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Tag Archives: financial

US banks should undermine Occupy protesters–an article today that, to my mind, represents a disturbing attitude towards (mostly) legal and peaceful protests. Not able–or maybe not willing–to let legal restrictions limit the actions of OWS, already being done, the Financial Sector is now willing to try to undermine OWS with some type  of media coertion.

The Occupy Wall Street movement is a big enough problem for U.S. banks that they should pay for opposition research into the political motives of protesters, said a firm that lobbies for the industry.

Clark Lytle Geduldig & Cranford, a Washington-based firm, proposed the idea in a memo to the American Banking Association, an industry group which said on Saturday that it did not act on the idea.

The four-page memo outlined how the firm could analyze the source of protesters’ money, as well as their rhetoric and the backgrounds of protest leaders.

“If we can show they have the same cynical motivation as a political opponent, it will undermine their credibility in a profound way,”

Apparantly the banks cannot trust the situation to be handled by legal authority. The financial sector wants to take their efforts away from just making money?

No. I guess that is still their final goal.

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Today I read this unusual, honest story about how a financial advisor lost his home in the US.

The story gives us a good insight into how questionable banking practices actually affect individual families. Though obviously a bit embarrassed by his poor planning, the author’s account of the whole story gives me a better idea of how the whole recession began and how it impacted all kinds of people, even those well versed in financial planning can fall into trouble.

There are many stories these days of people who lost their financial bearings during the housing boom and the crisis that followed, but my story is a bit different from most.

I’m a financial adviser. I get paid to help people make smart financial choices, and I speak and write about personal finance issues for this publication and others.

The thing that few people know, though, is that I learned a lot of this from experience. I made a bunch of mistakes, the very same ones that I now go around warning people to avoid.

So this is the story of how I lost my home, the profound ethical questions that arose along the way, and what my wife and I learned from the mistakes that led us to that point.

While the author naturally points to the importance of making wise decisions regarding debt and expectations, another lesson is that oversight of the financial sector is important both for banks and their customers.

Much of the economics news today is tied to the Senate panel hearing with Goldman-Sachs. If you don’t know already, Goldman-Sachs (and other financial firms) are being accused of contributing to–maybe causing–the current recession in the US. And the real sin, Goldman-Sachs made money while their clients were losing.

“The idea that Wall Street came out of this thing just fine, thank you, is just something that just grates on people,” said Senator Edward E. Kaufman Jr., a Democrat from Delaware, said. “They think you didn’t just come out fine because it was luck. They think you guys just really gamed this thing real well.”

I agree that new regulations need to be put in place, but why is anyone upset that financial firms are to blame? Their job is to make money, and they did that.

But throughout a subcommittee hearing lasting more than 10 hours, current and former Goldman officials insisted that they had done nothing to mislead their clients.

Yes, they were selling mortgages and short selling them at the same time. Do they have the resposibility to share their own pessimism with their buyers? I think a good analogy is someone selling a used car.

You have got an old car that you think will decline in value. Do you have a resposibility to tell the buyer that the car will be worthless after a couple of years? That is probably why you are selling. It is the buyer’s resposibility to decide if the car is worth the cost or not.

Of course it is difficult for the average person to know the markets well enough to say the value will go up or down, but is that the responsibilty of the seller?

If so, the US Congress can reinstate regulations on the market, probably a good idea, but with the deregulated market, who can find fault with the companies involved?

Surprise, surprise–the Republicans are getting away with a filibuster of the financial oversight bill. Democrats have not been able to get enough votes to fight the filibuster, and manyAmerican companies have lobbyists devoted to fighting the bill.

Far afield from Wall Street, the intense debate over the overhaul of financial regulations by Congress is attracting some unlikely but powerful players. More than 130 companies from the manufacturing, retail and service sectors have retained high-powered lobbyists to weigh in on, and often oppose, the regulatory system being debated this week in Washington, according to an analysis of lobbying records by The New York Times.

Many of the lobbyist come from companies that are not from Goldman Sachs and other financial companies who’s behaviors are responsible for the popular support of the bill. The problem is that the legislation–so far–is so loosely defined that many companies are afraid the final bill could include limits to how they finance what they do.

Examples–Harley Davidson does not want restrictions on how they arrange loans for the purchase of their motorbikes. Mars does not want to lose its ability to dabble in the derivatives markets for cheap sugar and chocolate.

Economically, it is probably best if there is some intervention early on, leading to a better defined bill and the restrictions that will be imposed. Politically, this is very visible evidence of the power big business has over the legislative process in the US capital.

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President Obama branded Wall Street bankers “shameful” on Thursday for giving themselves nearly $20 billion in bonuses as the economy was deteriorating and the government was spending billions to bail out some of the nation’s most prominent financial institutions.

The real problem here seems to be that these bonuses are coming straight from government funds meant as a bailout. Is it really the same money?

This article says no, not exactly the same funds, but it certainly gives the financial institutions more leeway in funding the extravagant bonuses.

Applause to Obama for scolding the bankers, but will it matter? The US can not–will not–put legal limits on compensation by private industry. Why not make it a condition of the bailout to begin with–bonuses stop until the bailout money is repaid.

That would be effective, eh?