As of late, we read many examples of corporations filing the big 'B' in various newspapers and online. In August, I discussed how clothing retailer Steve & Barry's had filed for bankruptcy, but were still expected to remain open in their Terre Haute location. Word has it now that they will be closing this location. Linens-N-Things and Circuit City both filed for bankruptcy, too, recently.
These better-known examples, with locations in nearby Terre Haute & Bloomington, raise some interesting questions as we approach the Christmas season…
In these and other stories, we find that banks have loaned millions of dollars to corporate borrowers both secured -- and unsecured -- who go bankrupt. Often, I've heard people comment, "Well, the bank had it comin' if they didn't have any collateral to back these loans." Yet, do you know who else is an 'unsecured' creditor, who might be left holding the bag if a company files for bankruptcy?
Perhaps, you! (That puts a different perspective on things, doesn't it?)
'Tis the season for giving, and soon billions of dollars will change hands via gift cards. If you are in possession of a gift card, you may feel pretty insecure this holiday season as several retailers file for bankruptcy protection or otherwise go out of business. In fact, this Christmas, it could be said the Grinch comes in a different form: corporate bankruptcy!
See, when a corporation files bankruptcy, a gift card holder is deemed an 'unsecured creditor' and is thrown in the mix behind the secured creditors. While some companies continued to honor the cards, others haven't, while yet others have added 'strings' to redeem them. There seems to be no set of rules when it comes to gift certificates & cards in a corporate bankruptcy that I've found.
I suppose you could file a creditor claim in the company's bankruptcy, but it seems hardly worth the paperwork for a few bucks on a card -- and no assurances anything would ever come of it anyway.
As you may recall, I wrote about gift cards last year about this time: http://www.magiccoalcity.blogspot.com/ Then, the issue was different, but the end result was the same: people losing money on gift cards.
As the pitfalls mount against gift cards, maybe it's just best to stick with cash in a card if nothing else…
***
This blog post by Chris Wathen was also published in his Linton, Indiana based Greene County Daily World blog entitled, "Riddle Me This".
Monday, November 24, 2008
Thursday, November 13, 2008
County-by-County Education & Earnings
The Indiana Chamber of Commerce has recently published some state-wide maps with interesting county-by-county data, regarding educational levels of the current and available Hoosier workforce. Below you'll find links to these county-county maps for the State of Indiana:
These three maps show educational attainment by age category:
http://www.indianachamber.com/images/CountyMaps/PercentAdultsAssociateDegreeorHigher.jpg http://www.indianachamber.com/images/CountyMaps/1824NoHighSchoolDiplomaCty.jpg
http://www.indianachamber.com/images/Cou...
These maps show the increase in earnings from high school degrees to more advanced degrees:
http://www.indianachamber.com/images/CountyMaps/AssociatesDegreeIncrease.jpg
http://www.indianachamber.com/images/Cou...
This map shows the percentage of adults, who have high school diplomas or less, earning under what is deemed a 'living wage' for families in their research:
http://www.indianachamber.com/images/CountyMaps/1864inFamilyEarningLessThanLivingWage.jpg
***
This blog post by Chris Wathen was also published in his Linton, Indiana based Greene County Daily World blog entitled, "Riddle Me This".
These three maps show educational attainment by age category:
http://www.indianachamber.com/images/CountyMaps/PercentAdultsAssociateDegreeorHigher.jpg http://www.indianachamber.com/images/CountyMaps/1824NoHighSchoolDiplomaCty.jpg
http://www.indianachamber.com/images/Cou...
These maps show the increase in earnings from high school degrees to more advanced degrees:
http://www.indianachamber.com/images/CountyMaps/AssociatesDegreeIncrease.jpg
http://www.indianachamber.com/images/Cou...
This map shows the percentage of adults, who have high school diplomas or less, earning under what is deemed a 'living wage' for families in their research:
http://www.indianachamber.com/images/CountyMaps/1864inFamilyEarningLessThanLivingWage.jpg
***
This blog post by Chris Wathen was also published in his Linton, Indiana based Greene County Daily World blog entitled, "Riddle Me This".
Terre Haute Has No Mayor
Wow! Terre Haute is now without a Mayor!
One of my interests is keeping up with current court cases around the State of Indiana, and a truly interesting one was found, which I thought I'd share. In fact, the Court of Appeals opinion was just published earlier today.
It deals with the November 2007 mayoral election in Terre Haute. Duke Bennett beat incumbent Kevin Burke in that election, which Burke then challenged in court. Burke argued that Bennett was ineligible to run for mayor because of his employment as operations director at the Hamilton Center. Since the Hamilton Center receives federal funding for some of its programs, it limits the political activity of employees, his legal team argued.
The Court of Appeals agreed today.
To read the actual court opinion, here is the link:
http://www.in.gov/judiciary/opinions/pdf/11130801ebb.pdf
***
This blog post by Chris Wathen was also published in his Linton, Indiana based Greene County Daily World blog entitled, "Riddle Me This".
One of my interests is keeping up with current court cases around the State of Indiana, and a truly interesting one was found, which I thought I'd share. In fact, the Court of Appeals opinion was just published earlier today.
It deals with the November 2007 mayoral election in Terre Haute. Duke Bennett beat incumbent Kevin Burke in that election, which Burke then challenged in court. Burke argued that Bennett was ineligible to run for mayor because of his employment as operations director at the Hamilton Center. Since the Hamilton Center receives federal funding for some of its programs, it limits the political activity of employees, his legal team argued.
The Court of Appeals agreed today.
To read the actual court opinion, here is the link:
http://www.in.gov/judiciary/opinions/pdf/11130801ebb.pdf
***
This blog post by Chris Wathen was also published in his Linton, Indiana based Greene County Daily World blog entitled, "Riddle Me This".
Wednesday, November 5, 2008
Mood Swings & Madness
If you've opened up your 401(k) or other investment statement recently, I'll bet it wasn't pretty. So, it's very timely that the Greene County Community Learning Center offers an informational workshop, instructed by Randall Brown of Edward Jones, to address the current bear market.
The informational workshop will provide tips on how to weather the current market, along with tools for safeguarding your assets in such a turbulent time in the world of investments. This FREE workshop entitled, "Riding the Roller Coaster: Mood Swings & Madness in Today's Market" will be held on Monday, November 10, 2008, from 6:30-8:30 P.M.
Call the Community Learning Center at 659-3862 to reserve your space. Mr. Brown makes some good presentations, and I'm sure you won't be disappointed. As a former investment rep for Edward Jones myself, I can tell you there are a lot of very good workshops and seminars available through the local offices.
***
This blog post by Chris Wathen was also published in his Linton, Indiana based Greene County Daily World blog entitled, "Riddle Me This".
The informational workshop will provide tips on how to weather the current market, along with tools for safeguarding your assets in such a turbulent time in the world of investments. This FREE workshop entitled, "Riding the Roller Coaster: Mood Swings & Madness in Today's Market" will be held on Monday, November 10, 2008, from 6:30-8:30 P.M.
Call the Community Learning Center at 659-3862 to reserve your space. Mr. Brown makes some good presentations, and I'm sure you won't be disappointed. As a former investment rep for Edward Jones myself, I can tell you there are a lot of very good workshops and seminars available through the local offices.
***
This blog post by Chris Wathen was also published in his Linton, Indiana based Greene County Daily World blog entitled, "Riddle Me This".
Monday, November 3, 2008
Debt Drowns, Cash Floods
Americans have used their homes as ATM machines for many years. And as home values have declined lately, their ability to refinance their way out of cash crunches has vanished.
But wait, there's a new type of debt in town: credit cards!
While not exactly new, there is new focus on credit cards and their rampant use. In fact, several sources report that the 'average' American today carries roughly a $10,000 total balance on one or more credit cards. So, while access to funds through home loans may have dried up due to issues with collateral values recently, an increase in unsecured credit card debt may now be occurring.
Well, let me re-state that: IT IS OCCURING!
According to the Federal Reserve, credit card debt is well on its way toward $1 trillion dollars. Now, that's a lot of debt! Sure, it may be a nationwide total, but that's a lot of vapor. It's vapor because it's unsecured -- or without backing of any collateral.
And that is almost even more worrisome.
It's worrisome because where is all of this money going? What is it being used to purchase? While taking out a home loan, the property serves as collateral. With that you can say, here is what I bought. It's tangible. But what is unsecured credit card debt purchasing?
Is it gasoline as it has recently sky-rocketed, although calming down as of late?
Is it food, clothes, electronics, housewares, & furniture?
None of which typically serve as good collateral because they're consumable… well not exactly… perhaps 'disposable' or 'depreciative' would be better words to use here.
I suppose the disconnect for me, as a banker, is useful life of the product purchased vs. time said amount is financed. Moreover, are we still paying on debt for a product when it now sits in a landfill somewhere? I'm thinking the answer to that question is more often than not: yes!
In any event, despite arguments on the actual useful life of a GI Joe with the Kung-Fu grip, unsecured debt is rising to pretty substantial levels. After all, how many lifetimes would it take to count a trillion dollars if counted dollar-by-dollar? (I'm sure one of you out there have done the calculations. How about it per moenia urbis?)
So, it's a negative trend we can surmise, which begs the question, " Is this the next shoe to drop credit-wise in America?"
Perhaps.
The other worrisome issue I think today is regular e-mail alerts from the Fed that I receive entitled, "Federal Reserve will offer $150 billion in 84-day credit through its Term Auction". The Fed is absolutely flooding the market with cash. Last December, these e-mails read, "the Federal Reserve will offer $20 billion in 28-day credit through its Term Auction". So, we've leaped from $20 billion to $150 billion!
Hopefully, someone at some point has a big mop to soak up all of this cash being put in the economy, or we're going to need a wheelbarrow of cash to buy a loaf of bread.
***
This blog post by Chris Wathen was also published in his Linton, Indiana based Greene County Daily World blog entitled, "Riddle Me This".
But wait, there's a new type of debt in town: credit cards!
While not exactly new, there is new focus on credit cards and their rampant use. In fact, several sources report that the 'average' American today carries roughly a $10,000 total balance on one or more credit cards. So, while access to funds through home loans may have dried up due to issues with collateral values recently, an increase in unsecured credit card debt may now be occurring.
Well, let me re-state that: IT IS OCCURING!
According to the Federal Reserve, credit card debt is well on its way toward $1 trillion dollars. Now, that's a lot of debt! Sure, it may be a nationwide total, but that's a lot of vapor. It's vapor because it's unsecured -- or without backing of any collateral.
And that is almost even more worrisome.
It's worrisome because where is all of this money going? What is it being used to purchase? While taking out a home loan, the property serves as collateral. With that you can say, here is what I bought. It's tangible. But what is unsecured credit card debt purchasing?
Is it gasoline as it has recently sky-rocketed, although calming down as of late?
Is it food, clothes, electronics, housewares, & furniture?
None of which typically serve as good collateral because they're consumable… well not exactly… perhaps 'disposable' or 'depreciative' would be better words to use here.
I suppose the disconnect for me, as a banker, is useful life of the product purchased vs. time said amount is financed. Moreover, are we still paying on debt for a product when it now sits in a landfill somewhere? I'm thinking the answer to that question is more often than not: yes!
In any event, despite arguments on the actual useful life of a GI Joe with the Kung-Fu grip, unsecured debt is rising to pretty substantial levels. After all, how many lifetimes would it take to count a trillion dollars if counted dollar-by-dollar? (I'm sure one of you out there have done the calculations. How about it per moenia urbis?)
So, it's a negative trend we can surmise, which begs the question, " Is this the next shoe to drop credit-wise in America?"
Perhaps.
The other worrisome issue I think today is regular e-mail alerts from the Fed that I receive entitled, "Federal Reserve will offer $150 billion in 84-day credit through its Term Auction". The Fed is absolutely flooding the market with cash. Last December, these e-mails read, "the Federal Reserve will offer $20 billion in 28-day credit through its Term Auction". So, we've leaped from $20 billion to $150 billion!
Hopefully, someone at some point has a big mop to soak up all of this cash being put in the economy, or we're going to need a wheelbarrow of cash to buy a loaf of bread.
***
This blog post by Chris Wathen was also published in his Linton, Indiana based Greene County Daily World blog entitled, "Riddle Me This".
Saturday, November 1, 2008
Place Your Bets on Gas Prices
In parts of Indiana, I've read that gasoline prices are about $1.80-something a gallon recently. In Linton, I noticed the stations were around $2.15 yesterday.
I, along with everyone else, are left to wonder: will the price continue to go down, or will this be only a short-term phenomenon? And if this does become the new price level -- or even lower -- I wonder how quickly we will all forget how quickly prices can go back up again?
***
This blog post by Chris Wathen was also published in his Linton, Indiana based Greene County Daily World blog entitled, "Riddle Me This".
I, along with everyone else, are left to wonder: will the price continue to go down, or will this be only a short-term phenomenon? And if this does become the new price level -- or even lower -- I wonder how quickly we will all forget how quickly prices can go back up again?
***
This blog post by Chris Wathen was also published in his Linton, Indiana based Greene County Daily World blog entitled, "Riddle Me This".
Subscribe to:
Posts (Atom)
