Exploiting economic illiteracy – While this post specifically talks about investors, I would think that the whole theme goes further than just investing. Complex can be good for the financial industry, but not necessarily for the customer at the other end, especially when the pitfalls of the product haven’t been explained properly to the customer (think Option ARMs).

According to this article in a local newspaper, 23% of people foreclosed in Nevada were strategic defaults. If you review the linked document, there are unfortunately a couple of important points missing from the strategic default data – for example, how much of the borrower’s income was spent on the mortgage (the same report mentions that 65% of respondents mentioned that they were spending 1/3 of household income or more on the mortgage, which the report rightly labels as ‘financial strain’. Would be interesting to see how much overlap between the two groups there was. Also, the personal quotes in the report seem to hint at some of the usual reasons like “[my bank] said we had to miss payments before the could talk to me”, which seems to be a theme that is coming up again and again. I’m also a bit dubious as to why a respondent who supposedly used up all their savings and their 401k would be thrown in the ‘strategic default’ bucket. That does make me wonder how much of this document tries to perpetuate the myth of the strategic default.

Back to a simpler personal finance related topic. From The Consumerist: 9 Things We Wished We Did Before Our House Burned Down. I’ve always been a little sloppy with certain things (like keeping my passport at home, which might or might not be a good idea if you’re an expat) but maybe this article will give me the necessary kick up the backside to finally sort out a safety deposit box for my wife and myself.

If you’ve been an Amazon Customer for a few years, you might want to change your password if you haven’t done so recently.