NEW FDIC DEPOSIT INSURANCE LIMITS

I know FDIC Insurance raised from $100,000 to $250,000. When will this end? My neighbor says the end of this year.

Roy

Roy, on May 20, 2009, the temporary increase of standard FDIC deposit insurance from $100,000 to $250,000 per account ownership type was extended through December 31, 2013.

Contact your bank for more information.

It is a pleasure serving you.

Larry Kopsa CPA

INTERESTING INFO FROM THE U.S. CENSUS BUREAU

(The Washington Times) - Within 10 years, for the first time in the history of mankind, the number of people in the world age 65 and older will be greater than the number of people age 5 and younger, according to a new U.S. Census Bureau report.

OPINION: 'States That Soak the Rich, Lose the Rich'

(Wall Street Journal) -- In a Wall Street Journal op-ed, Arthur Laffer and Stephen Moore, co-authors of "Rich States, Poor States," write that "with states facing nearly $100 billion in combined budget deficits this year, we're seeing more governors than ever proposing" to "soak the rich." According to the opinion piece, lawmakers in several want to raise income tax rates on the top 1% or 2% or 5% of their citizens. The governor of Illinois "wants a 50% increase in the income tax rate on the wealthy because this is the 'fair' way to close his state's gaping deficit." The problems, the authors note, is that soaking the rich "never works because people, investment capital and businesses are mobile: They can leave tax-unfriendly states and move to tax-friendly states."

The op-ed notes that "research from Richard Vedder of Ohio University ... found that from 1998 to 2007, more than 1,100 people every day including Sundays and holidays moved from the nine highest income-tax states such as California, New Jersey, New York and Ohio and relocated mostly to the nine tax-haven states with no income tax, including Florida, Nevada, New Hampshire and Texas."

Over these same years, "the no-income tax states created 89% more jobs and had 32% faster personal income growth than their high-tax counterparts," the authors write. The authors state that, "We believe there are three unintended consequences from states raising tax rates on the rich. First, some rich residents sell their homes and leave the state; second, those who stay in the state report less taxable income on their tax returns; and third, some rich people choose not to locate in a high-tax state." Read more at <http://online.wsj.com/article/SB124260067214828295.html>

ENERGY POSTINGS

'Slippery Slope: EPA Moves Forward On New Rules To Regulate Greenhouse Gas Emissions'

(New York Times) -- NYTimes.com reports, "Unwilling to wait for Congress to act, the Obama administration announced this week that it was moving forward on new rules to regulate greenhouse gas emissions from hundreds of power plants and large industrial facilities." Obama "has authorized the EPA to begin moving toward regulation, which could goad lawmakers into reaching an agreement." The EPA's move is "significant, because under the Clean Air Act, any facility emitting more than 250 tons per year of a regulated pollutant must meet federal requirements." Bloomberg notes that "under the proposal ... the EPA said it won't target small sources despite the way the Clean Air Act is written because doing so would lead to 'absurd results.'" Senate Republicans last week "failed to block EPA from regulating greenhouse gases from stationary sources during a debate over legislation that funds the agency." Bryan Brendle, energy and resources policy director for the National Association of Manufacturers, said, "The proposed EPA regulation of large industrial sources is a 'slippery slope' that may 'discourage a lot of investment' in the U.S." See the story at <http://www.nytimes.com/2009/10/01/science/earth/01epa.html?_r=1&scp=1&sq=%2b%22National+Association+of+Manufacturers%22&st=nyt>

'Sen. Johanns: Senate Climate Change Bill Is Left Of Obama, Pelosi'

(Sen. Johanns release) – In a news release, Senator Mike Johanns this week made the following statement regarding the climate change legislation introduced Sept. 30 by Senators Barbara Boxer (D-CA) and John Kerry (D-MA): "This bill is an assault on agriculture. It is to the left of Speaker Pelosi and to the left of the President. It will lead to higher taxes, higher energy costs, a tighter squeeze on disposable income, more lost jobs and lower standards of living. For agriculture, the costs are real and the benefits are theoretical -- our country's heartland is in the crosshairs of this national energy tax." The bill proposes reductions of 20% below 2005 levels by 2020, compared to the (House-passed bill) Waxman-Markey reductions of 17% and the President’s proposed reductions of 14% in the same period.

'Manufacturers Voice Concern Regarding Latest Global Warming Bill'

(NAM release) -- The National Association of Manufacturers (NAM) Vice President Keith McCoy this week issued the following statement on climate change legislation introduced by Sens. Barbara Boxer (D-CA) and John Kerry (D-MA): "While the legislation omits many key details, the NAM is concerned that the current draft of the Boxer-Kerry climate change bill introduced (Wednesday) will increase costs for manufacturers and consumers ... while resulting in little benefit to the environment." A recent NAM analysis "showed the (House-passed climate bill) would result in up to 2.4 million lost jobs, higher energy prices for businesses and consumers, and cumulative GDP losses of up to $3.1 trillion over an 18-year period." See the full release at <http://www.nam.org/NewsFromtheNAM.aspx?DID=%7bDAA0484A-3637-4F17-B416-566C5CF6DEFF%7d>

'Kerry convinced climate bill has a shot'

(The Hill) -- TheHill.com reports Democrat Sen. John Kerry (D-Mass.) said he is "convinced" that the Senate's climate change bill "has a shot to pass." The Hill notes that Kerry, a coauthor of the Senate climate bill, and other supporters of the bill have "framed the need for the legislation as a national security issue." http://thehill.com/blogs/blog-briefing-room/news/60869-kerry-convinced-climate-bill-has-a-shot-in-the-senate

'Senate global warming bill leaves out ag wishes'

(Des Moines Register) -- The Des Moines Register reports that the Senate's version of the climate bill "lacks many of the provisions sought by farm groups." The story notes that "the House bill has already been under attack from farm organizations because of the potential impact on fuel and fertilizer." See more at <http://www.desmoinesregister.com/article/20090930/BUSINESS01/90930045/1030>

IF YOU ARE HIRING YOU MIGHT WANT TO WAIT FOR A NEW TAX CREDIT

Lawmakers and economists like the idea of a tax credit for new job creation. A proposal to give a tax credit to companies for hiring is getting support from U.S. lawmakers, as well as former Labor Secretary Robert Reich and Nobel Prize-winning economist Edmund Phelps.

Economists in the Obama administration have been researching the idea for several weeks, but the White House has not formally announced a plan. "There's a lot of traction for this kind of idea," said Rep. Eric Cantor, the Republican whip. "If the White House will take the lead on this, I'm fairly positive it would be welcomed in a bipartisan fashion."

The New York Times

WHAT'S HAPPENING IN HOUSING - NOT PRETTY

Ongoing flood of foreclosures seen as threat to recovery

Home-foreclosure filings exceed 6,600 per day, the Center for Responsible Lending reports, and there have been nearly 2 million already this year. More than 6 million families could face foreclosure over the next three years, Michael Barr, the Treasury Department's assistant secretary for financial institutions, said last month. The flood of foreclosures could wash out any economic recovery, Barr warned. CNBC/Reuters (10/8)

Banks, regulators work to prevent wave of option-ARM mortgage defaults: Obama administration officials and bankers are working to stave off an expected wave of defaults on pay-option adjustable-rate mortgages, banking sources said. A large number of these so-called option-ARMs mortgages will reset and call for higher payments soon, but a vast number of borrowers already can't meet their payments. The administration wants lenders to forgive some of the principal on these loans, but banks would like to see another solution. The Wall Street Journal (10/7)

Wachovia computer bug has limited mortgage modifications: A problem with computer software is preventing Wells Fargo unit Wachovia from modifying the majority of its distressed-mortgage holders under the Obama administration's $75 billion foreclosure-prevention plan, according to Michael Heid, co-president of Wells Fargo Home Mortgage. Wachovia has been able to process modifications for only 2% of its mortgage holders during a trial period. Wachovia will begin processing a larger number of loan modifications under the administration's program in the next couple of weeks, Heid said. The Wall Street Journal (10/8)

REVERSE MORTGAGE INFORMATION

Recently I published a question on reverse mortgages. Here is some additional information that was just published.

The popularity of reverse mortgages -- once seen as a resource for seniors despite their high fees -- is declining. The National Consumer Law Center released a report Tuesday highlighting potential problems posed by "aggressive reverse mortgage lenders who target the home equity of vulnerable seniors." With aggressive marketing, 115,000 reverse mortgages were issued last year, up from a few thousand in 2000. Forbes (10/6) , Bloomberg

Larry Kopsa CPA