philipmax

FDIC's Latest Proposal Will Simply Help Big Banks Engineer Healthy Balance-Sheets

Interesting...The $45 Billion advance is just about equal to the Dividends that were suspended or reduced by the 10 leading banks in the USA, in the wake of last year's banking cataclysm.

Now the FDIC wants the banks to continue this decrease by appropriating stockholder's rights to bank income returns for itself.

How Inflation Concealed the DJIA's Precipitous Decline over the Last Decade

Why is everyone who posts on this blog well aware that inflation was !2-15% per annum over the past ten years, yet the "official" Government numbers calculate it at 2-4%?

In all that time, I have never once heard a commentator grouse that the numbers were deceptive. The public knew. but official media ignored the truth. Do they really think the the average guy is so stupid? You didn't have to be a Harvard scholar to see that your groceries, fuel and other necessities were increasing exponentially while income stayed within the "norm".

But then...Social Security benefits and other indexed Government outlays would have had to be adjusted as well, so why let the truth interfere with the delusion?

The New Bull Market Fallacy

Superb article. Too long for one topic could have been split into four articles. Very comprehensive coverage.

David Weidner wishes Madoff victims would stop whining. So does Joe Nocera: "They were robbed, pure and simple, and the government is not in the business of reimbursing for robberies. Not even when the cops stumble across the robbers and then mistakenly let them go."

The Madoff victims are mad that with all the righteous regulations in place at the SEC, this scam has been undetected for 40 years.

This is where the peeve against the government is focused at.

The voices you hear are the same as Citi's victims AIG victims GM and dozens of other formerly "towers of safety" companies that let their stockholders down with unscrupulous behavior. The difference is that Madoff's victim have a face and a name to point at but corporate America has successfully shielded its perpetrators.

Does anyone else see the irony of the fleecing of America of 15 TRILLION Dollars by Corporacity complicity without criminal trials while a relative piker (Madoff) gets 150 years??? !!!

Banks, Oligopolies and Ever-Rising Fees

I saw some blogs here heralding the virtues of credit unions. I'm a member of one. Nice people and all..but no great shakes on personal service and other embellishments referred to above... just the same ho-hum as other banks.

Banks, Oligopolies and Ever-Rising Fees

Why do think that the banks are working on behalf of their stockholders? If anything, the past 18 months have demonstrated that the banks have little regard for their stockholders, as well as, your well described abuses of their depositors.

By dropping the dividends to minuscule levels, ostensibly to shore up the capital base, the banks are stealing $50 Billion a year from the stockholders.

Then again, the banks issued new stock, without a public rights offering to the existing stockholders, further diluting the equity of the original stockholders. This was done in the last month when most bank stocks (of the top 19 ) are at a depressed level, causing further dilution by having to issue more shares than would ordinarily be required.

Instead, the banks are raising the base pay of their executives in order to come in under the Fed scrutiny of bonus fees. This will permanently raise the cost of doing business for the banks and reduce stock valuations.

There is nothing in the above behavior pattern that indicates that the banks have any regard for their stockholders.

Without some checks and balances on congressional lobby groups, you Oligopoly will soon turn to Monopoly.

Is There Any Limit to Bank Arrogance?

A lot of of logic in your article. Perhaps that is why your words of warning will go unheeded.

when the sharks are in an eating frenzy it is unwise to go swim in their midst.

It is so demoralizing to watch the banks literally suck the life juices from the economy through blatant acts of thievery.

Watch the Zombie Bank Lifeline

I would like to see the banks do "stress test" on the Treasury to see if it can survive in the next few years.

if the banks had done a proper "stress Test" on their loan applicants we wouldn't be in this pickle in the first place.

It looks like the only real "STRESS TEST" will be on the tax payers.

Is American Express Risking Its Cache in Current Treatment of Cardholders?

American Express used to have its own credit criteria that was based on a proprietary financial profile. About 5 years ago they switched to one of the three consumer credit bureaus and strange things started to happened to its card holders.

Long before TARP and the implosion of credit. I experienced the total dysfunction of this company.

I August of 2006, rented a vacation car and used my Gold AMEX card to charge the trip. On the first billing cycle AMEX charged me an interest fee. When I called to inquire about this "new" policy, I was subjected to an incredibly intrusive interrogation into my background. When I protested that none of the information requested of me was ever supplied by me to AMEX before I was summarily disconnected. When I tried to call back I was again interrogated. Again I was disconnected by the rude interrogator.
-
I sent my Gold card (I held for 37 years @ $125.00 per annum), as well as my green card, and my blue card back to its owner. I also profited handsomely by shorting the damn stock.

AMEX is hell bent on self-destructing and this article confirms that summation.

Credit Card Catastrophe: Congress Can't Help

Hey folks, I want to share my view on why the cc debuckle is a national scandal.
Way back when...people would get their pay-check on a periodic basis , say bi-weekly and let's say $1,000.00 per pay stub. They would generally leave $600.00 in the bank to cover mtge, insurance, car payments and such, and split the remainder $300.00 for food and other daily necessities and $100 for the wage earner to go back and forth to work with gas money, lunch, beer money, cigarettes and such.
credit cards were to be used for vacations, capital purchases and large emergency uses. The system worked for most people.

Then, about 8 years ago, an earthquake hit the family budget. Supermarkets started accepting credit card for food purchases. Suddenly, the decision at the register was: Do I charge it or do I part with the cash.(that $300 mentioned above). Credit card were easy and they accrued mileage or or other points. The smart move would have been to return the $300 to the kitty. but it was very tempting to buy stuff with it. If you watched the price of Coach,Inc the pocketbook manufacturer you would have seen a seven fold increase in its price over the same period. ladies shoes experienced an unbelievable price explosion as buyers were sucking the product off the shelves.

When the monthly bills arrived it was easy to see that it was the supermarket bills that were accumulating in the credit card bills, that "understandable" since the head-of-household was aware of the inflation and that his/her income was not keeping up with it. And ..Look...You don't have to pay it up ...You can pay a minimum amount. each month.

The first time that the credit card monthly payment became onerous, well ...just re-finance the mortgage and use the cash-out to extinguish the balance. So far, so good, America was managing its bills. The second time this happened...well.. maybe... we can re-mortgage one more time...The third time....GAME OVER!

Does this scenario soud familiar to anyone else? Let me hear about it. Thanks.

Credit Card Catastrophe: Congress Can't Help

Thanks. I am a member of a credit union and like it very much.
And , I stay away from credit card use as though they are a plague.
i wish that I could teach others to understand the true dangers imposed by these instruments.
But, alas, that was the point of my earlier remarks about the conniving manipulation of the public by the cc issuers.


On May 04 07:58 PM Anandakos wrote:

>
> Philip,
>
> The easiest way to poke the banks in the eye is to transfer all of
> your depository business to a credit union. Now that nearly all
> CU's participate in their ATM consortium, you don't have to pay foreign
> ATM fees when you travel.
>
> Credit unions mostly lend the money you deposit locally, and they
> typically do it with a higher degree of due diligence and social
> commitment than do banks.
>
> And they usually pay a little higher interest. Nothing to get excited
> about mind, but something. What's not to like?
>
> On May 03 11:10 AM philipmax wrote:

'Manipulomics' in the Markets

Boy! You said a mouthful. This article has the causes of most of the current financial ills lined up in perfect order. Well done.

We are in a pickle, aren't we?
It looks like an explosive world-wide inflation is soon to tsunami upon us. But what if all the currencies in the world inflate at the same rate, would not the inflation be mitigated by the fact that currencies would be exchangeable at approximately the same ratio as today? So that the Euro would still trade at a 25% premium to the Dollar, but that a $3.00 loaf of bread would cost $10.00 and in Europe it would be comparably price relative to the US price increase.

Credit Card Catastrophe: Congress Can't Help

You want to know how profitable are the credit cards are to the issuers. Consider this:
You use your card responsibly. You charge $1,000.00 each month and pay it off before the next bill arrives. What does American Express make on this "losing transaction"?
January - you charged $1,000.00, the stores paid a service charge to AMEX of approx 3% to process the sale. That is $30.00 in AMEX pocket.
Same fee every month in the year($30 x 12). Gross profit $360.00. How much money did AMEX risk? $1,000.00. Every month its exposure was reduced to zero before new charges were added. Now, that's $360.00 on $1,000.00 of risk. a 36% return. And, that folks, is just the beginning!

If there is a balance left in your account at the end of the month, there is a 15% annual interest on that. Then, there is late payment fees, and over the limit fees, increased interest charges that can exceed 35%... and so on. I can demonstrate a rate of return of 150% or greater. See why this is so important to card issuers?
It's a great big party out there and no one wants to stop it.

Some time ago I used my AMEX card (after a long dormancy) to rent a car. On the initial invoicing I was was charged the 15% interest. When I called to simply find out why, after 37 of being a loyal Gold card holder ($125 year membership-ouch), was I being charged interest even before I got a chance to pay the initial charge, I was given such a detailed and intrusive ID interrogation that I never even got to speak to a representative.
Needless to say... the AMEX card is now history.

Credit Card Catastrophe: Congress Can't Help

God article. I see more blogging on the subject of credit cards than on most any other financial subject. this is true because all of America is hurting from the pernicious practices of the card companies.
This is where I digress from your analysis. You lay the blame on the stupid greedy card user. While it is true that the individual user who gets himself in a financial bind is certainly responsible for his actions, he was deviously maneuvered into the corner with highly sophisticated psychological tools that he/she may never prepared themselves for.

As you well stated, Washington is not about to help the little guy. It is too caught up in the machinations of highly paid lobbyists and the notion that consumer spending is good for the economy, even when this "spending " ends up to be usury interest transferred to these card issuers.
I see what is happening and I can't stop it.

What I want to know is, how do we, the ordinary citizenry, take control of our elected officials so that they start to represent our interest instead of big business?

How can we get this populist President to institute real reforms to the banking industry to stop the abuses?

How do we stop the Belt-Way lobbyist from perverting our democracy?

How do we get back to sanity in government?

Banking Industry Watch: Quick Move from Bust to Boom

Great article. You said it best.