“Personal Finance: Distrust spreads to Wall Street - Philadelphia Daily News” plus 1 more

Personal Finance: Distrust spreads to Wall Street - Philadelphia Daily News

Posted: 14 Nov 2010 12:00 AM PST

Posted on Sun, Nov. 14, 2010

American voters, angry at politicians and mistrustful of government, gave many incumbents their walking papers.

But there's another protest movement under way that's just as fierce: Investors are dissing Wall Street in addition to purging Capitol Hill.

The trend is expressed in the flow of $56 billion out of the stock market this year, despite the type of rally that typically tempts reluctant investors, and in the hundreds of e-mails I've received. A sampling:

"The Dow could hit 15,000 and no one would care," wrote JK. "With high-frequency trading and scandal after scandal, the average investor has finally wised up and understands he can't beat those guys."

"We are dealing with the devil, which is the banks . . . or make that two devils - the banks and the government - since the entire government stood by and let this happen to the American public," said Larry Kramer. "They have ruined our entire economy."

"Government and big business [have] become corrupted to such an extent by lobbyists and graft that no one has any faith or respect for these institutions," Michael Weiner said.

From what I've seen, many individuals have come to see the stock market as a rigged game.

Outrage in the market

In response to news that baby boomers are not saving enough for retirement, Jane Slupecki wrote: "It is depressing to read that we, the baby boomers, are going to starve to death" if we don't invest for the future. But as she struggles to pay for her daughter's college while watching bailout tax money paying the executives' bonuses, her conclusion is: "I'm not touching the stock market. No way!"

Some of this outrage was tallied at the polls. But you also can tally it in the low volume of trading in the stock market and in the inability of some young companies to expand by raising money through initial public offerings. They are hamstrung because they cannot sell their shares if the public is hesitant to buy.

"Few large IPOs have come to market because investors have shunned U.S. equities," noted Charles Biderman of research firm Trim Tabs in a recent report. Offerings are at the lowest level since 2005.

Muriel Siebert, president of Muriel Siebert & Co. Inc. brokerage firm, said she worries that lasting distrust could deprive the economy of those young companies that become the next global giants such as Microsoft Corp.

More immediately, Federal Reserve Chairman Ben S. Bernanke said recently that one reason he was forcing interest rates lower was to tempt people to buy stock.

Trust is missing

But while Wall Street pundits insist that investors will return to the stock market once they are more certain about the economy, there are impediments that go beyond economic weakness.

Suzanne Duncan, a researcher for International Business Machines Corp.'s Institute for Business Value, has just completed an 18-month study into perceptions of the financial-services industry. She found that trust is sorely missing and that professionals such as pension fund managers are as skeptical as individuals.

They sense that Wall Street has conjured up increasingly complex products that investors cannot understand because they are opaque - or designed specifically so only those who constructed them can analyze them and derive a profit.

Rather than helping investors, the industry is in it to serve itself, 70 percent of investors said. When Duncan surveyed the industry, she found that 70 percent of insiders agreed that they focus on selling products rather than helping clients.

Paul Purcell, chief executive officer of Robert W. Baird & Co. Inc., said the industry must rebuild its credibility, especially the tarnish from Wall Street's wild behavior. He said it would be in the industry's interest to welcome further financial reforms - like controls on leverage or debt levels - so trust can be rebuilt and the financial system would not be in danger of a new meltdown.

Gail MarksJarvis is a personal-finance columnist for the Chicago Tribune. E-mail her at gmarksjarvis@tribune.com.

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Personal Finance: California has $6.1 billion in unclaimed property - Sacramento Bee

Posted: 14 Nov 2010 12:00 AM PST

It's sort of California's official treasure hunt.

More than $6.1 billion in unclaimed property – old paychecks, insurance refunds, stock dividends, etc. – is sitting with the state controller's office, waiting to be handed over to the rightful owners.

One of those could be you.

Just two weeks after the deadline for banks and businesses to report accounts that have sat dormant for the last three years, state officials say millions of Californians could have money waiting to be claimed.

Where does it all come from? Forgotten bank accounts, uncashed checks or dividends, overlooked security deposits or utility refunds, old stocks or mutual funds, unclaimed life insurance payouts. Even the contents of grandma's safe deposit box.

Accounts go dormant for varied reasons: Someone moves or divorces and can't be located. Or a person loses track of a paycheck, refund or dividend check. Or when someone dies and their heirs are unaware that unclaimed assets exist.

The recession has contributed to the growing pot of unclaimed money, which nationally is about $33 billion, according to the National Association of Unclaimed Property Administrators (NAUPA), which represents programs in 50 states and parts of Canada.

For instance, following the collapse of Washington Mutual bank, more than $250 million in unclaimed accounts was turned over to various state governments last summer. California received $90.5 million in unclaimed WaMu deposits.

Overall, the state's stash of unclaimed property has steadily grown during the last three years, despite aggressive efforts to reach the owners. "It's rising because property keeps coming in and we can't always find people," said Hallye Jordan, spokeswoman for state Controller John Chiang.

"The dormant accounts are out there ... . With the economic downturn, people are trying to find dollars where they can," said Sonia Walwyn, vice president of unclaimed property services for the Keane Organization, a national risk management consulting firm.

Where to start searching

In California, it's easy, either by phone or online. The state's unclaimed property website – www.claimit.ca.gov – lets you search in seven languages: Armenian, Chinese, English, Korean, Spanish, Tagalog and Vietnamese. The toll-free phone is (800) 992-4647.

Due to increased efforts to reach property owners, the state controller's office has roughly tripled the number of returned properties in the last decade or so, from more than 115,200 in 1997-98 to about 414,000 in 2008-09.

In the last few years, the state has sent more than 3 million letters to owners of unclaimed property, some of it going back to the 1980s. In addition, financial companies must send consumers an advance warning that their property is about to be handed over to state coffers.

"It's resulted in significantly more property being returned to owners and less turned over to the state," said Walwyn.

Nationally, the NAUPA-affiliated site, www.MissingMoney.com, lets you easily search for missing property in any state.

And you aren't limited to searching only for yourself. If your dad worked in New Jersey or your mother lived in Texas, it's worth checking the unclaimed property websites in those states to see if there are accounts waiting to be claimed.

To claim funds, you must provide proof. Typically, that means a driver's license and Social Security number, along with your signed claim form.

If your claim involves contents from a safe deposit box, property valued at more than $1,000, or shares of securities, your signature must be notarized. And if you're an heir of a deceased property owner, you'll need a death certificate and proof of the deceased's Social Security number.

Due to California's large volume of claims, it can take up to 180 days for the state to determine whether the documentation is sufficient.

Claims that involve only cash can be processed within 30 to 60 days. Those that are more complicated – multiple heirs, stock splits, etc. – require more research to confirm the amounts and rightful heirs.

Stocks and mutual funds are generally sold after 18 months and the net proceeds held for the owners or heirs. Similarly, the contents of safe deposit boxes can be auctioned off after 18 months and the funds held for owners.

However, state Controller Chiang has not sold off safe deposit box contents since 2007, said spokeswoman Jordan. "The hope is that people will have enough time to claim their property," she said.

Some consumers say it's not worth the time and trouble to file a claim, especially for small amounts of money or complicated claims involving multiple layers of documentation.

"Some owners get discouraged," said Keane's Walwyn. "We've heard from people who say it's not worth it. 'I've got a $50 claim, but I'm not even going to bother.' "

There are firms, called "asset locators" or "heir finders," that offer to locate your unclaimed property for a fee. It's not necessary to pay for such services, since accessing the claimit.ca.gov website is free.

If you use such a service, do not pay any fees upfront. By law, companies cannot charge more than 10 percent of the returned property's value.

If you're willing to do your own legwork, searching for unclaimed property is as easy as hopping on the phone or the nearest computer.

Happy treasure hunting.

In last Sunday's column about open enrollment choices for employer health plans, we erred in describing the limits on tax-free contributions to a Flexible Spending Account (FSA) for medical or "dependent care" costs. Under an FSA for health expenses, there is no legal limit on pre-tax contributions; your employer sets the limit, either a dollar amount or a percentage of salary. Under a FSA for dependent care expenses, there is a $5,000 limit.

Have a personal finance question? Call The Bee's Claudia Buck at (916) 321-1968.

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Personal Finance

Sunday, November 14, 2010