Entries for October 2008

If you're still searching for a Halloween costume, check out Forbes' annual selection of Halloween masks. Each of "the Scariest People of 2008" comes with printing instructions and a cutout (see this one of Ashley Dupre).

The collection includes Eliot Spitzer, Julia Allison, Chris Matthews, Ben Bernanke, Henry Paulson, the presidential hopefuls, and my favorite, Rick Astley.

If you don't have a color printer, head on down to Kinko's.

Now that the Fed has slashed rates by a half-percentage point, big leaguers are already asking if that's enough to prop up the flagging economy.

Former Federal Reserve governor Laurence Meyer thinks the federal funds rate may drop all the way to zero next year. According to Real Time Economics, he and former Fed economist Brian Sack expect the Fed to cut rates 0.5 percent again, in December.

Check it out. The Treasury's trying to get us to swallow the bitter pill of credit education with an interactive game!

It's called the Bad Credit Hotel, where you "check in and learn the basics of maintaining good credit." At first, I got excited because I thought it might be like Choose Your Own Adventure. And it may well be. But either I'm not good at this game or I'm missing something, because after the hotel clerk ushered me into the parlor, a man in a top hat asked me to find his spectacles, and I gave up after clicking on everything on the page. Luckily, I can check out anytime I like!

By 2050, the number of people in the United States living to 100 will be 14 times what it is today, or nearly 850,000, according to a recent Nielsen study. And making it to the century mark might be easier than you think, according to this story.

If you live to 100, that means you need your money to last, and most financial professionals say the only way to do that is to keep a good portion of your nest egg invested in stocks. Like me, you may not be anywhere near retirement, but it's not a bad idea to get an idea of what your investments should look like when you get close (many planners say keeping 40 to 60 percent of your portfolio in stock funds is a good bet). Here are some sample portfolios.

Whoops—it looks as if we tripped the premarket circuit breakers. Ahead of trading this morning, stock futures fell 6.5 percent and hit "limit down," a built-in safety net that suspends futures trading until the start of the trading session (9:30 a.m. in New York). According to Investopedia, limit down is the maximum the price of a futures contract can decline in one trading day.

Now, let's talk trading halts.

Says the Kirk Report:

We're currently in crash mode and all but the most stubborn bottom callers will get flushed out in this move. As you might expect, they're already talking about trading halts that may occur today in response to the selling. In addition, Fed Funds futures are pricing in a larger rate cut for next Wednesday and there are already rumors of an emergency rate cut this morning as well.

Grab a life raft. Former Fed chief Alan Greenspan didn't mince words today when he characterized the financial crisis as a "once-in-a-century credit tsunami" in testimony before Congress.

What caused the tsunami and how policymakers can shimmy the country out of it were the focus of the House Committee of Government Oversight and Reform's hearing. Greenspan said he's in a "state of shocked disbelief" and admitted a flaw in his thinking about the free-market system. "I was going for 40 years or more on the perception that it was working well." (During his tenure, he opposed tight regulation of financial companies.) Today, he called for tighter regulation. He also said he was "partially wrong" about credit default swaps.

In the latest move to unclog the credit markets, the Fed said today that it's providing help for money market funds. (That's on top of the Treasury's guarantee to insure money market funds that pay a fee.)

Money market funds have been strained by investors cashing out and moving their money into government IOUs, which pay less but guarantee safety. The funds have had a tough time selling assets to satisfy redemption requests from investors, the Fed said in a statement. About $500 billion has flowed out of prime money market funds since August, according to Bloomberg.

To help money market funds meet redemptions, the Fed is setting up the Money Market Investor Funding Facility, which will be made up of five units run by JPMorgan Chase & Co. These units will buy money market instruments (such as certificates of deposit and bank notes) held by money market funds. By facilitating the sales of these instruments in the secondary market, the MMIFF "should improve the liquidity position of money market investors, thus increasing their ability to meet any further redemption requests and their willingness to invest in money market instruments," the Fed said. In other words, don't lose confidence in money market funds.