Q: I thought that the stimulus package would be also for people that is not only buying or own their house but is also renting, everybody does't own their own homes some people are still paying rent also. thank u

Submitted by Phyllis Daugherty from Rolla Mo.

A: everyone is getting a small payroll tax holiday of up to $400 unless you are a very high income earner. this helps renters and homeowners a like. this is also why the administration gave an $8000 tax credit for first-time homebuyers, not all home sales. there are also a number of measures to widen the safety net for those who have lost jobs or cannot find new ones.

Answered 04/23/09 11:30:38 by Kevin Hall and Tony Pugh

Q: Is it legal for the Federal reserve to print money without the approval of congress?

Submitted by Duane from Rancho Murieta, CA

A: Almost afraid to answer this question becomes I am not sure where you are coming from with it. I am guessing you are asking whether this major expansion of the Fed's balance sheet, in the trillions of dollars, amounts to printing money without the approval of Congress. First the printing of money is done by the Bureau of Engraving, the Fed controls the supply of money with the dual mandate of preserving maximum employment and fighting inflation. Now, this question of the expanding balance sheet. To be sure, it is unlike anything ever done and arguably pushes the Fed's traditional authorities to the limit. The Fed has created all sorts of lending programs, always taking collateral that is of the highest rating. The Fed now purchases commercial paper issued by corporations, lends to investment banks and other financial players it does not directly regulate and is taking a great amount of securitized, or pooled, loans onto its books. It is not purchasing these assets and it assumes that over time it will sell them back into the private sector at a slight profit. It is walking a very fine line of trying to rescue the economy while not exposing itself to risks that will damage its credibility. And to some critics, this expansion of the Fed balance sheet is akin to printing new money. But it is certainly not printing new money in the conventional sense of literally printing new money or expanding the money supply. Hope that's not too technical an answer.

Answered 04/21/09 17:59:27 by Kevin Hall and Tony Pugh

Q: I have a sizable fixed annuity with Jackson National Life Ins. C0. Would it be wise to roll some of it over into FDIC IRA CD's? I would earn less interest and when they come due, would have to replace them but annuities aren't insured. Is this company going to get part of the bailout? Haven't seen this question before. Appreciate your response.

Submitted by M. Brown from Surprise,AZ

A: We can't give specific investment advice, I think a starting point is to contact the company and ask them directly what would happen to your annuity in the event of an insolvency. I don't think that company has applied for TARP money, you might ask them that too. There may be some costs associated with transferring money out this program so you'd be wise to consult with a professional if it is as you describe a sizable fixed annuity. A little money spent could result in a lot of money saved, seems this is one where it's worth the money to get good advice.

Answered 04/21/09 17:46:57 by Kevin Hall and Tony Pugh

Q: Bank of America sent me a letter stating that my credit card will go up from 9.9 % interest to 14.75% on the balance the next time I used the cards (actually 2) if I didn't lock the rate in. There is a catch, after you lock the rate in and you use the card it automatically goes up to 14.75% interest unless you are fortunate to have the money to pay them off each month. I explained to the employee that these cards were only used for medical charges that had been left from a surgery and rehab and meds. Then I told him that it seemed like President Obama should have paid the bills of people like myself off to these banks instead of give them a stimulus check and now they are raising credit card rates already. The economy will never come back if all the banks start doing that. After the insurance companies get in line for their stimulus checks will you ask President Obama to have a line for people to get a stimulus check to pay off credit cards and make it manditory they will be turned in after that in good faith. The banks will get their money that way too to be able to put back into the economy. Do you have a good address and a person I could write to about this matter because I think it is so wrong?

Submitted by Susan Antonacci from Defuniak Springs, Fl.

A: Your complaints are well taken. Unfortunately, most credit card contracts allow issuers to change terms of the card agreement at their discretion. In fact, Pew Charitable Trusts recently conducted a survey of more than 400 cards offered online by the 12 largest card issuers. It found that 93 percent of cards allowed the issuer to raise interest rates at any time by changing the account agreement. My advice is to report your complaint to the folks at Consumer Action, a non-profit consumer advocacy group. They can respond to your complaint after you fill out the form at http://www.consumer-action.org/hotline/complaint_form/ You can also see the Pew report on credit card practices at http://tinyurl.com/c8qypr

Answered 04/21/09 17:44:35 by Kevin Hall and Tony Pugh

Q: Who are the "19 banks?"

Submitted by Frank Bond from Wheeling, IL

A: JPMorgan Chase Bank, National Association Bank of America, National Association Citibank, National Association Wachovia Bank, National Association Wells Fargo Bank, National Association U.S. Bank National Association The Bank of New York Mellon SunTrust Bank HSBC Bank USA, National Association State Street Bank and Trust Company Goldman Sachs Bank USA FIA Card Services, National Association Branch Banking and Trust Company National City Bank

Answered 04/21/09 17:42:13 by Kevin Hall and Tony Pugh

Q: I notice that the dollar has rallied recently, but on declining volume, what may that portend?

Submitted by John from Minneapolis

A: Knowing what moves the dollar these days is anyone's guess. For now it is likely to strengthen, as the Canadian dollar is weakening, the Mexican peso is weakening and Europe is in as much a hurt as we are. Over a longer horizon the dollar is likely to weaken as it becomes less of a safe haven as the global economy recovers. The longer term consequence of our soaring national debt and our long term obligations for retirees threaten to weaken the dollar is not addressed soon.

Answered 04/21/09 17:25:26 by Kevin Hall and Tony Pugh

Q: With all the bailouts going on and i still believe that these companies are undeserving what about the other people. the little people, I struggle and am loosing everything i got. I am an owner operator (truckdriver) and currently had to move out of my house cause i couldn;t pay the bills any longer. Their is no freight to haul and when their is it pays little and between fuel and insurance i don;t make enough to keep a home for my family, Whats next. The gov doesn;t help me with any money to keep me in business. Our president needs to look at something for the owner operators that are trying to make it. We need help also.

Submitted by Felix Lederhaus from Milwaukee, Wi

A: Thanks for your comments, few businesses are more price sensitive than the trucking business, where lots of companies fight over the narrowest of profit margins. You've hit the nail on the head, without freight to haul, no jobs for truckers, but also reflects lack of business activity and consumption. It's a vicious downwards spiral that the government and Federal Reserve are desperately trying to reverse.

Answered 04/21/09 17:14:21 by Kevin Hall and Tony Pugh

Q: these bailouts are getting out of hand,every tom,dick&harry,have got there hands out for more money.this has got to stop,let them enter chapter 11.and these companies and corporations,would change over night. no more bail outs.enought is enought.

Submitted by maurice morneault from buxton,maine

A: Nothing to add, will let your comments speak for themselves

Answered 04/21/09 17:11:54 by Kevin Hall and Tony Pugh

Q: We have a theft loss of $350,000.00 from an investment that went bad with the down-turn of the real estate market in California. The principles are in jail and have been since October. If we take the loss back three years, will we have to return the stimulus check money we received in 2008?

Submitted by Julie Newendorp from Santa Barbara, CA

A: Hmmm, interesting question that might have to go to a tax accountant. On the face of it I'm not sure why you'd have to give back money unless that was your sole source of income. As long as you collected a salary or wages and had taxable income, you were to receive a tax rebate. Seems like a few important details are missing from the question, like whether taking it back three years leaves your income higher than the cap for receiving the rebate etc. If you want to send more detail I can take a better educated guess. Sorry to get back this late, may be a moot point since April 15 has passed.

Answered 04/21/09 17:05:02 by Kevin Hall and Tony Pugh

Q: I Have an IRA that is in money market fund with American Century. This next wave of gov. protection on money market funds may not be protected with American Century. Am I better off to moving it to a credit union or bank CD.

Submitted by cynthia Holland from Columbus O

A: I can't give you financial advice, so the best I can offer is that the federal government has taken steps to ensure that money market funds are safe, and the FDIC has raised coverage on deposits up to $250,000. It's a question of how much risk are you willing to tolerate amid two reasonably safe investment vehicles. I think if you are concerned enough to move you money you may want to consult with a professional or go to any number of websites on consumer finance and research it a bit more

Answered 04/21/09 17:02:04 by Kevin Hall and Tony Pugh

Q: Who, when and how will the trillions of stimulus and bailout money be paid back to the American people?

Submitted by Duane from Rancho Murieta, CA

A: That's too broad a question to answer in detail, but generally speaking each program has different timetables and rewards. The capital injections into the banks come with a 5 percent dividend to the govt, thus taxpayers hypothetically will make 5 percent on what we've lent to the banks. The stimulus spending is a tougher one. It will be paid off over time, depending on how quickly the govt retires since it must be paid for with borrowing. One telling measure of what spending costs mean is that the recent 10 year forecast for the budget deficit has the cost of servicing the national debt beyond the expected defense spending a decade from now. That's a dismal reality for the future of my grade-school children and any younger American.

Answered 04/21/09 16:57:10 by Kevin Hall and Tony Pugh

Q: Do you feel that there is much risk buying a wells fargo bond going out approximately 3 years with a yield to maturity in the 5% plus area?

Submitted by Ron Lowry from Canton Ohio

A: I can't provide specific investment advice and certainly not about specific companies. Speaking more generally, bonds are certainly safer than stocks in the present environment and I think one of things any investor must factor in over the longer horizon is what will happen to inflation. Many analysts warn the big range of government spending and Federal Reserve offering its balance sheet for all these new programs will unleash inflation down the road. When that happens is a matter of debate.

Answered 04/21/09 16:53:06 by Kevin Hall and Tony Pugh

Q: What are the Banks that have accepted stimulus money suppose to be doing with it ?

Submitted by Maxine from Missouri City, Texas

A: There were no direct stipulations originally. It was designed to bolster their balance sheet and thus bring confidence in the banking system. The expectation, however, among lawmakers and an unhappy public is that banks lend this money. The Obama administration has forced the banks to report on a monthly basis about their lending activity as a means of pressuring them to lend more, but in a souring economy creditworthy borrowers become more scarce and many economists argue this is precisely the time where not lending makes sense as more people lose their jobs and companies go bust. It all underscores how difficult an economic situation the country now faces.

Answered 04/21/09 16:50:52 by Kevin Hall and Tony Pugh

Q: What exactly are these toxic assets are they more than mortgages, are they credit card debt? What sort of mix are they? Thanks

Submitted by RJ from Calif

A: The new buzz word for toxic assets is legacy assets. sounds cleaner. For the most part they are mortgage-backed securities, those bundles of pooled U.S. mortgages that were sold into a secondary market, where investors bought them with the hopes of having a monthly income stream. There is no market for these securities amid plunging home prices and dormant home sales. Other forms of toxic assets are collateralized debt obligations, or CDOs, which are pools of debt, sometimes credit card, sometimes mortgages, sometimes commercial real estate and sometimes a blend of all of them. These pools can also include bonds or other assets. Beyond the pools of actual debt -- which are bundled through a process called securitization -- there were also synthetic CDOs and CDOs squared. Here's how the website Investopedia defines synthetic CDOs: Synthetic CDOs are a modern advance in structured finance that can offer extremely high yields to investors. However, investors can be on the hook for much more than their initial investments if several credit events occur in the reference portfolio. Synthetic CDOs were first created in the late 1990s as a way for large holders of commercial loans to protect their balance sheets without actually selling the loans and potentially harming client relationships. They have become increasingly popular because they tend to have shorter life spans than cash flow CDOs and there is no extended ramp-up period for earnings investment. Synthetic CDOs are also highly customizable between the underwriter and investors. Got that? I assume the answer is no for most people. These things are so complex that the people who sell them can't explain them in plain English. So here's my crack at it. Synthetic CDOs were often invested in credit-default swaps, insurance like products taken out to protect against the chance that the person on the other end of the deal defaults. So a synthetic CDO hedges against default in the actual CDO. And as often the case with credit-default swaps, you don't have to own the underlying asset to you can bet against a synthetic version of an actual CDOs, which has as its collateral actual loans to U.S. consumers and businesses. You can see the layers of financial alchemy involved in this and why the house of cards came tumbling down when the underlying asset on which all of this was built, U.S. mortgages, soured as home prices fell. Long answer to a short question

Answered 04/02/09 12:03:02 by Kevin Hall and Tony Pugh

Q: This is about establishing good credit. How is a person who has just shifted into the work force and has little to no credit history, NOW attempt to establish credit? What, if any, avenues might one pursue? Any suggestions?

Submitted by Katey from Des Moines, IA

A: Good question. Traditionally if you have little credit history you should take out a credit card or take out a simple loan that you can repay quickly. What you want to do is show that you pay your bills, establish a history of good credit payment. In doing so, don't bite off more than you can chew. Perhaps you could take a store credit card and cancel the account a year later, pay off whatever you buy on time, dont be late on payments etc. the other option i have heard, and again with the big caveat that we dont give financial advice but just repeating what i have read through the years, is to take out a short-term bank loan and then pay it off as quickly as you can. then you have a positive item on your credit report. you are entitled to one free credit report per year from the three big consumer credit rating agencies: equifax, experian and transunion. if you havent done that yet, probably a good starting point to know where your credit is at the starting point. or alternatively pull your credit history after you've done something to build your credit rating.

Answered 04/02/09 11:49:05 by Kevin Hall and Tony Pugh

Q: Wouldn't it be a better idea to pour money into our economy at the bottom,rather than the top?If money was given to the working people,they would spend and things would get better at the top.What's wrong with a "bailout" to the working class,over a 3 year period?It could work for everyone,rather than the rich.

Submitted by from

A: That's why Obama chose a payroll tax holiday that gives people a little more in their checks instead of a one-time large check, under the theory that this money will get into economy immediately. As for a bailout of the working class, I would guess the Obama administration would argue that the tax credits for working poor, child credit expansion and a number of health and welfare measures in the stimulus bill are designed precisely to help those on the lower and middle end of the economic ladder. A bailout isnt always giving money away but can also be designing programs to reach the vulnerable.

Answered 03/24/09 14:53:05 by Kevin Hall and Tony Pugh

Q: I UNDERRSTAND SOME OFF THE MADOFF INVESTORS HAD INVESTED OVER 20 YEARS AGO. DID THEY RECEIVE THEIR 10% OF SUPPOSED DIVIDENDS EACH YEAR? OR REINVEST THEM IF THEY RECEIVED THE MONEY EACH YEAR THEY PROBABLY DIDN'T LOSE ANY MONEY. WOULDN'T THAT BE CORRECT?

Submitted by kathryn womack from pensacola fl

A: I presume many reinvested and many made money until the game was up.

Answered 03/24/09 14:50:08 by Kevin Hall and Tony Pugh

Q: My question is about the under water mortgage. We bought a home in 2004 for $70,000 through Wells Fargo and it is a FHA loan. The house is now $60,000. We called Wells Fargo yesterday to see what we can do. They said probably nothing. However I thought if a bank took money from the gov. there were suppose to help. And Wells Fargo did. I am under the 5% difference I believe. I would just like to refi it. We have have good credit. Any thing we can do, for I know a bank is just not going to help out if they don't have to. But if we can pressure them to. Krista

Submitted by Krista Lessen from Lincoln, Il

A: If you are not more than 5 percent underwater you should be able to refinance, if not through Wells then call around and see about whether they can qualify you for a refi. But the important question is how much lower will you go on the interest rate. If you go from 5.5 percent to 4.75 percent, that's different from 7 percent down to 4.75 percent. There are a number of websites that have mortgage calculators. The reason to do this would be to significantly lower your monthly payments, but everytime you refinance you are stripping some of the equity out of your home since you will pay fees that will eat up what you might have built up in your home... and of course if you are under water on the loan, it just adds to the hurdle you must climb to break even. Another factor to weigh as you way the costs and benefits is how long you expect to stay in the home.

Answered 03/24/09 14:49:30 by Kevin Hall and Tony Pugh

Q: Who do you like for the Final Four?

Submitted by tom from takoma park

A: MODIFIED TO UPDATE ANSWER AT BOTTOM: I can answer this one late, now that all the cinderellas are gone. I'll say Kansas and NC, without looking at whether they cancel each other in the brackets. The other two I don't know. Was more interested in baseball world championships. I'll ask Tony to answer too... Tony says.... Louisville, NC, Villanova and Memphis. And he's money in the bank. Two-time office pool winner!

Answered 03/24/09 14:45:39 by Kevin Hall and Tony Pugh

Q: I have grave concerns about the future of the dollar if we continue spending trillions of dollars by printing more money. Would it be a good idea to invest some dollars in other world currencies?

Submitted by Cathy Kilminster from New Freedom, PA

A: Well, central banks are certainly doing that, but as an average person looking to invest your savings, seems likely that you would spend those savings here on things that are priced in dollars. The problem with currency bets is you can't really know the future. Six months ago the dollar looked really weak, then it rebounded. Over a longer horizon, China's aging society and Europe's aging will happen faster than ours and they are less open to migration, at least China, so replenishing their workforce could be a problem, my money is still on the dollar over a longer time horizon, but I can understand concerns that this building up of the Federal Reserve's balance sheet is akin to printing money that devalues the current dollar holdings.

Answered 03/24/09 14:43:58 by Kevin Hall and Tony Pugh