Happy New Year! It's 2009!

2008: The Year That Was.......Strange.

How strange a year was it? Here's how strange:

O.J. actually got convicted of something.

Gasoline hit $4 a gallon - and those were the good times.

On several occasions, "Saturday Night Live" was actually funny.

There were a few days there in October when you could not completely rule out the possibility that the next Treasury secretary would be Joe the Plumber.

Finally, and most weirdly, for the first time in history, the voters elected a president who -- despite the skeptics who said such a thing would never happen in the United States-- was neither a Bush nor a Clinton.

Of course, not all the events of 2008 were bizarre. Some were depressing. The only U.S. industries that had a good year were campaign consultants and foreclosure lawyers. Everybody else got financially whacked. So, we can be grateful that 2008 is almost over. But consider this....just because the year is ending doesn't mean our troubles won't continue.

Oh well...Happy New Year anyway!

Michelle

EconomicWatch: New Credit Card Rules May Bring Some Relief to Consumers

The Federal Reserve is expected to vote Thursday on credit card reforms that may relieve customers faced with late fees, universal defaults and shorter payment periods, Reuters reported.

The new rules, which were proposed earlier this year, are expected to prohibit credit card companies from increasing rates at will, with some exceptions, and to ban universal default, which permits changing card terms if the borrower defaults on another bill.

The rules are also expected to ban double-cycle billing, where card companies reach back to earlier billing cycles to help calculate interest charged in the current cycle.

Consumers will also likely see easier-to-read tables on monthly statements.

Credit card companies that initially resisted the changes, however, warn borrowing limits may be reduced and interest rates charged on credit cards will rise for borrowers.

The new rules need the approval of the Federal Reserve, the Office of Thrift Supervision and the National Credit Union Administration, all are expected to act on Thursday.

Lisa

Is Regifting Wrong?

It usually goes something like this: you open a beautifully wrapped box only to find one of those tacky holiday sweaters with snowmen on it. Or maybe it's a desk lamp made completely of peanut brittle. Or something super useful, like that battery-operated singing fish that hangs on your wall. Even as you smile and say "thank you," you tell yourself, "This goes in the regifting pile." The problem is-and come on, you know this-regifting is a major faux pas. It makes you look like a complete ingrate should the gift-giver find out. And if the new receiver discovers your thoughtless attempt to pawn off a piece of junk, you'll quickly be in your social circle's proverbial doghouse.

But things could be different this year. Environmentalists are finding inherent value in the idea of regifting. They're removing the tacky connotation and rebranding it as green and earth friendly. "It's a way to turn trash into something useful. That's as green as it gets," says Urvashi Rangan, the editor of Greener Choices, the enviro-focused online hub of Consumer Reports.

For Rangan and a growing group of environmentalists, passing on an unwanted gift is a way to save money and resources, and reduce the amount of waste headed for landfills. "[Regifting] tends to be a really sexy topic when you're in a recession," Rangan says. "It really helps us play into the frugality that people are looking for."

Still unconvinced of a broader trend? Then check out Regiftable.com. The site recently studied the growing regifting scene and found that more than half of American adults were comfortable with the practice and that on average, more than 40 million gifts are regifted each year. The site's chock full of readers' stories highlighting their most successful, and horrifying, regifting stories. In one, brothers who were tired of the tube socks they kept getting for Christmas turned them into a massive holiday wreath that they ... gave back to mom. In another less successful exchange, a regifted highchair actually infected the receiver's toddler with a severe rash. "Don't give the gift of scabies!" she warns other would-be regifters.

For all the taboos, and occasional hazards, recycling a gift can still can be done responsibly and with tact. Heck, even the manner-minding Emily Post Institute endorses it, if done correctly. The Discovery Network's Planet Green staff amplified its regifting advocacy this year with a list of pointers, suggesting that regifting falls perfectly within the core tenets of environmentalism: the three R's-reduce, reuse and recycle. For one, there are scruples involved. You can't mindlessly pass on a piece of junk, says Meaghan O'Neill, editor of Planet Green, which also produces the environmental Web site Treehugger.com. "You have to know the person receiving it will like it." It also couldn't hurt to add something to make it personal, like getting initials embroidered on a tacky sweater, or tying a new color ribbon around that enormous basket of shower beads.

There's also the option of what one Planet Green blogger calls the "stealth store credit" type of regifting, wherein you take "unwanted item X," find out where it was purchased, return it for store credit (many stores will accept an exchange with no receipt) and buy a different item for the same amount. That way you maintain the neutrality of manufactured products while putting some thought into it. If that's too much work, there's an even safer option. Embrace the practice all together and throw a full-scale regifting event. Host a holiday gift exchange and ask everyone to bring only a regiftable gift. Or agree with your family to do it with the entire holiday season. "If it's out in the open, there's no tackiness at all," O'Neill says.

MICHELLE

EconomicWatch: Mutual Fund Industry Gets Extra Lumps Of Coal For Bad Behavior

After years of expecting a little something extra around the holidays, most people in the mutual-fund world are getting nothing extra for Christmas this year.

That said, it's my job to fill some of those holiday stockings. It's the annual Lump of Coal Awards, my holiday tradition of finger-pointing at the bad boys and girls of the fund business, the ones who should get nothing more than an inky chunk of carbon from Santa this year.

The Lump of Coal Awards recognize managers, executives, firms, watchdogs and other fund-world types for action, attitude, behavior or performance that is misguided, bumbling, offensive, disingenuous, reprehensible or just plain stupid.

With the average equity fund down by more than 40%, it would be easy to carpet-bomb the entire industry with insults this year, but the losing actually has made it harder to pick "winners" -- the buffoons and miscreants who added insult to injury by blunder, ignorance or arrogance.

The 2008 Lump of Coal Awards go to:

1. Bruce Bent, co-founder of the first money-market fund and chairman of the Reserve Funds.

Category: Forgetting that talk is cheap

For years, Bent railed against money funds holding anything riskier than Treasury bills and bank certificates of deposit. He ridiculed competitors for buying commercial paper, short-term corporate debt that's routinely unsecured.

But in 2006, when Reserve's money funds were lagging the field in yield, Bent's firm started buying the same things he once described as "garbage." Reserve's money-fund yields climbed the charts.

Meanwhile, Bent continued ranting well into 2008 about the horrible investment behavior of others, ignoring the fact that his funds had become the most dangerous of the bunch.

Holding $785 million in Lehman Brothers paper, Reserve's Primary fund was forced in mid-September to "break the buck," after that debt was officially declared as garbage in light of Lehman's financial troubles.

2. The Investment Company Institute

Category: Doing too little, too late

The money fund crisis came into full bloom in mid-September. The ICI -- the fund industry's trade association -- established its money fund working group in November, long after the focus of the economic crisis had moved on to other parts of the financial world.

3. DWS Investments

Category: Forgetting why investors gave them money in the first place

When DWS decided to close its miserable small-cap value fund, logic dictated that it move the assets into DWS Dreman Small Cap Value Fund, a sister fund in the same asset category and with a similar investment style.

But DWS Dreman Small Cap Value (KDSAX) was -- and remains -- closed to new investors, so DWS instead folded the fund into DWS Dreman Mid Cap Value Fund (MIDVX) .

As a result, investors wound up in an asset class they didn't pick, missing out on David Dreman's top-rated small-cap issue and getting his below-average mid-cap fund, thereby enduring a much larger loss on the year.

4. Every 2010 target-date fund

Category: Missing the bulls-eye

At the very time that investors most needed life-cycle and target-date investing to work, it failed.

Target-date funds are all-in-one portfolios built to age with an investor, so that the closer they get to the target date, the more conservative they become. As such, 2010 funds -- built for investors less than two years from hitting retirement age -- should be a comparatively safe haven.

Instead, the average 2010 fund is down nearly 30% this year. See related story on target-date funds' losses.

5. Oppenheimer's target-date funds

Category: The year's most off-target performance

Oppenheimer is dead last in its peer group for funds targeted for 2010, 2015, 2020 and 2030. By comparison, Oppenheimer 2025 is a star, standing next-to-last in its category. And Oppenheimer 2040 and 2050 didn't launch until March, but since their inception date, both rank dead last in their peer groups too. With performance like that, Oppenheimer may not be running "life-cycle funds," so much as "death spiral funds."

(Second place in this category goes to AllianceBernstein. Were it not for Oppenheimer's misery, Alliance Bernstein would be dead last in every target-date category tracked by Lipper Inc..)

6. Fritz Reynolds of Reynolds Blue Chip Growth Fund

Category: Faking his way to the top

Reynolds runs the top-performing "multi-cap core" fund in the Lipper database, and the top large-growth fund tracked by Morningstar Inc. The average competitor is down about 41.5% this year, but Reynolds Blue Chip Fund (RBCGX) has lost just 5%. You'd think that would earn him kudos and not coal, but Reynolds topped those stock-picking categories by being mostly in cash; for much of the year, he's been 0% in blue-chips and 100% in cash.

Worse yet, with a 2% expense ratio, when Reynolds goes all to cash in current market conditions, he's virtually dooming shareholders to a loss. If Reynolds was so convinced it was time to hit the sidelines, he should have told shareholders to sell his fund, park the cash in an account paying a bit of interest, and then asked them to re-up when he thinks it's time to buy again.

7. Dreyfus Emerging Markets

Category: Opening the doors and punching new visitors in the face

Dreyfus Emerging Markets Fund (DRFMX) re-opened to new investors the first week of December. Even in a troubled economy, solid funds re-opening to new money attract a lot of interest, mostly from people who had previously been kept out.

But the Dreyfus fund reopened less than two weeks before it is scheduled to pay out a 38% capital gain. In short, anyone who bought in when the fund re-opened will get kicked in the teeth with a big fat tax bill on the money they invested.

8. Regions Morgan Keegan

Category: Not knowing when to quit

Two former high-fliers, RMK's Select Intermediate Bond Fund (MKIBX) and Select High Income Fund (MKHIX) , may have been the industry's biggest travesties over the last two years.

Manager James Kelsoe -- the Lump of Coal (Mis)Manager of the Year in 2007 -- had a huge slug of money in subprime paper, so that both bond funds lost more than 50% last year, then watched things go from bad to worse in 2008.

High Income is down nearly 80% and Intermediate Bond has lost 85% this year. For every $1,000 invested in the funds at the start of 2007, there's less than $100 left now. You'd be hard-pressed to find two funds more deserving of liquidation,

Regions Morgan Keegan finally got rid of Kelsoe, but inexplicably kept the funds open, with a new subadviser running the money.

9. Ron Fielding of the Oppenheimer Rochester Municipal funds

Category: Sticking to your guns when they're aimed at your own feet

The Rochester funds have traditionally flown high on the muni-bond performance charts, largely because of Fielding's penchant for diving headlong into the riskiest portions of the bond market - notably sectors like tobacco, housing and airlines - to capture extra yield. As a result, Fielding's funds - and he's ultimately responsible for 18 Oppenheimer-owned issues - took on a lot more credit risk than the competition.

Results have been a horror show. Most of the Rochester single-state funds are down more than 35% this year, and Oppenheimer Rochester National Muni Fund (ORNAX) is down 48% this year, which is far more abysmal than the average stock fund in 2008.

Fielding has remained bullish, but a combination of redemptions and the continued credit crunch is likely to make things worse before they get better, which in turn could cripple the entire Oppenheimer family. Oppenheimer's target-date funds are suffering because of their bond exposure through Fielding's National Muni portfolio.

Lisa

Stuff Is Not Salvation: Finding The Real Christmas

What passes for the holiday season began before dawn the day after Thanksgiving, when a worker at a Wal-Mart in Valley Stream, N.Y., was trampled to death by a mob of bargain hunters. Afterward, there were reports that some people, mesmerized by cheap consumer electronics and discounted toys, kept shopping even after announcements to clear the store.

These are dark days in the United States: the cataclysmic stock-market declines, the industries edging up on bankruptcy, the home foreclosures and the waves of layoffs. But the prospect of an end to plenty has uncovered what may ultimately be a more pernicious problem, an addiction to consumption so out of control that it qualifies as a sickness. The suffocation of a store employee by a stampede of shoppers was horrifying, but it wasn't entirely surprising.

Americans have been on an acquisition binge for decades. I suspect television advertising, which made me want a Chatty Cathy doll so much as a kid that when I saw her under the tree my head almost exploded. By contrast, my very much older family members will be happy to tell you about the excitement of getting an orange in their stocking during the Depression. The depression before this one.

A critical difference between then and now is credit. The orange had to be paid for. The rite of passage for a child when I was young was a solemn visit to the local bank, there to exchange birthday money for a savings passbook. Every once in a while, like magic, a bit of extra money would appear. Interest. Yippee!

The passbook was replaced by plastic, so that today Americans are overwhelmed by debt and the national savings rate is calculated, like an algebra equation, in negatives. By 2010 Americans will be a trillion dollars in the hole on credit-card debt alone.

But let's look, not at the numbers, but the atmospherics. Appliances, toys, clothes, gadgets. Junk. There's the sad truth. Wall Street executives may have made investments that lost their value, but, in a much smaller way, so did the rest of us. "I looked into my closet the other day and thought, why did I buy all this stuff?" one friend said recently. A person in the United States replaces a cell phone every 16 months, not because the cell phone is old, but because it is oldish. My mother used to complain that the Christmas toys were grubby and forgotten by Easter. (I didn't even really like dolls, especially dolls who introduced themselves to you over and over again when you pulled the ring in their necks.) Now much of the country is made up of people with the acquisition habits of a 7-year-old, desire untethered from need, or the ability to pay. The result is a booming business in those free-standing storage facilities, where junk goes to linger in a persistent vegetative state, somewhere between eBay and the dump.

Oh, there is still plenty of need. But it is for real things, things that matter: college tuition, prescription drugs, rent. Food pantries and soup kitchens all over the country have seen demand for their services soar. Homelessness, which had fallen in recent years, may rebound as people lose their jobs and their houses. For the first time this month, the number of people on food stamps will exceed the 30 million mark.

Hard times offer the opportunity to ask hard questions, and one of them is the one my friend asked, staring at sweaters and shoes: why did we buy all this stuff? Did anyone really need a flat-screen in the bedroom, or a designer handbag, or three cars? If the mall is our temple, then Marc Jacobs is God. There's a scary thought.

The drumbeat that accompanied Black Friday this year was that the numbers had to redeem us, that if enough money was spent by shoppers it would indicate that things were not so bad after all. But what the economy required was at odds with a necessary epiphany. Because things are dire, many people have become hesitant to spend money on trifles. And in the process they began to realize that it's all trifles.

Here I go, stating the obvious: stuff does not bring salvation. But if it's so obvious, how come for so long people have not realized it? The happiest families I know aren't the ones with the most square footage, living in one of those cavernous houses with enough garage space to start a homeless shelter. (There's a holiday suggestion right there.) And of course they are not people who are in real want. Just because consumption is bankrupt doesn't mean that poverty is ennobling.

But somewhere in between there is are families like one I know in rural Pennsylvania, Virginia, New York, Colorado and Montana, Georgia and Kentucky - raising bees for honey (and for the science, and the fun, of it), growing Christmas trees, making ambrosia, digging a pond out of the downhill flow of the stream, with three kids who somehow, incredibly, don't spend six months of the year whining for the toy du jour. (The youngest once demurred when someone offered him another box on his birthday; "I already have a present," he said.) The mother of the household says having less means her family appreciates possessions more. "I can give you a story about every item, really," she says of what they own. In other words, what they have has meaning. And meaning, real meaning, is what we are always trying to possess. Ask people what they'd grab if their house were on fire, the way our national house is on fire right now. No one ever says it's the tricked-up microwave they got at Wal-Mart.

MICHELLE

Obama's Former Pastor And Mentor Rev. Jeremiah Wright To Visit Georgia

President-elect Barack Obama's former pastor, the Rev. Jeremiah Wright, is expected to preach at a Macon revival and will preach Monday through Wednesday at St. Paul AME Church. It will be his second visit to the Georgia city. Wright also spoke at St. Paul last year.

The Chicago minister drew headlines in the presidential campaign for remarks on racial injustice, conduct of the American government and U.S. foreign policy. Obama resigned from Trinity United Church of Christ during the campaign after inflammatory comments by Wright from the pulpit became a campaign issue.

St. Paul's pastor, the Rev. Ronald Slaughter, defends Wright, pointing to his longtime community activism, but has never fully addressed or admitted that the good reverend has racist, socialist leanings.

Lisa