July 15, 2008

Fannie and Freddie: A big deal

Posted: 09:26 AM ET

The mortgage crisis is back in the news, this time with two of the biggest players in the home loan business. Fannie Mae and Freddie Mac together hold or back more than $5.2 trillion in U.S. home mortgages - about half the outstanding residential loans in the country.


Both firms were originally set up by the government to help Americans purchase their homes. Over time, they morphed into "government-sponsored entities" – publicly listed companies backed by the government, but owned by shareholders with stock traded on Wall Street. In the last year, both firms together have lost almost $12 billion due to down home prices and a growing number of loan defaults. That has the government stepping in to make funds available to reverse both companies' fortunes.

To gauge the importance of what’s going on, let's take a look at what these firms actually do:

1) Fannie Mae and Freddie Mac buy mortgages from lenders. Banks offer loans to prospective homebuyers, and the banks in turn sell them to Fannie Mae and Freddie Mac for money.

2) Both firms free-up lenders to offer more loans. Banks use the proceeds from the sold loans to lend more to other prospective homebuyers.

3) Both repackage mortgages and sell them to investors. They pool these loans into "mortgage-backed securities," for sale to big investors, who seek the revenue streams from loan interest payments.

4) Both Fannie Mae and Freddie Mac use the proceeds to buy more mortgages. That frees up lenders to offer even more mortgages to borrowers.

Without Fannie Mae and Freddie Mac, many loans may not be accessible to a wide swathe of the public, and that means it would be a lot harder and more costly to own your home. These firms are the grease that keeps the housing market engine running.

So, when the government steps in to rescue these two giants of the home lending industry, you know this is a big deal.

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Filed under: Finance • Living • Velshi

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July 14, 2008

Inflamed tendons need TLC

Posted: 04:52 PM ET

You don't have to play a mean game of tennis to get tendinitis. Experts say it can be caused by repetitive motion activities such as gardening, painting and even carrying heavy objects. A doctor can rule out more serious conditions, but a lot of times tendinitis resolves on its own. The Mayo Clinic recommends the following tips if you decide to treat tendinitis at home. Just remember the acronym PRICE.


1) Protection. Immobilize the affected area to encourage healing. Elastic wraps, slings, splints, crutches or canes may help.

2) Rest. It is essential to tissue healing. Avoid activities that increase the pain or swelling. Don't try to work or play through the pain.

3) Ice. Apply ice packs or use ice massage for 20 minutes, several times a day to decrease pain, muscle spasm and swelling.

4) Compression. Wraps or compression bandages may help reduce swelling.

5) Elevation. If possible, raise the affected limb above the level of your heart to reduce swelling.

Some over-the-counter medications, such as aspirin, ibuprofen and acetaminophen may help relieve the discomfort associated with tendinitis.

Judy Fortin's Health Minute segment runs daily on Headline News from 10 a. m. to 6 p.m. ET weekdays.

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Filed under: Fortin • Health

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How to avoid getting the wrong medicine in the hospital

Posted: 03:22 PM ET

My heart breaks for the family of Keith and Kay Lynn Garcia.  I was on vacation last week when I heard about their deaths.  Though I have never met Keith and Kay Lynn, I can’t stop thinking about them.  The twins, who were born a month prematurely, were two of the 14 babies who were accidentally given an overdose of the blood thinner Heparin at a Texas hospital.

The babies received 100 times the amount of Heparin they should have been given.  Autopsies are being performed to find out for sure if it was indeed the Heparin that killed the Garcia twins.  In the meantime, the hospital is conducting an investigation into what happened.  Officials at Christus Spohn Hospital South say the pharmacy made a “mixing error.”  The two workers are on voluntary leave.

The Institute of Medicine estimates that 1.5 million people are harmed by medication errors each year. Over the years, I have talked to many doctors, nurses and other medical professionals about this alarming number.  No one is proud of it.  In the case of what happened in Texas, there is little a parent can do, but there are some practical steps you can take to lower the risk of other medication errors when you or family members are in the hospital.

1. Get your meds in writing
Ask for a list of all the medications you're supposed to be given, what they look like, and when you should get them. Then, when a nurse comes around to give you your medications, you know if they have it right, says Hedy Cohen, vice president of the Institute for Safe Medication Practices.

2. Make sure this is really YOUR medicine
Especially if your name is "Smith" or "Jones." "I personally saw a mom say to a nurse, 'Hey, the IV bag you're about to give my son has another child's name on it,' " Cohen says. She recommends showing the nurse your ID bracelet every time you're given a medicine.

Of course, it can be tough to notice mistakes when you're sick. That's why researchers who specialize in medical errors say it's very important to have someone with you in the hospital.

3. Get dramatic if you have to
Dr. Albert Wu, a professor at Johns Hopkins School of Public Health, says when his friend's daughter was in the hospital, his friend realized a nurse was about to administer the wrong medicine. When Wu's friend told her this was not the medication the doctor had ordered, the nurse didn't believe him. "He threw himself across the bed until they realized the medication was for the next patient," Wu says.

For more tips on becoming an Empowered Patient, check out

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Filed under: Cohen • Empowered Patient • Health

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Is your bank account safe?

Posted: 10:35 AM ET

Over the past few days we saw the second-largest failure of a financial institution in American history. Here's how to tell if your savings are protected.


1) Look for the logo
There is one thing that will save your money if your bank goes under– that's FDIC insurance.
Look for the FDIC logo at your local branch. If you don't see it, ask the bank, or go to the FDIC'S website at and click on "Bank Find."

2) Know the limits
As an individual, your deposits are insured up to $100,000 in an FDIC-insured bank.
This includes your savings, your checking, any certificate of deposits (CDs) and money market accounts. Joint accounts can be insured up to $200,000. IRAs and Keoghs, these are retirement plans, can be insured up to $250,000. Not covered: money invested in stocks, bonds, mutual funds, life insurance policies or annuities. One thing IndyMac customers should know...The FDIC will pay uninsured depositors 50 percent of your uninsured deposit if you have more than $100,000 in an IndyMac account.

3) Get the rules
When a bank fails, a healthier banking institution normally buys the failed bank. Your checks will still clear, you can still use your ATM card. But, there's one thing you may not be aware of–it's critically important if you have a CD–The terms of your investment can change.
For example, if you took out a CD with an annual percentage rate of 3.0 percent, the new bank may drop that interest rate. You do have the option to withdraw your funds without penalty if that happens.

For more of Gerri's Top Tips, watch CNN every day at 10:15 am Eastern Time.

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Filed under: Finance • Living • Willis

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Preparing your kid for a recession

Posted: 09:21 AM ET

As adults worrying about the economy is probably just part of your daily routine. But financial problems can really impact your kids too.


1) Have the talk
Don’t leave your kids out of loop when you talk about family finances. Chances are, they’ve been hearing about the downturn in the economy for a while. Don’t be afraid to share some of your financial struggles with them.

2) Get them involved
Now is your chance to show little junior how money and budgeting works. Have your kids help you clip grocery coupons in the local newspaper. You may even have them research prices for bigger ticket items online. At the end of the week you can tally how much money they’ve saved from those simple tasks.

3) Set a good example
If you have teens in your home, level with them about the situation. Make sure you set a good example too of budgeting and using your credit judiciously. Now is a great time to explain how credit works. It’s not always an easy lesson.

For more of Gerri's Top Tips, watch CNN every day at 10:15 am Eastern Time.

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Filed under: Finance • Living • Willis

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July 11, 2008

Preventing SIDS

Posted: 10:48 AM ET

If you are like most parents with an infant, your nerves can get the best of you when worrying about the safety of your baby. A common concern is something known as SIDS, or Sudden Infant Death Syndrome. It is the unexplained death of a healthy baby and typically occurs while the infant sleeps. According to the National Institutes of Health, most SIDS deaths occur between two and four months of age.
Health experts aren't entirely sure what exactly causes SIDS, but there are some things you can do to help protect your infant.


1) Always place baby on his/her back Studies show babies who do not sleep on their back are at increased risk of SIDS. Get in the habit of always placing your infant on its back, even to nap.

2) Use a firm mattress When shopping for a crib, choose a firm mattress that is safety-approved. Also, use only a fitted shift in the crib.

3) Keep soft objects out of the crib Avoid keeping stuffed animals and baby blankets in the crib. If using bumpers, be sure they are made with a "breathable" material and not pillow-based.

4) Keep infants body temperature cool Dress your baby in light clothes and keep room cool (around 72 degrees if possible) while he/she sleeps.

A belief among some parents is that childhood vaccines may cause SIDS. However, according to the American Academy of Pediatrics, which investigated the claim, there is no such link.

Be sure to tune in to Dr. Sanjay Gupta every weekend on HOUSE CALL. You'll find the answers to your medical questions Saturday and Sunday at 8:30 a.m. ET on CNN.

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Filed under: Gupta • Health

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July 10, 2008

How to help your child deal with pain

Posted: 10:00 AM ET

Dr. Jodi Greenwald, a pediatrician in Roswell, Georgia, has a secret weapon for helping children cope with pain. It's not a drug. It's not a medical device. It's a pinwheel. Yes, a pinwheel.


"Tell them to blow the pinwheel to make it turn, and you're accomplishing two things," Greenwald. "It distracts the child while they're getting a shot, and it makes them take deep breaths, which helps them relax."

Jennifer Crain discovered another anti-pain weapon after giving birth to her son: a pacifier dipped in sucrose water. Nurses gave it to him during his circumcision. Researchers think the action of sucking sugar water on a pacifier probably changes neurochemicals in the brain. "It diminishes the baby's behavioral response to something painful", says Dr. Elliot J. Krane, professor of Anesthesia and Pediatrics at Stanford University.

Pediatric pain experts say, sadly, that too many children aren't getting any pain relief at all – even something as simple as a pinwheel or sugar water. In a study last week in the Journal of the American Medical Association, researchers found four out of five babies in the neonatal intensive care unit received no pain relief when they had to undergo painful procedures.

The study was in France, but other studies have found U.S. doctors also don't give pain relief to babies and children as often as they should.

So whether it's for routine vaccinations or something even worse, here are some ways you can alleviate your child's pain.

1. For babies, ask about a pacifier dipped in sucrose water.  It worked for Crain's son, and doctors say it works wonders for other babies, too. If your pediatrician's office doesn't have any, you can make your own. According to the Web site of the late researcher Dr. Donna Wong, dip a pacifier in a mixture of one measuring teaspoon table sugar and four teaspoons water.

Give your baby the pacifier about 30 minutes before the shot or procedure, recommends Dr. K.J.S. Anand, at the Arkansas Children's Hospital Research Institute.

2. Ask for a topical pain creams.  These creams can help take the sting out of any needle stick, from a vaccination needle to an IV, McClain says.

Why don't all doctors use them? McClain says because they have to be given well in advance. "The argument I get from primary care doctors is that it takes so long, you have to just sit there. It slows things down," she says.

Solution: Ask your doctor for a prescription, and you can apply the cream yourself before you arrive at the doctor's office, McClain suggests. The cream needs to go on 30 minutes to two hours before the procedure.

3. Distract your child.  As Greenwald found out, a pinwheel can go a long way. Other ideas: Talk to your child about anything but what's going on. "The mistake parents make is saying, 'We'll get ice cream when it's over,' or, 'I know it hurts.'" she says. "That's empathetic, but it's not going to help a 3-year-old get their mind off the pain."

Instead, she recommends talking about something completely different. "Say, 'Remember the time we went to Disney World and Cinderella waved at you?' That'll be more effective."

Looking for some more tips on how to help your child deal with pain? Check out my column at

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Filed under: Cohen • Empowered Patient • Health

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The cost to commuters

Posted: 08:51 AM ET

It's not for nothing I'm called the “hairless prophet of doom.” Every day, it seems I'm breaking bad news on record oil and gas prices. Last week, crude oil hit dangerously close to $150 a barrel. This week, gasoline surpassed a national average of $4.10 a gallon - and almost every day sets a new record. The result: with gas prices up 40 percent from a year ago, Americans are altering their driving habits.

ali.velshi confirms some of this sentiment in a new online survey of 8,700 American workers - 89 percent of whom said they drive to work. Almost half said they’ve been forced to give something up to afford the cost of their commutes. Going out to eat at a restaurant was the biggest sacrifice for 35 percent of those surveyed, while 31percent spent less money on entertainment; and 21percent skipped a vacation. The lowest result was cutting back on their children’s extracurricular activities - only 4 percent did that.

Here are some tips suggests to get the most of your commuting dollar:

1) Check for office perks. Some employers actually reimburse you for your commuter costs.

2) Carpool. It's a win-win for both your wallet and the environment.

3) Take mass transit. If your area has good public transport, ride and save time and money– and it's less wear and tear on your car in the long run.

4) Telecommute. Many workplaces are now switching to a 4-day work week because fuel costs are so high. If your company is flexible, suggest working from home a day or two to cut down on costs.

5) Get in shape. If you can, walk or ride a bike to work when the weather's nice. You'll save a bundle and it's good for you!

It looks like high gas prices - and bad traffic- - are really taking a toll on American commuters. According to the survey, one in ten workers said they would take a pay cut just to drive to a job with a shorter commute. That makes sense. Who wants to pay double to be stuck in traffic? Now that's the pits!

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Filed under: Career • Finance • Velshi

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July 9, 2008

Voice your credit card complaints

Posted: 12:56 PM ET

If you’ve ever had your interest rate jacked up on your credit card, it’s your turn to gripe. Here's how to make your complaints count.


1) Get the facts
The Federal Reserve is proposing some changes to the way credit card companies operate. And you have the opportunity to make a comment on these changes.

2) Know the changes
Here are some of the proposals:
Banks wouldn’t be able to hit you with a higher interest rate on debt you already owe;
Banks would have to apply at least a portion of payments toward higher-interest rate debt; Eliminates two-cycle billing; consumers would get a reasonable amount of time to make payments.

3) Know where to go
You have until August 4th to submit your public comment. Go to and click on “consumer information” at the top of the page. Then click on “Proposed Rules for Credit Cards and Overdraft Services” and scroll to the bottom of the page. Look for Regulation AA and click on submit a comment.

For more of Gerri's Top Tips, watch CNN at 10:15 am Eastern Time.

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Filed under: Finance • Living • Willis

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July 8, 2008

Oil at $200 a barrel?

Posted: 12:13 PM ET

Oil came dangerously close to $150 a barrel last week, but is down a few dollars this week off its record high. Crude prices have shot up almost $50 a barrel in the first six months of this year. At that rate oil could very well hit as high as $200 a barrel by the end of the year. That means gasoline could shoot up to $6 a gallon, and Americans will be forced to change their driving habits more than they've ever done up to now.


A few months back, the president of OPEC predicted oil would hit the $200 mark, but laid the blame for that on excessive speculation in commodity markets. Some Wall Street analysts agree with his price prediction, but place the blame squarely on the world's growing appetite for energy - in other words, good old supply and demand.

The truth is there are several factors out there contributing to oil's meteoric rise. Here's a summary of some of the root causes out there for soaring oil prices:

1) Growing demand: Growth in China, India, Russia and the Middle East is fueling oil consumption in those countries, and it is using up the world's excess supply.
2) Higher production costs: Rigs and other equipment now cost more, especially for deep oil drilling– where the cost of leasing a rig has climbed above $600,000 a day– a 30 percent jump in two years.
3) A weak dollar: Remember, oil trades throughout the world are denominated in dollars, so the weaker value against other currencies can push prices up further.
4) Speculation concerns: Investors are flocking into oil markets to make money on price movements, without actually taking delivery of any oil - a phenomena being fueled in the U.S. as stock prices and home values continue to fall.
5) Conflict with Iran: The saber rattling over a possible military attack on Iran is making markets nervous. Any attack could lead an Iranian blockade of the Straight of Hormuz - a narrow waterway on its coast where as much as 40 percent of the world's oil passes through.

Any one of the factors should be enough to push prices higher. The truth is there is more than one factor contributing to oil's rise, making a break in prices unlikely anytime soon.

So, Americans may have to brace for the unthinkable - oil at $200 a barrel. There are a lot of factors driving prices up. Unfortunately, there are not a lot of factors that might drive them down right now.

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Filed under: Finance • Living • Velshi

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About this blog

Clark Howard helps you become a wise consumer. We know you're busy, and that's why Clark's tips are quick and effective. He'll arm you with the information you need to make smart choices. During these tough economic times, Clark wants to help you save more, spend less and avoid getting ripped off!