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Wall Street
Smile or Die, and the Financial Meltdown of 2007
Sunday, August 29th, 2010
10 Ways to Screw Over the Corporate Jackals Who’ve Been Screwing You
Saturday, December 19th, 2009
Tired of getting pushed around by faceless big business? Here are 10 ways to push back!
The New Year is nearly here, and so much has happened. Wait, what’s that? Nothing major at all has happened, you say? Oh right, we’ve been stuck in neutral since dumping the toxic trash of the Republican Bush administration and embracing Democratic promises of hope and change, neither of which have blossomed.
A year of our collective life has flown by and our global culture is still rife with schemers, screw jobs and sorry excuses for solutions. And we just sit back and take it, year after year. But no more. When you make that hefty list of New Year’s resolutions, drop some of these bombs. Then duck. You’ll get your change faster than you can say, “Teabag this!”
1. Mortgage underwater? Just walk away from it. Even academia says it’s OK. Move to the city and rent.
“Homeowners should be walking away in droves,” University of Arizona law school professor Brent T. White told the Los Angeles Times. “But they aren’t. And it’s not because the financial costs of foreclosure outweigh the benefits. One can have a good credit rating again — meaning above 660 — within two years after a foreclosure.”
In a scholarly paper called “Underwater and Not Walking Away: Shame, Fear and the Social Management of the Housing Crisis,” White tells cash-jacked homeowners that they can return the screw.
We’ve been championing that course for years, with reports on walkaways and trashouts, as well as violent homeowner blowback. Hell, we called the Great Recession before most did, and we’re still calling it another Great Depression in the making. So trust us. And if not us, then take it from the professor, who will soon be joined by a chorus of similarly credentialed whistleblowers as the financial crap truly hits the fan in the years to come. Go ahead, move back to the city and rent. You’ll end up there anyway when your suburb runs out of water and malls.
Read more at: AlterNet
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{Photography by Shoothead}
The Unemployment Game Show: Are You *Really* Unemployed? – From Mint.com
Friday, December 18th, 2009
Like it or not, here comes more stimulus
Thursday, October 22nd, 2009
There’s a push to extend some expiring provisions from the American Recovery and Reinvestment Act. But it will be done in bits and pieces.
You won’t see it all in one neat package. And you won’t hear the White House call it stimulus.
But there’s a good chance lawmakers will decide to extend some of the stimulus measures included in the $787 billion economic recovery package passed in February and possibly create some new ones as well.
On Wednesday, House Democrats are convening a forum of economists to debate the state of the economy, with a specific focus on job creation. And lawmakers are convening hearings on Capitol Hill this week to discuss the economic outlook and the state of the housing market.
A number of ideas on the table are lifeline measures, while some are flat-out incentives to spur economic activity.
Here’s a rundown of what’s under consideration, estimates of what the provisions might cost and where they stand currently in the legislative process.
Unemployment benefits extension
By year-end, an estimated 1.3 million jobless workers will have run out of unemployment benefits, according to the National Employment Law Project.
It’s expected that lawmakers won’t let that happen.
The House has already approved an extension and the Senate has amended it but not yet voted on it. Both parties say they want to extend benefits but they disagree over how to pay for it and how to handle amendments to the bill.
In the Senate proposal, unemployment benefits would be extended by up to 14 weeks in every state and then another six weeks on top of that in states where the unemployment rate tops 8.5%.
Read more at: CNN Money.com
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{Photography by Nick Starr}
Failures of Small Banks Grow, Straining F.D.I.C.
Monday, October 12th, 2009
A year after Washington rescued the banks considered too big to fail, the ones deemed too small to save are approaching a grim milestone: the 100th bank failure of 2009.
In what has become a ritual, the Federal Deposit Insurance Corporation has swooped down on a handful of troubled lenders almost every Friday, seizing 98 since January alone and putting their assets into the hands of another bank.
While the parade of failures still represents a mere fraction of America’s small banks, it underscores a growing divide between them and large institutions like Goldman Sachs, JPMorgan Chase and U.S. Bancorp, which are slowly growing stronger as the economy improves.
Burdened by worsening commercial real estate loans, many small banks’ troubles are just beginning. Many analysts say that the now-toxic loans could sink hundreds of small lenders over the next few years and place a significant drag on the economy.
Already, the bank failures are placing enormous strain on the F.D.I.C. and its fund, which keeps depositors whole. Flush with more than $50 billion only two years ago, the fund recently fell into the red.
Read more at: The New York Times
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{Photography by Dave Mcmt}
Steep Losses Pose Crisis for Pensions
Sunday, October 11th, 2009
Two Bad Choices for Funds: Cut Benefits Or Take Greater Risks to Rebuild Assets
The financial crisis has blown a hole in the rosy forecasts of pension funds that cover teachers, police officers and other government employees, casting into doubt as never before whether these public systems will be able to keep their promises to future generations of retirees.
The upheaval on Wall Street has deluged public pension systems with losses that government officials and consultants increasingly say are insurmountable unless pension managers fundamentally rethink how they pay out benefits or make money or both.
Within 15 years, public systems on average will have less half the money they need to pay pension benefits, according to an analysis by Pricewaterhouse Coopers. Other analysts say funding levels could hit that low within a decade.
After losing about $1 trillion in the markets, state and local governments are facing a devil’s choice: Either slash retirement benefits or pursue high-return investments that come with high risk.
Read more at: The Washington Post
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{Photography by: Alex E. Proimos}
Election 2008: the day after
Wednesday, November 5th, 2008
The day after Election 2008: So now what?
That’s what a lot of people are asking themselves this morning, now that the uncertainties of the election is out of the way, Obama is the Preseident Elect, and the Obama’s and Bush’s transition teams are working together to assure a smooth transition, and the Obama-Biden team are recruiting additional team members to lead and manage this wonderful country.
What about you and your situation? You surely cannot ask for help directly to either G.W. Bush, or to Barack Obama. They actually need your help, they need your help keeping the morale up, trust the political and financial institutions that once again prosperity will return to the US soil. If there something that most people have learned is that things are back to basic, wise use of credit, well thought out plans for important decisions like buying a home, a car, or a major appliance; carefully screening of financial advisors and more realistic investment strategies and expected returns.
If you have consumer debt: have a plan to pay it off as soon as possible.
If you have a house with a mortgage: have a plan to pay the mortgage off, sooner or later. If you need to refinance, do so, a home is a long term asset, and a necessary one if you can afford it. Make a plan to eventually pay off the mortgage.
If your financial situation is challenged, take matters into your own hands with a two-prong strategy:
- Cut your expenses.
- Increase your revenue: get a second job if you have to, or a third one. Clean up your attic and basement and sell all the stuff that you have and no longer use. If you don’t have time, and if eBay or Craigslist is not for you, consider donating your items to charity, and take the tax write off. Consult your tax advisor on that, and remember to get a receipt from the charity for your non-cash donation.
Start or continue saving: no matter how little you think you make, someone else down the street makes do with less than you have: simplify your life, eliminate expenses, cut down on your spending. There’s no alchemy math: living within your means is the new luxury.
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Photo Credits: Maria Leisa (cc)
Why is the Stock Market and the US Economy in this state? Whose explanation can we trust?
Thursday, October 16th, 2008
We are receiving a good deal of inquiries asking us to cover the happenings in the Stock Markets and the economy at large. It’s not easy to address those questions, and in reality, nobody really knows. The “experts” are divided on what caused these events, and what measures should be taken to correct these events in the short term, and how to set up the course for the long term.
Something that we look at when reading press releases or listening to interviews, is “Do these people have a conflict of interest in what they are saying?”. And most time the answer is YES.
When it comes to the stock market, one of the major components of a healthy market is “confidence”, and everyone agrees that the average investor’s confidence is at a low point. Wall Street insiders have a self interest in saying that everything is fine, and people should remain invested and buy buy buy some more stocks, bonds, ETF, Mutual Funds, and any and all financial instruments.
There are a handful of people that we like to listen to, one of then is George Soros (see: Financial crisis: how to make sense of how we got here, and what’s ahead? ), another one is Carl Icahn, the 46th richest man in the world with a net worth of $14 billion (source: Forbes.com), and he got so rich by buying and selling companies that were undervalued or underperforming and turning them around: he knows his stuff.
He is starting to appear in the financial circles, so you can catch him on CNBC and other channels, and you can also read his very insightful blog: The Icahn Report.
If you can get a hold on his interview on CNBC with Larry Kudlow on October 15 (yesterday), watch it and take note.
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Photo Credits: Clinton Steeds (cc)
Bubbles and crashes: does history repeat itself?
Thursday, October 16th, 2008
Knowledge vs. Action. Bookworms claim that knowledge is power, bullies state that action is power.
The smart people that we know have both: they take appropriate action with plenty of relevant knowledge; when it comes to personal finance and money in general that is the rule that we subscribe to, anything else is gambling.
There are some classic books that provide a wealth of information related to the cycles of the financial markets and economies, these are our favorites:
- THE GREAT CRASH 1929 by John Kenneth Galbraith (1955)
- EXTRAORDINARY POPULAR DELUSIONS AND THE MADNESS OF CROWDS by Charles Mackay (1841)
- THE GO-GO YEARS: THE DRAMA AND CRASHING FINALE OF WALL STREET’S BULLISH ’60S by John Brooks (1973)
- BARBARIANS AT THE GATE: THE FALL OF RJR NABISCO by Bryan Burrough and John Helyar (1990)
- CAPITALISM, SOCIALISM, AND DEMOCRACY by Joseph A. Schumpeter (1942)
- THE GENERAL THEORY OF EMPLOYMENT, INTEREST, AND MONEY by John Maynard Keynes (1936)
- THE WEALTH OF NATIONS by Adam Smith (1776)
- DEN OF THIEVES by James Stewart (1991)
- LIAR’S POKER: RISING THROUGH THE WRECKAGE ON WALL STREET by Michael Lewis (1990)
- THE SMARTEST GUYS IN THE ROOM by Bethany McLean and Peter Elkind (2003)
- THE WAY WE LIVE NOW by Anthony Trollope (1875)
- THE ESSAYS OF WARREN BUFFETT: LESSONS FOR CORPORATE AMERICA by Warren Buffett (1997)
- FOOLED BY RANDOMNESS: THE HIDDEN ROLE OF CHANCE IN THE MARKETS AND IN LIFE by Nassim Nicholas Taleb (2001)
- THE PRICE OF LOYALTY: GEORGE W. BUSH, THE WHITE HOUSE, AND THE EDUCATION OF PAUL O’NEILL by Ron Suskind (2004)
- THE PRINCE by Niccolò Machiavelli (1513)
- THE ART OF WAR by Sun Tzu (circa 500 B.C.)
- AGAINST THE GODS: THE REMARKABLE STORY OF RISK by Peter L. Bernstein (1996)
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Photo Credits: Jeff Kubina (cc)
Financial crisis: how to make sense of how we got here, and what’s ahead?
Friday, October 10th, 2008
The global financial markets are highly complex systems, dictated by economic, political, and psychological forces. The crisis that we are experiencing right now has been brewing for quite a while, and it is embedded in the very fabric that holds the various systems together, and renders them dysfunctional.
Listening to the insiders and the politicians is hard, since each one of them has personal and ideological bias, and some have conflict of interests as well.
Among all, there’s one voice that stands out from the crowd, a very smart person, his name is George Soros, who is famously known for “breaking the Bank of England” on Black Wednesday in 1992. With an estimated current net worth of around $9 billion, he is ranked by Forbes as the 99th-richest person in the world.
He has just published a book: The New Paradigm for Financial Markets: The Credit Crisis of 2008 and What It Means. If you want to understand how we got here, and what’s ahead, this is the MUST read, endorsed by the staff at Credit Cards Mojo.
Available at Amazon.com:
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Photo credits: World Economic Forum (cc)