Home | Economics | Entertainment | Computing | Cooking
Ocean Sports | Music | Photos | Sky Scene | Travel

Holiday traffic for Web shopping
Comparison sites expected to play big role this year

By Michael Liedtke
ASSOCIATED PRESS
November 19, 2005

SAN FRANCISCO – Laura Hanson relies on the Internet to make her a smarter shopper even when she isn't planning to buy online. Before traveling to a conventional store, the San Francisco resident regularly visits an online comparison shopping site to explore prices and review product research so she won't need to embarrass herself with store clerks. "With these (shopping comparison) sites, I can ask lots of stupid questions in the privacy of my own home," said Hanson, 27.

Yahoo Inc. runs Hanson's favorite comparison site – just one of many free Internet services that churn out pricing guides and other helpful insights about everything from iPod accessories to kitchen sinks. The comparison sites are expected to play a central role in the upcoming holiday shopping season when Forrester Research predicts some 2.5 million U.S. households will buy merchandise online for the first time. To grab more consumer eyeballs, they've laid on new features. Some are tracking more merchandise, others using the latest technology to alert shoppers to money-saving deals or warn them about fraud risks. Still others supplement their price comparisons with product reviews and hard-to-find coupons.

"We are entering a new era (in comparison shopping)," said Rob Solomon, general manager of Yahoo's shopping site. "Now, we are all trying to figure out ways to differentiate ourselves."

All told, U.S. consumers are expected to spend $18 billion shopping on the Internet between Thanksgiving and Christmas, a 25 percent increase from last year, Forrester estimates. Feeling the pinch of higher gasoline prices and home-heating bills, even consumers leery of Internet shopping are more likely to visit comparison sites to help steer them toward nearby brick-and-mortar stores with the best deals, predicts e-commerce analyst Heather Dougherty of Nielsen/NetRatings.

All the major comparison sites are free to use; they generate revenue primarily from referral fees for sending prospective customers to online merchants. It's a formula that's attracting big bucks as more consumers rely on the comparison sites. The two most popular sites, Shopzilla (formerly BizRate) and Shopping.com, were recently acquired in separate deals worth more than $1.2 billion. Meanwhile, venture capitalists have financed another wave of entrepreneurs promising to introduce even more useful shopping tools.

Michael Yang and his business partners have already raised $11.7 million for their 9-month-old site, Mountain View, Calif.-based Become.com. By coupling professional product reviews with pricing guides, Yang is confident he can do even better with Become.com than he did with his first comparison shopping site, MySimon, which he started in 1998 and sold to CNet Networks Inc. for $678 million in 2000.

"We haven't seen a terrible amount of innovation in comparison shopping during the past four or five years," said Talmadge O'Neill, co-founder of Smarter.com, another newcomer to the field. "We are still in the early days. There is a huge pie out there yet to be had."

As they angle for a bigger piece of the action, even long-established comparison sites are rolling out improvements designed to make themselves even more appealing. Yahoo's shopping.yahoo.com, for instance, is offering prices and information for about 90 million products, up from 60 million a year ago. The Sunnyvale, Calif.-based company also is encouraging more social interaction on its shopping site by asking consumers to post lists of their personal recommendations. Yahoo plans to set up a system in which a consumer will receive a slice of Yahoo's commission if those recommendations send visitors to a merchant.

Besides Yahoo's shopping channel, Shopzilla and Shopping.com, other top shopping comparison sites include Google Inc.'s Froogle.com, PriceGrabber, NexTag and ShopLocal. This group accounted for the bulk of the 49.3 million people who visited comparison sites during September, an 8 percent increase from 45.8 million at the same time last year, according to the most recent data from Nielsen/NetRatings.

Hunt for Promotional Deals

Wall Street Journal
December 2005

Web sites list promotional codes that can save you money on shipping or your gift.
Coupon Cabin www.couponcabin.com
Naughty Codes www.naughtycodes.com

Beware or Restocking Fees

There are many retailers that now are charging restocking fees for returned items.
10% - !5% is not uncommon so be sure to ask about the policy
when buying either online or at a bricks and mortar location.

NATION'S HOUSING
KENNETH HARNEY
August 14, 2005

Fixed rate better than equity credit

WASHINGTON – Could the mismatch between short-term and long-term interest rates change the way millions of Americans tap their home equity for remodeling, college tuition, an auto and other big-ticket expenditures? Market forces certainly are pushing consumers in that direction, and there is evidence the shift is already under way. You can refinance into a conforming 30-year fixed-rate mortgage and take substantial additional cash out for 5¾ percent with little or no closing costs. But a new home equity credit line – pegged at prime plus 1 percent – would run you 7¼ percent to start. Worse yet, it is highly likely to get more expensive in the coming months under Federal Reserve Board monetary policies.

Even equity lines at prime plus zero don't cut the mustard. The prime bank rate is at 6¼ percent and it, too, is likely to jump by another quarter to half a percentage point by the end of 2005. Long-term rates, by contrast, are beyond the Fed's control; they are affected instead by the cost of 10-year bonds in the global capital markets. Though long-term rates could rise modestly by year's end, according to some economic forecasting models, the gap between short-term home equity rates and long-term prime mortgage rates is likely to persist or even widen.

Which leads me to this very practical question: If you need cash for a big expenditure, should you take out a floating-rate home equity line and risk steadily rising monthly payments? Or should you lock in today's cheaper long-term money by going for a cash-out refi? If you already have a large equity line that is beginning to eat you up with payment increases, should you dump it and opt for a cash-out refi in the high 5 percent range?

There are no pat answers here; every homeowner's situation calls for individual analysis. But signs are emerging that growing numbers of people are looking again to long-term rates and cash-out refinancings. Mortgage investment giant Freddie Mac reports that cash-out refis last quarter hit their highest level since late 2000. Fully 74 percent of all refinancings involved borrowers increasing their principal balances by 5 percent or more, according to Amy Crews Cutts, deputy chief economist at Freddie Mac. Though some cash-out transactions add as little as 5 percent, many yield borrowers far more – 20 percent to even 50 percent. The owner of a $400,000 house with a mortgage balance of $100,000 can readily refinance, cash out another $200,000 and still have a comfortable 25 percent equity cushion in the property. The extra $200,000 is totally tax-free, and can be spent on whatever the owners choose.

Why the sudden switch to cash-outs? Cutts believes that growing numbers of consumers see today's long-term rates "as their last chance" to borrow at close to historically low costs. "People know rates are going to go up and they want to get in and lock it up while money is still cheap." Bankers are also seeing the first signs of a shift from floating-rate home equity lines to cheaper fixed-rate 30-year or hybrid adjustables. Hybrids typically carry attractive fixed rates for five or seven years before morphing into mortgages with annual rate adjustments.

Ken Koranda, president of MidAmerica Bank of Downers Grove, Ill., says "it's happening already and it's likely to continue if spreads between (home equity lines) and 30-year and 5-1 hybrid adjustables widen." Not all current home equity credit line borrowers are necessarily candidates for a transfer to a fixed-rate cash-out refi, however, says Koranda. People with relatively small equity line balances haven't felt much of a pinch from the 2¼ percent short-term rate increases during the past year. Other borrowers may like the convenience of credit lines – tapping their equity quickly when they need it, rather than pulling out large chunks through refinancings that might entail closing costs. For others, Koranda agrees, the short-term versus long-term rate equation right now tilts strongly toward fixed-rate cash-out refinancings.

Transfer-on-death registration is certainly worth checking out

CHUCK JAFFE
August 14, 2005

Thanks to an esoteric law approved in New York this month, it is time for fund investors to go back to basics. And the most basic decision investors have when buying funds is how to register shares. In the not-too-distant future, a lot of investors may want not only to change the way they have set up their fund accounts, they will find the process much easier to accomplish.

New York Gov. George Pataki signed into law a bill that allows "transfer-on-death" registration of a securities account, allowing individuals to automatically pass securities accounts to pre-designated beneficiaries upon the owner's death, without first requiring that the account go through the probate process. While New York was the 48th state to approve transfer-on-death legislation – only North Carolina and Louisiana don't have it – the Empire State is crucial in expanding the availability of the registration.

Financial firms are not required by any of the laws to offer transfer-on-death registration. Many New York-based firms heretofore have held out offering transfer-on-death to account holders nationwide, trying to avoid potential legal headaches that might have come from allowing the registration to customers who weren't eligible for it. Now, with transfer-on-death available in New York effective Jan. 1, that situation is likely to change. Even if it doesn't, however, investors would be well-advised to review precisely how they have registered their fund accounts to make sure their money goes where they want in the end.

Registration is an estate-planning issue

Registration is an estate-planning issue, showing where you intend for your accounts to go after you die. Die with your funds registered the wrong way – and the best way depends on your personal situation – and you create tax problems for your heirs. Typically, the idea is to maximize what goes to your heirs and avoid the headaches of probate. Probate is the state judicial process that determines the value of a dead person's estate. Mutual fund holdings typically are subject to probate, though laws vary by state.

For anyone with serious estate-planning needs – an estate must exceed $1.5 million in assets to be subject to tax, with the limit scheduled to rise to $2 million in 2006 – transfer-on-death options are no big deal. To minimize taxes, these high net-worth individuals or couples should be hiring an adviser to set up trusts that will preserve as much of the savings as possible. In those situations, mutual fund accounts will be registered in the name of the trust.

But for smaller savers, people whose estates aren't likely to threaten the estate tax limits, transfer-on-death rules are worth examining. Transfer on death is self-explanatory. Name a beneficiary, and that's who gets the money, without probate. The money still counts toward the value of the estate, which is why some advisers caution about getting carried away and handling large sums of money this way.

The account owner maintains control of the assets until he dies, and has the right to change the beneficiary designation at any time. When the owner dies, the beneficiary can manage the money right away, rather than having it subject to market whims while the estate potentially is tied up in court. "The advantage here is that you skip having to have a will and probate," says tax attorney Stephen Ziobrowski of Day, Berry and Howard in Boston. "In that way, it's a poor man's will. "But if you have a big estate plan and you do this with any significant amount of money – and not just a few small accounts for the grandkids – you now have something that passes outside of the estate, which has the potential to create other problems for the estate." That's the kind of stuff that scares lawyers.

For investors who want to use the transfer-on-death option, setting up your account is not always as simple as a checkoff on an account form. Many fund firms require separate beneficiary-designation forms; if you don't know to ask for them, you won't even know the option exists. Most firms that offer transfer-on-death accounts will walk customers through the application process, or help them retitle an account. The popularity of transfer-on-death accounts appears to be growing; a representative for the Janus funds noted that more than one-third of new accounts being opened online take advantage of the law.

"In everything you read these days, when it talks about the best money moves you can make for retirement, transfer-on-death registration is always on the list," says Marin Gibson, counsel for state government affairs for the Securities Industry Association. "No way of registering shares is right for everyone, but people clearly should learn about their options and pick the form that makes the most sense, rather than just checking a box and paying no attention to it."

The Home Loans Vexing Greenspan

BusinessWeek News

When Federal Reserve Chairman Alan Greenspan told Congress on June 9, 2005 that "the apparent froth in housing markets may have spilled over into mortgage markets," he was surely talking about mortgage markets like San Diego's. BusinessWeek Online has obtained the first-ever measurement by metro area of the increasing popularity of interest-only mortgages, and it shows that San Diego rates No. 1, by number of "IOs" in 2004.

In metro San Diego, 47.3% of all mortgages required interest payments only in their early years. The survey covered the top 50 metro areas in the U.S. and measured by the total number of mortgages issued. Atlanta, San Francisco, Denver, and Oakland, Calif., followed close behind San Diego. Milwaukee turned in the lowest number, just 4.8% interest-only loans last year.

FRENZIED MARKET

The data come from LoanPerformance, a San Francisco-based real estate information service. Although LoanPerformance also has statistics for the first few months of 2005, those numbers are too small to make them reliable [see the ranking of all 50 metro areas below]. Greenspan isn't the only one worried about the sharp rise of interest-only mortgages, which accounted for less than 2% of all loans as recently as 2001.

The concern: that they're helping supercharge already overheated housing markets. Because no payment of principal is due in the early years, interest-only loans offer lower monthly payments [even though the interest rate is slightly higher] than conventional ones. Based on the initial monthly payments, borrowers may be able to buy a more expensive house than they might otherwise afford. Trouble is, when borrowers do have to start making principal payments -- after anywhere from 2 years to 10 years -- the monthly payment could jump by up to 50%, or even more if the index for the adjustable rate rises as well.

UNDER SURVEILLANCE

BusinessWeek Online has also obtained new data from Fannie Mae and Freddie Mac that lend credence to the LoanPerformance numbers. They show that, in April, going by dollar volume, interest-only loans accounted for 35% of the adjustable-rate mortgages in securities sold by Fannie Mae and 39% of the adjustable-rate loans in securities sold by Freddie Mac. That represents a sharp increase for both giants, which buy mortgages from lenders and then repackage them as securities for sale to investors. As recently as January, 2004, only 10% of adjustable-rate mortgages in securities sold by Fannie classified as interest-only. And Freddie didn't sell any securities with interest-only loans at all until last December. [Amy Crews Cutts, deputy chief economist of Freddie Mac, provided the statistics to BusinessWeek Online.] Freddie Mac -- which uses a computer model to decide which mortgage loans to buy from the original lenders -- says it views with skepticism the rise of interest-only loans. "It is something that we are paying attention to very closely," says Cutts.

ARMS RACE

With mortgage rates remaining low despite Federal Reserve rate hikes, home prices keep going up. The Office of Federal Housing Enterprise Oversight says single-family home prices rose 12.5% from the first quarter of 2004 through the first quarter of 2005. Nevada led the nation with a 31.2% increase. For people worried about a bubble, the increasing popularity of so-called option ARMs look even scarier. Option ARMs have teaser rates as low as 1% and give borrowers four different choices of how much to pay every month. The minimum-payment option is so low that it may not even cover all the interest due. Whatever isn't paid gets added to the principal, a phenomenon called "negative amortization" that many credit-card users know all too well. Cutts says Freddie Mac doesn't buy option ARMs from lenders -- but she believes there's a "secular shift" toward them and away from ordinary interest-only loans.

ECONOMY CAN TAKE IT

Keith M. Schemm, a mortgage broker in Santa Clara, Calif., says option ARMs are "pretty dangerous loans to do" for many families. "The problem," he says, "is there's such a frenzy in the marketplace to buy a home." In his testimony before the Joint Economic Committee on Capitol Hill on June 9, Fed chief Greenspan voiced his own concerns about the increased use of interest-only loans and their variants. Despite his worries about mortgages, in the end, Greenspan maintained his view that even if home prices decline from their current elevated levels, he believes the economy can withstand the fallout. Here's hoping.

Interest-Only Loans Across the U.S. Metro Area Interest-Only Mortgages As Share of Total, 2004

Web sites give pointers on ways to save money

KNIGHT RIDDER NEWS SERVICE
January 9, 2005

Is more money going out than coming into your household budget? If so, then it may be a good time to re-evaluate your spending habits and find ways to gain tighter control over your spending habits and needs. A number of Web sites specialize in advice on how to calculate household expenses and areas to save. Here are a few places worth a visit:

Bankrate.com www.bankrate.com/brm/calc/Worksheet.asp Online calculator helps you take stock of food, housing and education expenses, and more.

Home Owner's Information Center www.ourfamilyplace.com/homeowner/budget.html Offers budgeting hints and tips to save money.

Planning For Retirement www.planningforretirement.com/householdbudget.htm Features steps to creating a household budget.

SoYouWanna.com www.soyouwanna.com/site/syws/budget/budget.html Contains sections of saving advice, from assessing spending habits to sticking to a budget.

• Start with the health insurance. The best tax breaks in the world won't do you any good if your policy won't pay up when you're sick. Call your current insurer and find out whether your policy is HSA compatible, or whether you can switch seamlessly to an HSA policy.
• Comparison-shop other plans at eHealthinsurance.com.
• Once you've found one or two that you like, call your doctor and ask for an opinion.
• Plan your saving strategy. Most insurers are offering paired savings and insurance accounts, so your premium and savings checks go to the same place. They typically send a checkbook that you can use to draw down the savings account as you need it.
• Compare fees, ease of access to your money and the interest rates. Many of these accounts are structured for people who intend to use their savings every year to cover their medical expenses and don't pay high rates.
• Ramp up the investment. If you can afford to stash tax-deductible money in your HSA, leave it there for years and shop for the savings account separately. Start at HSAInsider.com, which lists all the banks, brokers and insurance companies offering HSA savings plans. Look for ones that offer good investment choices and keep their fees low. Some providers to consider are hsaadministrators.com, which offers Fidelity funds, and hsabank.com, which offers full brokerage access to stocks and mutual funds for investment- minded HSA savers.

Job Seeking

San Diego Jobs
http://joblink.uniontrib.com/index.cfm

also

Salary.com
http://salary.com

To Help You Move
www.sbc.com/move

BILLS

Here are some links to sites that may help you reduce your Phone Bills.

http://www.LowerMyBills.com

http://www.ABTolls.com

http://10-10Phonerates.com

With the shakeout in the phone sector, and the allowance of Baby Bells to compete in the long distance as well as local service areas, there are some good deals to be had. If you are tired of paying AT&T, Sprint, MCI, and SBC 7 cents a minute and monthly fees from $5.00 to $12.00, then check out the following.

Everdial California Classic
No Monthly Fee
3.5 cents in state
4.9 cents out of state

http://www.everdial.com

or try

OPEX

http://www.opex.org

Mortgages

www.mtgprofessor.com

UPDATED CURRENCY CONVERTER http://www.xe.com

Investing

Stocks

Here are some sites for stock research:

MorningStar
www.morningstar.com

Security and Exchange Web Site
www.sec.gov

SEC Edgar Database
www.sec.gov/edgar/quickedgar.htm

The North American Securities Association
(the national association of the 50 state securities regulators)
www.nasd.com

Investing Online Resource Center
http://www.investingonline .org

The Motley Fool
http://www.Fool.com/school

My Retirement Program

If you had bought $1000 of Nortel stock three years ago, it would now be worth $49. With Enron, you would have $16.50 of the original $1,000. With Worldcom, you would have less than $5 left. If you had bought $1,000 worth of Budweiser (the beer, not the stock) one year ago, drank all the beer, then turned in the cans for the 10 cent deposit, you would have $214. Based on the above, my current investment advice is to drink heavily and recycle. This is my new retirement program, I call it my 401 Keg program.

401k Information

Fidelity Investments
www.401k.com

Quicken
www.quicken.com/retirement/401k

Living Trusts

A Living Trust has become a popular method for protecting assets from Probate and Tax concerns.

It's Legal!
www.itslegal.com/infonet/wills/Trustliv.asp

National Consumer Law Center
(A slightly different take on the subject: How to Avoid Living Trust Scams)
www.consumerlaw.org

Save Wealth
(Offers thorough guide to Living Trust Basics)
www.savewealth.com/planning/estate/livingtrusts/

Consumer Information

TELEMARKETER 'DO NOT CALL' LIST
California State Department of Justice has begun compiling a list of people
who ask not to receive calls from telemarketers.

People can register for the service by calling toll-free
at 1-888-382-1222 or visiting the Web site www.donotcall.gov.

http://www.fcc.gov/

For Complaints about telemarketers,
See my Do Not Call page.

Identity Theft

http://www.idtheftcenter.org

Consumers' Union
http://www.FinancialPrivacyNow.org

Home | Economics | Entertainment | Computing | Cooking
Ocean Sports | Music | Photos | Sky Scene | Travel