Q: can u please explain to me the whole deal with this "pay tzar". I need to write a term paper on it but i have no clue what the whole story is saying. Is this guy helping our economy an who is this "royalty"???? please help me

Submitted by leah Lang from monsey,ny

A: Well this will come too late to do any good for you (I don't like doing other people's homework assignment, I confess) but the pay czar is not royalty, it is an appointed position to oversee pay of companies who received TARP money, commonly called the taxpayer bailout of banks, insurance giant AIG and carmakes GM and Chrysler. The czar is Ken Feinberg, and he has aggressively sought to ensure that top level employees of firms that get taxpayer assistance dont reap big bonuses or leave with golden parachutes that leave them set for life. In March he announced a 15 percent cut in compensation for the 25 highest paid employees of all the companies living off the taxpayer bailout.

Answered 05/14/10 11:19:54 by Kevin Hall and Tony Pugh

Q: Why do many liberals say the Obama tax cuts were a waste of money and conservatives say that the biggest tax cut in history never happened? If we consider that consumer spending makes up about 70% of the US economy and creates demand and jobs, then we should give the consumer more to spend. On April 1, 2009, low- and middle-income workers started seeing a bit more in their paychecks, thanks to the "Making Work Pay" tax credit in the federal recovery act. The benefit is spread out over the paychecks workers receive beginning in April 2009 until the end of 2010. Tens of billions of dollars have been pumped back into the economy since April. 2009 through this bottom-up tax cut. All other positive economic indicators have followed. After at least a 3 year decline, Consumer Spending began to rise in April of 2009. After a 5 year decline, GDP began to rise in April of 2009. After a 2 year decline, the Leading Economic Index began to rise in April of 2009, and is currently higher than at any time in many years. Historically, it's one of the few reliable forward indicators that exist. After a dramatic 1 year increase, Job losses began shrinking in April of 2009. This has been the most rapid turn from net jobs losses to net jobs gains of any business cycle in the last century. From its low on March 9th, 2009, the current S&P recovery began to rise in April of 2009 and has outperformed the 1974 and the 2002 rebounds over the equivalent period. So far, only 12% of the public think they got a tax cut. Shouldn't somebody start talking about this?

Submitted by Dave Rusk from Estes Park

A: Here's an idea, give the consumer more to spend and tax him. You could devise a tax cut to spur consumption and pass a value-added tax on consumption that was dedicated to say, covering the uninsured and expanding coverage for all Americans to reduce what we all indirectly pay through out premiums. Republicans like to say that tax cuts raise revenue, there is no evidence of that in real world studies. Likewise, economic theory has plenty of examples how poorly designed taxes crowd out other spending and discourage hiring and investment. But I dont think the middle class tax cuts had much to do with turnaround, just as i dont think the 2003 tax cuts were behind the booming economy. we have since learned that cheap money and leverage explained a lot of what seemed robust growth.

Answered 05/14/10 11:16:48 by Kevin Hall and Tony Pugh

Q: In Congress' discussions about financial reform, is the idea of making "naked" credit default swaps illegal? I can see no reason why anyone should be allowed to "insure" an investment of someone else. My understanding is that Goldman Sachs' receipt of $13 billion from AIG was from just these types of CDS.

Submitted by michael nola from claremont, ca.

A: Amen. Sorry so late in the response. This is a personal pet peeve, crusade of mine. Regulators right now can't tell you how many of the credit default swaps written last year against GM bonds, or more recently against Greece's sovereign bonds, are actually naked swaps where neither better has exposure to the underlying assets. I fail to see where this sort of activity helps in capital formation or brings any social benefit. The closest explanation I've heard is that it helps markets focus on risks and adds liquidity_ kind of a buzzword for any sort of justification. But I am totally with you on this one!

Answered 05/14/10 11:13:36 by Kevin Hall and Tony Pugh

Q: SO....IF THE ONES ON S.S.I. ,,,LIKE ME, CAN NOT GET ACOL RAISE, THEN WHY SHOULD MEMBERS OF CONGRESS GET ONE?,,,THEY MAKE ABOUT 10+ TIMES AS MUCH AS I DO

Submitted by OLIVER from CANBY,OR.

A: I missed what this question was in response to, I presume it was a government-wide cost-of-living adjustment that also raised lawmaker pay. Hard to side with lawmakers on much of anything since so many of them live high on the hog and then cash in their time here to become lobbyists or head trade associations. But whatever cost of living adjustment government employees get Social Security recipients usually get too. Where the breakpoint is, I think, again not sure what this and an earlier question were in response to, but government employees are represented by a AFGE, a powerful while-collar union. It may be the government workers get a different cost of living adjustment through a union contract. But I am just guessing here.

Answered 05/14/10 11:11:15 by Kevin Hall and Tony Pugh

Q: In all good conscience, I ask the members of congress how they can live with themselves when they continue to vote FOR their raises when the people who voted them into office are straddled with the burden of their many misguided decisions and their numerous EXTRA PERKS. How can they not compare themselves to the executives on Wall Street? SHAME ON ALL OF YOU. I would like to ask the members of congress to NEVER AGAIN ASK OR RECEIVE A RAISE.

Submitted by Jackie Pool from Austin, TX

A: Not sure how to answer this, other than to say exercise your vote and if you are unhappy with your representatives, whatever their party, vote for someone new.

Answered 05/14/10 11:08:20 by Kevin Hall and Tony Pugh

Q: How can the Rep. from N.C. (Matt Watt) justify a cost of living increase when Seniors Social Security checks have not been adjusted for COLA and will not be next year either. Aren't we using the same figures to determine the COLA adjustments?

Submitted by Tom Hahn from Broken Arrow, Ok

A: Don't know how to answer that, I presume you are referring to a government-employee wide cost of living adjustment, which I would be pretty small given that inflation has been so tame. I get where you are coming from, but I personally have a problem with raising the COLA for seniors if in fact the Consumer Price Index has fallen or been flat. It was an adjustment to take into account rising price. That's not to say there are not other ways to help seniors, many of whom live on fixed incomes. But a COLA was never designed to automatically increase takehome amounts, it was supposed to reflect actual costs in the economy.

Answered 05/14/10 11:07:26 by Kevin Hall and Tony Pugh

Q: reading tdy's paper about wall street "overhaul would give credit firms a pass" your graphic to show how these dervatives work was CONFUSING..i know it's complicated science..but I need to know the way it is calulated I guess>>the final results.etc.and the impact on financial reform, good or bad?

Submitted by MARVA LIGHTBOURNE from MIAMI,FLA

A: Sorry the graphic was confusing, I don't know if that was something out of here our out of Miami in its newsroom. It is hard to explain derivatives in general because there are so many types. the common theme is they derive their value, hence derivative, from a shift in some underlying asset. It could be a shift in interest rates, a change in the value of some currency with respect to the dollar, the movement in the price of a barrel of oil or a bushel of wheat etc. Most of those examples are pretty plain vanilla. Where it gets more complicated are things like credit default swaps, where a risk of default on a bond is transferred to a buyer willing to assume that risk for a fixed fee. If the default happens, the buyer of the risk protection wins, if it doesnt happen, the company that offered the risk protection against default has won since the fees were collected and there was no payout. As for the broader reform, there is common agreement on greater reporting requirements, transparency, clearance mechanism that no longer leave the settling of this bet to happen off some formal exchange or clearing platform. All that brings stability and clarity, but the fight now is over how much of those complex bets should be allowed to be considered "customized" and not standardized and thus subject to the transparency rules. The devil is always in the details and we won't know until it is all worked out.

Answered 05/14/10 11:05:21 by Kevin Hall and Tony Pugh

Q: I guess my biggest question, with all the goings on in Congress, can all the bills being passed on regulation and financial reform help, or are all the big companies that screwed up going to have to be pressured to learn financial responsibility?

Submitted by Jen from Phoenix, AZ

A: Good question and only time will tell. If I had to bet, companies will do all they can to take as much risk as they can in search of reward. We have a business culture that increasingly is focused on the short term, and probably a fair criticism of our society more broadly, and these financial firms will find ways around the hurdles being erected by new regulation. The most important thing that can be done is to erect a system that prevents companies from becoming so big and interconnected that they don't pose a risk to the broader system, no small task since several large banks are already there.

Answered 05/14/10 10:59:43 by Kevin Hall and Tony Pugh

Q: I would like to know why there seems to be no concern over helping the long term unemployment situation,I am 56 and I can't find a new job,Is there going to be any long term help for us? I will have no place to live and no car to continue to seek work,and welfare will not help unless you have children.Therefore I dont know what I will do Homeless.Can you please shed some light at the end of the tunnel for me? Thank you for your time, Sharon Horne

Submitted by Sharon Horne from Marshall, michigan

A: I wish I had some good news for you, but I think the best hope is that the economic recovery picks up steam, and if you are in Michigan unfortunately any comeback is likely to lag in an area that's been pretty depressed. Unemployment benefits have been extended repeatedly and I presume that will continue for states like yours with unusually high state rates of unemployment. A lot of younger people who dont have the roots have picked up and moved, that's not easy for an older work who presumably has roots in the community. I think you just have to keep pounding the pavement, try to find the state jobs counselors etc and put yourself out there in hopes of being in the right place at the right time. Best of luck.

Answered 05/14/10 10:57:18 by Kevin Hall and Tony Pugh

Q: which of the following would be considered a manufactured export?

Submitted by samia from houstin tx

A: There is nothing here to answer, send the question again

Answered 04/30/10 14:49:53 by Kevin Hall and Tony Pugh

Q: Fannie Mae and Freddie Mac are often quoted as having "more than 50% of the mortgage market". How much of the market is owned or backed by each?

Submitted by Neil Blumberg from Louisville, KY

A: They pool and package loans to investors, a process called securitization. From about 2000-2007, Wall Street competed with these entities offering so-called private label securities, which were doing what Fannie and Freddie did but without the underwriting standards. Today, Fannie and Freddie are the only game in town, so they have almost all of the market. I dont have the data in front of me, but I think that by 2005 Wall Street was securtizing something like 57 percent of the loans. The point is Wall Street surpassed Fannie and Freddie, which often is left out when some folks blame Fannie and Freddie for the crisis. The fate of Fannie and Freddie, now in government receivership, has been left until next year at the earliest as the state of housing remains too precarious to address right now. The 50 percent of the mortgage market refers to the fact that mortgages and purchased by Fannie and Freddie for securitizing, or bundling into a bond. And if not for the two mortgage finance entities, the housing situation would be far worse than it is today.

Answered 04/30/10 14:49:14 by Kevin Hall and Tony Pugh

Q: to Kevin Hall, Your story today, 4/1/10, "Small businesses starved for capital", states that the US Small Business Administration head, Karen Mills guaranteed $22 billion in loans to small businesses since early last year. I got to thinking about the "$22 billion" and wondered what percent of total small business loans are backed by the SBA. Last November a US Treasury report was quoted that the 22 largest banks in the country reduced small business lending by $10.5 billion to a cumulative total of $258.7 billion. Adding the decline to the Nov 2009 cumulative total, small business lending by the 22 largest banks is about $269.2 billion. In other words, the SBA -- which is supporting only $22 billion of this sum, is actually guaranteeing less than 10% of the small business loans. The CNN story supporting this data may be found at: http://money.cnn.com/2009/11/16/smallbusiness/small_business_loans_evaporate/ My question is, how much do the remaining small community banks loan to small businesses? When we know this, we will be able to calculate the actual percent of small business loan guarantees.

Submitted by Jim Jarvis from Chicago IL

A: That's too complex a question for this forum, if I spent hours on that I wouldnt be able to write my stories. It is a very good question, and one that actually goes to the heart of today's difficulties. Community banks are failing at a fast rate, working on a story right now about the problems in Georgia, and what's clear is that many of these banks got away from lending to consumers and businesses and put all their eggs in one basket, lending to builders. And they got burned badly, further impacting lending to small business as they go under. So I beg pardon for not fully answering the question, but the tone of the question is correct in suggesting that however valid the SBAlending is, it still covers a fairly small universe.

Answered 04/20/10 11:51:32 by Kevin Hall and Tony Pugh

Q: What is the good, the bad and the ugly of revaluing the Chinese Yuan? Is it the USA it will save or the rest of the world?

Submitted by Jim Russell from Birmingham, Alabama

A: The revaluation itself won't be a magic bullet but will realign costs globally around a closer view to reality. The losers in China would be firms that earn dollars but pay wages and other business costs in yuan. Those would be Chinese firms and many American firms. The winners presumably would be U.S. exporters, who would become more cost competitive in China and elsewhere and U.S. companies who are being underpriced by Chinese imports here in the United States. But the currency is just one part of the problem, at least in selling in China, where U.S. firms also face problems of home-court advantage to Chinese firms, poor enforcement of copyright and patent protection and rules that can change quickly. The biggest advantage, in my mind, is that the revaluation moves China closer to other economic powers in having a currency set by foreign-exchange markets, which are generally good judges of value and the move ends the distortion that comes with a government-mandated exchange rate.

Answered 04/20/10 11:47:16 by Kevin Hall and Tony Pugh

Q: You said that you must prove you are on unemployment, this means that if you have no job, but can not collect unemployment you do not qualify for this program

Submitted by Jack Raz from Charleston, South Carolina

A: Not sure what this referred to and forgive me for the delayed response. If you still have teh question resend it with more detail and I will try to respond.

Answered 04/20/10 11:43:04 by Kevin Hall and Tony Pugh

Q: thank you . would a 3 % national sale taxe over a 10 year time frame pay off our national bebt. help cover socialy secutity. also would there be money left over for repairs to our interstellar problems. thank you for taking the time to read this. Joe Barnhill

Submitted by Joe Barnhill from Parkton , North Carolina

A: I don't know if 3 percent would do it, you'd need to run that by smarter people than me. I do know that Bill Gale, one of the biggest names in tax research, has said to meet our unfunded commitments at par value we'd have to double everyone's taxes. I think there is growing interest in a value-added tax that would be dedicated toward meeting the promises made to boomers about to retire that we cannot pay for today.

Answered 04/20/10 11:41:43 by Kevin Hall and Tony Pugh

Q: I bought a house in florida in 2007 for 540000,at that time I was married and my ex husband had two mortgages on tat house for the amount of 300000.. the house is in my name now as well as the mortgages ,the value of the house dropped down to 350000 if not lower . I am a single mom ,just started a job and make less than 24000 a year .I moved to new jersey and I don't live in that house anymore . can I get any help ?? so far I am making the payment on the two mortgages but strugling every month to make ends meet . what are my options ?

Submitted by maryanne from ridgewood new jersey

A: I think you need to talk to one of the government hotlines to discuss options more fully. We're not allowed to give advice and you have to make some tough choices like whether to take a short sale, where you and bank lose money but your credit isnt ruined, or walking away from the home, where you lose less but your credit is ruined. a lot also depends where in florida you are etc. I'd go to the Hope for Homeowners and the Making Home Affordable websites and find some of the help numbers there as a starting point. A financial adviser might be a good use of a couple hundred dollars to determine your long term plan, whatever you do should be seen in the light of your future finances as a single mom with a child to care for that should be the priority.

Answered 04/20/10 11:39:21 by Kevin Hall and Tony Pugh

Q: I paid $145 000. for my condo in 2007 and did $30,000. in renovations. I put in $65,000. of my own money with $10,000. owed to Home Depot. I owe $97,000. on my $100,000. mortgage. I have been unemployed since 11/01/09 and have just been hired at less than half of what I was making before. I will now be getting only $1190. per month. If I am approved for payment reduction to 31% ($369.), will my outstanding balance be reduced, since the condo is now valued at about $110,000. (more than I owe)? Is my equity totally lost? I am 61 yrs old and this was supposed to be my secure investment for retirement (duh). My lender is Bank of America, who bought the morgage from Countrywide.

Submitted by Linda Ficke from St. Augustine, FL

A: You can approach BofA about a HAMP loan, citing loss of income. On the face of it, you sound like the kind of person they aim to help. They normally offer five years of reduced payment but that is no magic bullet as the loan then reverts back to whatever the average rate is five years from now, but you've bought some time to get finances in order etc.

Answered 04/20/10 11:36:29 by Kevin Hall and Tony Pugh

Q: I'm looking for an unemployment rate for 2010 in jobs that require clearences

Submitted by Padgett from Ashburn, Va.

A: Boy that's a tough one, there are rates for education levels, race, age and gender but not one requiring clearances. That I presume is federal employment but there isnt public data on State Dept and CIA jobs that require clearance, or DHS or FBI and DOJ to think of a few more.

Answered 04/20/10 11:33:09 by Kevin Hall and Tony Pugh

Q: why is wall street controlling the oil prices again? people are just barely making endsmeat and now they want to raise gas prices again .maybe they ought to cut out there bonuses and live like us common folk and see if they can live from payday to payday like us little people

Submitted by brenda from La Vergne Tn

A: Well said, hard to argue with your views.

Answered 04/20/10 11:31:42 by Kevin Hall and Tony Pugh

Q: I don't understand how the US can condone oil specualtion to go on. This is a product is vital to our national security, to the function of our government, country, taxpayers, etc. but yet this is something that people can play with. This is not a private enterprise. This runs everything. Can't this be stopped?

Submitted by Charma Craven from Luray Kansas

A: Good question and one that for the moment seems to have the answer no. The good news is that there are a number of bills moving through Congress which may make it harder for this background trading of oil to happen and that could drive down prices. The Wall St firm analyst Oppenheimer on Monday came out with a report predicting a drop in oil prices after new laws are enacted.

Answered 04/20/10 11:31:15 by Kevin Hall and Tony Pugh