Consumerist

Beware The CEO Panhandlers [QFT]

Chris Walters — Fri, 10 Oct 2008 17:48:40 EDT

Enjoy your weekend, and mind your pockets when you're out and about.

"I Am Going To Be Small" by Jeffrey Brown, via Neatorama

Old Cigarette Ads: Doctors, Nurses, And Rock Hudson Say It's Good For You [Badvertising]

Chris Walters — Fri, 10 Oct 2008 17:20:59 EDT

Man, cigarettes were awesome in the past, if these old ads collected by Stanford University are to be believed. They calmed your nerves so you'd stop humming nervously! They soothed your throat! They made you a movie star and helped you capture animals on your big game hunt! We don't know what tobacco was made of before the mid-80s, but no wonder everyone smoked.

Or maybe it was just ridiculous advertising. Check out Stanford's full collection for more stunners like the ones below.

"Not a Cough in a Carload" [Stanford University via WeirdNewsFiles via Neatorama]

Walmart Decides To Honor DRM-Protected MP3 Purchases After All, At Least For Now [Walmart]

Chris Walters — Fri, 10 Oct 2008 15:17:17 EDT

Last month, Walmart announced it was shutting down the DRM side of its online music store, and too bad if you were a customer, because they were also going to turn off the DRM server that authorized your music for playback. Apparently enough customers complained, because they came to their senses—at least for the time being—and decided to keep the server running. Read their email below.

NOTE: This is a follow-up to our email titled "Important Information About Your Digital Music Purchases" from 9/26/08.

Based on feedback from our customers, we have decided to maintain our digital rights management (DRM) servers for the present time. What this means to you is that our existing service continues and there is no action required on your part. Our customer service team will continue to assist with DRM issues for protected windows media audio (WMA) files purchased from Walmart.com.

While our customer support team is available to assist you with any issues, we continue to recommend that you back up your songs by burning them to a recordable audio CD. By backing up your songs, you insure access to them from any personal computer at any time in the future.

We appreciate your support and patience as we work to provide the best service possible to you. As we move forward with our 100% MP3 store, we'll continue to update you with key decisions regarding our service and your account via email.

Thank you for using Walmart MP3 Music Downloads.
The Walmart Digital Music Team

They could still turn it off in January, or next summer, or hell, the day after Thanksgiving next month, and we're not naive enough to think Walmart will follow Yahoo's footsteps and offer DRM-free replacement tracks, so take the extra time you've got to back up those tracks if you don't want to be at Walmart's mercy in the future.

"Walmart has a change of heart, decides to maintain DRM servers" [Engadget]

Comcast Gives Reader Hurricane Ike Refund [Comcast]

Ben Popken — Fri, 10 Oct 2008 14:45:42 EDT

Reader Josh is a Comcast customer says he was without power for 7 days due to Hurricane Ike, and by calling 1-800-COMCAST he was able to get a service credit for the whole time he couldn't watch TV.

(Photo: Wayne Gunn)

Supermarket Chain Adds 10% At Register, But Only In Some Stores [Avanza]

Chris Walters — Fri, 10 Oct 2008 14:44:20 EDT

Nash Finch, a Minneapolis-based supermarket chain, adds a 10% fee to the bill at its stores catering to Hispanic shoppers in Colorado, reports 9News in Denver:

The Nash Finch stores Avanza, Food Bonanza and Wholesale Food Outlets add the 10 percent charge to food at the register and specialize in serving Hispanics, according to store workers.

However, the Nash Finch stores Sun Mart Foods, Econo Foods, Family Fresh Market, Pick N Save and Prairie Market stores do not charge extra at the register and do not cater to Hispanics, according to the store workers.

"Jim," a store manager, told the news station that the fee is to offset other costs, but it's clear that the 10% charge is at least partly a way to offer steeper "discounts" throughout the store that are effectively removed when you pay.

Nash Finch denies it's doing anything skeevy or illegal with its unclear pricing, but 9News points out their attempt at full disclosure is confusingly worded, perhaps deliberately so:

"The 'shelf-plus' pricing program is only used in certain store formats. These stores tend to be located where consumers are more price-conscious, as compared to our more conventional supermarkets," said Brian Numainville, Public Relations for Nash Finch Company. "The pricing policy is explained, not just in English, but also in Spanish, so that no customer is caught unaware at the cash register."

The stores do advertise that they are going to add a 10 percent fee in signs posted across the store, on the store shelves below the price of a food item on the store shelf and in flyers and circulars. However, the wording is confusing to many. For example, the flyers read, "A great way to save - Plus 10 % at the Register."

What do you think—is this an acceptable way to price groceries? In a series of questions Nash Finch answered for 9News' story, they claim that they're not the only chain to do this, and that it's not just Hispanic markets. Here's their final justifaction for the practice:

Question 9: Wouldn’t it be more honest/up front to just add 10 percent to the price of all of the products—so that people can see the actual price on the shelf and on the sticker?

Answer: The grocery industry is extremely competitive. Stores vie for customers. Customer loyalty is highly valued. Given the need to attract and retain customers, our stores cannot afford to alienate its customers by charging unexplained fees or unanticipated mark-ups. Our pricing is attracting customers—rather than losing them—demonstrating that the pricing policy is in fact fair, obvious, and well-understood by our shoppers.

"Some grocery stores add 10 percent fee" [9News.com] (Thanks to Randy!)

Community Outraged At Buca di Beppo Restaurant Manager's Firing? [Mysteries]

Meg Marco — Fri, 10 Oct 2008 14:42:51 EDT

Reports that community of Chandler, AZ is outraged at the firing of Buca Di Beppo manager Joe Busone have been popping up in our inbox. The Arizona Republic says that when he was let go, seven servers also walked out — in the middle of dinner.

Busone, 53, had been the manager at Buca Di Beppo at Ray and Priest roads for eight years, and he had built a reputation as someone generous to community groups and loved by his staff.

Greg Geryak, who owns an insurance agency in Ahwatukee, had organized an annual dinner for the Ahwatukee Kiwanis Club at the restaurant. Forty people showed up for the 6 o'clock reservation.

Shortly after, Geryak said, "Joe saw me, gave me a hug and walked out the door. Five minutes later, I heard he was fired. Then . . . the three guys that were going to take care of my party walked out."

The group received their dinner, at a reduced rate, but Geryak said it wasn't up to Buca standards. The salad was soggy, drinks were slow in arriving and Geryak had to get up to refill water glasses himself. Desserts were so slow that a number of the group had left by the time they arrived.

Geryak was so incensed at Busone's firing that he wrote an e-mail to Planet Hollywood, which recently bought the Buca chain.

The paper also interviewed some of the employees who quit when their manager was fired. They compared him to a father, and said "He always took a special interest in everyone. It was not really working for a boss, it was working with him."

We received an email from a 13-year-old boy who says that with his parents permission, he wrote to Planet Hollywood and asked that Joe be rehired and whoever fired him be fired instead.

The Republic says that the manager refuses to say why he was fired, Planet Hollywood will not return their phone calls, and the comments on the article are full of various conspiracy theories. It's all very mysterious.

Workers walk out after Buca di Beppo manager fired [Arizona Republic]

$1 Netflix Price Hike For Blu-Ray Access [NetFlix]

Ben Popken — Fri, 10 Oct 2008 14:26:11 EDT

Netflix will be start charging you $1 more per month to offset the costs of Blu-Ray movies, starting November 5. You have to opt-in to the Blu-Ray access, and the $1 surcharge, by going to "your account" and "add Blu-Ray access." If you don't already have Blu-Ray access on your account, then your membership price stays the same. Sounds like they needed to invent a way to make more money and this fee, admittedly small, seemed the best way to go about it. Copy of the email they sent subscribers, inside.

Dear Dash,

As you may know, Blu-ray movies are more expensive than standard definition movies. As a result, we're going to start charging $1 a month (plus applicable taxes), in addition to your monthly membership charge, for unlimited access to Blu-ray movies.

The additional charge for unlimited Blu-ray access will be automatically added to your next billing statement on or after November 5th, 2008 and will be referenced in your Membership Terms and Details. If you wish to continue getting Blu-ray movies for $1 a month more, you don't need to do anything. If not, you can remove Blu-ray access anytime by visiting Your Account at the Netflix website.

If you have questions about this change or need any assistance, please call us anytime at 1-888-638-3549.

-The Netflix Team

Price change for access to Blu-ray movies [The Official Netflix Blog] (Thanks to Dash!) (Photo: corsec67)

Lawsuits Claim Applebee's Weight Watchers Food Has Too Much Fat [Nutrition Information]

Meg Marco — Fri, 10 Oct 2008 13:34:11 EDT

Awhile back we posted about some testing done by a group of local news affiliates that showed that the actual amount of fat (and calories) in certain "healthy" menu items from a variety of restaurants was different than what was listed on the menu.

Now it seems that the inevitable lawsuits have begun, (though we know of no direct connection between these particular test results and the lawsuits.)

The Seattle Post-Intelligencer says that a lawsuit filed earlier this month in King County Superior Court claims that Applebee's Weight Watchers menu has two to three times the amount of fat advertised.

"Applebee's made certain representations ... and independent lab tests showed that the representations they made were way off," says Jason Epstein, an attorney with Premier Law Group.

This isn't the only lawsuit to be filed about the issue. There's another one in Kansas. Applebee's parent company has responded to that one, telling the Washington Business Journal that the lawsuit is without merit.

According to the lab tests reported by WXYZ in Detroit, Applebee's Cajun Lime Tilapia was supposed to contain 6 grams of fat, but really had 14.3 grams of fat. Applebee's Garlic Herb Chicken also was advertised at 6 grams of fat, but really had 18. If you'd like to take a look at the results, click here. (PDF)

The P-I says that the Washington lawsuit is seeking class action status.

Suit accuses Applebee's of understating calorie counts [Seattle P-I] (Thanks, Rob!)

Friday Consumerist Flickr Pool Finds [Flickr]

Ben Popken — Fri, 10 Oct 2008 12:52:17 EDT

Here are seven wonderful photos that readers added to The Consumerist Flickr Pool this week, chosen because they're both neat and could possibly be used in a Consumerist post. Our Flickr Pool is the place where Consumerist readers go and upload photos for possible use in future Consumerist posts. Just be a registered Flickr user, go here, and click "Join Group?" up on the top right, and start hitting "send to group" on your individual photos you want to add to the pool.

Title: "18:365 The choice is yours. Choose wisely."
By: unleashedlive

Title: "jump"
Caption: "Wall Street news that didn't make the front page..."
By: shorty63136

Title: "Sell Stocks, Buy Shoes"
By: Atomische.com

Title: "FDIC"
By: smcgee

By: jbuck

Title: "Bombay Sapphire"
Caption: Camera: Nikon D200 Lens: Nikkor 50mm f/1.8D AF
By: themikepark

Title: "DCBliss"
Caption: "Taken at the National Arboretum, Washington DC."
By: ryanhollowayphotography

Add your shots to The Consumerist Flickr pool, and perhaps they'll get featured in a future story, or even highlighted in a Friday Consumerist Flickr Pool Finds post. See previous winners of the Friday Consumerist Flickr Pool finds here.

Maximize Your Netflix Membership With FeedFlix [NetFlix]

Chris Walters — Fri, 10 Oct 2008 11:51:09 EDT

We first discovered the very useful FeedFlix back in May, and since then the site's been updated to present more data on how well you utilize your Netflix membership. By pasting in any of your private Netflix RSS feeds, you'll see a breakdown of your activity stats, like how long on average you keep titles and your average cost-per-rental. A handy new feature is the "email alerts" function, where you'll receive a weekly reminder if you've kept a title past a certain number of days. We've included a screenshot below.

We'd love to see Netflix roll out a reminder service, but since that would directly impact their bottom line, we have a feeling it won't be showing up on the official site any time soon.

Here's what the typical data screen looks like, if you're curious:

Holy crap, I kept Michael Clayton for 58 days, and I only watched it once! Maybe I should just cancel Netflix and read more books.

FeedFlix.com

People Think Coupon Users Are Cheapskates, Unless You're Hot [Coupons]

Ben Popken — Fri, 10 Oct 2008 11:42:51 EDT

If you use coupons in a store, your fellow shoppers are probably negatively judging you as being cheap, according to a new study. The stigma extends to those around the coupon redeemer as well. However, if you're hot, you get a reprieve. The study had people watch consumers cash coupons, and then interviewed the participants afterward for their reaction. The stigma is lessened if you don't know the person using the coupon, the coupon is of high value, if they're in a different line, and if the coupon-user is a hottie. Researchers proposed that the reason for the coupon-hating is "the modern consumer tends to prize status and luxury over thrift."

Stigma by Association in Coupon Redemption: Looking Cheap because of Others [Journal of Consumer Research] (Photo: Getty)

Comcast Filled My House With Raw Sewage [Comcatastrophe]

Meg Marco — Fri, 10 Oct 2008 11:35:38 EDT

Tressy Campbell of Woodstock, Georgia has a kitchen. In this kitchen is a lot of raw sewage. It's been this way since June. As you might imagine, Ms. Campbell is somewhat annoyed about this, and would like the Comcast contractor who drilled a hole in her pipe and ran a cable through it to pay for the repairs.

WSBTV says that the contractor, Madison Communications, has offered her $12,000 to fix the kitchen, which she would gladly accept — were it not for the fact that the estimates she's gotten say that it will take her at least $15,000-$16,000 to clean up the mess.

We hope she's able to get this resolved, but there is one ray of hope — the limit for small claims court in Georgia is $15,000. Go get 'em, Tressy!

Homeowner Says Cable Mistake Filled Kitchen With Raw Sewage [WSBTV] (Thanks, Tim!)

Fake IRS Fax Demands Your Bank Account And Passport [Scams]

Chris Walters — Fri, 10 Oct 2008 11:10:35 EDT

Nick has written in to warn us about a fake IRS scam that lately has been targeting nonresident aliens (e.g. teachers and researchers) working in the U.S., as well as American citizens working abroad. In the scam, which has been going on since at least 2002 (pdf), the target receives a faxed request from the IRS to provide his name, SSN, and pretty much every other bit of data you'd need to take over a person's financial identity.

If you have a friend who's working overseas, let her know to watch out for this:

I'd like to tip you about a scam going around Japan right now, and possibly Asia (I live and work in Japan), and maybe other places. It's a fax from being sent to foreigners, and in my case to schools. I've received it once and many of my friends have too.

The form is attached [pdf], claiming to be from "Internal Revenue Service IRS.gov", and prompts the recipient to complete form W-8BEN, which is a tax withholding form. Sure, sounds legit at first, but scroll to the 2nd page (page 1 of the fax) which has a W-8BEN "Substitute Form" that asks for personal info including your bank account number, SSN, and a copy of your passport among other things.

Then it asks the person to fax the form back to +1-206-888-1766 within one week to get a ficticious w-9095. Please inform your readers that this is a scam! I (nor my boss) don't know how this person got the fax numbers, and one of my friends recieved this even though she's from England so perhaps they are trying random numbers.

If you receive one of these faxes, report it to the Treasury Inspector General for Tax Administration at ustreas.gov/tigta.

US Muses Backing All Deposits, No Deposit-Insurance Ceiling [Money Meltdown]

Ben Popken — Fri, 10 Oct 2008 11:04:03 EDT

In order to stem the tide of panic-stricken morons taking out all their cash from banks and further destabilizing the financial system, the US is considering a proposal to completely back ALL deposits. This would mean that there would be no deposit insurance ceiling. So even if you had more than $100,000 in the bank, even if you had $1,000,000 in the bank, the government would give you back ALL of that money if your bank failed. The proposal is only in discussions right now, and several different agencies would have to agree that there was "systemic risk" in order to enact it. Europe has already guaranteed all deposits, however, and in order to keep large corporate accounts from emigrating overseas, the US may be forced to follow suit within a few weeks.

[via WSJ]

Wells Fargo Wins, Will Buy Wachovia [Money Meltdown]

Meg Marco — Fri, 10 Oct 2008 10:54:04 EDT

Wells Fargo is the winner in the battle for Wachovia, says the New York Times. Apparently, Citibank became nervous about splitting the bank when they saw the size of the "bad assets" it would have to take on, and quietly walked away. The bank will continue to seek $60 billion in damages, however.

The Times says that if Wells Fargo is successful in a deal with Wachovia, it would elevate what is essentially an overgrown regional bank into a national player.

A deal with Wachovia would elevate Wells Fargo to a prime position in the American banking industry, with the largest nationwide deposit and branch franchise in the country. Together, Wells Fargo and Wachovia will have $1.42 trillion in assets, 48 million customers and 280,000 employees.

The combined bank will be present on both coasts in the fastest-growing markets, playing on the same field as JPMorgan Chase and Bank of America, two of the nation’s largest banks.

Wells Fargo Wins The War For Wachovia [NYT]

Morning Deals [Sales]

Ben Popken — Fri, 10 Oct 2008 09:03:50 EDT

Diesel: Limited-edition pair of jeans for $50 starting at 10:30am eastern, free shipping on everything else with coupon code XXXSold out.
Lowes: Waterfall & Fountains 75% off from Lowes
Amazon: Adidas Men's Jackets for $15+ (70% off)

Highlights From Dealnews

Amazon.com: Diesel Men's shoes from $30 + free shipping
Buy.com: Bluetooth Headset Roundup: Motorola H555 for $15 + $7 s&h, more
Target: Isaac Mizrahi for Target Dresses from $9 + $5 s&h

Highlights From Buxr

onSale: Westinghouse LVM-37W3SE 37 1080p LCD HDTV for $549 w/ Free shipping after rebate.
Circuit City: %10 OFF when you select in-store pickup and apply coupon code: C9A74ZKAHP
Deal Extreme: Noise Isolation Earbuds For iPod for $1.99 w/ Free shipping (use coupon code: BULKRATE for bulk orders)

Highlights From Dealhack

Newegg: Refurbished Magellan 3200 GPS Navigator $80 Shipped
Dell Home: Guitar Hero Aerosmith Bundle for PS3 or Xbox 360 $60 with Coupon
Amazon: Price Drop: Samsung BD-P1500 Blu-Ray Player $230 Shipped

What Are "Collateralized Debt Obligations?" Watch These Champagne Glasses. [Videos]

Ben Popken — Thu, 09 Oct 2008 18:15:45 EDT

There's a lot of funky financial terms getting thrown as we try to explain how the money meltdown started in the first place, and one of the funkiest is a CDO or "collateralized debt obligation." Luckily, Paddy Hirsch from Marketplace is here to explain it using just champagne glasses, a whiteboard, and a sexy British accent..

Crisis explainer: Uncorking CDOs from Marketplace on Vimeo.Basically, the CDO manager has a champagne bottle filled with mortgages. Every month when the debtors pay their mortgages, it fills the bottle with payments. The cork pops off and he pours the bubbly over a tray of glasses, each one representing a tranche of increasing risk.

The glasses at the top, rated AAA, get paid first and the least amount, and the bubbly flows down to AA, BBB, BB and equity, the tray at the bottom.

The party gets bad when people stop paying their mortgages. Now the bubbly only reaches the first levels, and the BB and the equity don't get paid at all. To make it worse, we have a SECOND CDO manager.

His bottle, instead of being filled with the mortgages, is filled with the BB-rated securities. When a few people stop paying on the first bottle, that means his bottle has no juice at all. He has a whole champagne glass tower with glasses rated AAA through BB like the first one, but it's not getting filled up at all. Then the champagne towers fall over and crash and Wall Street evaporates and there's runs on the bank some wisenheimer paints the Wall Street bull's balls blue. That's CDOs for you.

If you enjoyed that one, he also made another video explaining Credit Default Swaps, which are what brought AIG down.

Crisis explainer: Uncorking CDOs [Marketplace]

PHOTO: Wall Street Bull Had Blue Balls Today [Money Meltdown]

Ben Popken — Thu, 09 Oct 2008 17:39:49 EDT

The balls of the famous Wall Street bull got painted blue today. Before they were cleaned, a Gothamist reader snapped this pic. In terms of the creative comic output it's sparked, this may be the funniest economic meltdown ever.

Wall Street Really Needs Relief [Gothamist]

Get A New Sprint Line, Get Free Companion Airfare Ticket [Deals]

Ben Popken — Thu, 09 Oct 2008 17:05:46 EDT

Just found an extra deal for today from Sprint: Get a new Sprint phone line and get a free airline companion ticket, up to a $500 value. Get two tickets, up to a $1,000 value, with activation of a BlackBerry on a BlackBerry Plan or a Simply Everything Plan.

Sprintholidayoffer.com [Official Site via Fry's Forum] (Thanks to Luis!)

Chicago Sheriff Halts Foreclosure Evictions, Won't Toss Innocent Renters [Vigilantes]

Chris Walters — Thu, 09 Oct 2008 16:48:36 EDT

Chicago's sheriff has placed a moratorium on evictions for mortgage foreclosures, angering bankers who say he's breaking the law.

Cook County Sheriff Tom Dart said he understood he was flouting the law in refusing to have deputies carry out the rising number of eviction requests, but mortgage holders must be accountable.

"These mortgage companies only see pieces of paper, not people, and don't care who's in the building," Dart said.

By halting the evictions, he's preventing about 500 notices that were scheduled over the next 6 weeks.

Mortgage foreclosure cases filed in Cook County are likely to exceed 43,000 this year, compared to some 18,000 in 2006, the sheriff said.

The president of the Illinois Bankers Association, Linda Koch, points out that they have to have the ability to "take over collateral upon default" or they won't make loans—which of course is absolutely true, but may not be the most realistic, or humane, or in this case enforceable, position at this moment in our country's history.

Update: I have edited the headline to include a reference to renters, because my original post didn't explicitly mention this and it's important to the story.

"Sheriff in Chicago halts foreclosure evictions" [Reuters]
(Photo: Getty)

How To Find Some Extra Cash [Money]

Ben Popken — Thu, 09 Oct 2008 16:41:58 EDT

A few weeks ago, part of our advice on how to handle these tough financial times was to increase your emergency fund. Obviously this is something that most people would like to do — have more cash in their lives — but how exactly can this be accomplished? MSN has some suggestions on how to find some extra cash:

* Sell something — Household possessions, nonretirement investments, heirlooms.
* Cash out — Certificates of deposit, whole life policies.
* Earn more — A second or third job, a side business.
* Hit up Mom and Dad — Ask for a gift, ask them to pay a medical or tuition bill, ask for a loan.
* Borrow smart — Tap home equity, reverse mortgage, hit up friends or other family, consider a social lending site, talk to your credit union or bank about a personal loan, borrow from your 401(k), margin loans, use a credit card advance, pawn-shop loans.

A good list, but the one thing MSN misses is finding extra cash by cutting back on expenses. Here's a quick round up of some decent money saving resources from around the web:

* 301 Posts On Saving Money
* Top 10 Ways to Trick Yourself into Saving Money
* 30 Easy Ways to Save Money (and No, you are not doing them all!)
* 75 Painless Money-Saving Tips
* 25 Gadgets That Actually Save Money

Sure, there's a fair amount of overlap among these, but by reviewing them and the initial ideas from MSN, you're sure to find at least a few ways to help you create more cash. And these days, more than ever, cash is certainly king.

The best ways to raise cash fast [MSN Money]

— FREE MONEY FINANCE

(Photo: Getty)

3 Ways 2008 Isn't 1929 [Money Meltdown]

Ben Popken — Thu, 09 Oct 2008 16:30:31 EDT

With the Dow currently below 8600, stocks are continuing their downward spiral this week, the but the WSJ tells us 3 ways why it's totally different from 1929:

We have the FDIC. Depositors aren't going to lose a dime. Can't say the same for the shoeboxers, though.
The Fed is cutting interest rates now, not years down the road.
The bad loans were made against tangible assets, houses, instead of the more intangible asset of stocks. Equity can dissipate in keystroke, but you can't just vaporize a house.

Have the essential rules of the economy changed? No. Boom and bust, that's how it goes. Sit tight, little chickies, and bide your time until we can jump on the next hot speculative trend: moonfarming!

As Dire as the Times May Seem, History Isn't About to Repeat Itself [WSJ]

Is Circuit City Going Bankrupt? [Circuit City Bankruptcy Watch]

Meg Marco — Thu, 09 Oct 2008 16:18:37 EDT

Since the end of May, Circuit City's stock has lost about 87% of its value; the company has fired its CEO, lost a $1.3 billion takeover offer from Blockbuster, and posted quarterly losses of $239.2 million. Now the Washington Post says that the company lost a recommendation from a firm that advises manufacturers on whether to ship goods to retailers — meaning that Circuit City may be having trouble paying its vendors. Are they ready to go under?

Motley Fool thinks so. They placed Circuit City at the top of a short list of retailers that you could "kiss goodbye."

The new CEO recently hired some independent advisers who will presumably work to save the company from itself, but is it just too late?

Circuit City's shares are currently trading at $0.42. You might want to use up your remaining gift cards... just in case.

Ben & Jerry's Ice Cream Set Is Inappropriately Proud Of Its Materials [Oops]

Chris Walters — Thu, 09 Oct 2008 16:16:17 EDT

The person in charge of the Ben & Jerry's gift shop in their Vermont factory might want to talk to someone about redesigning the packaging of this ice cream bowl and spoon set—"melamine" probably isn't the kind of word you want to position so prominently these days.

(And yes, we know it's not toxic in this form. That's why the tag is "oops" and not "poison!")

(Thanks to Pete!)

Government May Begin Buying Bank Stock Within Weeks [Money Meltdown]

Meg Marco — Thu, 09 Oct 2008 15:51:29 EDT

As it is now apparent that the credit crisis has spread to the global economy and has not been contained in any way, the Bush Administration is considering an option included in the $700 billion dollar bailout package that would allow them to invest directly in banks — buying preferred stock in exchange for a "cash injection." White House spokesperson Dana Perino said taking partial ownership of banks and other moves associated with the financial rescue plan would not be “part of [Bush's] natural instincts,” according to the NYT, but acknowledged that the situation has gotten sufficiently dire as to warrant a change of heart.

“But when presented with the evidence that the financial crisis about to hit the United States would affect every single American up and down the economic food chain, this president decided that it was important that the government take robust action. That’s why we worked with Congress to establish the rescue package.”

Ms. Perino said the “capital injections” into the banks would involve “an equity stake” for the federal government but would not amount to a takeover.

“Secretary Paulson is looking at all the different tools to figure out which ones should be used at what time and how robustly and how much money to put into each,” Ms. Perino said, referring to Treasury Secretary Henry M. Paulson Jr.

The plan allows the government to take an ownership stake in banks — even healthy ones. In exchange, the banks would get an injection of cash that (in theory) would strengthen their balance sheets and convince them to start lending again.

The Times also says that the recent coordinated global rate cut hasn't seemed to help much:

Never before has the Fed issued an announcement on interest rates jointly with another central bank, let alone five other central banks, including the People’s Bank of China.

Yet the world’s markets hardly seemed comforted. Credit markets on Wednesday remained almost as stalled as the day before. Stock prices, which had plunged in Europe and Asia before the announcement, continued to plummet afterward. And stock prices in the United States went on a roller-coaster ride, at the end of which the Dow Jones industrial average was down 189 points, or 2 percent.

Even serious free-market type Republicans are starting to warm to the "cash injection" idea:

“The problem is the uncertainty that people have about doing business with banks, and banks have about doing business with each other,” said William Poole, a staunchly free-market Republican who stepped down as president of the Federal Reserve Bank of St. Louis on Aug. 31. “We need to eliminate that uncertainty as fast as we can, and one way to do that is by injecting capital directly into banks. I think it could be done very quickly.”

Administration Is Considering Cash Injections Into Banks
(Photo: Getty)