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The Almighty Buck

Submission + - Up to 40 Million Consumers Have Errors in Their Credit Reports 1

Hugh Pickens writes writes: "The Star Tribune reports that the Federal Trade Commission has found that up to 21 percent of the 200 million people on file with the country’s major credit reporting bureaus have verified errors in their credit reports and five percent have bloopers serious enough to not just change their credit score but also change their class of credit risk, potentially making loans more expensive or even cutting off credit access altogether. The study was based on a representative sample of 1,001 consumers who reviewed nearly 3,000 credit reports, or about three reports per person, along with a study associate. All the credit reports with alleged material errors were sent to an analyst at Fair Isaac Corp. for an initial rescoring. Ed Mierzwinski at the U.S. Public Interest Research Group says the level of mistakes found by the FTC is significantly higher than the 0.5 percent error rate found in a May 2011 industry-funded study on credit-report accuracy. “We’ve criticized the credit reporting industry for decades over unacceptable levels of seriously damaging mistakes, many of which are entirely preventable,” says Mierzwinski. But Gerry Tschopp, a spokesman for Experian says the report confirms that credit reports are predominately accurate and serving lenders and consumers well. “We take all errors seriously, and invest millions of dollars every year in ways to maintain the integrity of our data by updating our systems to keep data as fresh and accurate as possible.""
The Almighty Buck

Submission + - Technology Makes It Harder to Save Money

Hugh Pickens writes writes: "LiveScience reports that a survey conducted for the American Institute of CPAs reveals that while more than half of US adults believe technology has made it easier to spend money, just 3 percent think it has made it easier to save. The research found that Americans who subscribe to digital services spend an average of $166 each month for cable TV, home Internet access, mobile phone service and digital subscriptions, such as satellite radio and streaming video — the equivalent of 17 percent of their monthly rent or mortgage payment. and those who download songs, apps and other products spend an additional $38 per month. "Our gadgets and connections can bring benefits like mobility and efficiency,” says Jordan Amin. “But they can also bring financial challenges, like taking money that could go to savings, for instance, or contributing to credit card debt." If facing a financial crunch, Americans would rather change what they eat than give up their cell phones, downloads or digital TV services. Asked to choose the one action they would most likely take in tight time, 41 percent said they would cut back on eating out, 20 percent said they would cut off cable TV, 8 percent said they would end cell phone service and 8 percent said they would stop downloading songs and digital products."
The Almighty Buck

Submission + - The Man Who Quit Money

Hugh Pickens writes writes: "John Coyne writes about Daniel Suelo, a man who learned to live, sanely and happily, without earning, receiving, or spending a single cent. Suelo doesn’t pay taxes, or accept food stamps or welfare. He no longer carries an I.D. "When he dropped out, Daniel Suelo was thirty-nine years old, came from a good family, and had attended college. He was not mentally ill, nor was he an addict.," writes Coyne. "His decision appears to have been an act of free will by a competent adult. In the twelve years since, as the Dow Jones skyrocketed to its all-time high, Daniel Suelo has not earned, received, or spent a single dollar." Suelo wasn't always this way. Suelo graduated from the University of Colorado with a degree in anthropology, he thought about becoming a doctor, he held jobs, he had cash and a bank account. In 1987, Suelo joined the Peace Corps and was posted to an Ecuadoran village high in the Andes where he watched as the villagers began to adopt the economics of modernity. They bought soda and white flour and refined sugar and noodles and big bags of MSG to flavor the starchy meals. They bought TVs. The more they spent, says Suelo, the more their health declined. He could measure the deterioration on his charts. By 1999, Suelo was living in a Buddhist monastery in Thailand. From there, he made his way to India, where he found himself in good company among the sadhus, the revered ascetics who go penniless for their gods. "Life has flourished for billions of years like this. I never knew such security before I gave up money," says Suelo on the website he maintains from the public library in Moab. "Wealth is what we are dependent on for security. My wealth never leaves me. Do you think Bill Gates is more secure than I?”""
The Almighty Buck

Submission + - Apple Has Too Much Money

Hugh Pickens writes writes: "AP reports that last week during a question-and-answer session at the company's annual shareholders' meeting CEO Tim Cook said he believes Apple has more money than it needs and his next challenge is to figure out whether Apple should break from the cash-hoarding ways of his predecessor, the late Steve Jobs, and dip into its $98 billion bank account to pay shareholders a dividend this year. "Frankly speaking, it's more than we need to run the company." The question of how to handle Apple's cash stockpile is a touchy one, partly because company co-founder Jobs had steadfastly brushed aside suggestions that the company restore its quarterly dividend which Jobs suspended in 1995 when it was in such deep trouble that it needed to hold on to every cent to keep from going bankrupt. Marketwatch analyst Mark Hulbert writes that a compelling case can be made that a huge cash hoard actually represents grave danger for Apple. That’s because too much cash often burns a hole in managers’ pockets, and they end up doing a poor job of investing that cash—engaging instead in foolish pursuits like empire building. According to a famous 1986 article by Michael Jensen in the American Economic Review shareholders should concentrate on how to “motivate managers to disgorge the cash (PDF) rather than investing it at below the cost of capital or wasting it on organization inefficiencies.” Hulbert adds that a good strategy for insuring that Apple remains a hungry, growth-oriented entrepreneurial company might be for it to distribute much of its cash to shareholders."
The Almighty Buck

Submission + - Obama Pushes for Cheaper Pennies

Hugh Pickens writes writes: "Time Magazine reports that hidden deep inside in the White House’s $3.8 trillion, 2,000-page budget that was sent to Congress this week is a proposal to make pennies and nickels cheaper to produce. Why? Because it currently costs the federal government 2.4 cents to make a penny and 11.2 cents for every nickel. If passed, the budget would allow the Treasury Department to “change the composition of coins to more cost-effective materials” resulting in changes that could save more than $100 million a year. Since 1982, our copper-looking pennies have been merely coppery. In the 1970s, the price of copper soared, so President Nixon proposed changing the penny’s composition to a cheaper aluminum. Today, only 2.5% of a penny is copper (which makes up the coin’s coating) while 97.5% is zinc. The mint did make steel pennies for one year — in 1943 — when copper was needed for the war effort and steel might be a cheaper alternative this time. What about the bill introduced in 2006 that the US abandon pennies altogether.? At the time, fifty-five percent of respondents considered the penny useful compared to 43 percent who agreed it should be eliminated. More telling, 76 percent of respondents said they would pick up a penny if they saw it on the ground."
The Almighty Buck

Submission + - The Zuckerberg Tax

Hugh Pickens writes writes: "David S. Miller writes that when Facebook goes public later this year, Mark Zuckerberg plans to exercise stock options worth $5 billion of the $28 billion that his ownership stake will be worth and since the $5 billion he will receive will be treated as salary, Zuckerberg will have a tax bill of more than $2 billion making him, quite possibly, the largest taxpayer in history. But how much income tax will Zuckerberg pay on the rest of his stock that he won’t immediately sell? Nothing, nada, zilch. He can simply use his stock as collateral to borrow against his tremendous wealth and avoid all tax. That’s what Lawrence J. Ellison, the chief executive of Oracle, did, reportedly borrowing more than a billion dollars against his Oracle shares to buy one of the most expensive yachts in the world. Or consider the case of Steven P. Jobs who never sold a single share of Apple after he rejoined the company in 1997, and therefore never paying a penny of tax on the over $2 billion of Apple stock he held at his death. Now Jobs' widow can sell those shares without paying any income tax on the appreciation before his death — only on the increase in value from the time of his death to the time of the sale — because our tax system is based on the concept of “realization.” Individuals are not taxed until they actually sell property and realize their gains and the solution to the problem is called mark-to-market taxation. According to Miller, mark-to-market would only affect individuals who were undeniably, extraordinarily rich, only publicly traded stock would be marked to market, and a mark-to-market system of taxation on the top one-tenth of 1 percent would raise hundreds of billions of dollars of new revenue over the next 10 years."
The Almighty Buck

Submission + - Warren Buffett Says Stop Coddling the Super-Rich 1

Hugh Pickens writes writes: "Warren Buffett, chairman and chief executive of Berkshire Hathaway and ranked as the third wealthiest person in the world, writes in the NY Times that managers who earn billions from our daily labors are allowed to classify our income as “carried interest,” thereby getting a bargain 15 percent tax rate along with "other blessings are showered upon us by legislators in Washington who feel compelled to protect us, much as if we were spotted owls or some other endangered species." Back in the 1980s and 1990s, tax rates for the rich were far higher, and Buffet's percentage rate was in the middle of the pack. "According to a theory I sometimes hear, I should have thrown a fit and refused to invest because of the elevated tax rates on capital gains and dividends, writes Buffett. "I have worked with investors for 60 years and I have yet to see anyone — not even when capital gains rates were 39.9 percent in 1976-77 — shy away from a sensible investment because of the tax rate on the potential gain." Buffett says that for those making more than $1 million — there were 236,883 such households in 2009 — I would raise rates immediately on taxable income in excess of $1 million, including, of course, dividends and capital gains. "My friends and I have been coddled long enough by a billionaire-friendly Congress. It’s time for our government to get serious about shared sacrifice. ""
The Almighty Buck

Submission + - The Future of Shopping

Hugh Pickens writes writes: "The WSJ reports that a newdevice, now in use at about half of Ahold USA's Stop & Shop and Giant supermarkets in the Northeast, is making supermarket shoppers—and stores—happier. Looking like a smartphone, perched on the handle of your shopping cart, it scans grocery items as you add them to your cart. And while shoppers like it because it helps avoid an interminable wait at the cashier, retailers like it because the device encourages shoppers to buy more.Retail experts predict the new retail gizmos could eventually bring about the end of traditional cash registers and if the technology takes off, it could become a new opportunity for stores to shrink payrolls and put smaller stores out of business. Best of all for retailers, shoppers who use the Scan It system spend about 10% more than the average customer, probably because of targeted coupons and the control consumers feel while using the device.Retail experts predict that before long most of these mobile shopping gadgets will be supplanted by customers' own smartphones andas more customers load their smartphones with debit, credit and loyalty card information, more stores will adopt streamlined checkout technology."

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The means-and-ends moralists, or non-doers, always end up on their ends without any means. -- Saul Alinsky