In Big Finance, Interconnections Are Double-Edged

By Katherine Reynolds Lewis
c.2008 Newhouse News Service

WASHINGTON — This is Ben Bernanke's reality: The Federal Reserve Board couldn't allow Bear Stearns & Co. to go bankrupt.

The collapse of the fifth-largest securities firm would have hurt its trading partners, customers and investors. Worse, it would have sent shock waves of fear through the financial markets as everyone asked: If Bear can fail, is anyone immune?

"At the end of the day the financial system hangs together because of confidence," said Mark Zandi, chief economist at Moody's in West Chester, Pa.

Once that confidence is shaken, investors and customers of other financial institutions might demand their money or ask for new collateral, even as creditors refuse new loans — a classic run on the bank.

As one bank after another falls short of cash, credit freezes up. The banks have to sell assets to survive, depressing prices and hurting the already-struggling economy.

Taxes May Have Nowhere to Go But Up

By Katherine Reynolds Lewis
c.2008 Newhouse News Service

If you're grumbling about the size of your tax bill this year, brace yourself.

Many financial advisers predict that tax rates are going to rise to cover the escalating burden of an aging population and the federal debt.

"In all the discussions I have with contemporaries, we do expect rates to go up at some point in the future," said Ira Herman, a partner at J.H. Cohn, an accounting firm in Roseland, N.J.

Each American's share of the federal government's unfunded obligations amounts to $175,000 comparable to a home mortgage with no collateral, said Stuart Butler, a vice president at the Heritage Foundation.

When You Find Your Valentine On The Job

By Katherine Reynolds Lewis
c.2008 Newhouse News Service
Photo by Kraig Scattarella

Office romance often brings to mind an adulterous affair or supply-closet rendezvous a la "Grey's Anatomy."

But people who met a soulmate at work are fighting to change that rap, which discourages many from dating a colleague. They tout the workplace as the ideal venue to get to know possible partners.

"The office lends itself to these old-fashioned courting rituals of yore," said Stephanie Losee, San Francisco-based co-author of "Office Mate." "You get to know the substance of the person."

Recession Downturn Has Its Upsides

By Katherine Reynolds Lewis
c.2008 Newhouse News Service

The news on the economic front seems grimmer every day. We may soon be in a recession, if we're not in one already.

But as painful as that would be, downturns have an upside. Consider:

— Prices for energy and consumer goods may fall.

"A recession here and anywhere else will help drive down oil prices," said Alan Reynolds, an economist at the Cato Institute in Washington. "You're going to see a cutback of industrial demand. I'm betting on it in the markets, shorting oil and shorting oil stocks."

Companies Weed Out Ineligible Dependents

By Katherine Reynolds Lewis
c.2008 Newhouse News Service

Ever thought of sending your boss your marriage certificate? Your tax return?

Meet the insurance audit. Increasing numbers of employers are requesting personal documents to ensure that all the dependents in their health care plans are entitled to coverage.

With insurance costs rising faster than inflation for a decade, they want to verify that you're actually married to the person receiving spousal benefits, or that your 19-year-old son really is enrolled as a full-time student. If you can't produce proof, the dependent loses coverage.

"There has been a significant growth of interest in conducting these types of reviews," said Daniel Priga, a Pittsburgh-based principal for the Mercer workplace consulting firm, where the workload conducting audits has doubled in each of the past two years. "This is a hot one."

When All They Want for Christmas Is Time Off

By Katherine Reynolds Lewis
c.2007 Newhouse News Service

Since Ebenezer Scrooge, employers have struggled with holiday staffing.

Modern-day managers may wish they could grant every request for time off during Christmas and New Year's. Unfortunately, meeting business needs raises the touchy topic of which employees pull the unpopular shifts.

Solutions run the gamut from closing down operations for the holiday weeks to requiring every employee in a department to work.

How to Be Kind to the Earth, and Your Wallet

By Katherine Reynolds Lewis
c.2007 Newhouse News Service

Before you head to the mall this holiday season, here's food for thought.

Discarded electronics are the fastest-growing source of hazardous waste. And with manufacturers increasingly viewing devices as disposable, this year's must-have cell phone or music player could be in a landfill before you pay off your credit card bill.

"In the last 10 years, the life span of these products has been cut in half. That is planned obsolescence," said Rick Hind, legislative director of the Greenpeace Toxics Campaign.

But can you resist the onslaught of holiday marketing for the latest products and their new bells and whistles? Some 22 percent of sales this season will be consumer electronics, costing more than $22 billion, according to the Consumer Electronics Association.

Retailers Hope Friday Puts Them in the Black

By Katherine Reynolds Lewis
c.2007 Newhouse News Service

Black Friday. The words shoot dread and delight along the spines of retailers and avid shoppers alike.

Dread at the long lines and jostling crowds on one of the busiest shopping days of the year. Delight at the potential profits for retailers, and good deals for consumers looking to stock up on holiday gifts.

Wikipedia cites two newspaper articles from Nov. 29, 1975, as the earliest reference to Black Friday, in the context of police and bus drivers complaining about the hectic crowds of shoppers on the Friday after Thanksgiving.

But retail experts interviewed for this story said the name refers to the first day that store ledger entries turn black, signifying profit, after almost 11 months of red ink.

New Products Help Boomers Manage Retirement

By Katherine Reynolds Lewis
c.2007 Newhouse News Service

As the wave of aging Baby Boomers begins to crash on the shores of retirement, financial experts are rolling out new products and services to manage savings.

The good news is that the many companies competing for retirees' business likely will drive down the cost of retirement products as well as improving the variety of choices.

For instance, this fall Fidelity Investments and Vanguard Group each announced new sets of mutual funds structured to distribute consistent monthly payouts, aimed at helping retirees who want predictable income.

"You're going to see more products that are competing against the annuity market," said Robert Goodman, director of investments at Fairport Asset Management in Cleveland. "I'm very excited."

Portraits: The Changing Face of Retirement

By Katherine Reynolds Lewis
c.2007 Newhouse News Service

A generation ago, you'd retire from your job of 30 years, collect a gold watch, and start cashing pension checks.

No more is retirement a uniform picture.

"The concept of retirement is changing," said Tom Orecchio, a financial planner in Old Tappan, N.J., and chair of the National Association of Personal Financial Advisors. "It truly is a long-term transition as opposed to an abrupt change."

Many people are working past 65, often in part-time or consulting roles, while others are getting out of the labor force as early as they can.

Meditation on the Job Makes for Healthy, Productive Workers

By Katherine Reynolds Lewis
c.2007 Newhouse News Service

Imagine an executive who moves his telephone to the far side of his office. It takes an extra five seconds to answer every call. Must be an unproductive fellow, right?

Not according to Jonathan Foust, who teaches meditation at the World Bank and other Washington, D.C., venues.

Foust encourages his pupils to pause during the rush of daily life, to return to the calm place they find in meditation. With a renewed focus, they can actually be more productive better at prioritizing work and managing distractions.

When the executive rises from his chair to get the phone, he steals a sliver of time to clear his mind.

"When you slow down, what is most important will come to the surface," said Foust, warning that this takes time to master. "These practices are like swimming upstream, because you're encountering not only your own conditioning but the culture. This culture does not want to slow down."

If You Think You Can't Be Scammed, Think Again

By Katherine Reynolds Lewis
c.2007 Newhouse News Service

We're taught from childhood that if something sounds too good to be true, it probably is. So why are we so susceptible to get-rich-quick scams?

It's human nature, experts say.

"We are hot-wired to react in certain ways. Everybody is a potential victim," said Les Henderson, the Sudbury, Ontario-based author of "Crimes of Persuasion."

The Federal Trade Commission estimates that nearly 25 million Americans are victims of consumer fraud each year 11 percent of the adult population.

We may think we make decisions after dispassionately weighing pros and cons, but research finds our choices are largely driven by emotion and unconscious cues. Fraudsters understand the psychology, and play to it.

Labor Walkouts Losing Effect in U.S.?

By Katherine Reynolds Lewis
c.2007 Newhouse News Service

This week's brief national strike by the United Auto Workers against General Motors Corp. may be among the last of its kind, labor economists and analysts say.

"National strikes are going to be very, very rare," said Barry Bluestone, dean of the public policy school at Northeastern University in Boston. "The reason is that unions are very weak and the companies aren't much stronger."

Strikes have declined in use quite simply because they're a less effective weapon for employees to wrest concessions from management. But what will replace labor's traditional leverage?