WalletPop Blog http://www.walletpop.com/blog WalletPop Blog http://www.walletpop.com/blog/media/feedlogo.gif WalletPop Blog http://www.walletpop.com/blog en-us Copyright 2009 Weblogs, Inc. The contents of this feed are available for non-commercial use only. Blogsmith http://www.blogsmith.com/Judge's ruling against LifeLock both good and bad for consumershttp://www.walletpop.com/blog/2009/05/29/judges-ruling-against-lifelock-both-good-and-bad-for-consumers/http://www.walletpop.com/blog/2009/05/29/judges-ruling-against-lifelock-both-good-and-bad-for-consumers/http://www.walletpop.com/blog/2009/05/29/judges-ruling-against-lifelock-both-good-and-bad-for-consumers/#commentsFiled under: , ,

A recent federal judge's ruling says that LifeLock is breaking California law when it puts credit alerts on consumer files at credit reporting agencies.

The lawsuit was brought last year by credit reporting agency Experian, which alleged that LifeLock was abusing the fraud alert system to make money off its customers.

Fraud alerts came on the scene in 2003, when a new law allowed consumers to put alerts on their credit files if they believe they have been a victim of identity theft or are at serious risk of becoming a victim of identity theft. The fraud alert means that creditors are supposed to contact you directly before opening a new line of credit in your name.

In reality, that doesn't always happen. Creditors may see a fraud alert on your report, but not take any steps to verify that it's really you trying to obtain credit. The law says they should try to phone you at the telephone number on your credit file, but beyond that, there's no guidance and apparently little recourse if the creditor doesn't follow through. For this reason, I caution consumers against putting much faith in the fraud alerts to begin with.

Continue reading Judge's ruling against LifeLock both good and bad for consumers

Judge's ruling against LifeLock both good and bad for consumers originally appeared on WalletPop Blog on Fri, 29 May 2009 14:00:00 EST. Please see our terms for use of feeds.

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]]>identity theftIdentityTheftlifelockTracy CoenenFri, 29 May 2009 14:00:00 ESTHow many times should consumers pay the banks?http://www.walletpop.com/blog/2009/04/15/how-many-times-should-consumers-pay-the-banks/http://www.walletpop.com/blog/2009/04/15/how-many-times-should-consumers-pay-the-banks/http://www.walletpop.com/blog/2009/04/15/how-many-times-should-consumers-pay-the-banks/#commentsFiled under:

This story will come as no surprise to many WalletPop readers. Banks are raising interest rates across the board and it's upsetting consumers. If you've had some trouble with your finances, you're probably expecting your credit card company to penalize you in some way.

But if you've been paying your bills on time and have a strong credit score, the rising interest rates on credit cards seem unfair. We're talking double digit rate increases for many credit card users. The banks say it's simple: They have too much money at risk and they need to generate some profits. This is a surefire way to do it.

But how many times must consumers bail out the banks? As taxpayers, we're on the hook for the bill for all the bailout madness. It seems like we've already made our involuntary contribution to the banks. Why should we be hit again with rate increases?

Continue reading How many times should consumers pay the banks?

How many times should consumers pay the banks? originally appeared on WalletPop Blog on Wed, 15 Apr 2009 16:00:00 EST. Please see our terms for use of feeds.

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]]>bailoutTracy CoenenWed, 15 Apr 2009 16:00:00 ESTThe sprint is on for the tax deadlinehttp://www.walletpop.com/blog/2009/04/15/the-sprint-is-on-for-the-tax-deadline/http://www.walletpop.com/blog/2009/04/15/the-sprint-is-on-for-the-tax-deadline/http://www.walletpop.com/blog/2009/04/15/the-sprint-is-on-for-the-tax-deadline/#commentsFiled under:

Today's the big day, for those of you wanting to file their taxes on time, and there are plenty of people sprinting toward that finish line. There are also plenty of procrastinators.

Based on the numbers collected by TurboTax when its users file their taxes online, Intuit has compiled a list of the cities with the most tax procrastinators. And from the looks of it, most of those in the top ten are repeat performers, making their inclusion in this list next year almost a sure thing.

Here are the top ten procrastinating cites when it comes to filing taxes:

Continue reading The sprint is on for the tax deadline

The sprint is on for the tax deadline originally appeared on WalletPop Blog on Wed, 15 Apr 2009 07:00:00 EST. Please see our terms for use of feeds.

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]]>extensionIntuittaxesTurbotaxTracy CoenenWed, 15 Apr 2009 07:00:00 ESTTaxpayer money to help GM through bankruptcyhttp://www.walletpop.com/blog/2009/04/14/taxpayer-money-to-help-gm-through-bankruptcy/http://www.walletpop.com/blog/2009/04/14/taxpayer-money-to-help-gm-through-bankruptcy/http://www.walletpop.com/blog/2009/04/14/taxpayer-money-to-help-gm-through-bankruptcy/#commentsFiled under: , ,

If General Motors is going bankrupt, why are we still pumping taxpayer money into it? Beats me, but now the word is that GM is well on its way to bankruptcy and the government (that's us, taxpayers) will have to kick in $77 billion to help that bankruptcy go smoothly.

Here's how it supposedly will work: GM will file bankruptcy around June 1. The type of bankruptcy it will file won't mean that GM will be out of business. Rather, it will restructure (hopefully with a business model that is actually sustainable). In addition to the $13.4 billion GM has already gotten from the taxpayers, another $77 billion would be added to the tab.

Continue reading Taxpayer money to help GM through bankruptcy

Taxpayer money to help GM through bankruptcy originally appeared on WalletPop Blog on Tue, 14 Apr 2009 11:00:00 EST. Please see our terms for use of feeds.

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]]>bankruptcygeneral motorsGeneralMotorsgmTracy CoenenTue, 14 Apr 2009 11:00:00 ESTI didn't run a Ponzi scheme. Honest!http://www.walletpop.com/blog/2009/04/08/i-didn-t-run-a-ponzi-scheme-honest/http://www.walletpop.com/blog/2009/04/08/i-didn-t-run-a-ponzi-scheme-honest/http://www.walletpop.com/blog/2009/04/08/i-didn-t-run-a-ponzi-scheme-honest/#commentsFiled under: ,

The latest news in the case of the alleged $8 billion Ponzi shceme perpetrated by Allen Stanford is that... he says he didn't do it. Now isn't that clever and unexpected? In an interview with ABC News, Stanford apparently said he didn't really run a Ponzi scheme, and he'd "die and go to hell" if his business was a Ponzi scheme.

Well all right then. That's all I needed to hear. Move along. Nothing to see here.

If only it were that simple. And if only those who invested money with Stanford were going to have such an easy time getting their money back. I say we let Stanford prove that he didn't run a Ponzi scheme. Just go ahead and refund everyone's money to them. If it's not a Ponzi, surely there are funds available?

Stanford says there are funds, but that government agencies have frozen account and other assets in order to hopefully collect for investors. It will be interesting to see how much is really available from those frozen assets. And I'd be thrilled if there really was enough money out there to make investors whole. Somehow, I doubt it.

I didn't run a Ponzi scheme. Honest! originally appeared on WalletPop Blog on Wed, 08 Apr 2009 09:00:00 EST. Please see our terms for use of feeds.

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]]>Allen StanfordAllenStanfordgovernmentinvestingPonzi SchemePonziSchemerip offs and scamsRipOffsAndScamsTracy CoenenWed, 08 Apr 2009 09:00:00 ESTBiggest cigarette tax increase starts now...ready to quit smoking yet?http://www.walletpop.com/blog/2009/04/01/biggest-cigarette-tax-increase-starts-now-ready-to-quit-smokin/http://www.walletpop.com/blog/2009/04/01/biggest-cigarette-tax-increase-starts-now-ready-to-quit-smokin/http://www.walletpop.com/blog/2009/04/01/biggest-cigarette-tax-increase-starts-now-ready-to-quit-smokin/#commentsFiled under: ,

Today the largest increase in the federal tobacco tax of all time is going into effect -- what used to be 39 cents per pack will now be $1.01 per pack. It won't exactly pay the tab of the stimulus package, but it's probably the most palatable to the average Joe.



Typically the easiest way to get a consumer to be in favor of a tax increase is by convincing her or him that someone else will pay it. No one personally wants to pay more in taxes, but if someone else is paying, who really cares? It's even easier to get a consumer to endorse a tax if those paying the tax are made out to be evil villains.

Naughty rich people are often the targets of tax increases. It doesn't matter that they pay an enormously high proportion of the taxes in this country (yes, more than their fair share), they can "afford" more so let's stick it to them.

Continue reading Biggest cigarette tax increase starts now...ready to quit smoking yet?

Biggest cigarette tax increase starts now...ready to quit smoking yet? originally appeared on WalletPop Blog on Wed, 01 Apr 2009 14:00:00 EST. Please see our terms for use of feeds.

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]]>cigarette taxcigarettesCigaretteTaxfeaturedtaxesTracy CoenenWed, 01 Apr 2009 14:00:00 ESTScathing resignation letter from AIG executive published in NY Timeshttp://www.walletpop.com/blog/2009/03/26/scathing-resignation-letter-from-aig-executive-published-in-ny-t/http://www.walletpop.com/blog/2009/03/26/scathing-resignation-letter-from-aig-executive-published-in-ny-t/http://www.walletpop.com/blog/2009/03/26/scathing-resignation-letter-from-aig-executive-published-in-ny-t/#commentsFiled under: , ,

Jake DeSantis, an executive vice president in American International Group's financial products unit sent a pointed resignation letter to Edward Liddy, the head of the company. That letter was published yesterday in the New York Times and provides an interesting perspective on the bonus and bailout situations.

Specifically, DeSantis criticizes Liddy for throwing him and other bonus recipients under the bus following taxpayer outrage at the bonuses paid by AIG. The unit DeSantis was over didn't cause the major financial troubles of AIG. Yet those employees still had to pay the price for the reckless acts of other units within AIG.

During the turmoil, AIG promised employees like DeSantis that they would receive their bonuses defined in contracts previously signed. Many of the employees did make concessions throughout the drama, such as DeSantis, who worked for an annual salary of $1. Yes, $1. And after putting in his time to help AIG come out of this mess, DeSantis and others received their bonuses but have now been asked to return them.

Continue reading Scathing resignation letter from AIG executive published in NY Times

Scathing resignation letter from AIG executive published in NY Times originally appeared on WalletPop Blog on Thu, 26 Mar 2009 09:00:00 EST. Please see our terms for use of feeds.

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]]>aigbailoutfeaturedJake DeSantisJakeDesantisTracy CoenenThu, 26 Mar 2009 09:00:00 ESTOne billion won't go far...for Madoff victimshttp://www.walletpop.com/blog/2009/03/25/one-billion-wont-go-far-for-madoff-victims/http://www.walletpop.com/blog/2009/03/25/one-billion-wont-go-far-for-madoff-victims/http://www.walletpop.com/blog/2009/03/25/one-billion-wont-go-far-for-madoff-victims/#commentsFiled under: , , , ,

Madoff bankruptcy trustee David Sheehan says he's found more than $1 billion around the world that will hopefully be available to investors scammed by Bernie Madoff. Sheehan is on the hunt to find as much money as possible, and I doubt that Bernie Madoff is inclined to give hints about the secret hiding places.

With Madoff victims around the world, there is already fighting over who should take control of the money and other assets. A billion dollars is a lot of money, but unfortunately, it's only fraction of what victims have lost and really won't go very far toward making them whole.

This case continues to shock me, even when I think I've had enough of it. It's shocking that Madoff was allowed to continue living in his $7 million Manhattan apartment instead of in jail. It is appalling that his wife was busy trying to hide money as all this was unfolding.

I'm at the point where I don't think there should be any mercy for Madoff or his wife. They lived the high life on stolen money, and they both should pay for their sins. There are people who have lost everything they own thanks to the Madoff family, and the price must be paid.

One billion won't go far...for Madoff victims originally appeared on WalletPop Blog on Wed, 25 Mar 2009 09:00:00 EST. Please see our terms for use of feeds.

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]]>madoffponziTracy CoenenWed, 25 Mar 2009 09:00:00 ESTIn a frenzy over Ponzihttp://www.walletpop.com/blog/2009/03/24/in-a-frenzy-over-ponzi/http://www.walletpop.com/blog/2009/03/24/in-a-frenzy-over-ponzi/http://www.walletpop.com/blog/2009/03/24/in-a-frenzy-over-ponzi/#commentsFiled under: , , ,

Regulators are going crazy over Ponzi schemes. One regulatory agency has reportedly found 19 Ponzi schemes so far this year, and says that hundreds of reported investment schemes are currently being investigated across America.

Why are all these schemes coming to light? It probably has less to do with the media coverage of Bernie Madoff's scheme, and more to do with the economy. The tough financial climate has caused a lot of people to want to cash out their investments. Cashing out is difficult to do in a Ponzi scheme because the heart of this type of scam is a constant influx of cash. When investors try to cash out (especially if many of them want to do it at once) a Ponzi scheme is likely to be uncovered.

Continue reading In a frenzy over Ponzi

In a frenzy over Ponzi originally appeared on WalletPop Blog on Tue, 24 Mar 2009 10:30:00 EST. Please see our terms for use of feeds.

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]]>ponzi schemePonziSchemepyramid schemePyramidSchemeTracy CoenenTue, 24 Mar 2009 10:30:00 ESTWhat's several thousand credit card numbers between friends?http://www.walletpop.com/blog/2009/03/24/aussie-data-breach-reveals-hidden-danger-of-bankrupt-credit-comp/http://www.walletpop.com/blog/2009/03/24/aussie-data-breach-reveals-hidden-danger-of-bankrupt-credit-comp/http://www.walletpop.com/blog/2009/03/24/aussie-data-breach-reveals-hidden-danger-of-bankrupt-credit-comp/#commentsFiled under: ,

I've always believed that Google is your friend, and it is especially friendly when it's telling you that 19,000 credit card numbers are freely available on the internet. That's what happened to someone in Australia, who received a strange-looking Google Alert.

The alert was triggered by a name that was within a list of about 19,000 credit card numbers and personal information. When the person realized that thousands of credit card numbers were there for the taking on the world wide web, he tried to report it to Visa and Mastercard. Their response? None.

Again and again we hear stories of poor security leading to the compromise of thousands of credit card numbers, along with vital information. This data breach didn't just include credit card numbers, it also offered names, addresses, expiration dates, and the CVV numbers from the backs of the credit cards.

Continue reading What's several thousand credit card numbers between friends?

What's several thousand credit card numbers between friends? originally appeared on WalletPop Blog on Tue, 24 Mar 2009 08:00:00 EST. Please see our terms for use of feeds.

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]]>creditidentity theftIdentityTheftTracy CoenenTue, 24 Mar 2009 08:00:00 ESTBailout bonus rage is midirected.http://www.walletpop.com/blog/2009/03/20/bailout-bonus-rage-is-midirected/http://www.walletpop.com/blog/2009/03/20/bailout-bonus-rage-is-midirected/http://www.walletpop.com/blog/2009/03/20/bailout-bonus-rage-is-midirected/#commentsFiled under: ,

Taxpayers are rightfully outraged at the paying of bonuses to AIG executives, in light of the enormous bailout with taxpayer funds. But the last solution they should want to this problem is a huge tax levied against the recipients of the bonus money.

Sure, a massive income tax sounds good when it's happening to someone else. But what about if it was happening to you? If you think the average taxpayer can't become the victim of a massive money grab by politicians, you're wrong. Even this tax on AIG employees is hitting innocent parties.

How can that be? The tax bill passed by the House of Representatives by a vote of 328 to 93 imposes the income tax on families with income above $250,000 and wages from AIG. What about the family with one spouse working at AIG and another spouse at a separate company? If their income is over $250,000, they're going to be hit by this. Is it fair that the spouse's income (unrelated to AIG) is included in that $250,000 threshold? No, it's not.

Continue reading Bailout bonus rage is midirected.

Bailout bonus rage is midirected. originally appeared on WalletPop Blog on Fri, 20 Mar 2009 15:30:00 EST. Please see our terms for use of feeds.

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]]>aigbailoutbonusTracy CoenenFri, 20 Mar 2009 15:30:00 ESTCould you live on $53,000 (a week)?http://www.walletpop.com/blog/2009/03/19/could-you-live-on-53-000-a-week/http://www.walletpop.com/blog/2009/03/19/could-you-live-on-53-000-a-week/http://www.walletpop.com/blog/2009/03/19/could-you-live-on-53-000-a-week/#commentsFiled under: ,

It's hard for to feel sorry for a woman who is receiving a $43 million divorce settlement, and is still claiming that she can't possibly survive on such a small sum of money. Marie Douglas-David and former investment banker George David are getting a divorce, and of course, fighting over the money. His net worth is estimated at $329 million.

Continue reading Could you live on $53,000 (a week)?

Could you live on $53,000 (a week)? originally appeared on WalletPop Blog on Thu, 19 Mar 2009 14:00:00 EST. Please see our terms for use of feeds.

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]]>divorcegold diggergold diggingGoldDiggerGoldDiggingTracy CoenenThu, 19 Mar 2009 14:00:00 ESTPonzi victim losses tax deductiblehttp://www.walletpop.com/blog/2009/03/19/ponzi-victim-losses-tax-deductible/http://www.walletpop.com/blog/2009/03/19/ponzi-victim-losses-tax-deductible/http://www.walletpop.com/blog/2009/03/19/ponzi-victim-losses-tax-deductible/#commentsFiled under: ,

The Internal Revenue Service issued guidance this week on losses sustained by investors involved in Ponzi schemes like the ones allegedly run by Bernie Madoff and Allen Stanford. In prior years, investors would have been reporting earnings and gains on their investments in these schemes. Now it's known that those profits never existed, and the IRS is saying that taxpayers can take a theft loss deduction.

This deduction is to be taken in the year a fraud is discovered, and is not subject to the same limits that would apply to a normal capital loss. This deduction should only be taken if the investor doesn't have a reasonable chance of recovering his losses.

Tax professionals were speculating whether the IRS would allow Madoff and Stanford investors to go back and amend prior years' tax returns to remove the phantom profits that were reported. The IRS has not addressed this issue publicly, which indicates that this would not be the proper treatment. Instead investors should follow the guidance issued this week that will allow them to take the theft loss deduction.

This seems fair, as investors shouldn't be on the hook for taxes on gains and profits that never actually occurred and that they don't have any chance of actually receiving. This isn't much comfort to those who lost their savings in these schemes, but at least it is clear that the IRS won't heap additional punishment on the victims.

Ponzi victim losses tax deductible originally appeared on WalletPop Blog on Thu, 19 Mar 2009 08:30:00 EST. Please see our terms for use of feeds.

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]]>IRSMadoffStanfordtaxTracy CoenenThu, 19 Mar 2009 08:30:00 ESTWhat do you know about the Federal Reserve?http://www.walletpop.com/blog/2009/03/16/what-do-you-know-about-the-federal-reserve/http://www.walletpop.com/blog/2009/03/16/what-do-you-know-about-the-federal-reserve/http://www.walletpop.com/blog/2009/03/16/what-do-you-know-about-the-federal-reserve/#commentsFiled under:

If I asked you to tell me what the Federal Reserve Bank is, what would you say? Like most consumers, would you say that it's the big bank our Federal government runs for us? Would you be shocked to hear that it's a private corporation that runs our money?

That's right. The Federal Reserve is a private entity that has been given its power by our federal government. And really, it has too much power. It issues currency and it oversees the banks around the country, supposedly ensuring that they're following the banking laws.

This kind of makes me want to start a company, include the word "federal" in the name, and hope consumers are silly enough to think that my company is run by our beloved federal government. How much easier could it get to swindle consumers who aren't educated about their government and financial matters?

Continue reading What do you know about the Federal Reserve?

What do you know about the Federal Reserve? originally appeared on WalletPop Blog on Mon, 16 Mar 2009 12:00:00 EST. Please see our terms for use of feeds.

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]]>federal reserveFederalReserveTracy CoenenMon, 16 Mar 2009 12:00:00 ESTTimes are tough, even for a gigolohttp://www.walletpop.com/blog/2009/03/09/times-are-tough-even-for-a-gigolo/http://www.walletpop.com/blog/2009/03/09/times-are-tough-even-for-a-gigolo/http://www.walletpop.com/blog/2009/03/09/times-are-tough-even-for-a-gigolo/#commentsFiled under: , ,

The jig is up for a Swiss gigolo found guilty of defrauding and blackmailing a German woman. The 44-year-old male escort convinced married BMW heiress Susanne Klatten to give him $9 million, and tried to get millions more from her in return for not outing her for her infidelity.

Continue reading Times are tough, even for a gigolo

Times are tough, even for a gigolo originally appeared on WalletPop Blog on Mon, 09 Mar 2009 18:30:00 EST. Please see our terms for use of feeds.

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]]>extortiongigoloprostituterecessionsex sellsSexSellsTracy CoenenMon, 09 Mar 2009 18:30:00 ESTGuilty plea coming for Bernie Madoff?http://www.walletpop.com/blog/2009/03/09/guilty-plea-coming-for-bernie-madoff/http://www.walletpop.com/blog/2009/03/09/guilty-plea-coming-for-bernie-madoff/http://www.walletpop.com/blog/2009/03/09/guilty-plea-coming-for-bernie-madoff/#commentsFiled under: ,

It's looking like Bernie Madoff of big Ponzi fame will be pleading guilty this week to one count of securities fraud. People are now questioning whether the $50 billion price tag attached to Madoff's scheme is really accurate, or if it just sounds sexy and makes great headlines. But no one's disputing that the guy ripped off investors for billions.

Madoff is allegedly going to be waiving his right to a grand jury indictment, which is one hint that there is likely going to be a guilty plea. Of course, no one is confirming this is what's going to happen, but all the talking heads seem to agree that a guilty plea is all but assured.

Is this good for the public? I don't know. It seems like too easy a resolution to such an egregious act of fraud. However, a quick resolution saves money, hopefully preserving assets for eventual distribution to Madoff's victims. The victims will probably only get pennies on the dollar returned to them, but the absence of a drawn-out investigation and legal proceedings may make more money available to them.

Let's just hope Madoff doesn't get away with just a slap on the wrist. Just like Enron investors, the people who put money with Madoff have, in some cases, lost their entire savings. This is a bad, bad man who has harmed a lot of individuals and organizations, and the financial effects are wide-reaching. Here's to hoping that the punishment he receives is as severe as the crime he's pleading guilty to.

Forensic accountant Tracy Coenen investigates corporate fraud and consumer scams, and is the author of Expert Fraud Investigation and Essentials of Corporate Fraud.

Guilty plea coming for Bernie Madoff? originally appeared on WalletPop Blog on Mon, 09 Mar 2009 17:00:00 EST. Please see our terms for use of feeds.

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]]>madoffponziTracy CoenenMon, 09 Mar 2009 17:00:00 ESTHow much is a life worth?http://www.walletpop.com/blog/2009/03/09/how-much-is-a-life-worth/http://www.walletpop.com/blog/2009/03/09/how-much-is-a-life-worth/http://www.walletpop.com/blog/2009/03/09/how-much-is-a-life-worth/#commentsFiled under: ,

I recently came across the story of Jessica Cowin when a friend linked to it in an email to me. Jessica was born with a heart condition that required several surgeries, a pacemaker at a young age, and eventually a heart transplant at age 16.

In the years sine the heart transplant, Jessica has been doing well, but almost 10 years later, the drugs she takes to prevent rejection of the transplanted heart have destroyed her kidneys. The good news is that her sister is a match and can donate a life-saving kidney to her.

The problem is that there is a high cost to the transplant surgery. Jessica's insurance doesn't cover much. Her health insurance will cover up to $30,000 of the cost of a transplant, but the surgery is expected to cost over $100,000, plus $30,000 in related treatments. In order to get the surgery, Jessica needs to pay for it in full up front. The surgical team will not proceed with the transplant until they are paid.

Continue reading How much is a life worth?

How much is a life worth? originally appeared on WalletPop Blog on Mon, 09 Mar 2009 11:00:00 EST. Please see our terms for use of feeds.

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]]>featuredhealth insuranceHealthInsurancekidneytransplantTracy CoenenMon, 09 Mar 2009 11:00:00 ESTBeware of grant scamshttp://www.walletpop.com/blog/2009/03/06/beware-of-grant-scams/http://www.walletpop.com/blog/2009/03/06/beware-of-grant-scams/http://www.walletpop.com/blog/2009/03/06/beware-of-grant-scams/#commentsFiled under:

A tough economy makes consumers more likely to fall victim to scams. They're less skeptical than they might usually be, often because they're desperate to earn some money or find an opportunity for themselves. One scam gathering steam is the "government grant" scheme. You simply pay a few dollars for a "grant kit," and you can be quickly on your way to getting free money from Uncle Sam.

Continue reading Beware of grant scams

Beware of grant scams originally appeared on WalletPop Blog on Fri, 06 Mar 2009 09:30:00 EST. Please see our terms for use of feeds.

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]]>government grantGovernmentGrantgrantscamTracy CoenenFri, 06 Mar 2009 09:30:00 ESTStick a fork in General Motorshttp://www.walletpop.com/blog/2009/03/05/stick-a-fork-in-general-motors/http://www.walletpop.com/blog/2009/03/05/stick-a-fork-in-general-motors/http://www.walletpop.com/blog/2009/03/05/stick-a-fork-in-general-motors/#commentsFiled under: ,

Auditors aren't always right, but if they have even a small clue right now, General Motors is almost done. GM filed its most recent annual report today with the Securities and Exchange Commission, and in it is something called a "going concern" problem. Essentially the auditors have given an opinion that the company isn't likely to be able to continue in business for much longer.

The company logged a $30.9 billion loss for 2008. It has received $13.4 billion from the U.S. taxpayers to help weather the storm, but at the rate GM is going, that clearly doesn't even put a dent in the company's money problems.

Over the last three years, GM's losses have totaled $82 billion, and the prospects for the future are grim. Sadly, American automakers have a business with a cost structure that can't be profitable in this economy. No amount of welfare from the taxpayers will change that fact, and it's only a matter of time before GM, Ford, and Chrysler will be forced to completely change the way they do business or go out of business all together.

Simple cost-cutting by eliminating jobs and closing factories isn't enough either. There are too many other costs associated with running these companies -- in large part the benefits owed to retirees -- that are dragging them down. GM has until March 31 to demonstrate to the federal government that the business is viable, but I'm doubtful that it can actually achieve profitability. Bankruptcy is the next step, and we should all hope that the government doesn't waste more taxpayer money trying to put off the inevitable.

Stick a fork in General Motors originally appeared on WalletPop Blog on Thu, 05 Mar 2009 18:30:00 EST. Please see our terms for use of feeds.

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]]>automakerbankruptcygeneral motorsGeneralMotorsgmTracy CoenenThu, 05 Mar 2009 18:30:00 ESTAIG, please take more of our moneyhttp://www.walletpop.com/blog/2009/03/03/aig-please-take-more-of-our-money/http://www.walletpop.com/blog/2009/03/03/aig-please-take-more-of-our-money/http://www.walletpop.com/blog/2009/03/03/aig-please-take-more-of-our-money/#commentsFiled under: ,

I don't know how the clowns running this "bailout madness" could be any more reckless than they've been so far. American International Group (AIG) is getting yet another $30 billion compliments of the American taxpayers.

First AIG got a gift of $85 billion. Then executives promptly went on a little luxury spa trip, costing $440,000. Then... woe is me. More money was needed by AIG, and the company got another $65 billion, for a total handout of $150 billion. And now we can tack another $30 billion gift onto that.

$180 billion for AIG, a company that some idiots in our government apparently believe is "too important to fail." Really? Either AIG has been lying each time it holds its hand out (because the money it seems to "need" never goes far enough), or the executives of the company are complete morons. Either way, they don't deserve any more money from the taxpayers.

Continue reading AIG, please take more of our money

AIG, please take more of our money originally appeared on WalletPop Blog on Tue, 03 Mar 2009 11:00:00 EST. Please see our terms for use of feeds.

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]]>aigbailouttaxTracy CoenenTue, 03 Mar 2009 11:00:00 EST