Be bold.  Be cheap.  Go incognito.

 

Part of maintaining wealth (or your attempt at accruing it) involves protecting it from thieves.  While most credit card companies are generally quick to respond to fraudulent charges by crediting your account within the calendar month they receive the affidavit highlighting specific false charges; the hassle, headache and panic of someone running around with your numbers is no picnic.

 

Rest assured. Virtual credit cards are here.  RecessionGirl has just experimented with two online purchases via the virtual credit card.  Dang.  It was so simple. And fun. Try it. You’ll like it.

 

Citibank has a nice system that takes you through James Bond style security prompts and then, complete with ‘Mission Impossible’ sound effects, punches up numbers on a one-use, temporary, virtual credit card.  You’ll have to generate digits for each online purchase, but it’s a small price to pay for a hackless online-shop.

 

Also, as far as I can tell, the virtual card numbers are very objectcentric.  Meaning it’s great for online tangibles you might purchase on ebay, itunes or amazon.  But if you’re seeking reservations for a vacation, renting a car etc., it seems there are some road-blocks installed to protect companies from getting the bait-and-switch.  Overall, the virtual card gets RecessionGirl’s two thumbs up. 

 

Be bold.  Be cheap.  Go incognito.

 

 

RecessionGirl is a former employee of a boutique asset management firm/auction house and wants to share her inside information.  As most of you are all too well aware, the housing bubble has burst.  There are over a million foreclosures in America every 20 seconds.  That’s a straight-up lie, but there are an awful lot of them.  This article will help position you to get the best value for a foreclosed home through auction.

 

When houses are foreclosed upon they go to auction at the county courthouse before being returned to the banks.  But, not so fast.  Don’t go to that auction.  It’s a common misconception that you will get a ‘great deal’ at a courthouse auction.  However, that’s what insiders refer to as an ‘early auction’.  It would behoove you to do a little bit of research and catch an asset management firm auction, instead, where the real deals live.

 

If the foreclosed house does not sell at the initial courthouse auction, it goes to the bank.  Banks, especially in this market, do not want to hold a house on their books as the bank is responsible for the carrying costs involved (aka taxes).  They literally loose money by holding onto homes.  Banks are in the business of making money.  They don’t want to invest in carrying costs for the thousands of homes that are on their bank sheets.  

 

Most banks holding homes consider the three month mark critical. Pay attention. 90 days is the winning number.  It is highly advantageous for the bank to get rid of the property at this point as the home becomes an extremely toxic-asset, especially when compounded with the other homes on the bank sheets. The empty house might turn into a crystal-meth lab or a crack den (no joke) after being vacant for so long, making it a super hard sell for the bank and most likely a reduced revenue sale.  That’s when banks get into the wheeling and dealing of REO’s.  The bigger, better and more connected banks understand that they do not have the manpower or advertising leverage to conduct fire auctions to rapidly expedite the sale of the parcels they are carrying.  They turn to financial asset management firms/auction houses to manage the marketing and follow through to sale.

 

Why would the asset management firm auction be a better (cheaper) deal than the initial court house auction?  What’s the changing variable? Simple: Time. The advantage of the asset management auction is that it is occurring 3 months after it has been on the bank roll with 1 auction at the courthouse already conducted.  If the bank doesn’t accept the final bid through an asset management auction (the second auction), it goes back to the bank.  Costing the bank money, maintaining it’s toxicity.  Potentially turning the home into a crack den as the home continues to be vacant, which potentially makes the house next door that the bank also owns of lower value.  The asset management auction is a bit of a ‘last call’ for the bank to dispose of a home.  

 

Banks are typically slow to come to terms with market value as they flirt with insolvency on prices that are between a quarter and half of their 2006 values. In this particular market most banks are in complete denial, but they should not be able to keep it up.  Stay tuned for legislation, executive orders, extra TARP and the ‘bad bank’ to see how long banks can play hide-and-go-seek with home values.  This is no guarantee that a bank will accept your final bid through an asset management auction, but you are more likely to get the price you want on post-bid negotiation.

 

But don’t get too excited.  Banks are not stupid.  They haven’t started ‘dumping’ homes on financial asset management firms or REO specialists.  Do some research.  Watch the clock and trust your instincts.  For sure there is a deal out there for you, but RecessionGirl would hold out till May or June.  Check the links below to get started:

New York’s Premiere Auction House/Financial Asset Management Firm

http://www.gramercyauctions.com/

Other Auction Firms

http://www.williamsauction.com/

http://www.houseauctioncompany.com/index.php

 

 

The thing nobody wants to talk about even more than potential bank insolvency sounds like an outtake from the 1984 sci-fi classic, Dune. It’s called the Jupiter High-Grade CDO V.

Say that three times fast. It’s funny, I’ve seen virtually nothing about these Jupiter bonds and a google search on ‘Jupiter Bonds’ turns up just about nothing. You have to search ‘Jupiter High-Grade CDO V’ specifically and even then wikipedia doesn’t even have a mainstream breakdown. There is a reason this bond is hard to find. Nobody wants to find it. Not even MSNBC. Not yet. Nobody wants to know what its real value is because it would be very, very, very scary to find out. Soon enough, everyone will have to get familiar with it, because it’s going to emerge as a leading heavyweight contender vs. economic recovery. 

In short, the Jupiter High-Grade CDO V was one of the grand puba’s of packaged, leveraged, sold, then sold again, leveraged for a hundreth time bonds that doesn’t exist in real time or space, but is an ephemeral evil-lord of the underworld than can only be contemplated by applying laws of quantum mechanics and theoretical physics. This process is also referred to as ‘creative accounting’. At its worst. For more information you will have to sift through the net as if you were searching for gold. Jupiter High-Grade CDO-V is something you won’t hear, see or speak about. Until it’s too late.

In the bubble months and years BLD (Before Lehman Brother’s Died) this was the bond that kept giving.  We’ve quickly discovered something different now:  The Jupiter Bond giveth.  And the Jupiter Bond taketh away.  It taketh away all the bank money.  It taketh away the notion that markets can self regulate.  It taketh away some fundamental tenants of capitalism.  Welcome to Jupiter.  The next stop on the recession bus.

What’s up with gold? It’s too heavy to carry out of the bank and horde in your closet and it was determined not to be gangsta enough to back our currency in 1971. There are commercials that have popped up suggesting that it’s a guaranteed good time if you invest in it. And there are women all over the United States having ‘gold parties’ where they bring the bling that they are ‘over’ and have an assessor give them cash for the recycling meltdown. Dang. To invest or not to invest that is the question.

Gold has traditionally been considered a safe haven or what the investment world likes to refer to as ‘hedge’ which would protect folks from market destabilization due to political unrest or other unforeseen occurrences (ahem, radical hard-core recession). But don’t be fooled by all the hype. While safer than many other investments, gold does fluctuate. Check the internet for a 2005 study conducted by Rick Munarriz where he compares the value of one share of Google stock to an ounce of gold. While gold won, the study provides a nice profile of the volatility and fluctuation of gold pricing in laymen’s terms that should not be ignored when determining if gold is an appropriate investment for you.

If you decide gold is for you, you don’t actually have to get a police escort and secured armored vehicle to bring it all home. Most gold investments are through bullion or coin ownership, or indirectly through certificates, accounts, spread betting, derivatives or shares. If you want to get started, you can talk with any of the usual suspect financial investment firms, or you can just buy from a gold pusher. Check the links below to start your research:

http://www.gold-investment.info/
http://www.blanchardonline.com/gold_as_investment/new_investors.php
http://www.gold.ie/

Be Bold. Be cheap. Slow down.

In 2008 BLD (Before Lehman Brother’s Died) the common knowledge was that stocks would out-perform any secure high interest savings scheme over the long haul (10 years or more), but now that the Dow Jones has hit 1997 lows plunging beneath the psychological threshold of 7000pts, it might be high time for reassessment of the value of a secure investment.

Secure investments are boring. They lack the sex appeal of risk and potential for gratuitous upward spikes. They are slow and plod along like an overfed-bull migrating toward ‘the end’ with no brain in its head whatsoever. But your money is safe. If you lack the wherewithal to participate the Las Vegas, casino-style gamble of wall street, you might want to consider a safe haven for your dinero. It’s a win-win situation. It’s a slow situation. But there is virtually no volatility. There is the lowest chance of risk (unless we roll like Argentina and there is a run on the banks), so if you buy into cliché’s like, ‘It’s better to be safe than sorry’ then this one is for you:

Savings Bonds and Treasury Paper
About.com – Treasury Securities & Programs

Certificates of Deposit aka CD’s
http://banking.about.com/od/cds/a/cdbasics.htm

Good Old Bank Savings Account
http://banking.about.com/od/savings/a/savingsaccount.htm
http://home.ingdirect.com

I didn’t mention fixed annuities or money market accounts because I’m not down with investing in insurance in the current climate and investment schemes on money markets seem a bit dodge at the moment, but maybe Recessiongirl will feel more frisky in the months to come.

Be bold. Be cheap. Try to get a big tax refund.

RecessionGirl is providing links to help you blow back with free or low cost tax preparation havens in your hood. The kind-hearted city of New York has also established a savings account cash incentive if you’d like to get some free money with your refund. If you’re eligible, knock yourself out with the links below:

Free and/or low cost tax prep:
http://www.nyc.gov/html/ofe/html/poverty/taxassistance.shtml

Free money via a city savings program:
http://www.nyc.gov/html/ofe/html/poverty/save.shtml

What tax credits are you eligible for:
http://www.nyc.gov/html/ofe/html/poverty/taxcredit.shtml

Make sure your tax preparer is legit:
http://www.nyc.gov/html/dca/downloads/pdf/consumerbillofrights.pdf

Get the most value for your refund:
http://www.nyc.gov/html/ofe/downloads/pdf/refund_tips_english.pdf

Be bold. Be cheap. Try to get a big tax refund.