In this Issue:

Homeowners Worried About Their Mortgage
Money Saving Tactics for 2009
Russian Professor Predicts the End of the U.S.

(Please leave us a comment at the bottom of the newsletter.)

Homeowners Worried About Their Mortgage

According to research, nearly half of all homeowners are worried they will not be able to pay their mortgage or rent during the coming year as the economic downturn takes hold.

Around 44% of homeowners are concerned about meeting their mortgage repayments during the next 12 months, with roughly 15% saying they are very worried.

A further 47% of people who are local authority or housing association tenants are also concerned about keeping on top of their rent, while 41% of private renters are also worried.

With the rising worry among homeowners and renters to keep up with their housing costs, some bankers and real estate professionals have begun to get creative.

Gone are the days when struggling homeowners had no other option than to enter foreclosure, lose their home and damage their credit. In today's economic climate, lenders are realizing that it makes more sense to work with the homeowner to keep them in their home, rather then wind up with a property that loses value and doesn't sell.

One of the new services lenders have created to cope with this problem is called short refinancing.

Short refinancing is a new way for homeowners to rework their home loan, stay current with their payments, and avoid foreclosure. In a short refinance, the original lender agrees to take a payoff which is less then the original amount of the loan. Once this happens, the homeowner can find a second round of financing for the remaining amount of the home's value. With short refinancing, everyone wins. The homeowner stays in their home, and the bank is able to avoid incurring a slew of fees, and no longer has to attempt to sell a devalued home in an unstable market.

The problem with short refinancing, however, is that few know what it is and even fewer know how to handle one correctly. Banks are only now starting to wake up to the realities of the current housing market, and have been slow to move on this possible new solution.

Stay tuned to this newsletter for more on Short Refinancing as the concept takes hold across the country.

Money Saving Tactics for 2009

The custom of making New Year's resolutions dates back more than 4,000 years, when the Babylonians started the year by returning borrowed farm equipment.

You could continue that tradition by resolving to return your neighbor's leaf blower. Or here's a better idea: Resolve to take some simple steps that will save you money in 2009.

Here are a few suggestions:

Order your free credit reports. You're entitled to a free credit report every 12 months from each of the three major credit bureaus. You can order credit reports, either online or through the mail, at www.annualcreditreport.com .

Checking your credit reports is critical this year, says John Ulzheimer, president of educational services for Credit.com. Interest rates on home mortgages and car loans have dropped to record lows, but you need spotless credit to qualify.

Set up online bank and credit card accounts. These services, which are usually free, allow you to pay bills electronically, monitor your accounts for suspicious transactions, and create electronic alerts that will remind you when bills are due.

Avoid ATM Fees. Can't bear the thought of giving up your daily cappuccino? Here's a resolution that's easier to keep: Use your own bank's ATMs.

The average ATM surcharge — the amount banks charge non-account holders for using their ATMs — was $1.97 in 2008, according to Bankrate.com. Most banks also charge a fee when their customers use another bank's ATM. The average amount of that fee was $1.46 in 2008. That works out to $3.43 — or the equivalent of paying nearly 7% interest on a $50 withdrawal.

Submit claims for your health care flexible-spending account. Flex accounts allow workers to contribute pretax dollars to pay for unreimbursed medical and dental expenses. At most companies, you're required to use the money by Dec. 31 or forfeit the balance. However, most large companies also give their employees until March 31 to submit claims for expenses incurred before the end of the previous year.

Russian Professor Predicts End of the U.S.

(From the Wall Street Journal)

For a decade, Russian academic professor, Igor Panarin, has been predicting the U.S. will fall apart in 2010. For most of that time, he admits, few took his argument — that an economic and moral collapse will trigger a civil war and the eventual breakup of the U.S. — very seriously.

Prof. Panarin's bleak forecast for the U.S. is music to the ears of the Kremlin, which in recent years has blamed Washington for everything from instability in the Middle East to the global financial crisis.

Mr. Panarin's views also fit neatly with the Kremlin's narrative that Russia is returning to its rightful place on the world stage after the weakness of the 1990s, when many feared that the country would go economically and politically bankrupt and break into separate territories.

"There's a 55-45% chance right now that disintegration will occur," he says. "One could rejoice in that process," he adds, poker-faced. "But if we're talking reasonably, it's not the best scenario — for Russia."

Though Russia would become more powerful on the global stage, he says, its economy would suffer because it currently depends heavily on the dollar and on trade with the U.S.

He predicts that economic, financial and demographic trends will provoke a political and social crisis in the U.S. When the going gets tough, he says, wealthier states will withhold funds from the federal government and effectively secede from the union. Social unrest up to and including a civil war will follow. The U.S. will then split along ethnic lines, and foreign powers will move in.

Americans hope President-elect Barack Obama "can work miracles," he writes, "But when spring comes, it will be clear that there are no miracles."

The professor says he's convinced that people are taking his theory more seriously, although many tout that the professor is just "wishful thinking."

People like him have forecast similar cataclysms before, he says, and been right. He cites French political scientist Emmanuel Todd. Mr. Todd is famous for having rightly forecast the demise of the Soviet Union — 15 years beforehand. "When he forecast the collapse of the Soviet Union in 1976, people laughed at him," says Prof. Panarin.

You can read this complete story, as well as see Prof. Panarin's prediction as to which states will fall to which countries (map) by going to the Wall Street Journal online .

(Side Note: We find this article, although sobering in thought, to be somewhat humorous. We'd be interested in hearing your opinion. Leave us a comment below)