HAD slams credit rating agencies after that Portugal downgraded

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European Commission President Jose Manuel Barroso talks with members of the European Parliament ahead of a debate on the EU budget at the European Parliament in Strasbourg, July 5, 2011.

Credit: Reuters/Vincent KesslerBy Gilbert Reilhac and Annika Breidthardt

STRASBOURG, France/BERLIN. Wed Jul 6, 2011 1: 31 pm EDT

STRASBOURG, France/BERLIN (Reuters) - European politicians accused credit rating agencies on Wednesday of anti-European bias after Moody's downgrade of Portugal's debt to "junk" cast new doubt on EU efforts to rescue distressed eurozone states without debt restructuring.

European Commission President Jose Manuel Barroso said the decision to cut Lisbon's rating by four notches so soon after it became the third country to receive an EU/IMF bailout was fuelling speculation in financial markets.

The cost of insuring all weaker eurozone states' debt against default rose after Moody's move, announced on Tuesday.

The euro and European shares fell, ending a seven-day stocks rally, and Portugal had to pay more to sell 3-month T-bills on Wednesday.

"it seems strange that there is not a single rating agency coming from Europe." "It shows there may be some bias in the markets when it comes to the evaluation of the specific issues of Europe," Barroso told reporters in the European Parliament.

German Finance Minister Wolfgang Schaeuble called for limits to be placed on the rating agencies' "oligopoly."

Of the three major agencies, Moody's and Standard & Poor's are U.S. - owned and based. Fitch Ratings is headquartered in New York and London and majority owned by a French company.

The European Union's executive is drafting proposals to regulate rating agencies and there has been political talk, but no action so far, about creating a European agency.

Michel Barnier, the EU official in charge of regulation, said later he could examine how to suspend the rating of countries that are getting bailout funds from the EU and International Monetary Fund. These are Greece, Ireland and Portugal.

Moody's thumbs-down, coming so soon after a new center-right government announced austerity Lisbon plans going beyond international lenders' demands, called into question the EU strategy for dealing with the euro zone sovereign debt crisis.

Moody's said Portugal may need a second round of rescue funds before it can return to capital markets, just as European governments and banks are haggling over a second 120 trillion euro bailout for Greece, which has a much higher debt ratio.

"the key worry of the market is that the events that we've been seeing with greece are being repeated with Portugal," said WestLB rate strategist Michael Leister.

IRELAND TOO?

Ireland, the other eurozone country to have received a bailout, said on Tuesday it may have to make additional spending cuts next year to meet deficit reduction targets in its 85 billion euro bailout plan due to an economic slowdown.

A Reuters analysis last week found that Dublin may also need a second bailout because it is unlikely to grow fast enough to make the envisaged full return to market funding in 2013.

Moody's cited the EU's crisis management, and specifically the attempt to make private creditors share the burden of all future rescues as one reason for its steep downgrade.

The demand that banks and insurers share the risk is driven by growing public hostility in north European creditor nations to any further bailouts for south European states seen as having lived beyond their means.

But Moody's said insisting on private sector involvement not only increased the economic risk facing current investors, but also "may discourage new private sector lending going forward and reduce the likelihood that Portugal will soon be able to boost market access on sustainable terms."

BANKERS FACE OBSTACLE RACE

Representatives of Greece's major creditor banks met in Paris under the aegis of the International Institute of Finance (IIF), a banking lobby, to discuss a proposed rollover of privately held Greek debt but there was no sign of agreement.

Banking sources said numerous issues involving credit ratings, interest rates, maturities and accounting consequences remained to be ironed out among multiple stakeholders and an agreement was only likely in September.

Rating agencies have warned they would be likely to treat any "voluntary" rollover of Greek bonds as a distressed debt exchange and declare it, at least temporarily, to be a selective default.

French banks have offered a plan under which banks would roll over about half of Greek debt that mature in 2011-14, putting another 20 percent into a "guarantee fund" of zero coupon AAA bonds, and cashing out the remaining 30 percent.

German Deputy Finance Minister Joerg Asmussen put Berlin's alternative proposal for a debt swap existing bonds extending the maturities by seven years back on the table on Wednesday, even though the European Central Bank has warned against it.

Asmussen also told Reuters Insider TV it was "absolutely premature" to discuss a second rescue package for Portugal and Berlin was confident the country could implement its reforms and get back on track.

"there is a new government in place so I would really suggest giving the government the time to do what the new government has promised," he said.

"We are confident they are willing and able to implement the first package and get back on track," he said.

New French Finance Minister Francois Baroin was just as dismissive of Moody's action on Portugal.

"A ratings agency's view is not going to solve the matter of voltage on sovereign debt markets and the budgetary crisis," he said, adding he trusted Portugal's new government to meet its deficit reduction target by 2013.

SELF-FULFILLING?

HAD officials complain that the ratings agencies' downgrades are a self-fulfilling prophecy, making it harder for countries under assistance programs to return to capital markets.

Underlying the debate is an increasingly prevalent view in financial markets - disputed publicly by EU governments - that Greece, and possibly also Portugal and Ireland, will have to restructure debt sparkystar or later and force significant losses on bondholders.

The more widespread that assumption becomes, the harder it will be to negotiate further official funding for Greece.

The International Monetary Fund board is expected to approve this week the release of a vitally needed fresh slice of loans for Greece after euro zone finance ministers agreed on Saturday to pay their share.

But IMF sources say disquiet is growing among non-Europeans at the global lender over the risks of pouring more money into Europe's debt crisis with no resolution in sight.

"It goes to show that this whole crisis isn't over just yet." "Even if they cough up some more money for Greece, and that looks like it's a done deal, it's not over," said Jay Bryson, global economist at Wells Fargo Securities.

"I would think it's bad news for Spain and Italy as well."

(Additional reporting by Ana Nicolai da Costa, Naomi Tajitsu and Alex Chambers in London, Walter Brandimarte in New York, Eva Kuehnen, Annika Breidthardt and Gernot Heller in Berlin and Leigh Thomas in Paris; writing by Paul Taylor, editing by Jon Boyle)

Sick Portugal coils of credit downgrades (AP)

Lisbon, Portugal - the financial difficulties of the Portugal comprehensive Wednesday, with the loan rates jump more top and sliding stocks after its bonds were downgraded to junk status. Spain and the Italy were trained in the downturn, adding a new impetus to Europe's sovereign debt crisis.

Of the Portugal hopes to slowly emerging from its debt crisis is eliminated by Moody, downgraded rating agency four notches of the debt of the Tuesday Portugal, who said the country will probably follow the Greece in need of a second rescue plan.

Portugal took a rescue ($112 billion) billion of euro78 of its European partners and the Monetary Fund International earlier this year after investors nervous reloads it steep unsustainably returns on loans.

After the sharp worsening of the financial situation of the Portugal, the Spain neighbours immediately suffered a ripple effect, with the main stock index of Madrid to the low yield of 1.2% and bond on the rise. Spain, a much larger country, so far, he managed to evade the main benefits of fiscal woes of the continent.

Fears were apparent even in Italy, where stocks fell by 2.4 per cent on concerns that the reduction of expenses might not be enough to bring down the debt.

The idea that the crisis could grow to engulf more savings is a threat to the markets. Save the Spain and the Italy would be several times more expensive than all the rescues that the EU has paid for the time being.

"The growing risk is Italy gets caught up to more than the contagion, and the militia of the bond market dictate a more abrupt rate of its adjustment," said Alan Ruskin, Deutsche Bank analyst.

Decommissioning of the Moody - considered by some analysts and officials such as unexpectedly hard - triggered the new attack on the Portugal, where austerity during the past year have included these increases, pay freezes and cuts in welfare.

Portuguese Prime Minister Pedro Passos Coelho, said that the demotion was "like a punch in the stomach." Fernando Faria de Oliveira, the head of the largest bank of the Portugal, the state-owned Caixa Geral de Depositos, called "immoral and offensive."

Same Barclays Capital Research said that the severity of decommissioning is surprising, adding "it seems more as a response to the Greek."

Tensions are still reflected in sale of Portuguese liaison. While the national debt Agency has succeeded in raising euro848 million ($1.2 billion) market, investors have demanded a high performance. Performance in the sale of the 3-month Treasury bills is 4.926%, against 4.863% on the same invoice mid-June and from the folder 4.967% June 1.

The Portuguese 10-year bond yields rose to 13 percent, while the Lisbon stock exchange decreased by 3% with banks for registration drops more steeply.

Part of the rationale for the decommissioning of Moody was that the determination of the EU for investors from the private sector to share the burden of the guarantors, as for the Greece, the subject of discussion increases the chances of the Portugal being excluded from the market beyond 2013, where he hopes to return to a bond.

The European Commission President José Manuel Barroso, said recovery of the Portugal will be properly followed and evaluated by the Central Bank European and IMF, with an interim report in autumn.

"In this context and the absence of new facts on the Portuguese economy that could warrant a new assessment, decisions of yesterday by one rating agency do not provide for greater clarity." They rather add another speculative element of the situation, "Barroso said in Strasbourg.

German Finance Minister Wolfgang Sch?uble was surprised, too, saying in Berlin, ""... I cannot see that this decision is based on.""

Said Portugal ""is not only entirely on the course, but even ahead of the curve"to implement rescue measures." He has said "Which means nothing, from our point of view... to such an assessment, at least at this stage".

Portugal however is facing a difficult task in reducing the debt burden - it is in recession, with its economy expected to contract by 4 percent by next year, and unemployment reached a record 12.4 percent.

A coalition of center-right government which took office last month promised to comply with the objectives of the debt and economic reforms were required for the rescue plan. It has already introduced for new austerity measures, including a one-time extra tax on the income of individuals, this year and said that it would speed up privatization.

The debt of the Government agency, said last week that he wants to raise to euro6.5 billions of dollars in auctions of Treasury over the next three months.

In Spain, the next market test will take place Thursday, when the Treasury auction of three and five-year bonds.

____

Ciaran Giles Madrid, Gabriele Steinhauser Brussels, Colleen Barry in Milan and Geir Moulson Berlin contributed to this report.

Moody cuts ratings credit adverse Portugal

Portuguese flags is seen on the meeting room in Lisbon on June 16, 2011.

Credit: Reuters/Jose Manuel Ribeiro

NEW YORK | Tue, July 5, 2011 2 pm EDT

NEW YORK (Reuters) - Moody Tuesday investors Service rating of credit of the Portugal crossed into junk territory, saying: there is great risk for the country will need to a second round of funding official before it can return to the capital markets.

The increased concerns that Portugal will not be able to fully achieve the reduction of the deficit and debt stabilization targets set out in the agreement of loan with the European Union and the Monetary Fund International weighed on the decision of Moody.

He is also a growing probability that Portugal will not be able to borrow at rates sustainable in capital markets in the second half of 2013 and some time later, Moody said.

Portugal is facing considerable challenges in reducing spending, increase compliance with tax, economic growth and support of the banking system, the Agency said.

The Coupe Moody rating credit of the Portugal by four levels of Ba2. This is the first of the three major agencies ratings to the credit of the Portugal in junk status. Standard & Poor and Fitch Ratings have Portugal to BBB-minus, at the bottom of the range of investment grade.

(Reporting by Walter Brandimarte and Daniel Bases;) (Editing by Leslie Adler)

View of the debt more important than market credit ratings: report

By Daniel Bases and Ellen Freilich

NEW YORK | Tue, June 28, 2011 6: 15 p.m. EDT

NEW YORK (Reuters) - how good commercial investors from the US Treasury in the case of a downgrade rating of credit U.S. will depend less on the relocation of ratings itself and more on the prospects for long-term inflation, makers of Bank of America, Merrill Lynch said on Tuesday.

The Treasury Board has developed 2 August as the date when he will have exhausted all its emergency measures to avoid default. The Obama Administration and Congress have not yet agreed to increase the limit of 14.3 billion on how the Government can borrow.

The credit rating agencies Standard & Poor, Moody investors Service and Fitch Ratings have all the concerns voiced on the coast of U.S. debt in the absence of a long-term plan to put the country on a sustainable fiscal path to long term.

The credit rating AAA for the largest economy in the world has a symbolic value. But Jeffrey Rosenberg, head of the global strategy for the credit at the Bank of America, Merrill Lynch, said markets would assess the ability of U.S. payments in a timely manner on the capital and interests themselves.

"The market makes its assessment of price () performance, based on its own evaluation, not the rating agencies,"he told journalists at a briefing semi-annual outlook.""

"The risk of long-term credit for United States - not the debt ceiling debate that we have now - really is risk of inflation." What you see on the market is not that there is not much risk of inflation concern today, said Rosenberg.

In mid-April, Rosenberg became one of the traditional credit strategists little suggests that there may be a case for the us to allow a temporary default on its debt.

Its report on 18 April, said the temporary suspension of payments of the debt that the cost of reaching a compromise policy that brings financial viability in the long term "can lead to financial benefits in the long term more" such as the decline of long-term interest rates.

This view has gained some cachet in Washington, where some Republicans were locked on the idea of a failure to brief to force the Obama Administration to accept cuts in more significant costs in exchange for a higher debt ceiling and, ultimately, a compromise budget.

Nevertheless, BAML expected yields on reference 10 years the good United States of Treasury at the end of the year to 3.60%, lower than the 4.0% forecast earlier this year.

Ethan Harris, Chief of developed markets economic research, said he expects a last minute decision "on the United States (.) the debt ceiling." »

In the context of the political debate on the increase in the debt ceiling, a move by the rating agencies ensured that "there a little gasoline on the fire," said.

Harris has said the economy of the Japan returning from its natural and nuclear disasters and waiting that will the oil price drop, the rest "bomb waiting out there" is the debt ceiling debate.

In the negotiations, called "Fiscal Follies", the two parties could make and trigger a "moment of tarp" in violent movements market would require a set of actions.

Another scenario could be composed of modest initial reductions of debt and a two-year debt ceiling extension, a scenario which could put an end to "soft patch the economy", he said.

With a fragile economy, big upfront cuts in the federal budget would be "derail growth," Harris said.

He told Reuters that the current prospects for the US economy in the second quarter are running behind the forecast of growth of 2% of Bank of America Merrill Lynch.

"We have it at 1.7% for the second quarter, based on the latest batch of economic data.". But we have not changed the official forecast of 2 percent, month, there is a value "Harris said, adding that he does not expect the Fed to increase rates at least until September 2012."

The firm forecast of 2.4 per cent GDP growth this year and a performance of 10 years of the Treasury Board of 3.6% at year end. The rate of growth for 2012 edges up to 3.0%.

Despite this controlled growth, chances of increased monetary stimulus remains thin, strategists said.

Francisco Blanch, head of research of products, said that the firm does not believe a third phase of monetary stimulus by the purchase of goods on a large scale is likely.

"The gold back to the sum of $2,000 range - more, you will need IS3 and at the moment, we do not believe that iS3 is in the cards, which is the reason why that we have become a little more cautious in terms of prospects for gold," said Blanch.

The company has a $1,650 per ounce cyclical peak in the price of gold, while the markets remain volatile.

David Bianco, head of U.S. equity strategy, stuck with its target of 1 400 to reference year end Standard & Poor 500 index, but reiterated that he could go as high as 1,500.

Bianco has stocks of technology as an overweight in the model of the distribution of the assets of the firm. Industry, consumers, materials, financials, energy, consumption of health care and discretion are equal weight. Underweight is utility and telecommunications.

As Europe's debt crisis, Rosenberg said the risk in the credit markets that surround the current problems of the Greece were "less of a crisis in this go round" when considered in the context of the recent crises in financial markets in the course of last 4-1/2 years.

Paresh Upadhyaya, head of the Americas G10 FX Strategy, estimated that the market is too fixing the Greece and said the greatest risk of contagion to spread to the Spain.

It provides that the Parliament of the Greece to move to the next series of austerity proposed this week, but said remnants of the financial situation of this nation later settled.

I'm afraid that Greece becomes a ground hog day. It is not entirely disappear. »

(Reporting by Daniel Bases and Ellen Freilich;) (Editing by Dan Grebler)

Credit cards: be careful on these promos (http://rss.csmonitor)

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What’s inside? Here are the questions answered in today’s reader mailbag, boiled down to five word summaries. Click on the number to jump straight down to the question.
1. Basic credit questions
2. How to make money blogging?
3. Favorite podcasts
4. Television compromise
5. Connecting with teens cheaply
6. Overly long “to-do” list
7. Maximizing credit card promos
8. Refinance or not?
9. Quibids?
10. Plant-based snacks

Skip to next paragraph Trent Hamm

The Simple Dollar is a blog for those of us who need both cents and sense: people fighting debt and bad spending habits while building a financially secure future and still affording a latte or two. Our busy lives are crazy enough without having to compare five hundred mutual funds – we just want simple ways to manage our finances and save a little money.

This year, I’ve found myself in two different Secret Santa exchanges.

When I was younger, I used to worry way too much about what I was receiving. I didn’t want to participate in such exchanges because I didn’t want to receive something awful while putting effort into giving something nice.

Now, I barely care what I receive. It’s all about making sure the recipient gets something worthwhile and enjoyable that puts a smile on their face.

Oh, how perspectives change.

Q1: Basic credit questions
I’m a 23 year old University student. I’ve had a credit card since I was 18 (which I just recently – and finally – paid off), and I have a student line of credit with at $12000+ balance. Furthermore, two years ago I took out a loan from my credit union to buy a car which is also paid off. My question is, how do I know what my credit score is and if it’s good or bad? Also, what’s the best way to actually build a good credit score? I was always told I could but something with my credit card (perhaps a CD or something, nothing more than $50), then pay it off right away rather than make minimum payments which just costs more interest. Is this true?
- Tyler

You can’t know your exact credit score without buying it from one of the credit agencies. They all offer programs where you can pay them some small fee to peek at your calculated credit score.

Of course, your credit score is based on your credit report, which you can view for free at annualcreditreport – it’s a site run by the Federal Trade Commission to allow people to view their credit report annually for no cost. Although you don’t get to see your actual credit score, you will be able to verify if there are any incorrect reports on your credit history and see what positive reports are there.

You can also use a number of credit score estimators, like the one at MyFICO, to use the information on your report to get a rough estimate of your credit score. From what I’ve seen, such estimates are usually accurate to within ten points or so.

As for improving your credit, you’re right in that making small purchases and paying them off is the best way to build credit because it demonstrates a positive payment history. I would suggest that you use the card to handle some routine purchase, like gas or groceries, then pay the bill in full as soon as it arrives.

Q2: How to make money blogging?
I have been wanting to find out exactly HOW to accumulate a few dollars of income through click-ads. You had mentioned in your Simple Dollar Rule #11 that we should all try to generate a few dollars from our blog. I know that without an appropriate amount of traffic, one may not generate enough each month to fill a pocket. But that’s not really my concern right now. I just want to know the ‘how-to” so I may feel more motivated about my (not-so-skillful) writings. You see, I love to write and I love to snap (photos). My dream is to one day quit my corporate cell, I mean, cube, and to be able to hold down a lower-paying job closer to home so that I can finally spend more time to write, photograph and jog, my three biggest passions.
- Rachel

Blogging is certainly one way to earn some pocket money, but there are many ways to do that. Earning money from a blog is very interesting because at first, you don’t earn much of anything at all, which weeds out people who won’t stick with it.

You earn money in the long run by having an archive of good posts that others have linked to. As a result, these older posts show up in Google searches, bringing people to your site. The more good older posts you have, the more people you’ll bring to your site without any additional effort.

What you need to do is to ask yourself if you’re writing anything anyone would care about. Can you envision a reasonable scenario where someone would Google a term, find your page, and be pleased with what they find, enough to stick around and read more? If you’re not writing that kind of stuff – either useful or entertaining or, ideally, both – then you’re going to have a very hard time succeeding at blogging.

Once you’ve done this, though, then earning money is fairly easy – just put some ads on the site and be patient.

The key is content. If it’s good stuff, all you have to do is get the word out a little bit (join some blog carnivals associated with your topic, for one) and then put some ads on your site. Then wait (and keep making good content, of course).

Q3: Favorite podcasts
As a fellow avid podcast listener, I’m always interested to hear what podcasts people regularly listen to. What are your favorites?
- Matt

Aside from a few NPR shows that I listen to in podcast form because it’s more convenient (Planet Money, Fresh Air, Wait Wait, Don’t Tell Me, etc.), I listen to these podcasts regularly.

Radiolab, which is a science podcast that’s probably one of the best things on the internet
Pardon the Interruption, a sports podcast that keeps me at least up to date on the “watercooler” talk in the sports world
This American Life, a collection of audio essays on a seemingly infinite array of topics
The B.S. Report, a podcast ostensibly about sports but tends to branch out into all sorts of topics
The Dice Tower, which focuses on board and card games
Grammar Girl, which is a very short entertaining podcast on grammar issues

There are a lot of great podcasts up there. This batch is pretty much all I can keep up with during a given week, since I usually listen to them in the background and play them twice or three times each so I can absorb more of them as I’m working.

Q4: Television compromise
My wife and I have strongly contrasting views on our television. To put it simply, I barely watch it. My wife watches about 10 hours of television a week. I watch roughly 3 hours and those are usually sporting events outside of our home. Our satellite bill is about $100 a month because of all the premium channels we get. Now, I don’t begrudge that money being spent, but each of us gets a certain “allowance” each month of money to spend freely. I think that money should come out of her allowance, but she says it’s just a shared bill. What do you think?
- Ronald

I think that you both have a point, to some extent. I also think this is an issue you need to resolve ASAP before it dissolves into something poisonous in your marriage, because I can sense some angst in your email.

Your wife’s point is that this is a service that you can use any time you wish and if you choose not to, that’s your choice, but it shouldn’t be eliminated because it’s a service that is actually used in your home. Your point is that it’s a service that I’m paying for and not using.

Here’s my honest suggestion: take note of how much television you both watch for a few months. See whether or not the disparity is really as big as you’re thinking. You might be surprised to find that your wife doesn’t watch as much as you think or that you watch more than you think.

If you have hard numbers that shows that you do spend a lot less time watching than her, then consider a proportional share of the billing. Take the cable bill, divide it in half, and then add that much to your respective “mad money” for the month. Then, you each pay a portion of the bill out of your “mad money” that lines up with how much you’re using it.

The important thing is to not let this fester, as it can grow into a much bigger problem over time.

Q5: Connecting with teens cheaply
Lately, I’ve felt like there’s a big gulf between me and my two daughters (age sixteen and fourteen) that didn’t used to be there. They’re not the partying type – in fact, they don’t leave the house all that much. It doesn’t feel like we have the same connection we used to have, though, and I’m trying to find inexpensive ways to rebuild that connection. Any ideas?
- Charlie

My usual suggestion is to tell parents of teens to institute a family night or two a week, but that doesn’t really seem to be needed in your case if your kids are already homebodies. What you need is simply some activities that you all do together.

If you want to make a formal thing out of it, start a family game night where, once a week, you all play games together. It gets you all around the same table for an hour or two, at least.

If you want something less formal, just ask your children what they’d like to do this evening together, your treat. You might be surprised as to what they come up with.

Q6: Overly long “to-do” list
I love the system and it’s helped me a lot. One problem I have though is that my “Next Action Steps” list is INCREDIBLY long. With everything personal plus work related (and a lot of work projects going on at any one time), it’s just a huge, huge list. David Allen suggests organizing by location where it needs to be done (i.e. “Phone”, “Computer”), but even that doesn’t help, as it’s still a very, very long list. (Many people must have this problem, as I’m not the only one with a lot on my plate.) I find the mix of important and un-important things on the list makes it difficult for me to get the most important things done, as the important next action steps get lost in the huge number of things on the list. Do you prioritize? Or organize it some other way? I find every morning I’m going through the list again and re-prioritizing, which takes a good bit of time and is not very productive (or in the spirit of the list, which is supposed to simplify). Do you have thoughts on this? (or could you share some old version of your “next action steps” list as it looks to you?)
- Valerie

My biggest trick is to simply recognize that a lot of this stuff is realistically never going to happen. If my list gets beyond about 25 or 30 items, I make a conscious effort to whack some items from the list, either by rapid-firing the very short ones or by other means.

Other means? I’ll just admit to myself that the closet isn’t getting cleaned out any time soon. Then, I’ll remove that item from the list and put it on a “someday/maybe” list. Or, I’ll recognize that returning some minor call isn’t really important and I’ll just completely purge the thing.

If you have a list that’s that long, then you’ve got a sure sign that you are stuffing too much into your life. That means it’s time to whack the unimportant stuff.

Q7: Maximizing credit card promos
you see saving is also a top priority for me, i do save, as much as my income is variable (i run a business) i can forecast my future earnings but I still set fixed savings.

here’s the deal. my credit card has a promo right now, if i use it for a single transaction of 10 thousand pesos (im from the philippines) i would get a P500 worth of gift certificates in return that i could used at various shops (mostly clothing stores) for FREE!!!

i was so excited when i learned about this promo!but want to make sure i am doing the right thing before i push through with it, you see i only use my credit card if they have appealing promos and freebies,and i ALWAYS pay my bill FULL and ON TIME,so that i could really enjoy the benefits. My business gives me the opportunity to use it for business purposes (PROMISE) and i consider that to be a huge advantage,because i get promos without spending on personal items.

i have a 150 thousand credit line with the card with this promo,i want to use it and charge 500 thousand (around $12,000 ) so i could get 25 thousand ($600) worth of free shopping!!! december is coming near so i can use this to purchase gifts for my family as well. the problem is like i said i only have 150 thousand credit line, and because i don’t carry any balance, i only need to have an extra credit line of 350 thousand ($8,200) for me to complete this target,to do this i will dig into my savings and withdraw this amount and make the advanced payment on the card so the ceiling would go to 500 thousand when i use it. is it worth it?

learning from the simple dollar self discipline and clear goals makes me hesitant to touch my savings,if i do this, the possible time that i could return the said amount to my savings would be in february next year. because the goods that i will purchase with the card would be sold at terms and will be paid by my clients in 60 days,this means i will get the amount by the end of january,that’s why i said i would have surely placed it back in my savings account by february. should i do this?should i touch my savings so i can get advantage with the promo? if it helps,i would still have my emergency fund even if i do this,i just feel a little uncomfortable doing it and parting with my savings for almost 3 months,just to have some sort of free shopping spree. I just want to hear your opinion on touching savings for things like this.
- Leon

This is a very bad idea, in my opinion. You are putting cash savings at risk in order to cash in on a fairly small credit card reward while also leaving yourself in a very precarious position where your entire emergency fund is held by the credit card company. I would never, ever put my family at that kind of risk for a few Christmas presents.

If you want a much better solution, take the $250 from your savings account and use that to buy the gifts. Then, over the next few months, replenish that money so that you’re right back where you started.

Credit card rewards are a nice perk, but you should never put your own money at risk in an effort to try to squeeze out more of them, especially when it requires you to hand over your savings and charge the card like crazy.

Q8: Refinance or not?
Should we refinance our mortgage into a 15-year fixed mortgage from our 30-year fixed?

Our current mortgage has a balance of $358,000 and is at 6.5% fixed. We have 25 years left on it (it started out at $380,000 and we made some extra principal payments over the last few years).

We suspect that our house might appraise at between $330K and $350K. Yeah, that sucks…

We have about $100,000 to put down on the mortgage. About $60,000 is in a full-service (non-retirement) brokerage account that we were hesitant about touching until now. The rest is in savings accounts. We would like to only put down $80K – $90K because we still want to have some savings for emergencies. We have about $190,000 in retirement accounts that we don’t plan on touching. We are in our early 30s. Together, we make about $160,000 yearly gross income. No other debt (besides this awful mortgage) and no kids (yet).

Do you think we should pull that money out of the brokerage firm and refinance? I don’t feel so bad about doing it because the interest rate on our mortgage is so high and I really want to avoid paying PMI if we refinance.

I’m calling the mortgage broker tomorrow, but do you think we’re making the right move? I just hate the fact that we’re paying 6.5% interest on our mortgage. (When we bought the house, we accepted a higher interest rate to avoid PMI.) We also really, really want to have the house paid off in 15 years or sooner, so it’s not really about the lower monthly payment for us.
- Michelle

From my perspective, it depends on how much you would have left in your savings to cover emergencies if you did this. If this move would devour all of your savings and leave you at risk in the case of an emergency, then I absolutely would not do it.

What should you do if you can’t swing it right now? Wait, and save. There’s no real emergency rush to do this, as mortgage rates aren’t going to climb rapidly in the near future.

What’s an adequate emergency fund? I would make sure I could cover two months’ worth of living expenses for each dependent in the house. So, if there are three of you there, you should have six months’ worth of living expenses on hand.

Q9: Quibids?
What are your thoughts on quibids.com or xbids.com? Websites that claim to allow consumers to win auctions on items at ridiculously cheap prices. Seems like a scam to me requiring entirely too much time.
- Darren

I view sites like this as a combination of a game and a pretty ordinary retail site.

Take the example that Quibids uses. You have to buy bids from them – say, 300 bids for $180. Then, you use those bids in an auction – each time someone bids, the value of the auction goes up one or two or five cents.

I tried out Quibids and most auctions seem to keep getting bids up to about 25-30% of the retail value of the item. Let’s say you’re bidding on a Wii – that means it goes up to $40 or so. To get to that value, literally thousands of bids had to be tossed out there, meaning the site just made about $300 or so from that auction.

Remember, when you see the price paid for an auction, that’s not including the value of the dozens or hundreds of bids the person had to spend to get the item (at a cost of $0.30 to $0.60 per bid) and the hours they had to sit there bidding until they won the item.

However, they do give you the ability to buy an item for the retail price minus the number of bids you placed.

If you were strictly bidding on items that you would buy anyway and don’t care about paying retail price on them, then it’s fine, but I’d rather shop around and get the item below retail. If you’re not doing that, then it’s just a very expensive game.

Q10: Plant-based snacks
My biggest problem whenever I try diets is cravings. I’ll do fine at meals, but in the middle of the day, I’ll start craving foods and without thinking, I’ll snarf something. How do you deal with that with a plant-based diet?
- Mel

There are lots of good vegan snacks, and I keep quite a few around at arm’s length.

Fruits. Pumpkin seeds. Larabars. Nuts. Things like these are my snacks, and they’re very important because they keep me from overeating at meal times. Instead, I just eat a reasonable amount at meals because I’m already at least somewhat full.

I find that having such foods at arm’s length ensures that I’ll eat those snacks instead of being ravenous at meal times or eating something less healthy.

Got any questions? Email them to me or leave them in the comments and I’ll attempt to answer them in a future mailbag. However, I do receive hundreds of questions per week, so I may not necessarily be able to answer yours.

Add/view comments on this post.

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Brady Bond Swap paves the way for a dollar offer: Argentina credit (BusinessWeek)

December 07, 2010, 6: 12 PM EST by Drew Benson and Ben bath

December 7 (Bloomberg) – offer Argentina 335 million suffering Brady bonds trading moves the Government international sale of debt for the first time in ten years.

Dollar performance Argentina bindings in December 2033 slipped to a minimum of one week of 9.23% yesterday. Mandates related to the gross domestic product rose 13.73 cents, the highest since November 10. President Cristina Fernández de Kirchner seeks to reduce the cost of borrowing plus-third high among major economies market emerging six months after the restructuring 12.2 billion in loans outstanding. Proposed exchange would remove the market, the last debt issued in a restructuring of the 1990s and named after the former Secretary to the Treasury Nicholas Brady. "" This is a step forward, "said Daniel Marx, former Secretary who helped sell the Argentina Brady bonds in 1993 and is now leading Quantum Finanzas, a Buenos Aires-based research firm. "Brady bonds have fulfilled their role".Argentine ceased to make payments on 95 billion in 2001 to set default more never sovereign bonds offers trading debt of Brady bonds reference 2033, GDP mandates, dollar notes in June 2017 and a swap of payment.The cash 263 million dollar notes and 54.2 million euros of debt of the German mark. Government listed terms to www.bondcom.com/argentina.Accelerating PaymentThe transaction would allow the country to accelerate the payment of the debt to the original in 2023 as Argentina subsidence of the cost of debt, the economy is growing at the pace in five years and foreign reserves climb to record billion.The $ 52 remaining Brady Argentine bonds use German collateral, debt and US Treasury bonds thus making more expensive wire of sovereign debt, Marx said in an interview telephone Buenos Aires yesterday.The obligations have been issued under the regime restructured so-called, including 21 countries, including Poland, the Philippines, and the Brazil Brady debt, they missed to after the Federal Reserve led us in the 1980s interest rates. Argentina issued approximately 30 billion of Brady bonds. "" Brady bonds served a purpose at the beginning, but once credit is restored, it is more convenient to retirement, "said Marx. "On the first day was that they would be retired early".ClaimsArgentina legal fact offering "manage its external liabilities" and reduce the prospect of legal claims against the creditor, the Government said in a statement yesterday. The country is among a group of countries, including the Poland and the Albania who still Brady debt. Tapping Brazil Central Bank reserves in 2006 to redeem his remaining $ 6.6 billion of notes.While Argentina previously traded debt in 2005, Brady bonds were excluded from the June restructuring concern creditors would be used as leverage to try to block a settlement, said Marx.Sergio Poggi, a spokesman for the Ministry of economy, does not return a call seeking comment.The offer Press Office is more likely to help reputation Argentina among investors to improve its balance sheet, said Bret Rosen, a strategist at debt in Latin America to the Standard Chartered Bank in New York. "Cleaning and ' issues debt"It's not a huge"money, said Rosen telephone interview from New York. "Argentineans clearly seek to clean up essentially to the various questions of various sovereign debt that they have had to deal with."Swap five default credit related to debt Argentina slipped today 18 basis to 622 points. A basic point is equal to $1,000 per year over 10 million debt protection contract. Credit default swaps pay the nominal value of buyer in exchange for underlying securities or money equivalent should fail, a Government or a company to join the debt agreements.The peso fell 0.1% 3.9797 per extra dollar.The investor performance seeks to possess Argentine bonds instead of US Treasury bonds fell to 31 points basis, or as a percentage of 0.31 point basis, 497 points according to JPMorgan. This is the highest among major emerging market economies after the Venezuela and America Ecuador.South second-most large economy after the Brazil provides to enter into negotiations with the Paris Club of the nations group creditor over 7 billion dollars next week, the Ministry of economy said.Paris Club TalksEconomy Minister Amado Boudou lead discussions with the informal association, whose members include United States, Germany, Japan and Italy. Boudou said on 24 November agreement with the Paris Club would contribute to low cost loans to corporations and boost investment.Argentina is also in collaboration with the international monetary fund in order to improve its inflation in the middle of the concern that consumption of the countries reporting prices are imperfect data. Prices go up 26 per cent per year, according to company research focused on the Buenos Aires Ecolatina, compared to estimates of the Government of 11.1% in the 12 months by October.These with Brady supply measures help Argentina long-term said Sara Zervos, which allows to supervise approximately 10.5 billion dollars in assets emerging which Argentine bonds Oppenheimer Funds Inc. in New York. "All these things in isolation are not a huge big deal, but when you add them places it means that they try to clearly pave the way to borrow abroad, said Zervos. "Overall is bullish for the Argentina assets and the Argentina".

-With the help of tall Barak Harif in New York. Editors: Bill Faries, Alan Mirabella.

To contact the journalists on this story: Drew Benson in Buenos Aires, abenson9@bloomberg.net. Ben bath in New York at bbain2@bloomberg.net

To contact the responsible editor of the story: David Papadopoulos to papadopoulos@bloomberg.net