Many of the greatest minds in our government think that an emergency economic bailout is the best way to stabilize our sagging economy. They stipulate that buying troubled debts from banks will infuse them with the capital they need to continue creating more debt by making new loans. Never mind the fact that unrestrained lending is what got us into this mess in the first place.

So Congress banded together to create The Emergency Economic Stabilization Act of 2008 (here is the full text of the bill. Note, it’s 451 pages long). After passing it back and forth, the bill was passed - but not without a lot of added fluff.

I don’t profess to be an economist, and I can’t say whether or not the bailout plan will work. What I do know is that the bailout plan is unpopular among many people in the US, particularly those in the middle and lower income ranges. But sometimes unpopular decisions are the right decisions to make. Maybe the emergency bailout plan is the best option to help our economy?

Assuming the bailout plan stabilizes our economy, what comes next? How can the government improve the economy in a way that affects the majority of the US populace - what most people refer to as the middle class.

Well, several bloggers and I decided to try and answer that question and we are posting our answer at the same time this morning. You will find links to their articles at the end of this one. None of us is an economist; we are just regular citizens - similar to the majority of the voting population and the kind of people that Congress should keep in mind when making decisions on policy.

This is the question we asked ourselves:

“What is the single most important initiative that the next administration should undertake to improve the economic health of the U.S. middle class?”

My Answer:

“Cut the fat.”

I will not contest the idea behind the emergency bailout bill. As I previously mentioned, I have no training as an economist and I do not know if it will work or not. But it doesn’t take an economist to see that our country could scarcely afford the original version of the $700 billion economic bailout plan, and spending an additional $110 billion in pork barrel spending was not only unnecessary, it was grossly out of line.

The brightest economists in our nation recommended to President Bush that we need this emergency bailout bill to pass or we may face a global financial meltdown.

Here is my question to Congress:

If our economic situation was that perilous, then why wasn’t the bill quickly passed in its original form?

Answer: because it didn’t pander to any special interest groups.

To be fair, the version of the bailout bill that passed had a few enhancements that may have enticed additional Congressional voters. Chief among these were a tax credit for research and development and an increase in insurance for bank accounts, both of which could have a broad economic impact.

But there was also a substantial amount of fluff added to the bill - added expenses that don’t benefit Americans as a whole. Instead, some weak Congressional leaders gave into temptation and peer pressure and withheld their votes from an emergency bill so they could hold out for a sweeter offer - one that would pander to their special interests, never mind that our economy was in an emergency situation.

Here are some of the more disgusting examples of Congressional misuse of power (This list from CNN):

• Provisions related to film and television productions - $478 million over 10 years.
• A refund of excise taxes on rum imported from Puerto Rico and the Virgin Islands - $192 million.
• Extension and modification of duty suspension on wool products, wool research fund and wool duty refunds - $148 million.
• Creation of a seven-year cost recovery period for construction of a motorsports racetrack - $100 million.
• Income averaging for amounts received in connection with the Exxon Valdez litigation - $49 million.
• Transportation fringe benefit to bicycle commuters - $10 million.
• Exemption from the excise tax for a specific arrow used by child archers - $2 million over 10 years.

I don’t have a problem with our government spending money on necessary items. But how can any of these expenses be labeled as an emergency? The answer is, they can’t.

Several Congressional leaders determined they could extort votes for their special interests by using The Emergency Economic Stabilization Act of 2008 as leverage. These members of Congress put their interests and needs before that of the American people.

Congress, if you want to help the average middle class citizen, cut the fat. Spend the money where it is needed most - on projects that benefit the general American economy, not on your special interests.

Here are the other synchroblog participants and their topic:

• Blunt Money: Long-term thinking
• Cash Money Life: Pork-barrel spending
• Clever Dude: Accountability
• Finance Your Life: Energy crisis
• Fiscal Zen: Confidence in banking/lending
• My Dollar Plan: Education
• My Journey to Millions: Less government intervention
• Student Scrooge: Education
• Tough Money Love: Education

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So what caused the financial crisis of 2008? This is actually the perfect storm which has been brewing for years now and finally reached its breaking point. Let’s look at it step by step.

Market instability

The recent market instability was caused by many factors, chief among them a dramatic change in the ability to create new lines of credit, which dried up the flow of money and slowed new economic growth and the buying and selling of assets. This hurt individuals, businesses, and financial institutions hard, and many financial institutions were left holding mortgage backed assets that had dropped precipitously in value and weren’t bringing in the amount of money needed to pay for the loans. This dried up their reserve cash and restricted their credit and ability to make new loans.

There were other factors as well, including the cheap credit which made it too easy for people to buy houses or make other investments based on pure speculation. Cheap credit created more money in the system and people wanted to spend that money. Unfortunately, people wanted to buy the same thing, which increased demand and caused inflation. Private equity firms leveraged billions of dollars of debt to purchase companies and created hundreds of billions of dollars in wealth by simply shuffling paper, but not creating anything of value. In more recent months speculation on oil prices and higher unemployment further increased inflation.

How did it get so bad?

Greed. The American economy is built on credit. Credit is a great tool when used wisely. For instance, credit can be used to start or expand a business, which can create jobs. It can also be used to purchase large ticket items such as houses or cars. Again, more jobs are created and people’s needs are satisfied. But in the last decade, credit went unchecked in our country, and it got out of control.

Mortgage brokers, acting only as middle men, determined who got loans, then passed on the responsibility for those loans on to others in the form of mortgage backed assets (after taking a fee for themselves originating the loan). Exotic and risky mortgages became commonplace and the brokers who approved these loans absolved themselves of responsibility by packaging these bad mortgages with other mortgages and reselling them as “investments.”

Thousands of people took out loans larger than they could afford in the hopes that they could either flip the house for profit or refinance later at a lower rate and with more equity in their home - which they would then leverage to purchase another “investment” house.

A lot of people got rich quickly and people wanted more. Before long, all you needed to buy a house was a pulse and your word that you could afford the mortgage. Brokers had no reason not to sell you a home. They made a cut on the sale, then packaged the mortgage with a group of other mortgages and erased all personal responsibility of the loan. But many of these mortgage backed assets were ticking time bombs. And they just went off.

The housing market declined

The housing slump set off a chain reaction in our economy. Individuals and investors could no longer flip their homes for a quick profit, adjustable rates mortgages adjusted skyward and mortgages no longer became affordable for many homeowners, and thousands of mortgages defaulted, leaving investors and financial institutions holding the bag.

This caused massive losses in mortgage backed securities and many banks and investment firms began bleeding money. This also caused a glut of homes on the market which depressed housing prices and slowed the growth of new home building, putting thousands of home builders and laborers out of business. Depressed housing prices caused further complications as it made many homes worth much less than the mortgage value and some owners chose to simply walk away instead of pay their mortgage.

The credit well dried up

These massive losses caused many banks to tighten their lending requirements, but it was already too late for many of them… the damage had already been done. Several banks and financial institutions merged with other institutions or were simply bought out. Others were lucky enough to receive a government bailout and are still functioning. The worst of the lot or the unlucky ones crashed.

The Economic Bailout is designed to increase the flow of credit

Many financial institutions that are saddled with risky mortgage backed securities can no longer afford to extend new credit. Unfortunately, making loans is how banks stay in business. If their current loans are not bringing in a positive cash flow and they cannot loan new money to individuals and businesses, that financial institution is not long for this world - as we have recently seen with the fall of Washington Mutual and other financial institutions.

The idea behind the economic bailout is to buy these risky mortgage backed securities from financial institutions, giving these banks the opportunity to lend more money to individuals and businesses, hopefully spurring on the economy.

What? Credit got us into this mess! Why give more?!?

Ironic isn’t it? Yes, it is true that credit got us into this mess, but it is also true that our economy is incredibly unstable right now, and being that it is built on credit, it needs an influx of cash or it could come crashing down. This is something no one wants to see as it would ripple through our economy and into the world markets in a matter of hours, potentially causing a worldwide meltdown.

As I previously mentioned, credit in and of itself is not a bad thing. Credit promotes growth and jobs. Poor use of credit, however, can be catastrophic, which is what we are on the verge of seeing now. So long as the bailout comes with changes to lending regulations and more oversight of the industry, along with other safeguards to protect taxpayer dollars and prevent thieves from not only getting of the hook, but profiting again, there is potential to stabilize the market, which is what everyone wants. Whether or not it works is to be seen, but as it has already been voted on and passed, we should all hope it does.

Want more opinions? Check out this article on the same topic:

• What Caused The Financial Crisis Of 2008?

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What does this mean to Washington Mutual Customers?

This deal combines the operations of two banks and most customers should be completely unaffected by this deal. Friday morning should be the same as any other day and customers should still be able to access funds and maintain their normal banking privileges. Customers should not panic as the only thing really happening is a change on the letterhead on their statements.

Washington Mutual is also covered by FDIC insurance, but since the bank was basically absorbed by JPMorgan Chase, the FDIC insurance will not be used. Stockholders and some bond holders will lose the entirety of their investments.

This deal saves taxpayer money

Because the sale of Washington Mutual was brokered by the FDIC, the bank wasn’t allowed to fail to the point that the FDIC insurance was used. This could have cost taxpayers nearly $30 billions of dollars and depleted the FDIC deposit insurance fund. Instead, JPMorgan Chase purchased the bulk of Washington Mutual, including the bank’s deposits and loans, and it’s risky mortgage portfolio, which played a large role in WaMu’s failure.

It’s good to be WaMu’s CEO. According to the New York Times (update: this article now requires free registration to read), Washington Mutual’s CEO, Alan Fishman, who has been on the job for less than three weeks, is eligible for $11.6 million in cash severance and will get to keep his $7.5 million signing bonus.

OK, it’s really not good to be the Alan Fishman right now. He does get a lot of money out of his contract, but it really has to be heartbreaking to see your company falter so soon after taking the helm.

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Blockbuster vs. Netflix

Since the service provided by Blockbuster and Netflix provide is very similar, let’s compare the two and see which features set them apart from each other.

Blockbuster vs. Netflix Review
Online movie company	Netflix	Blockbuster Total Access*
Cost per month	$8.99/$13.99/$16.99	$11.99/$16.99/$19.99
Budget Pricing Plan	$4.99	$3.99
# DVD’s at a time	1/2/3	1/2/3
In-Store Exchange	No	Yes
On-line video streaming	Yes	No
Video Selection	100,000	85,000
Late Fees?	No	No
Blu-Ray?	Yes	Yes
Free Shipping?	Yes	Yes
Free Trial?	Yes	Yes

*Blockbuster has 3 plan options. They are: Blockbuster by Mail (no in-store exchanges), Blockbuster Total Access (a limited number of in store exchanges), and Blockbuster Total Access Premium (unlimited in-store exchanges). Blockbuster Total Access is the most popular plan and is the price that is listed. Blockbuster by Mail is slightly cheaper, and Blockbuster Total Access Premium is more expensive.

Common features between Blockbuster and Netflix

There are quite a few standard features between Blockbuster and Netflix:

• Free shipping. Both Blockbuster and Netflix use postage paid envelopes for sending movies to and from their customers.
• No late fees. This is one of the biggest marketing features employed by Blockbuster and Netflix.
• Blue-Ray. Both Blockbuster and Netflix offer the next generation DVDs.
• Budget pricing. Blockbuster and Netflix also offer a budget rental plan, which limits customer rentals to 1 movie at a time, and 2 movies per month. The plan is $3.99 via Blockbuster, and $4.99 via Netflix. The Netflix plan also comes with 2 hours of free online movie screening.

Unique features offered by Netflix and Blockbuster

Blockbuster Offers In-store exchanges. Blockbuster offers their customers the opportunity to exchange videos and games at a brick and mortar location instead of sending the movies or games back through the postal service. This allows customers the opportunity to exchange movies more quickly than they otherwise would be able to. However, this service is limited  to a 2-5 times per month, depending on the plan.

Netflix offers online video streaming. Netflix doesn’t have any brick and mortar stores to offer in-store exchanges, so instead Netflix offers customers the ability to stream movies online. This is unique compared to Blockbuster, but in order to enjoy this feature to its max potential, you need to have a fast internet connection and a computer system capable of displaying high definition graphics. There are currently over 12,000 titles to choose from for online viewing.

Which is better - Blockbuster or Netflix?

Both Blockbuster and Netflix offer customers good value for their money, depending on how often the customers rent videos. Which is better? The plans are very similar, so which plan is best probably depends on how often you would use their unique features, namely the in-store exchanges or online streaming.

Free trial offers. Both Blockbuster and Netflix offer free trials, so you can always try it free to determine which company and plan best meets your needs.

• Blockbuster Total Access Free Trial Offer
• Netflix Free Trial Offer

Live in Canada? Check out this Canadian online DVD rental comparison.

I’d love to hear your opinions on these services.

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A New Kind of Fraud - The American 419 Scam

Our country is in the middle of an economic crisis and it is the result of a massive series of confidence jobs that have taken place over the last few years. Systematic bending and breaking of financial regulations and best practices has brought our economy to its knees. Why? Greed and a lack of ethics on the part of lenders, brokers, consumers, bankers, and more. Yes, there are millions of innocent people. But the actions of a few bad apples are threatening to ruin the bushel - and we, the tax paying American public, are left footing the bill.

So what is the American 419 Scam? Borrow, borrow, borrow. Then claim the economy will fail because you can’t pay back your loans. If you’re lucky, the US Government will come along and bail you out.

The financial crisis of 2008

Greed and fraud have affected nearly every aspect of the American financial industry:

Banks and financial institutions. In recent months, several US banks crashed, including IndyMac and Washington Mutual - the largest bank failure in US history. Several other US banks or major players in the US financial industry have announced massive losses or were assumed by other banks - Bank Of America To Buy Merrill Lynch For $50 Billion.

Real estate. The real estate market has been hit particularly hard. Since 2006, 286 major mortgage lending institutions have either shut down completely, or temporarily closed their doors to new mortgage loans. Most recently Freddie Mac and Fannie Mae were assumed by the US government.

Insurance companies. The federal government made an $85 Billion bail out of AIG, one of the largest insurance companies in the US. The government bail out gave the government an ownership stake in the company.

Stock markets. The stock markets have been a roller coaster this week, and I imagine it will continue in the near future. In an effort to shore up stock prices, the SEC placed a temporary ban on short selling stocks. The majority of my investments are in retirement accounts, and I don’t trade individual stocks. But this affects thousands of people who trade for a living, and probably ended up hurting hundreds, if not thousands, of individual and professional traders.

FBI Investigations. The problem has escalated to the point of an FBI investigation of 26 companies and their leadership, including mortgage companies Fannie Mae and Freddie Mac, insurer American International Group Inc, and Lehman Brothers Holdings Inc.

The government’s answer? Throw more money at the problem.

A proposed $700 Billion government bail out - that could rise to over $1.8 TRILLION. The government is discussing a $700 Billion bail out to help stabilize our fragile economy. The $700B is earmarked for buying bad mortgages and other assets from struggling institutions. The government has several other proposals on the books and the final tally could run as high as $1.8 trillion.

Here is the Fact Sheet for the proposed bail out, as published by the Department of the Treasury: FACT SHEET: Proposed Treasury Authority to Purchase Troubled Assets. The fact sheet is light on details, but I’m sure they will get hammered out before anything is approved.

The American public was systematically scammed

…and now we, the American taxpayers, have to pay the price. I don’t like the idea of a $700 Billion bail out, and I especially don’t like the idea of a $1.8 Trillion bail out. It doesn’t seem right for our government to make good on the systematic fraud committed by thousands of individuals and companies.

But I don’t have the answers to the problems that face our economy and I don’t know what the long term ramifications will be both here and abroad. How long will it take our country’s economy to recover if we proceed with the $700B bail out? How long will it take if we don’t? What happens to the world economy? I don’t have the answers, but I know this: The American people will survive, and so will our economy.

The American economy will survive

Though it may not seem that way at the moment, America is still the proverbial land of opportunity. If one looks at our history, one will see that we have weathered major periods of financial difficulty before, particularly The Great Depression and the period of stagflation in the late 70’s/early 80’s. Though the Great Depression and the period of Stagflation were difficult for our country, the periods following the Great Depression and stagflation were generally considered prosperous. The stock markets have had their ups and downs, and major companies have folded and others have grown to take their place. Through it all, America has always prevailed.

The American economy is in a difficult place right now, but there are things everyone can do do improve his or her situation.

Do your part. The best thing that you and I can do is pay attention to what is going on and prepare for anything. If you do not agree with the bailout, you can contact your senator and voice your opinion. Are you worried about banks failing? Learn what happens if your bank fails. Pay your bills on time, look for more ways to earn money, invest wisely, etc.

Vote. The General Elections will happen in less than 2 months. I imagine the current state of the economy will be one of the most heavily debated topics preceding the election, though both parties are wisely playing “wait and see” right now. The results of this year’s election will go a long way toward shaping the American economy for years to come.

Here are some contemporary views on the financial crisis of 2008.

• Thoughts on the Financial Crisis from an Actual Economist.
• What Caused The Financial Crisis Of 2008?.
• Should We Let The Greedy Bastards Fail?.
• Me too, Secretary Paulson!.
• Your Urgent Help Needed.
• Just Received A Nigerian Scam Email From Treasury Minister Henry Paulson.

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FEMA Disaster Assistance

Many people who live in a federally designated disaster area may qualify for FEMA disaster assistance funds. This money is meant to assist people and businesses whose property was damaged or destroyed and whose losses are not covered by insurance. It is not intended to restore your damaged property to its condition before the disaster, it is only meant to help people with critical expenses that cannot be covered in other ways.

Types of FEMA Housing Needs Assistance

FEMA offers people in disaster areas different types of housing assistance to help them through the disaster. The types of assistance include Temporary Housing, Repairs, Replacement, and Permanent Housing Construction.

Temporary Housing (a place to live for a limited period of time): Temporary Housing can include a hotel stay, government provided housing, or a rental unit if available. More information about housing rental resources.

Repair: Money is available to homeowners to repair damage from the disaster to their primary residence that is not covered by insurance. The goal is to make the damaged home safe, sanitary, and functional.

Replacement: Funds may also be available to homeowners to replace their home destroyed in the disaster if is not covered by insurance.

Permanent Housing Construction: Direct assistance or money for the construction of a home. This type of help occurs only in insular areas or remote locations specified by FEMA, where no other type of housing assistance is possible.

Non-Housing Disaster Assistance Needs

Housing and shelter are generally the most important needs that most people experience after a disaster. However, there are other needs that arise, particularly needs including medical, food, water, power, and more. FEMA may provide assistance for disaster related medical and dental costs, funeral and burial costs, clothing, fuel, cleanup items, transportation, moving and storage costs, generator reimbursement, and more. To qualify for this form of aid, you will need to meet certain criteria, including living in a federal disaster area, your losses are not covered by insurance or other means, you have exhausted all other sources of assistance. Certain citizenship or residential status requirements may also apply.

How to apply for FEMA Assistance

You can apply for FEMA assistance over the phone or online. In both cases, particularly over the phone, have patience. The system may be overloaded with many people trying to make claims at the same time. And remember, the people working for FEMA are doing their best to help you, extending them your patience and courtesy can go a long way in helping your claim get registered accurately.

When you make your claim, be sure to have the following information ready to make the process go more smoothly:

• Your Social Security number.
• Current and pre-disaster address.
• A telephone number where you can be contacted.
• Insurance information.
• Total household annual income
• A routing and account number from your bank (if you want to have disaster assistance funds transferred directly into your bank account)
• A description of your losses that were caused by the disaster.

You will receive a FEMA claim number. Write this down and keep it! You will need it for future reference! You can make a claim at the FEMA Individual Assistance Center. You may also be eligible for aid from the Small Business Administration if you are a business owner.

After Applying for FEMA Assistance

After you apply for assistance, you should wait 24 hours to check the system for your claim status. This can be a long time to wait if you are in an emergency situation, so be sure to take care of yourself during this time. Get the help you need and worry about the aid later.

FEMA will send an inspector to your residence to inspect your damage and assess your needs. Be sure to have as much information to support your claim as possible. This can include copies of your insurance policy, pictures, and other information. If you have insurance, you need to have a copy of your insurance decision letter (settlement or denial of claim). Remember, you must exhaust all other forms of assistance before receiving FEMA aid.

Important notes regarding FEMA home inspections:

• FEMA inspections are performed by contracted inspectors, not FEMA emplouyees. They merely report facts; they do not decide settlement issues.
• FEMA inspections are free. DO NOT pay for a FEMA home inspection!
• You must be able to show proof of ownership or occupancy (deed, tax forms, mortgage paperwork, driver’s license, insurance policy at the address, utility bill, public records, etc.).

It can take up to 10 days after your inspection before you claim is approved or denied. The entire FEMA claims process can take several weeks because you will need to first get an insurance claim, wait for an inspection, then wait an addirtional 10 days for the decision.

If you qualify for a FEMA grant. You will receive monetary aid in the form of a check or direct deposit, depending on the form you chose when you applied for aid. It is important to note that you can only spend the grant money on eligible expenses, which will be noted in your decision letter. If you use the money on other expenses, you may be required to refund the money to FEMA and may not be eligible for further aid. Keep your receipts for 3 years in the event of a FEMA audit.

The FEMA granted funds are tax free, do not have to be repaid, do not count as income for social security or other aid, and is exempt from garnishment, seizure, encumbrance, levy, execution, pledge, attachment, release, or waiver. The money may not be reassigned or transferred to another person.

If you do not qualify for a FEMA grant. You can still appeal FEMA’s decision. You will need to make your appeal in writing. Be thorough and be sure to include all information regarding your claim, including additional documents, photos, the FEMA claim number, and any other information you feel is vital for your case.

Frequently asked questions regarding FEMA claims: The FEMA website has a list of FAQ’s you can check for additional information. If you can’t find your answer there, I highly recommend calling a FEMA representative at 1-800-621-FEMA (3362) or visit a nearby Disaster Recovery Center. They should be able to assist you with your claim.

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Even though they have double paned storm windows, the force of the winds caused water to leak around the edges of the windows. They may have to replace several window sills and possibly a few windows. They called their insurance agent and filed a claim and are now waiting for the claims adjuster to come out. Hurricane and storm insurance is a tricky beast, and there are certain limitations to the kinds of damage the insurance will cover. Hopefully they won’t be left to foot the majority of the bill themselves.

Federal Disaster Areas and FEMA

My parents’ home is located about 16 miles inland, so there was still plenty of force when the hurricane made landfall. Their house was located in a mandatory evacuation zone, and the area has been declared a federal disaster area. This could be an important factor when determining what, if any, federal aid they may receive from FEMA.

The good news is that their house is well built and it weathered the storm well. Their neighbor’s house a few blocks over didn’t fare as well. He had major roof damage and the rainfall caused several ceilings to cave in, and caused major water damage to the floors and walls. His house is in the same subdivision, but was built by a different home builder. Many of the houses built by the same builder experienced similar roof damage. Of course, it may not be the builder’s fault, it could be a result of the storm’s path.

Gas, food, and other supplies are tight

Most places are still without power, including grocery stores, restaurants, gas stations, and other businesses. There are a few gas stations with power, but the lines are several blocks long as people are trying to fuel their cars and generators. There are several distribution points for food, water, and ice, all of which are being trucked into the area and are being distributed to residents in need.

Still no power

My parents are still without electricity, and they may be without it for another 2-3 weeks. They are lucky though, because they have a gas stove and a gas water heater, so they can cook and take warm showers. The boil water advisory was lifted yesterday, so they can drink the tap water again. They just won’t have refrigeration or lights for a couple weeks.

They are using hurricane lamps (oil lamps) for lighting and have a cooler set up to keep food cool, but right now they are having a hard time finding ice. Ice is being trucked in from all over the state, but it is a matter of finding it. So for now they are eating small meals like canned chicken or tuna, which won’t leave much in the line of leftovers.

FEMA reimburses some generator costs

My parents are looking into buying a generator, but again, they are difficult to find, prices are at a premium, and obtaining fuel is test in patience. FEMA will reimburse generator costs for some people, but not in all cases.

From the FEMA FAQ page:

I was told that FEMA would reimburse me up to $800 for the purchase of generator, is that true?

FEMA reviews requests for reimbursement of the cost of a generator on a case-by-case basis. The maximum eligible reimbursable amount is based on a determination of the median cost of a generator sufficient to power an average-sized home. You will not be eligible for reimbursement if you purchased the generator after your power was restored.

I need to call them today and let them know the situation, because they heard this from a rumor, and there wasn’t any qualifying information given - the rumor simply stated that FEMA would reimburse people up to $800 for a generator.

Don’t buy a generator for the sole reason that you think FEMA will reimburse you. You may not be reimbursed and you may be taking a generator someone else may need for medical conditions such as respirators, dialysis machines, and more. If you need the generator you should certainly buy it, just be aware that a reimbursement is not automatic. Here is more information about how to file a FEMA disaster assistance claim.

Life will return to normal

…it will just take awhile. My parents are looking at 2-3 weeks without power, and minor repairs to their home. Others have more major repairs to face, and still others, such as my best friend, lost everything. Still, I have a feeling that for most people, life will return to normal. Most people will rebuild if possible, and some will move away never to return. But I think it will take a much stronger storm than Ike to break the spirit of a city that is as proud as Houston.

A thousand miles to the north and east, things are also returning to normal. My wife and I got power again last night after 24 hours without electricity, but about half the area is still without power. There are a few places where it is not expected back until Friday or so. Many of the gas stations and restaurants are coming back to life, but about half are still closed. It is an eerie sensation to drive along unlit roads and stop at every stoplight and treat it like a 4 way stop sign because the stop lights are without power. The schools are still closed and may be throughout the week. For us, the cleanup is much easier, and the talk around the water cooler a little lighter. We have it easy compared to those in the Houston and Galveston area, and for this we are blessed.

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My parents are fine. I talked with my parents a few times since Saturday, and other than being without electricity (still), they are fine. They called me while they were attempting to get home Sunday and asked me about the road closures in the area. I got online and looked at the traffic reports and road closures and told them to turn around and go back to their friend’s house, where they were staying. Just about every major road that traverses Houston was shut down or had major delays due to flooding or debris in the roads.

They haven’t yet been able to make it back to their home to assess any damage, which if there is any, will hopefully be minor. Their house is on an incline several feet above the street level, and there is a giant drainage culvert several blocks away, so I don’t think they will have any flood damage. All in all, it looks like they will make it through without too much trouble - though I am sure they will come home to a nasty mess in the fridge and freezer.

My friend probably lost everything. My best friend from high school lives about a mile inland from Galveston Bay. He lives in a prefab house that is on a four foot lift and is situated on land that is 8 feet above sea level. When he called his neighbor after the eye of the hurricane passed, his neighbor informed him there was standing water at least a foot deep, maybe more, in the house. (that means flooding at least 13 feet above sea level, one mile inland). I’m not sure how much, if anything, will be salvageable.

When I talked with my friend about it, he was handling it very well. He had enough time to get his important and valuable belongings together and evacuate before the storm hit. Of course, he couldn’t take everything, and left behind a lot of belongings that were probably destroyed or otherwise ruined. He has hurricane and flood insurance which should cover most of the damage and losses. The important thing is that he and his family are safe.

The Houston and Galveston area cleanup could takes weeks. The early estimates state it could be up to two to three weeks before power is restored in the Houston and Galveston areas, and possibly longer in some of the hardest hit areas. Some people’s houses are completely gone, and they lost everything. My prayers are with them.

The effects of the storm were felt as far north as Indiana, Illinois, and Ohio. Yesterday (Sunday), parts of Kentucky, Indiana, and Ohio received sustained winds of 50 miles per hour and higher for over 4 hours (gusts of up to 74 mph were reported at the Cincinnati airport). Indiana and Illinois received torrential rains and some flooding.

We are without power. I live in southwest Ohio, and the winds were strong enough to take down large trees and telephone poles. A large oak tree was knocked down in our yard, but thankfully it missed the house. Several other trees were knocked down in our neighborhood, but luckily the damage was all superficial and none of our neighbors were injured. We are, however, without power… along with about 1.3 million other people in our region. There are some businesses with power right now, which is why I am able to post this blog - many thanks to Panera and free wi-fi service.

There are estimates that it could take up to 3 days or longer to get power back to everyone in our area. Hopefully, it will be back up more quickly than that.

I drove around for about an hour this morning looking for ice and a few other items. I couldn’t find ice, but I was able to buy some more candles and plenty of bottled water. I was also able to fill my car’s gas tank, but it took me quite some time to find a gas station with power. Luckily, I am able to work because our company has generators large enough to support full operations, so I won’t be stuck at home without anything to do for the next few days.

Thankfully, the weather in our area is expected to remain cool this week, so we won’t be too uncomfortable in our house. For us, this is just a minor inconvenience, and one I am not too bothered by. Some people lost everything; those are the people we should pray for.

CNN report of Hurricane Ike damage.

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Articles from my reader:

Looking To Get Cash Back When You Spend? Check Out These Cashback Credit Cards. Here are a few cards to put cash back in your wallet.

Cash Back Credit Cards | Rebates that Put Money in Your Pocket. Didn’t find enough in the last list? Try this list for more variety.

English and American expenses. I lived in the UK for a few years while I was in the USAF, so I found this article very interesting.

Another Reason for an Emergency Fund. This is another example of why living within your means is the MOST important financial principle you can follow.

How We Optimized Our Banking. My wife and I consolidated our bank right after we got married. It made life much easier!

5 Surefire Ways To Improve Your Investment Performance. Automation, Allocation, Expenses, and more.

Take Advantage Of Flexible Spending Accounts. If you have the opportunity to take advantage of an FSA, you should look into it. You can save a lot of money.

Why we used a real estate agent. Buyer’s agents, seller’s agents and more. What you need to know if you are buying or selling a house.

You Tell Me: Is a Freezer Worth the Money?. We had a giant freezer when I was growing up. I think it allowed us to save money some of the time, but I would wager we left many things in there too long and didn’t use them. It was also in the garage, which is extremely inefficient in hot and humid temps.

5 Ways to Save Money Without Even Trying. It’s amazing how easy it can be to get started.

This week’s Carnivals:

• The Carnival of Personal Finance was held at Banker Girl.
• The 142nd Festival Of Frugality was held at Frugal Babe.
• The Money Hacks Carnival #29: Food Heaven was hosted by Living Almost Large.
• The Finance Fiesta #15~The Patriot Day Edition was hosted at On a Quest to be Debt Free.

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Top referring blogs to Cash Money Life during August. Thanks to everyone who sent traffic my way! I’d love to thank each referring webmaster, but the list is long. So I will name the top 10, and to everyone else, say “Thanks!”

• My Two Dollars
• Being Frugal
• I’ve Paid For This Twice Already…
• Gather Little By Little
• Frugal Dad
• Moolanomy
• My Dollar Plan
• Broke Grad Student
• My Money Blog
• Mrs. Micah

Notable articles from my reader:

• Qualifying For A Mortgage As A Freelancer - An Exercise In Patience. Mortgage companies have tightened the purse string in recent months, making it more difficult for some freelancers to obtain a mortgage.
• Everything You Ever Wanted To Know About Asset Allocation. This is a very comprehensive artivle about asset allocation. This is a great place to start.
• The Easy Guide to Money Management. Another great place to start for learning how to set your finances straight.
• Streamline Your Finances and Make Your Life Easier By Not Hoarding. I used to have a big problem with collecting “stuff.” I still have more stuff lying around than I need, but I’ve made improvements.
• What is a Roth 401k?. Like a Roth IRA, but different.
• How to Install a Programmable Thermostat. If you have a thermostat, programmable is the way to go.
• The Inner Workings of a Car Dealership (and How To Use Them to Your Advantage).
• The U.S. Gold-Medal Olympian Salary: Zero Dollars… Plus Bonuses.
• Ready for Hurricane Gustav?.
• Best Advice I Ever Received.
• Thieves Smashed Into My Car and Stole $700 Worth of Stuff.
• Consumer Alert: Fraudulent Medical Bills.
• Buying Retirement with a Credit Card.
• 6 Easy Tips on Raising Your FICO Score.
• EARN: Helping Low-Wage Workers Learn to Save.

This week’s carnivals:

• Finance Fiesta #13 - Bank Troubles & Money Management.

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• $50-100 - Credit Card Bonuses (credit card sign up bonus money)
• $50 - TradeKing Bonus (details)
• $25 - ING Referral Bonus ($25 ING Referral)
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• Blockbuster Total Access free trial
• Netflix free trial