any government assistance. To help these small business owners, new rules have been included in the legislation which aim to increase funding for small business loans.

Mortgage Changes

Several changes have also been made to the way mortgage lenders can run their business. In the past, lenders could take commissions or bonuses for putting a client in a riskier but more expensive loan. However, this act is now illegal, and there will also be a new cap on mortgage origination fees, as well as requirements for all lenders to check borrowers assets and income.

Americans Who Swap Passports

Many American taxpayers are giving up their passports in an effort to avoid excess taxes. However, as this article from FinancialTimes.com explains, giving up your passport can result in a lot of other unintended sacrifices.

At the US Embassy in London, there is a waiting list that none of the officials likes to discuss. On the list are Americans hoping to give up their citizenship, as they seek shelter from the Internal Revenue Service.

One lawyer fighting for her clients’ right to do so is Suzanne Reisman, a former civil rights lawyer, who is now a private-client lawyer in Mayfair, central London.

“You make a lot of sacrifices when you have to pay US taxes and live outside the country for a long time. But you also make a lot of sacrifices when you give up your passport,” she says.

Having lived in London since 1998, Ms Reisman herself has considered giving up her US passport. But she probably won’t. “I don’t think I want to die in the UK,” she says.

With many executives living away from their countries of origin, the reasons to change citizenship range from clarifying tax status, making it easier to cross borders, particularly in the case of passport holders from emerging markets who find themselves working in countries such as the US for a prolonged period of time, or discovering that over time their allegiances have changed.

Continue reading at FinancialTimes.com…

Personal Savings Rate Climbs to 1-Year High

From CNNMoney.com:

Americans saved a slightly larger chunk of their disposable income for a third straight month in June, pushing the personal savings rate to its highest level in a year, according to government data released Tuesday.

The Commerce Department reported that personal savings totaled $725.9 billion, or 6.4% of post-tax income, up from $713.9 billion, or 6.3%, in May. The rate was the highest since June 2009, when the reading came in at 6.7%.

"The rebound in the savings rate is encouraging," said Mark Vitner, senior economist at Wells Fargo. "It means that spending is likely to rise more in line with income whenever it grows."

In addition to lifting spending, a higher savings rate also means that households have a better cushion to pay down debt.

The report showed that personal income and spending were virtually unchanged during the month.

The Tax Hike Nobody's Talking About

The media has placed a lot of attention on a few minor tax changes, such as the new tanning tax. However, little focus has been put on a major tax hike that is about to occur. Unless Congress takes immediate action, the Marking Work Pay credit is due to expire; if it does expire, working taxpayers across the country will have more money withheld from their paychecks.

The credit, introduced last year as part of the government's stimulus package, boosts paychecks by up to $400 for single filers and up to $800 for joint filers, by reducing the amount of tax withheld from each paycheck.

But unlike those cuts, which were largely viewed as a benefit for wealthier Americans, the Making Work Pay credit is designed exclusively as a middle-class benefit, and will affect a wider base of taxpayers.

Continue reading at CNN.com…

Banks: We're Hiring So We Can Make More Home Loans

Even though home sales are down, a handful of financial institutions are getting ready to hire more loan originators, so that they can increase lending. This should come as good news to the thousands of Americans finding it difficult to get a home loan. You can check out a segment of the story below, or read the full post at CNNMoney.com.

Several banks are gearing up to do a whole lot more mortgage lending in the future.

Even though new homes sales were at a historical low in May and the housing market in general is in the doldrums, these banks are hiring hundreds of loan originators, getting ready for what they believe will be a significant pick-up in lending.

JPMorgan Chase (JPM, Fortune 500), one of the nation's largest lenders, is in the midst of hiring 1,200 mortgage officers. "We may not be inundated with applications tomorrow, but we are confident the the need will be there," said Christine Holevas, a spokeswoman for JPMorgan Chase.

Housing experts, however, warn that overall mortgage lending is expected to remain flat, largely due to a decline in refinancing.

Loans for home purchases should steadily increase over the next two years to $916 billion, up from an expected $725 billion this year, according to forecasts by the Mortgage Bankers Association. But refinancings should plummet to $474 billion in 2012, down from $717 billion this year.

Consumer Prices Dip For Second Straight Month

For the second month in a row, American consumers are seeing lower prices on goods, energy bills, and other services. According to Forbes.com, earlier today the Labor Department reported that the Consumer Price Index dropped 0.2% in May, following a 0.1% decrease last month.

It marked the biggest decline since consumer prices plunged 0.7 percent in December 2008. That was a period when the worst recession since the 1930s stoked fears of deflation. The country didn't get stuck in a deflationary spiral then, and probably won't now, economists say.

Deflation is dangerous. It's a widespread and prolonged drop not only in the prices of goods at stores but also real estate, stocks and wages. America's last serious case of deflation was during the Great Depression of the 1930s.

Meanwhile, "core" consumer prices, which strip out volatile energy and food, edged up 0.1 percent in May, after being flat in April. That meant core prices are up only 0.9 percent over the past year - below the Fed's inflation target.

Confusion Over the Dormant Estate Tax Keeps Advisers Busy

From NYTimes.com:

The disappearance of the federal estate tax this year has created confusion and frustration among the wealthy, even among those who stand to benefit from it. And this has sent them in droves to amend documents that they may have to change again next year.

Steven H. Goodman, an accountant and financial planner in Melville, N.Y., says he has not had a meeting recently without clients asking him what they need to do this year and for 2011, when the tax is set to return at a higher rate than when it expired. Yet for all the business this has brought his firm, the SHG Financial Group, Mr. Goodman says he is not happy. “It’s a pain in the neck,” he said. “Even though I do this for a living, no one likes to do this.”

Those who work with the extremely rich say they, too, have been exceedingly busy, but for a different reason. The wealthiest are looking to take advantage of a short-term trust that allows people to pass money to heirs tax-free — what’s known as a grantor retained annuity trust — out of fear that the federal government could change the terms of these trusts. Cheryl E. Hader, a partner in the individual clients group at Kramer Levin Naftalis & Frankel, said she set up 30 of these trusts last month, up from six in a normal month. Daniel L. Kesten, a partner in the private client group at Davis & Gilbert, a law firm in New York, said he was working nights and weekends last month setting up the same type of trusts.

How this boon to tax advisers happened is yet another chapter in the partisan gridlock common to Washington these days. At the end of 2009, Max Baucus, the Montana Democrat who is chairman of the Senate Finance Committee, tried to extend for three months the existing estate tax laws, put in place in 2001. But when that motion failed, the estate tax expired for the first time since 1916.

What this has meant is that the heirs of wealthy people who die this year will owe no taxes. An extreme case, as detailed in an article in The New York Times on Tuesday, is that of Dan L. Duncan, who died two months ago with an estimated wealth of $9 billion. His heirs will inherit his estate without paying the 45 percent tax that was in effect in 2009, billions that would have gone to the Treasury.

Bill Would Extend Home Buyers' Deadline for Tax Credit

Despite reports that there was not enough support for a homebuyers tax credit extension, a bill has been introduced in Senate floor to extend the deadline by a few months. According to the Washington Post, the creators of the legislation hope to allow qualifying taxpayers an additional three months to claim the credit.

Senate Majority Leader Harry M. Reid (D-Nev.) co-authored a proposal that would allow those eligible for the tax credit to close on a home by Sept. 30 to give lenders more time to process a crush of applications.

Reid and his co-sponsors hope to attach the measure to a separate bill moving through the Senate that would extend a variety of tax breaks as well as emergency unemployment benefits. But even if senators succeed in attaching the tax-credit initiative, Democrats are still struggling to assemble the votes needed to pass the overall tax bill.

To qualify for the tax credit -- $8,000 for some first-time buyers and $6,500 for certain current homeowners -- buyers must have signed a contract by April 30 and close on the their transactions by June 30.

The National Association of Realtors said many home buyers will not be able to meet the June 30 closing deadline because of the surge in loan volume and delays related to home appraisals and short sales, transactions in which lenders allow struggling homeowners to sell their homes for less than they owe on them.

Continue reading at Washington Post.com…

Banks Seizing More Foreclosed Homes

Despite the fact that less Americans are behind on their mortgage payments, the number of homes being foreclosed actually increased in May. CNN Money put together a great article discussing some potential reasons for the hike, as well as a set of tips for those who have faced or are likely to face foreclosure in the future.

Bank repossessions hit a record monthly high in May, according to RealtyTrac, the online marketer of foreclosed properties. Lenders took back 93,777 properties, up 1% from the previous month's record and 44% from the same period a year earlier.

Foreclosure filings, meanwhile, fell by 3% from a month earlier and edged up less than 1% from May 2009. One in every 400 homes received a foreclosure notice last month.

"Lenders appear to be ramping up the pace of completing those forestalled foreclosures even while the inflow of delinquencies into the foreclosure process has slowed," said James Saccacio, RealtyTrac's chief executive.

After foreclosure: How long until you can buy again?

Overwhelmed by the mortgage meltdown, lenders have been relatively lax in repossessing homes as they try to cope with the flood of borrower defaults. As the housing market starts to stabilize, however, they are turning their attention to taking back homes.

Continue reading at CNN.com…

Tax Bills In 2009 At Lowest Level Since 1950

According to a new analysis of federal data, the average U.S. taxpayers paid less tax last year then they have since 1950. Federal, state, and local taxes, consumed about 9.2% of personal income in 2009, which is much lower then the 12% average we have seen for the past few decades.

The overall tax burden hit bottom in December at 8.8.% of income before rising slightly in the first three months of 2010.

"The idea that taxes are high right now is pretty much nuts," says Michael Ettlinger, head of economic policy at the liberal Center for American Progress. The real problem is spending,counters Adam Brandon of FreedomWorks, which organizes Tea Party groups. "The money we borrow is going to be paid back through taxation in the future," he says.

Individual tax rates vary widely based on how much a taxpayer earns, where the person lives and other factors. On average, though, the tax rate paid by all Americans — rich and poor, combined — has fallen 26% since the recession began in 2007. That means a $3,400 annual tax savings for a household paying the average national rate and earning the average national household income of $102,000.

Continue reading at USA Today.com…

Tax Bills Won’t Rise for Parents Who Keep Older Kids on Health Insurance

After millions of taxpayers expressed anger over concerns they might be hit with additional taxes for children under the age of 27 still receiving health benefits, both the IRS and Obama administration have spoken up regarding the issue. According to LA Times.com, the Federal government announced that tax bills will NOT increase for these families.

The president and his congressional allies have billed the new benefit for older children as one of the most immediate advantages of health legislation that in other respects remains highly controversial.

And last week, after prodding from Health and Human Services Secretary Kathleen Sebelius, several leading national insurance companies said they would offer the extended coverage immediately to parents who buy plans on their own.

But the healthcare bill did not make clear if employees would have to pay taxes on the additional benefit if they receive health insurance through work, as most Americans do.

Tuesday, the IRS issued a 12-page notice explaining that the added insurance for children under 27 would be tax-free, like other employer-provided health benefits, and that employers with some kinds of plans could begin offering the benefit immediately.

Continue reading at LA Times.com…

5 Lies The Big Banks Keep Telling Us

The federal bank bailouts and financial crisis are hot topics currently on the minds of many. Regarding the topic, it seems like every day we hear more excuses from CEOs. However, taxpayers are becoming fed up with big banks and the lies they are telling. MSN Money published a great article this morning highlighting the five most common lies big banks are telling us all and I highly recommend reading their full list here.

It's tough to head off the next disaster if you don't understand why the last one happened -- an insight that's apparently lost on Wall Street.

Instead, as I watch banker after banker being grilled on how the mortgage mess happened, they seem to repeat a lot of the excuses I've heard for more than a year. Such as "No one knew." Or "It was everyone else's fault."

Although there's a little truth in each excuse, no excuse is completely honest. "If we're going to avoid these mistakes, it really starts with an honest assessment of what's happened," says Phil Angelides, the head of the Financial Crisis Inquiry Commission, an investigative panel charged with identifying to causes of the credit crisis.

The excuses also muddy the waters at a critical time. The nation is just starting to recover from the meltdown. Financial reform has finally taken center stage in Washington. We need to know what truly went wrong to keep this from happening again.

Big lie No. 1: No one could have known

Consider this scenario: You work at the top of a key bank on Wall Street. You hire the smartest guys from the best schools. You get paid big bucks to know your business better than anyone else. And warning signs are everywhere. When it goes bad, can you really say you didn't know?

Continue reading at MSN Money.com…

Home Prices in Feb Showed First Annual Gain in 3 Years

In the last few days there have been a handful of announcements with good new for our economy. In addition job growth, home prices in the U.S. showed a rise in the month of February, which is the first time we have seen an increase in three years. As this ABC News story explains, although this is a good sign, many economists have been quick to warn Americans not to assume the housing market is rebounding already.

Despite the 0.6 percent increase on a non-seasonally adjusted basis, 11 of the 20 cities in the Standard & Poor's/Case-Shiller home price index showed declines.

The last time prices rose on a year-over-year basis was December 2006. But economists polled by Thomson Reuters had predicted prices to rise 1.2 percent in February.

Home prices are up more than 3 percent from the bottom in May 2009, but still are 30 percent below the May 2006 peak.

Las Vegas saw the largest annual drop at almost 15 percent. San Francisco posted the biggest gain, at about 12 percent.

"These data point to a risk that home prices could decline further before experiencing any sustained gains," David Blitzer, chairman of the S&P index committee, said in a statement.