Science News reports on current research indicating that any kind of multitasking while driving is dangerous. Not just the obvious distraction of juggling a cell phone, but even talking to a passenger or listening to a book on tape. The researchers used a driving simulator inside an MRI machine to measure brain activations. “Attending to what someone says galvanizes language-related brain areas while simultaneously reducing activity in spatial regions that coordinate driving behavior. This finding recommends that people who combine relatively automatic tasks, such as speech comprehension and car driving, exceed a biological limit on the amount of systematic brain activity they have the ability to accommodate at one time, the researchers propose. As a result, the less-ingrained skill — in this case, driving, which is learned long after a person grasps a native language — takes a neural hit.”

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Ant writes “Popular Mechanics reports if the looming Discovery mission or any other between now and the spacecraft’s retirement loses control, National Aeronautics and Space Administration (NASA) is prepared to ditch it in the Atlantic ocean — or blow it up. The article also shows complete no-fly-zone maps and a photograph of the switch.”

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UK’s Goldfrapp ambivalent about hip-hop, Madonna - Reuters
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UK money market rates - Forbes
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Records show Sharpton owes overdue taxes, other penalties - San Francisco Gate
Massive corporations give him money. Presidential candidates seek his endorsement. He has influential friends in Congress and the governor’s mansion. The Rev. Al Sharpton has emerged over the past decade as perhaps the nation’s most prominent civil

Pappas Telecasting Files For Chapter 11 Bankruptcy - CNN Money
The largest privately-held commercial broadcast operator in the U.S., Pappas Telecasting Inc., filed for Chapter 11 Saturday with plans to sell its 30 Television stations under bankruptcy court protection. Pappas cited “the extremely difficult business

Tenants’ money ’still not safe’ - BBC News
The full scale of the problem isn’t clear, but Shelter says it gets calls each week about deposits still not being protected. And Citizens Advice states its bureaux around the country regularly report complaints about the same issue. “It’s clearly

Smith has money lead over Griswold - AZCentral.com
If Scott Smith loses the mayoral race to Rex Griswold, it won’t be for lack of money. Smith continues to far outpace Griswold in both raising and spending campaign dollars as they race toward Mesa’s May 20 runoff election. The former homebuilder, who

News Corp pulls bid for Newsday - MSN MoneyCentral
NEW YORK (Reuters) - Rupert Murdoch’s News Corp has withdrawn its bid to purchase Tribune Co’s Newsday newspaper, a spokesman stated on Saturday. The spokesman said the deal had become “uneconomical.” Cablevision Systems Corp earlier bid $650 million to purchase

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Filed under: Federal Natl Mtge (FNM), Comfort Zone Investing, Housing

Ted Allrich is the founder of The Online Investor and author of the just released book: Comfort Zone Investing: Build Wealth And Sleep Well At Night. In this weekly column, he’ll offer advice to investors who are just getting started.

Fannie Mae (NYSE: FNM) announced disappointing earnings. But the stock went up. Is that a signal investors think the worst is over, that the future looks brighter for financial stocks? Maybe.

While Fannie Mae is only one company, it’s the biggest in the mortgage business. That means everyone is watching what it’s doing and how it’s faring. As Fannie Mae goes, so goes the mortgage market. As of the latest earnings release, things aren’t going too well. Earnings per share showed a loss of $2.57, much worse than the 81 cents analysts predicted. Management cut the quarterly dividend to 25 cents a share starting in the third quarter to save money. To bolster its capital, Fannie will raise $6 billion, most likely in preferred stock since there’s a strong market for income shares.

The company wasn’t too optimistic. It sees severe weakness in the housing market to continue this year with increasing delinquencies, defaults and foreclosures on mortgage loans. Notice the use of the word increasing. CEO Daniel Mudd said he didn’t think a real recovery in the U.S. housing market would happen before 2010. In the most current quarter Fannie Mae’s mortgage credit book of business went up by 3% to $3 trillion.

So where does that leave investors, especially ones considering the financials? With a little bit of hope. That’s because all the new capital being raised strengthens the balance sheets of the banks and lenders who were able or are going to issue new securities. With new capital, more loans can be made, ones that are more sane, more apt to be paid back.

One other note: all of the banks and thrifts have been booking loan loss reserves. Those reserves are a hit to earnings in the quarter in which they are taken. Then those reserves can be used in the future against losses. That way new losses will be taken against those reserves, not affecting earnings. In other words, there’s money in the bank to use against future losses. If the reserves are sufficient, future earnings for many lenders will be very strong when compared to the losses being taken now.

Does that all add up to a better time to invest in financials? It might. Some of the home builders are beginning to see fewer cancellations of new home contracts. Some lenders are showing decreases in the size of their losses. The worst does seem to be behind lenders, as far as mortgages are concerned.

But that isn’t the only area of lending. There’s also credit cards and home equity loans. Those are beginning to show delinquencies and some defaults. While not as big as the mortgage market, these loans could be another blow to earnings, especially if unemployment becomes a real problem. Be aware of more losses for banks coming from different parts of their portfolios. If those start to snowball, the worst might still be ahead.

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