Bankruptcy – Not For The Faint Hearted

Inability or impairment of ability of individuals or organisations to pay off their creditors is known as bankruptcy. Normally individuals and business establishments initiate the process of bankruptcy but sometimes a group of creditors can ask for a declared state of bankruptcy in order to recover money owed to them.

The law of bankruptcy serves the primary purpose of giving a second chance to the honest debtors by relieving them from most of the debts and to enable the debtors to repay the portions of the debts with their available financial resources.

To keep the financial ship from sinking, declaring bankruptcy should be treated as an absolute last resort. This emotionally difficult choice can be carried out through a relatively simple process. Information detailing property, income, creditors and debts should be provided to the court and further collection efforts by the creditors is prevented by the issuance of a notice by the court to the creditors.

Child support, alimony, recently accrued back taxes, loans availed by students, large purchases made recently and penalties or fines of government agencies cannot be evaded by filing bankruptcy.

A negotiation with the creditors to reduce the extent of monthly payments should be explored prior to filing bankruptcy.

Non-exempt assets which can be divided among the creditors are permitted by the laws of bankruptcy. In addition, the bankruptcy declaration permits the debtors to be discharged from most of the financial obligations even if debts are paid in full after the distribution of non-exempt assets. Through a legally binding “Stay” the debtor is protected from extra bankruptcy action by other creditors. The creditors cannot demand payment, garnish wages or continue with lawsuits.

In its strictest legal sense, bankruptcy relates only to partnerships and individuals in the United Kingdom. Even though various different procedures such as administrative receivership, administration or liquidation are followed in the cases of companies and corporations, it is often wrongly referred as bankruptcy in general conversation and by media.

A licensed insolvency practitioner or a civil servant (official receiver) is usually appointed as a Trustee in bankruptcy cases.

After the introduction of Enterprise Act 2002, a bankruptcy in United Kingdom normally can not last longer than 12 months or less if the Official Receiver files a certificate in the court stating that the investigation is complete.

After the liberalisaion of the bankruptcy regime by the Government it is expected that bankruptcy cases will increase.

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Bad Debt Loans- Old Days Are Gone Now

There was a time when lenders use to see bad credit holders as potentially risky customers to lend money to. But with the increasing number of people having poor credit, lenders started seeing a huge potential of market in there and came up with financing plans especially for adverse credit holders.

A person can get bad credit tag due to defaults in previous debts, arrears, declaration of bankruptcy, CCJ etc. it means that credit rating of that person is below 620 which is not seen as a good one in loan market. But loans for bad debthave totally reversed the situation enabling bad credit holders also to secure cash when they need it.

Use of loaned amount
These loans can be taken in any form – bad credit home loan, bad credit car loan or bad credit personal loan etc. and use of the money depends on the which scheme you have applied for. But you have a certain degree of freedom to use the money wherever you want.

The types:
These loans can be secured in secured or unsecured forms. In case of secured ones collateral has to be placed against the money and it will help to negotiate with the lender to certain degree. But with unsecured bad debt loans there is no need of any security.
These loans can be applied for either long term or short term scheme. In case of the first one, money can be repaid within 10 to 25 years and rate of interest rate will be less. But with short term repayment term will be 3 to 5 years and interest rate will be high. Being, regular in repayment will help you to improve your credit score.

Any amount in the range of £10000 to £25000 can be secured. Interest rate will vary from lender to lender. These loans are available in banks, private loan lending agencies or from online lenders also.

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Anatomy of a Home Equity Loan

Introduction

Home Equity Loans have quickly grown to become one of the greatest and most popular loan types in the world today. The idea that a person that is a home owner can go ahead and get a loan taken out on their home in order to deal with any emergency situations that might crop up is something that allows a lot of people to rest easy at night and ultimately the people that are able to rest easy are going to have lower stress levels and a better all around existence specifically because of the presence of the option of the home equity loan in their lives. Now, home equity loans are quite good and what is even better is being able to understand the anatomy of a home equity loan and exactly how it shakes out in a number of different areas.

Interest Rates

One of the biggest questions that people usually have regarding home equity loans is the question of interest rates. When you take a look at the different interest rates that are available and indeed you take a look at the interest rates for other types of loans in comparison to the home equity loan, what you immediately find is that the people that are interested in getting the home equity loan for themselves pay a much lower interest rate on average than people that are involved in other loans. This is because home equity loans have been created from a structural point of view to resemble mortgages. The average mortgage has an interest rate between 5% and 7% annually and when you look at the average home equity loan, you find the same thing is true as well.

Monthly Repayment Amounts

When you look at the different monthly repayment amounts for the different loans available on the market today, you tend to the see the exact same thing when comparing them to home equity loans that you did with the interest rates. Namely that home equity loans usually tend to be on average 10-20% lower per month in terms of the monthly repayment amounts. This is because of the presence of strong collateral (property is the strongest collateral imaginable in a free market society) as well as the longer term lengths when it comes right down to the actual loan deal itself.

Fees

Now, home equity loans, just like mortgages, sometimes carry a fee schedule with them. The fee schedule is an idea that financial institutions to a large degree have borrowed from credit cards, because for the longest time mortgages were not as restrictive as they are in today’s world. When you take a look at the mortgages and home equity loans in today’s society, what you eventually see is that the fees tend to revolve around things like late payments, underpayments and even overpayments in certain agreements. Either way, the fees are not really a big part of most loan agreements, but it is worth mentioning that they might be there for full disclosure.

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An Analysis Of Journal Communications (JRN)

Journal Communications (JRN) is comprised of seven essentially separate businesses: The Milwaukee Sentinel, Community Newspapers, Television Stations, Radio Stations, Telecommunications, Printing Services, and Direct Marketing. The company’s five reportable segments do not exactly match these seven businesses; however, I believe an investor should analyze JRN on the basis of these seven businesses and their constituent properties, rather than as a single going concern with five reportable business segments. Additional reasons for this belief will be outlined below. For now, it is sufficient to say that if Journal Communications were to divide into seven separate public companies, the combined market value of those companies would be substantially greater than JRN’s current enterprise value. Simply put, the sum of the parts would be valued more highly than the whole.

Journal Communications has an enterprise value of just under $1 billion. Pre-tax owner’s earnings are probably around $125 million. So, JRN trades at eight times pre-tax owner’s earnings. That’s cheap.

Journal’s effective tax rate is 40%. That is an unusually high rate. Journal’s media properties would likely generate more after-tax income under different ownership. The difference would be material; but, for anyone other than a highly leveraged buyer, tax savings would not be a primary consideration. When evaluating Journal as a going concern, it is perfectly appropriate to treat the full 40% tax burden as a reality. These taxes reduce owner’s earnings by $50 million.

With after-tax owner’s earnings of $75 million and an enterprise value of $1 billion, Journal’s owner’s earnings yield is 7.5%. Remember, this is the after-tax yield. The pre-tax yield is 12.5%. When evaluating a company, it’s best to use the pre-tax yield for purposes of comparison. Last I checked, the 30 – year Treasury bond was yielding 4.63%. So, looking at JRN’s current earnings alone, the stock appears to offer a large margin of safety.

This is especially true if you consider the fact that earnings yields offer more protection against inflation than bond yields. They don’t offer perfect protection. But, with stocks, there is at least the possibility that nominal cash flows will increase along with inflation. The cash flows generated by bonds are fixed in nominal terms, and therefore offer no protection against inflation.

When evaluating a long-term investment, such as a stock, I do not use a discount rate of less than 8%. This reduces JRN’s margin of safety considerably. Instead of being the difference between 12.5% and 4.63%, Journal’s margin of safety is the difference between 12.5% and 8%. Is such a margin of safety sufficient? Maybe.

When evaluating a prospective investment, I first look at the risk of a catastrophic loss. What is the magnitude? And what is the probability? For my purposes, a catastrophic loss is defined as any permanent loss of principal. The risk that I’ve overvalued a business is always greater than my risk of catastrophic loss, because I insist upon a margin of safety. A catastrophic loss is one that wipes out the entire margin of safety.

I can make a bad investment without suffering a catastrophic loss. For instance, most mutual funds are bad investments, because they underperform alternatives. However, mutual funds do not usually carry a high risk of catastrophic loss. In fact, they generally have a low risk of catastrophic loss, because they are highly correlated to the overall market.

It’s easiest to understand this concept if you think of valuing companies as being a lot like writing insurance. Even if reality exceeds your expectations in nine out of every ten cases, a terrible misjudgment in the tenth case can cause you great harm. It isn’t just how many mistake you make. It’s also how big they are.

Some stocks, like Google (GOOG), trade at prices that allow for catastrophic losses of considerable magnitude. Other stocks, like Journal Communications, trade at prices that only allow for very small losses to principal. However, there is also the matter of probability. How likely is it that a Google shareholder will suffer a catastrophic loss? I don’t know. I’m not even willing to hazard a guess.

In the case of Journal Communications, I am willing to stick my neck out.

I believe an investment in JRN carries a very low risk to principal – considerably less than, say, an investment in the S&P 500. Why? Because Journal Communications is trading at a very modest owner’s earnings multiple. But, that isn’t the only reason. You shouldn’t look at Journal solely from a going concern perspective. JRN mainly consists of readily saleable properties. The assets backing shares JRN are quite substantial:

Publishing

The Milwaukee Journal Sentinel: Milwaukee’s only major daily and Sunday newspaper. The Sunday edition has the highest penetration rate (72%) of any Sunday newspaper in the top 50 U.S. markets. The daily edition has the third highest penetration rate (49%) of any daily newspaper in the top 50 U.S. markets. The paper has a daily circulation of 240,000 and a Sunday circulation of 425,000.

The Milwaukee Journal Sentinel also operates three websites. JSOnline.com and OnWisconsin.com generate advertising revenue. PackerInsider.com is a subscription – based website.

Over the last three years, both daily circulation and Sunday circulation have decreased by about 1% annually. Full run advertising linage has also fallen by a similar amount; however, after accounting for increases in part run advertising and preprint pieces, it appears there has been no real decrease in total advertising.

The Journal Sentinel generates approximately $230 million in revenue. Advertising accounts for 80% of the Journal Sentinel’s revenue (the other 20% is circulation revenue). Advertising revenue is somewhat cyclical, and may currently be above “normal” levels.

It’s difficult to value the Journal Sentinel, because JRN places the Journal Sentinel and its community newspapers under one reportable segment. Even if the numbers for the Journal Sentinel were broken out, I would have still have some difficulty coming up with an exact figure, because I’m not an expert on newspapers.

Having said that, I can’t see how the Journal Sentinel could be worth less than $250 million or more than $500 million. If I had to put a dollar figure on the Journal Sentinel, it would probably be in the 250 – $300 million range. I’d like to think this is a conservative estimate, but I don’t know enough about newspapers to be sure. JRN’s failure to break out the numbers for the Journal Sentinel apart from the community newspapers complicates the issue. However, I am quite confident the Journal Sentinel is worth no less than $250 million.

It’s even more difficult to value JRN’s Journal Community Publishing Group. It consists of 43 community newspapers, 41 shoppers, and 9 niche publications (automotive, boating, etc.). The group generates about $100 million in revenue. I can’t value this group apart from the Journal Sentinel, because of the aforementioned lack of disclosure (combining the group with the Journal Sentinel for reporting purposes), my inability to find enough public information on community newspaper businesses, and other such factors.

The best I can do is offer an educated guess as to the combined value of JRN’s publishing business. My best guess is that, taken together, the Journal Sentinel and the community newspapers are probably worth somewhere between $300 million and $500 million.

Broadcasting

Journal Communications owns 38 radio stations. The most important of which are: WTMJ-AM Milwaukee, KMXZ-FM Tucson, KFDI-FM Wichita, and KTTS – FM Springfield (MO). All four of these stations are number one in their market. JRN’s radio stations generate about $80 million in revenue.

Journal Communications owns seven television stations. Almost all of these stations are ranked as one of the top three in their market. Three are NBC affiliates, three are ABC affiliates, and one is a Fox affiliate. JRN owns two stations in Milwaukee, two in Idaho, one in California, one in Michigan, and one in Nevada. Journal’s TV stations generate about $90 million in revenue.

Again, it’s too hard for me to value JRN’s TV stations and radio stations separately. Taken together, I believe they’re worth somewhere between $250 and $450 million.

Telecommunications

JRN owns a 3,800 mile network in the Great Lakes region. Norlight Telecommunications generates about $150 million in revenue. I’m very hesitant to make any attempts to value this division, because I don’t understand the telecom business well enough. Having said that, I don’t see how it could be worth much less than $350 million.

Miscellaneous

I don’t like the printing services and direct marketing business at all. I have no idea how to value them. They do have revenues though; so, they are probably worth something to someone. Revenues from these two businesses exceed $100 million, but they are not very profitable.

Real Estate

JRN owns a surprising amount of unencumbered real estate. For the most part, such properties are closely tied to one of JRN’s operating businesses. As long as JRN continues as a going concern, much of the real estate could not be sold. Just to give you some idea of the extent of these properties, it appears JRN owns a little less than two million square feet – much of which is in or around Milwaukee. I can not accurately value such real estate. As I said, much of it is closely tied to operating activities. However, buildings in urban areas can sometimes be converted to other uses.

It hardly matters though. Journal Communications is likely to remain a going concern for some time, and as long as it does, it is unlikely to dispose of such assets.

Valuation

So, what is JRN worth? It’s hard to say. The current enterprise value is around $1 billion, which is clearly too low. My most conservative estimates for the publishing, broadcasting, and telecom businesses alone add up to $900 million. I think those are very conservative estimates. Using more reasonable estimates, I can not arrive at a value of less than $1.25 billion for JRN’s constituent parts. This is true whether I perform an intrinsic value analysis on the entire company, or apply some sort of earnings, sales, or EBITDA multiple to each business separately.

Journal Communications is probably worth somewhere between $1.25 billion and $2 billion. I’m quite pessimistic about the newspaper business; therefore, I would lean towards the $1.25 billion figure (which assumes slightly declining revenues). Any sort of revenue growth would dramatically change the valuation. If such growth will occur, JRN is extremely undervalued at these levels. However, I’m not sure there will be any growth at all.

Journal Communications voting structure will probably discourage the best course of action: breaking up the company. JRN should spin off the community newspapers, the TV stations, the radio stations, and the telecom business. The printing services and direct marketing businesses should also be disposed of in some way. These are really very different businesses. There are few good reasons for keeping them together, and many good reasons for separating them.

Newspapers, radio, and TV all face different challenges. They need different managers who have complete control over capital allocation and who are compensated based on the performance of their business, not on the performance of a hodge-podge of various media properties. Breaking JRN up will make it easier to manage and will make it easier for current owners to dispose of their shares at more favorable prices should they wish to.

If these businesses traded as five or six different public companies, it is very unlikely their combined market cap would be less than $1 billion. It may not even be necessary for them to be publicly traded. There might be buyers for such properties, if JRN’s properties were separated into common sense collections.

But, none of this is likely to happen. Employees control JRN (they maintain control through the ownership of shares with disproportionate voting rights). No one interested in shaking things up will take a stake in this company, because he would be unable to impose his will. I can’t imagine management ever embarking on such a sweeping venture without some prodding from the outside.

JRN has almost no downside. Sadly, it doesn’t seem to have a lot of upside either. There is a real danger investors will see their returns wither away as the time it takes to realize the value in Journal Communications proves costly. Time is the enemy of the investor who buys this kind of business at this kind of price.

Objectively, I have to admit JRN is undervalued. But, I’m not sure it’s grossly undervalued – and I am sure there are better long term investments.

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American Express Blue Cards: Which Blue Is For You?

Times certainly have changed for American Express. Gone are the days where the American Express card was simply a charge card that had to be paid off in full every month. Yes, the old workhorse – the green card – is still available and popular too. However, American Express decided to take MasterCard and VISA on directly by offering its own line of credit cards. These “blue” cards have been such a hit with consumers that the admired financial giant is now offering four different blue cards from which consumers can choose. Each American Express blue card is different, so let’s take a look at just what makes each one so special.

American Express Sky Blue, The Ultimate Travel Rewards Card

Sky Blue – If you are tired of all those rewards cards that promise you a weekend in Las Vegas, but can only deliver you an overnight stay in Providence, then the Sky Blue card should appeal to you. Touted by American Express as putting an end to travel reward card restrictions, Sky Blue goes where no other American Express blue card has gone before it. With absolutely no black out dates and no travel restrictions, the Sky Blue card allows for card holders to travel where they want, when they want. But, it even gets better: 0% introductory APR and no annual fee; discounts on airline tickets, hotel stays, and car rentals. You even get free coverage on rental car insurance and travel accident insurance with Sky Blue.

Blue Cash For Cold, Hard Cash

Blue Cash – If it is cold, hard cash that you want, then there isn’t a card that matches the American Express Blue Cash card. This is no 1% or 2% cash back card; the Blue Cash card is one that really works for card holders as it gives back 5% cash on just about everything you buy. Save 5% on gas. Save 5% on drugstore visits, on the bills you pay, and on so much more. Best of all, you don’t have to worry about redeeming your points as every year American Express will give you your earnings back to you in the form of a big fat credit to your account!

The Original Blue: The American Express Blue Card

Blue – The American Express Blue card was the card that got the whole blue movement rolling. Although it isn’t as power packed with the features found in Sky Blue or Blue Cash, the Blue card is still a worthy choice. If you select “Blue” you get 0% APR for up to 15 months, 4.99% APR on balance transfers for the life of the loan, and you will earn points toward the American Express free rewards program. Yes, there is no annual fee with the Blue card either!

Jet Blue: The Airline And The Card

Jet Blue – Named for the airline it represents, the American Express Jet Blue card allows card holders to accumulate points toward free Jet Blue Airways flights. Using the card the very first time nets users a cool 5,000 points right off the bat. You can also get double points at many places where you like to shop or eat.

As you have read, the competition for credit card carrying customers is heating up. With an American Express Blue Card you can receive benefits not available to customers of competing card companies. What are you waiting for? Put an American Express Blue Card in your wallet today and reap all of the rewards!

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American Dream Down Payment Initiative

It is no secret that one of the things that keep the middle class going in our country is home ownership. One program is making the dream come true for more and more people.

American Dream Down Payment Initiative

On December 16th, 2003, the American Dream Down Payment Initiative was signed into law. After years of debating and rewriting, the initiative finally became a practical, useful program for Americans.

The American Dream Down Payment Initiative authorizes up to $200 million annually to be spent between the years 2004 and 2007. The funds are provided to state and local institutions to fund programs that help increase home ownership in the United States. Alas, this is one of the positive ways the government uses our tax dollars!

The American Dream Down Payment Initiative was passed with the aim to help increase home ownership in the United States. This initiative is aimed primarily at low income families and minorities, groups that have had traditionally low rates of home ownership. The initiative seeks to help first time homeowners to overcome the two primary problems faced when buying a home: down payment costs and closing costs. The American Dream Down Payment Initiative can be used to help with down payment costs, closing costs, and rehabilitation assistance to any who fall eligible under the initiative. The amount of assistance provided cannot exceed $10,000 or 6 percent of the value of the home, whichever is greater.

HUD is the facilitator of the program on the federal level. Per its guidelines, the program is available to first time homebuyers purchasing single family housing properties. A first time buyer is a person who has not owned a home in the previous three years, an odd definition if you think about it. Those falling with the definition can use the funds in the purchase of up to four person family housing, condominium unit, cooperative unit, or manufactured housing.

The American Dream Down Payment Initiative is a nice little government program helping first time buyers realize the American Dream of homeownership. It ends in 2007, so make sure to take advantage of it while you can.
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America Turning Into A Nation Of Hamburger Flippers

While Wall Street and Washington debate the technical definitions of a recession, the fine print of the US Census Bureau reports reveals a startling statistic: US employment figures incorporate a huge proportion of what can best be called casual, temporary and seasonal jobs. We all know that the old-fashioned manufacturing jobs have gone to China. But many of those trying to pick the market bottom today are unaware of the fact that the ranks of store-front clerks, restaurant workers, yoga teachers and delivery personnel--to name just a few categories—have all served to boost the employment data in recent months and years.

Then, of course, the wars in Iraq and Afghanistan have made their own contribution to the US employment data. At least 150,000 working-age, non-military men and women are doing their bit in the conflict zones; so they don’t figure in the compilation of jobless Americans. And, at home, defense orders have required arms and war-related equipment manufacturers to hire new workers since 2003. “If we decide to bring our troops back today, the economic crisis will deepen, almost immediately,” one Wall Street analyst conceded on condition of anonymity. “Very few of those returning will find any decent jobs.”

In actual fact, American economists right across the political spectrum are unable to recognize the fact that the global economy is nowhere as robust as was being commonly proclaimed just a few short months ago. A closer look at the engines supposedly driving global demand, namely China and India, will show that the statistical information derived from repeated government announcements concerning GDP performance was extremely shallow, even misleading. Very briefly, in the case of China, foreign investors failed to take into account the impact of loose credit and inflated real estate values; in the case of India, western analysts have proven themselves incapable of either estimating the potentially devastating influence of one bad harvest or the phenomenal role black money plays in the day to day lives of ordinary citizens. [The term “black money” is used to describe an amazingly broad range of tax avoidance schemes and criminal activities; certain knowledgeable observers point out that the sheer size of India’s underground economy exceeds 50% of India’s GDP].

In an appearance on CNN’s Larry King Live yesterday, Donald Trump emphasized that the US is in a recession today, and that the true extent of the problems relating to housing and credit cards was still to unfold in coming months. Mr. Trump laughed off Washington claims that “the structural foundations of the economy are strong”, and for very good reason. Because that claim is largely unsubstantiated: perhaps for fear of political repercussions, nobody in authority is willing to detail those structural foundations on the record.

There are simply too many powerful underlying factors playing a role in shaping America’s future: oil prices, debt default, global demand, commodity prices, foreign exchange rates, international trade and, lest we forget, the war on terror. Whether any or all of those factors can be construed as “structural foundations” is best left for the academicians.

But, theory apart, there are two compelling realities to contend with right away. Firstly, neither President Bush nor any of the presidential hopefuls have produced a thoroughly researched position paper addressing the complexity of the situation. Secondly, all those rosy predictions of increasing demand (for virtually everything) from the developing world are coming back to haunt forecasters. In other words, a deteriorating situation is being compounded by ignorance, or intellectual dishonesty, or both.

As far as the employment statistics are concerned, the change of seasons will help perpetuate the “all’s well with the world” illusion. As spring sets in, the job matrix will again expand—deck chair and patio salesmen, gardening and swimming pool assistants, bar tenders, life guards and gym instructors. Not to mention the apparently ever-expanding world of hamburgers, pizzas, tacos, donuts and coffee cups.

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America Turning Into A Nation Of Hamburger Flippers

While Wall Street and Washington debate the technical definitions of a recession, the fine print of the US Census Bureau reports reveals a startling statistic: US employment figures incorporate a huge proportion of what can best be called casual, temporary and seasonal jobs. We all know that the old-fashioned manufacturing jobs have gone to China. But many of those trying to pick the market bottom today are unaware of the fact that the ranks of store-front clerks, restaurant workers, yoga teachers and delivery personnel--to name just a few categories—have all served to boost the employment data in recent months and years.

Then, of course, the wars in Iraq and Afghanistan have made their own contribution to the US employment data. At least 150,000 working-age, non-military men and women are doing their bit in the conflict zones; so they don’t figure in the compilation of jobless Americans. And, at home, defense orders have required arms and war-related equipment manufacturers to hire new workers since 2003. “If we decide to bring our troops back today, the economic crisis will deepen, almost immediately,” one Wall Street analyst conceded on condition of anonymity. “Very few of those returning will find any decent jobs.”

In actual fact, American economists right across the political spectrum are unable to recognize the fact that the global economy is nowhere as robust as was being commonly proclaimed just a few short months ago. A closer look at the engines supposedly driving global demand, namely China and India, will show that the statistical information derived from repeated government announcements concerning GDP performance was extremely shallow, even misleading. Very briefly, in the case of China, foreign investors failed to take into account the impact of loose credit and inflated real estate values; in the case of India, western analysts have proven themselves incapable of either estimating the potentially devastating influence of one bad harvest or the phenomenal role black money plays in the day to day lives of ordinary citizens. [The term “black money” is used to describe an amazingly broad range of tax avoidance schemes and criminal activities; certain knowledgeable observers point out that the sheer size of India’s underground economy exceeds 50% of India’s GDP].

In an appearance on CNN’s Larry King Live yesterday, Donald Trump emphasized that the US is in a recession today, and that the true extent of the problems relating to housing and credit cards was still to unfold in coming months. Mr. Trump laughed off Washington claims that “the structural foundations of the economy are strong”, and for very good reason. Because that claim is largely unsubstantiated: perhaps for fear of political repercussions, nobody in authority is willing to detail those structural foundations on the record.

There are simply too many powerful underlying factors playing a role in shaping America’s future: oil prices, debt default, global demand, commodity prices, foreign exchange rates, international trade and, lest we forget, the war on terror. Whether any or all of those factors can be construed as “structural foundations” is best left for the academicians.

But, theory apart, there are two compelling realities to contend with right away. Firstly, neither President Bush nor any of the presidential hopefuls have produced a thoroughly researched position paper addressing the complexity of the situation. Secondly, all those rosy predictions of increasing demand (for virtually everything) from the developing world are coming back to haunt forecasters. In other words, a deteriorating situation is being compounded by ignorance, or intellectual dishonesty, or both.

As far as the employment statistics are concerned, the change of seasons will help perpetuate the “all’s well with the world” illusion. As spring sets in, the job matrix will again expand—deck chair and patio salesmen, gardening and swimming pool assistants, bar tenders, life guards and gym instructors. Not to mention the apparently ever-expanding world of hamburgers, pizzas, tacos, donuts and coffee cups.

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Always Compare Prices

If you are anything like me, you have to abide by a strict budget in order to see all of your bills taken care of each month. Most months there aren't extra dollars laying around to be spent freely on anything you want. Sure, you might splurge on an occasional coffee or two, but for the most part the money you earn goes right to keeping you living each month. I have discovered a small but significant way to help curb my expenses and allow for a small amount of 'fun money' each month. Compare prices. It sounds simple and obvious, but my spending habits changed drastically once I began to always compare prices.

One of the biggest areas that I benefited from learning to compare prices is in grocery shopping each week. Rather than just running off to whatever store is closest or more convenient to me, I began to really search the ads and flyers to determine which stores would give me the best deals on the items I needed. I began each week by making a list of all of the grocery items I needed and then I only allowed myself to compare prices for those things. I didn't let myself just go to the store and fill my cart with whatever caught my eye. No, I had a list and I took time to carefully compare prices.

Alternatives To Filing Bankruptcy?

There is just no easy way to get out of debt, you have to face up to the consequences. A bankruptcy is not always the answer, as the effects are long lasting. There are four ways to handle debts that are out of control, listed in best to worst in regards to the effect it will have on your credit:

If your credit isn't in terrible shape, can you reduce your other expenses, even if it means making hard choices or just change your lifestyle to fit your income? Some ways to do this:

Alternatives:

Selling the second car
Pulling equity out of your home

Alternatives To Bankruptcy

Many people want to file bankruptcy the moment they realize they are in over their heads, and they feel like there is nothing they can do to get out of debt. Bankruptcy however, should be used as an absolute last resort- after all other options have been thoroughly researched and exhausted.

Before making the decision to file bankruptcy, consider each of the following alternatives:

• Refinancing
• Debt Consolidation
• Debt Settlement
• Debt Negotiation

If after you’ve considered each bankruptcy alternative, you still find that your personal debts are greater than the money you have available to make payments each month, you may have no choice other than bankruptcy.

Alternative Energy Investments

The following is an excerpt from the book Black Gold
by George Orwel
Published by Wiley; June 2006;$27.95US/$35.99CAN; 0-471-79268-3
Copyright © 2006 George Orwel


The oil market is not the only one looking up. Alternative fuel stocks are also attracting many investors. Because oil and gas are expensive, Americans are looking for cheaper nonfossil fuel and that demand is boosting the alternative fuel stocks as well. This is especially good for anyone who cares for the environment -- the greens. If you consider yourself an environmentalist or a preservationist, this is perfect for you, for you are now able to support efforts to preserve the environment while at the same time profiting from those efforts. It's a win-win situation. Consider this: Pacific Ethanol Inc., a small ethanol-producing company started in 2003 by Bill Jones, the former secretary of state for the state of California, has trebled its stock price on NASDAQ to about $30 a share within a year of going public in March of 2005. Like many other similar renewable fuel start-ups, millions of dollars in private equity money are being thrown at Pacific Ethanol like the world is coming to an end. Billionaire Bill Gates, the chairman of Microsoft, is one of those investing in renewable fuel stocks. Gates' investment company, Cascade Investment, has agreed to pump $84 million in Pacific Ethanol.

The U.S. government has recognized alternative fuel as the fuel for the future and has included a number of tax incentives in the Energy Policy Act of 2005, the energy law signed in the summer of 2005, to spur growth in the alternative fuel sector. If you haven't already, you should give alternative stocks a try as it will make you feel morally stronger. It's been nearly three decades since efforts to promote alternative fuel floundered after the 1973 oil crisis, but it's making a comeback. Still, alternative fuel remains a small industry, with small cap companies dominating. Since 2005, 15 of the 36 companies in the WilderHill Clean Energy index have made huge profits. That includes hydroelectric power and wind energy, solar energy, and fuel cells.

Some of the most successful companies in the renewable fuel sector are huge conglomerates, like General Electric and Germany's Siemens, and also big oil companies, like BP, that are hedging their bets. Investing in these companies offers a chance to own a clean energy stock. Here's some information about GE worth knowing: It made close to $2 billion in sales from production of wind-powered turbines in 2005, treble what it made from that business unit in 2002. However, that's only 1 percent of GE's revenues.

There's a lot of hope that alternative fuel technologies developed by some of the smaller companies will become commercially viable and help support the sector. As a result, stocks for these companies are expected to soar. WilderHill Clean Energy Index gained 26 percent in the past 12 months alone, compared with 50 percent for oil. That's not bad, considering this is not an established sector in the United States.

Moreover, since continued oil supply is uncertain, a lot more consumers are going to turn to coal, which is abundantly available in the United States, China, and India. Coal used to be frowned upon because of its dirt, but technology has improved enough to make it just as clean as other fuels. Shrewd investors could buy shares in U.S. coal producers, including the two biggest, Peabody Energy Corp. and Arch Coal Inc., both based in St. Louis, Missouri. Coal companies have profited from the current oil boom.

Investing in coal doesn't mean that Big Oil isn't safe anymore. It only means that you are on much firmer ground when you have a diversified portfolio. If you look at both types of stocks, the difference isn't large. Exxon Mobil, for instance, returned 36 percent to its shareholders in market appreciation and dividends in 2005 and BP returned 21 percent. Peabody Energy stockholders, meanwhile, did far better in the same time period. They more than doubled their money, and Peabody shares have risen more than three and a half times since the company's initial public offering in 2001. Arch Coal stock returned 65 percent in 2005 as well.

Coal producers have benefited from increased demand from power plants and steelmakers in the United States, China, and India. Massey Energy Co. of Richmond, Virginia, for instance, said its average selling price for coal used in steel-making jumped 38 percent in 2005. Consol Energy, Inc. of Pittsburgh, the third largest U.S. producer, plans a $500 million mine expansion to keep up with orders.

Soaring prices for natural gas have given coal demand another lift. Many electric power plants have switched from gas to coal, which costs about half as much. In the spring of 2006, Duke Energy Corp. closed on a deal purchasing Cinergy Corp. for about $9 billion, in large part because of Cinergy's coal-fired plants.

Back to oil, we've also seen that the market has been good to minnows as well. In fact, some smaller oil companies also have outperformed the giants. For instance, Apache Corp. of Houston produced a 12-month total return of 51 percent for its stockholders, helped by increased first-quarter selling prices of 51 percent for crude oil and 11 percent for natural gas. Apache recently bought property from Shell, BP, and Exxon Mobil and its profit rose tremendously in 2005. Oil transport companies have not been left behind. Overseas Shipholding Group of New York made an acquisition in 2005 that made it the world's second-largest oil tanker company. The bigger fleet, combined with higher tanker rates, boosted the company's 2005 earnings by about 40 percent. The world's biggest owner of oil tankers, Teekay Shipping Corp. of Vancouver, Canada, capitalized on high energy prices in yet another way. In the fall of 2005, Teekay raised $132 million through the public sale of a 20 percent interest in Teekay LNG Partners LP, whose ships carry liquefied natural gas and crude oil.

Is it too late to buy energy stocks, large or small? BlackRock, Inc., which manages $391 billion, doesn't seem to think so. It reported to the SEC in late summer of 2005 that after $870 million in purchases, it owned stakes in Peabody, Arch, Consol, and Massey ranging from 3.3 to 8.8 percent. The money manager also has a 4.7 percent stake in Newfield Exploration Co., an oil-and-gas company that returned 49 percent to its shareholders in 2005.

The bottom line is this: The world needs a lot of energy, but supply is getting tighter; an "├╝berspike" in oil prices is in the making and the potential rewards for the savvy energy investor are huge.

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