Tag Archives | Economics

Why The “Financial Literacy” Push Is A Sham

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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Major U.S. Banks’ Checks Sent To Homeowners Bounce In $3.6 Billion Improper Foreclosure Settlement

improper foreclosureHere’s fair warning that if Bank of America, Citibank, Goldman Sachs, HSBC, or Wells Fargo illegally foreclose on your home, the piddling compensation check sent to you a few years later may bounce when you attempt to cash it. Via ABC News:

A bunch of big banks agreed to a $3.6 billion legal settlement a few months ago to halt a review of improper foreclosures, in which banks’ law firms fabricated and robosigned documents.

Under the settlement, checks will be sent to more than 4 million homeowners who lost their homes to foreclosure in 2009 and 2010.

The first wave of checks was sent Friday. And, according to the Federal Reserve, at least some of them bounced. The Fed phrased it this way: “Some early recipients of checks informed the Federal Reserve’s consumer helpline on Tuesday that they were told their checks could not be cashed.” The Fed says the problem has been solved.

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Is it Time to Call “Capitalism” an Existential Threat?

Picture: Lepo Rello (CC)

Picture: Lepo Rello (CC)

Khannea Suntzu writes:

A few years ago I argued that rampant disparity in terms of affluence and poverty (or opportunity versus marginalization) in the world might be interpreted as an existential risk. In other words, a very large number of human beings might literally be pushed in to premature death by the combination of (a) disparity and (b) accelerating technologies. My point in 2007 was that technology is increasingly something that more rich people “purchase” (or invest in), and reap benefits from. So in effect I argued that at some point in the none too distant future technology might create products only for people who have money; lots of people would be without jobs and effectively unable to generate any meaningful income, and be displaced from the basic range of essential goods and services to literally survive.

This point was in some other form made by Jeremy Rifkin, Marshall Brain, Thomas Frey, Frederico Pistono and several others, and each placed the emphasis a little differently.

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More Adults And Families Turning To Communal And Cooperative Living To Save Money

Conservatives may worry that moral decline is destroying the American nuclear family, but in fact economic reality is rendering it impossible and obsolete. CBS News writes:

With the cost of living on the rise and showing no sign of slowing down, total strangers desperate to save money are moving in together. Two million Americans over the age of 30 now live with a housemate or roommate, and shared households make up 18 percent of U.S. households – a 17 percent increase since 2007.

Older adults and even families are using this method to pool their resources. And the new communities are redefining the modern family.

One group of women sold their homes and bought a house together in Mount Lebanon, Pa., after they all got divorced. “It made amazing economic sense,” said one of the women, Jean McQuillin. McQuillin, Louise Machinist and Karen Bush call their home a “cooperative household.” They share the common areas of the house, chores and expenses.

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Sonia Gandhi’s “Occult” Economics

Picture: Ricardo Stuckert (CC)

Surjit S. Bhalla writes at the India Express:

As we all know, an economic disaster has struck India for the last three years. A halving of GDP growth, a doubling of inflation rates, a 20 per cent depreciation of the rupee, and record current account deficits (latest, 6.7 per cent of GDP) are reflective of the deep rot the Indian economy is in.

The economy numbers are exceptionally bad and worse than most other countries. What, or who, is responsible for making the impossible possible? For sure, it is the Congress-led UPA government. But who within the Congress party? On economic issues, most fingers will point towards the prime minister, Manmohan Singh, an economist of international repute, and joint father of the economic reforms introduced under the leadership of non-Nehru-Gandhi Congressman Narasimha Rao in 1991. But this would be wrong.

For too long we have been made to believe that, within the UPA, the political decisions were made by Sonia and the economic decisions by Singh.

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Bitcoin Currency Tops $1 Billion In Total Value

Are we living in a video game? Quartz writes:

Digital currency bitcoin continues its remarkable and somewhat inexplicable run. It’s up 152% this month, and today the total value of all outstanding bitcoins topped $1 billion for the first time before settling back down.

That’s quite a milestone, considering bitcoin isn’t backed by any real asset or faith in any government. What makes bitcoin so maddening to explain—no, there’s no central bank; yes, it really is just a bunch of people creating money out of thin air—is precisely what makes it so powerful.

The estimated margin on “mining,” or creating, new bitcoins has already recovered from December, when the rate at which new bitcoins could be minted was cut in half, part of the currency’s intentionally deflationary design. Anyone, from hobbyists to bankers to thieves, can mine bitcoins, which requires raw computing power dedicated to solving cryptographic puzzles.

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Anti-Austerity March Hoped To Be The Biggest Protest In U.K. History

Organizers of the largest protest in history to this point, the 2003 march against the invasion of Iraq, are among those hopping to orchestrate a watershed moment for the global movement against austerity, writes the Independent:

The new “People’s Assembly Against Austerity” will march through London on 22 June, and, with the help of the Stop The War Coalition, intends to break that group’s record for the largest public rally in the nation’s history. The group claims it will be “an alternative democratic forum to a Parliament that has failed the people it is supposed to represent.” It will be, they hope “the launch-pad for mass resistance to austerity”.

Green Party Member of Parliament Caroline Lucas, Labour’s Katy Clark, Director of Executive Policy at the Unite trade union Steve Turner, head of the National Union of Teachers Kevin Courtney, comedian and disabled activist Francesca Martinez, as well as Independent columnists Owen Jones and Mark Steel, are the figureheads of a group they hope will appeal to anyone against austerity, regardless of background.

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Three Game Changers: Standard Chartered admits fraud, Cyprus, and BRICS Nations discuss proposal to challenge World Bank and IMF

via chycho

The changes that are taking place on the global political landscape are unprecedented. Our recent economic crisis has allowed us to lift the veil on financial institutions revealing their vile business practices that have allowed them to control our governments.

Below you will find three recent significant events that are acting as catalysts to accelerate the inevitable restructuring of the way we do business:

1) Sending a Message for Backpedaling on Settlements: “Earlier this year, John Peace, the chairman of Standard Chartered’s board, spoke at a news conference announcing the bank’s quarterly earnings. He was asked whether any employees would be held responsible for violations of United States laws restricting financial dealings with Iran and other countries that led to settlements with federal and state authorities costing the bank about $667 million. He responded, ‘We had no willful act to avoid sanctions; you know, mistakes are made — clerical errors — and we talked about last year a number of transactions which clearly were clerical errors or mistakes that were made.’

“There is just one big problem with attributing violations to mere ‘clerical errors.’ The deferred prosecution agreement with the Justice Department specifically provides that no one at Standard Chartered can make ‘any public statement contradicting the acceptance of responsibility’ in the settlement.… Read the rest

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Wall Street Exploring Ways To Profit From Global Warming

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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