Tag Archives | Business

Why The “Financial Literacy” Push Is A Sham

By on May 21, 2013 in News 0

financial literacyApril was national financial literacy month, promoted heavily by major banks and other debt-producing institutions who want you to believe that poverty, the financial crisis, and mounting student debt are the result of ordinary people’s ignorant refusal to discipline themselves and budget properly. Via the Guardian, Helaine Olen writes:

Companies and colleges say that if we all understand our finances, financial crises won’t happen. This is simply untrue.

April is National Financial Capability Month. Federal Reserve chairman Ben Bernanke says: “Among the lessons of the recent financial crisis is the need for virtually everyone – both young and old – to acquire a basic knowledge of finance and economics.” Sounds great.

But it promotes the false equivalence that the victims of the financial shenanigans of the past several years are as responsible for the financial crisis as the financial services sector, the ultimate creator of all those financial products of mass destruction.

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Wall Street Exploring Ways To Profit From Global Warming

By on March 11, 2013 in News 9

Turning lemons into really pricy lemonade. Bloomberg on the investment companies banking on massive windfalls as the planet heats:

Investing in climate change used to mean putting money into efforts to stop global warming. Now some investors are taking another approach. Working under the assumption that climate change is inevitable, they’re investing in businesses that will profit as the planet gets hotter.

Derivatives that help companies hedge against abnormal weather and natural catastrophes are drawing increased interest from big players. In January, KKR bought a 25 percent stake in Nephila Capital, an $8 billion Bermuda hedge fund that trades in weather derivatives.

Drought is helping spur business at Water Asset Management. The New York hedge fund, which has about $400 million under management, buys water rights and makes private equity and stock market investments in water treatment companies.

Ole Christiansen is also investing to take advantage of rising temperatures. “Last summer we were exploring in south Greenland, mainly for gold,” says the chief executive officer of NunaMinerals (NUNA), a local mining company.

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Is Sowing Artificial Scarcity The Future Of Business?

By on January 1, 2013 in News 2

Via the The New Inquiry, Peter Frase on where we’re headed:

Where we see scarcity, much of it appears to be imposed by choice. In particular, the increasing weight of intellectual property law heralds a world where the prime objective of business is to make things scarce enough that people will still need to buy them.

Unexpected scarcity long characterized agricultural societies—drought, pestilence, fire, and other natural calamities could bring about famine at any moment. But today’s farmers, who have learned to overcome many of these challenges, now face the prospect of a legal, rather than natural disaster. In a case that will soon appear before the Supreme Court, a 74-year-old farmer named Vernon Bowman was ordered to pay $84,000 in damages for infringing on the patents of agribusiness giant Monsanto. His crime was to plant a seed—a patented “Roundup Ready” seed, whose license agreement prohibits using it to produce new ones.

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Homeowners Foreclose On Negligent Banks

By on December 31, 2012 in News 1

Via CNN, in areas of the United States hit hardest by foreclosure, turning the tables on banks who turn deadbeat after repossessing homes:

Since the housing bubble burst in Florida five years ago, more than 400,000 borrowers have had their homes foreclosed on by their lenders. But for some, it’s payback time.

Hundreds of homeowners and condo associations are foreclosing on banks that have failed to pay dues and other expenses on the properties they’ve repossessed. When banks foreclose on a home they become responsible for paying fees to the homeowners association — both any unpaid fees going back as far as 12 months and all expenses going forward. In many cases, however, banks are failing to pay, leaving these associations short on cash, according to Miami-based attorney Ben Solomon. Now, homeowners groups are putting liens on the properties until banks pay up and foreclosing on them if they don’t.

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Big Business Is Gaming You

By on December 24, 2012 in News 13

Your world is being gamed, reports Nick Wingfield in the New York Times:

Congratulations. Reading the first paragraph of this article has earned you a badge.

If this made-up award makes you feel good about yourself, then you are on your way to understanding gamification, a business trend — some would say fad — that aims to infuse otherwise mundane activities with the excitement and instant feedback of video games.

Many businesses are using these game tricks to try to get people hooked on their products and services — and it is working, thanks to smartphones and the Internet.

Buying a cup of coffee? Foursquare, the social networking app that helped popularize the gamification idea, gives people virtual badges for checking in at a local cafe or restaurant.

Conserving energy? More than 75 utilities have begun using a service from a company called Opower that awards badges to customers when they reduce their energy consumption.

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Banking Giant HSBC Settles For $1.9 Billion Over Laundering Billions For Mexican Drug Cartels, Saudi Terrorists, And Iran

By on December 11, 2012 in News 13

Is the second-largest bank on the planet also one of the most far-reaching criminal organizations? The New York Times reports:

Federal and state authorities plan to announce a record $1.9 billion settlement with HSBC on Tuesday, a major victory in the government’s broad crackdown on money laundering at banks.

The settlement with HSBC stems from accusations that the British banking giant transferred billions of dollars on behalf of sanctioned nations like Iran and enabled Mexican drug cartels to launder money through the American financial system, according to officials briefed on the matter. Prosecutors found that the bank had facilitated money laundering by cartels and had moved tainted money for Saudi Arabian banks tied to terrorist organizations.

Since January 2009, the Justice and Treasury Departments and Manhattan prosecutors have charged six foreign banks, including Credit Suisse and Barclays. In June, ING Bank reached a $619 million settlement to resolve claims that it had transferred billions of dollars in the United States for Cuba and Iran.

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American Banks’ Record-Shattering Crime Spree

By on December 6, 2012 in News 22

The hottest new revenue flow trend in banking is simply stealing money from your customers. Via the Village Voice:

You wouldn’t know it by watching the news or reading the paper, but America’s banks are on the largest crime spree the country has ever known. Let’s go to the highlight reel, shall we?

In July, Wells Fargo paid a $175 million settlement after the feds caught its brokers systematically pushing minority customers into mortgages with higher rates and fees, even though they posed the same credit risks as whites. One study found that Wells Fargo charged Hispanics $2,000 more in what the Justice Department called a “racial surtax.” The bank docked blacks nearly $3,000 extra for their own improper pigmentation.

But despite a colossal civil rights fraud perpetrated against 30,000 customers, the settlement amounted to just .011 percent of the San Francisco bank’s annual income.

Across the country, in Minneapolis, U.S.

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On The Lucrative Careers Of Former Politicians

By on November 22, 2012 in News 4

The New York Times on what becomes of our leaders after leaving office: they are showered with wealth by the financial industry. Don’t pity Mitt Romney, as he is likely in for a massive payday in the near future. Likewise, consider this a preview of what is in store for Barack Obama, assuming he’s careful not to piss off Wall Street too badly:

Take Tony Blair, the former British prime minister. In September, Mr. Blair was called to Claridge’s hotel in London to mediate a renegotiation of the proposed acquisition of Xstrata by Glencore, according to British news reports. Mr. Blair, who negotiated peace in Northern Ireland, put his skills to good use, apparently earning himself roughly $1 million for three hours of work.

Remember Dan Quayle? Since 2000, the former vice president has worked at the hedge fund Cerberus Capital Management, where he is now chairman of the advisory board.

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Shadow Banking Industry Now Worth $76 Trillion

By on November 19, 2012 in News 1

Will unregulated, debt-based financial products destroy the world? Bloomberg reports that the funneling of capital into instruments of so-called “shadow banking” continues to balloon to unimaginably large proportions:

The shadow banking industry has grown to about $67 trillion, leading global regulators to seek more oversight of financial transactions that fall outside traditional oversight. The Financial Stability Board, a global financial policy group comprised of regulators and central bankers, found that shadow banking grew by $41 trillion between 2002 and 2011.

The size of the shadow banking system, which includes the activities of money market funds, monoline insurers and off-balance sheet investment vehicles, “can create systemic risks” and “amplify market reactions when market liquidity is scarce,” the FSB said.

Supervisors consider shadow banking activities to be those that allow banks to carry out business off balance sheets, as well as those which allow investors to bypass lenders and the functions they traditionally fulfill on the markets.

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A Call For Denaturalizing The Corporation

By on November 13, 2012 in News 2

Via Policy Shop, Anthony Kammer says that if we want to take back control from corporations, we need to begin by altering how we think of them:

Given how much time we spend working for and interacting with corporations every day, it’s unsurprising that we tend to see them as a natural part of our social fabric. But corporations, of course, are not naturally occurring entities. They are the product of state laws, and they have been reshaped regularly throughout American history by courts and legislatures in order to respond to changing societal needs.

As recently as 1990, a majority of the Supreme Court explicitly acknowledged that corporations received serious economic advantages from the State and could therefore be regulated to prevent those state-conferred advantages from disrupting the political process:

State law grants corporations special advantages — such as limited liability, perpetual life, and favorable treatment of the accumulation and distribution of assets.

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