Wednesday, December 29, 2010
Many factors can determine the ascent of gas prices, and this is where confusion arises in today’s market, and propaganda begins to take root. In 2008, the historic march of oil costs was blamed primarily on “speculators”, commodity investors who buy up petroleum with no intention of actually using it, thereby creating a false sense of scarcity in the market and driving up prices artificially. This was, for the most part, what really happened.
Another cause of oil increases is the natural reduction of global supply in the face of rising demand. An American economy running on all cylinders would necessitate greater supply and a higher price if that supply is insufficient.
Essentially both triggers are dependent on the fact of scarcity, engineered or legitimate, in order to cause price spikes. Neither trigger is applicable in today’s market, where currency weakness is the central determinant, yet these are the arguments we are hearing and will hear more of as we are fleeced at the pump through dollar devaluation.
From: Oil Juggernaut Unleashed
Wednesday, September 29, 2010
On the one hand the markets are rallying, companies are earning record profits while sitting on nearly two trillion dollars in cash. Ninety percent of people who want to work have a job. Nearly eighty-six percent of Americans live above the poverty line. Eighty-three percent of Americans are covered by health insurance. Household income is up seven percent amongst our oldest citizens - those over 65 years of age. The top one percent of earners are accumulating wealth at unprecedented rates, amassing fortunes the likes of which have not been seen since the blossoming of the industrial age.
Looked at this way, the evidence suggests the economy is on the rebound - the economic engine is rumbling to life. However, there is another perspective.
Household income is falling for every age group, except those over 65 - the median annual household income is hovering below $50,000.00 and has not increased in inflation adjusted dollars in decades. The number of Americans without health insurance has reached an all-time high of over fifty million men, women and children. Over forty-three million mothers, fathers, sons and daughters live in poverty. Tens of millions are unemployed, while millions more have given up looking for gainful employment altogether. Families are struggling with record levels of personal debt while corporations and state and federal governments plumb new depths - borrowing from foreign powers to sustain untenable entitlement growth, fuel a culture of consumption and finance foreign wars.
It seems from this latter perspective our economy still remains stalled.
We have had lots of tinkering under the hood - financial bailouts, corporate bailouts, a massive stimulus package and the loosest monetary policy possible. The master mechanics cannot seem to clearly diagnose the problem nor can they determine a viable way to reignite the engine. Though the motor may not have completely seized, the reality is - the economic engine is idle. We are broken down at a crossroads.
The choices before us are to repair the motor as best we can and attempt to squeeze every last gasp of performance out of the dated design, or we can begin anew and rethink and retool the engine that drives prosperity - rebuild the economy from the ground up.
A new design is needed for America to return to prosperity. It is time to reengineer our economic engine to perform better - to produce results for more people with greater efficiency and increased effectiveness. Oil, consumerism, and finance are spent fuels. We need to realign our priorities and slow down. We must envision a new future - dream a grander dream. We must test and challenge ourselves to achieve greatness. Success is not a spectator sport. Do your part, contribute to the redesign - start your engine.
About the Author
Scott F. Paradis, author of "Promise and Potential: A Life of Wisdom, Courage, Strength and Will" http://www.promiseandpotential.com publishes "Insights" and a free weekly ezine, "Money, Power and the True Path to Prosperity". Subscribe now at http://www.c-achieve.com
Thursday, June 24, 2010
The big global credit rating agencies (or CRAs, ie S&P, Moody's,
Fitch) originated in America a century ago to help investors
evaluate creditworthiness of bonds, issued by entities from
railways to governments to industrial firms. Over time CRAs grew
internationally, now assessing all kinds of debt. They have
enhanced transparency around a broad credit spectrum. Their
contribution to market discipline has been positive overall,
giving basis to sound credit pricing using default statistics
dating back decades.
With proliferating exotic instruments, securitizations and
manifold debt classes, CRAs have continued investor education.
Yet in recent years they've been swept up with investors in new
product momentum (and generous rating fees). In assigning top
ratings to structured products, particularly in US residential
mortgages, critical analysis was lacking; many deals originally
accorded highest creditworthiness fell drastically, to the
credit spectrum's bottom. A March Moody's study shows that 41%
of structured deals rated Aaa in 2007, and 39% in 2006, fell to
Caa by end-2009 (12 notch drop!). Before 2005, this figure was
1%. Moody's corporates experienced 2-notch average downgrades
over the last decade, versus 7.3 for structured in 2009.1 The
credit crisis should have affected all rating classes similarly;
CRAs seek consistency across sectors. This clearly shows flaws
in structured ratings, provoking international outcry during the
Criticism also stems from profits oligopolistic CRAs enjoy,
enhanced by increased debt issuance volume. Moody's 2007 ratings
profit margin (ebitda before restructuring) was 59%. Close to
half that year's revenue came from structured products.
CRAs first responded with self-regulation, appointing dedicated
compliance personnel, enhancing transparency, and rotating
analysts. In 2004, after failures of Enron and Parmalat
(carrying investment grade ratings - implying low default risk -
just before they went bust), CRAs began conforming to IOSCO's
Code, a voluntary regime built around International Organization
of Securities Commissions standards. This hasn't precluded
tighter regulation, in America and Europe. Last year the EU
approved European Regulation on Credit Rating Agencies, to set
CRA standards, improve transparency and governance, and
introduce regulation and supervision.2 America's financial
reform bill includes a new rating board, regulating CRA
interaction with rating clients.3
This legislation is not a cure-all. CRAs don't have to conduct
diligence on complex securitizations they rate, in contrast to
rating corporates. Since the US bill does require structured
methodology disclosure, which lacked transparency, this should
reduce CRAs' reliance on mathematical models (largely developed
by intermediaries). Excessive confidence in statistical analysis
accompanied insufficient acknowledgement of its limitations.
Direct contact of credit analysts with issuers in structuring
products also represented a conflict.
A fundamental anomaly remains: CRAs earn most of their income
from rated borrowers, not investors. CRAs' market share
ambitions result in incentives for issuers and intermediaries to
"shop" for high ratings. In my investment banking experience,
one public rating usually sufficed for an issue, which naturally
was the highest.
The debate has become more political, as sovereign downgrades
(eg, Greece) have led policy-makers to question CRA power,
including more calls for regulation and a "European" rating
agency. Value of the latter could be dubious, based on Japan's
experience, where JCR, a domestic agency, consistently awards
high ratings to domestic borrowers that global CRAs rate much
lower. For example, JCR rates Bridgestone AA, which Moody's
rates A3, 4 notches lower. JCR's extensive corporate ratings
list reveals just 2 sub-investment-grade firms, aside from
defaulted issuers (like JAL).4
Following are proposals to limit potential negative CRA
Regulated and sophisticated investors should rely more on own
Market participants should reduce ratings reliance in investment
CRAs should make available further information free to access.
Effective self-regulation is preferable to government
regulation, offering greater flexibility, expertise, acceptance,
higher standards, and more competition.
Above all, investors' interests should come first.
1. Tung, J. and Weill, N. (2010), "Structured Finance Rating
Transitions: 1983-2009," Moody's Investors Service: 9. 2.
Parker, E. and Bake, M. (2009), "Regulation of Credit Rating
Agencies in Europe," Butterworths Journal of International
Banking and Financial Law: 401-403. 3. Dodd, C., Chairman
(2010), "Summary: Restoring American Financial Stability,"
Senate Committee on Banking, Housing and Urban Affairs: 8. 4.
JCR.co.jp website. 5. Pizzani, L. (2008), "(Dis)Credit Ratings,"
CFA Magazine: 14-15.
About the author:
This article was written by Edward Bace a lecturer at BPP
Business School London.
BPP Business School is a leading provider of postgraduate
education with an excellent range of courses including the
MSc Finance and MSc Management degrees.
Tuesday, June 22, 2010
rolling, even though the good times were questionable.
2) Productivity was already being impacted by poor allocation of
resources, wars not going well.
3) Financial oligarchs effectively took over the government,
existing laws were not enforced, and as thing came to a head in
2006 and 2007 the big brokers (deal makers, IPO, LBO's) were
hiring specialists in bankruptcy reorganization. They were
poised to buy stuff up on the cheap when things blew up.
4) The recent "recovery" is really just the same recession, but
given a hit of crack so it can party on a little longer. Many
trillions were spent, but it mostly benefiting big business, big
banks/brokers. Long term benefits to the economy are
5) Government workers have increased their pay like 30% to 40%
whilst non-gov workers have treaded water, even if they have a
job at all.
6) Government is expanding it's powers and owning businesses.
Whilst theoretically, expanded powers could be useful, why we
anyone assume so, given that existing laws and oversight were
already so poorly performed.
7) Lobbying, campaign contributions, and restrictions on how any
Gov official could migrate from an oversight of an industry to
an executive or lobbying position must be instituted.
8) Deflation is likely to be the near term hobgoblin.
9) The Gov can literally just print money, seriously. They can
hand out that paper money to pay off debts. They do not have to
roll over every debt. All the governments with soveriegn
currencies can do this. The Euro cannot. This is called
10) Inflation can take hold someday. You best not have all your
assets in paper money or equivalents. These changes may happen
relatively quickly, like by 2012.
11) The US has plenty of military muscle, expect it to be used
more, especially as things go bad.
12) If anyone owes you money, get it now.
13) Very few, maybe 1% of the population learned anything from
the greatest financial crisis in a century. Or they "learned"
that the Gov can indeed save us by strong Gov intervention in
free markets. This makes the next crisis more dangerous.
14) Very few of the problems of the crisis were solved by those
trillions of dollars thrown at the situation. It was more just a
transfer of wealth from a captive audience to the ogliarchs. The
bad debts, bad assets are still on the books, they have just
been covered up. Those in the know, know it, and they are
pulling out all the stops to "get theirs" before round 2.
14) There may be a QE2 (Quantitative Easing, money printing,
throwing money at large banks/brokers), or the USA could follow
the austerity trend that is all the rage (pun intended).
15) Reviewed Conquer the Crash by Big Daddy Pretcher. We all
love Pretcher, he is a free thinker, like Armstrong, but he has
been so wrong for so long, he is not infalliable. His view on
Gold is wrong, it is not just a commodity that reacts like
16) Gold is a currency. Paper gold is a speculation device,
owning gold ETFs and even gold miners is not the same as owning
physical gold. Silver is good for making change, buying a tank
of gas, bag of rice, etc.
17) We are not at the precipice of Primary 3 wave down, we could
be near the end of the 1st 5 waves down (completion of wave 1).
Wave 2 could slog sideways for years, like a zombie propped up
18) Most people have lived beyond their means for a long time.
Most "young people" say 35 and younger, have only lived in a
19) In order for any chance of moving forward with positive
results a few things must happen--banks and investment
advisers/brokers/deal makers must be separated by a firewall,
not a just a company division name, lobbying must be curtailed,
contract law including making bondholders take their lumps, must
20) Never has the world been so intertwined. Never has the
situation for competitive devaluation of every countries
currency been so nicely setup.
21) There is still something like $600T of notional value of
derivatives floating around out there, and apparently no one
even knows where they are or how to track them. This is many
multiples of the world GDP. This can't be good for the common
About the author:
World recognized trends forecasters, known by many around the
world most addictive & highly accurate. Sign up for a FREE
Trends alert at: http://www.forecastfortomorrow.com
Wednesday, April 28, 2010
Allegations of fraud brought last week by the Securities and Exchange Commission is a shocking departure from the culture of collusion among the U.S. government and the nation's top banks. That despite the position of this publication and myriad others broadly categorized as "fringe" who have consistently and vociferously objected to the two or more standards applied to organizations and individuals by a corrupt legal system.
Throughout the 200 year-or-so history of linked financial markets, the name of J.P. Morgan has almost always been dominant. Goldman Sachs, though newer in terms of participatory history, has quickly risen to join J.P. Morgan at the forefront of the only industry that credibly dictates to government.
To many, the scandal surrounding Goldman Sachs apparent rigging of the craps tables in the house's favour comes as no surprise. The Gold Antitrust Action Committee has been stridently demanding an investigation into the concentrated short positions that plague the gold and silver markets to no avail. They've suffered from an absence of public concern or support for their position because the relationship between gold and silver markets and personal finance is not intellectually accessible for the majority of people. So the press, absent public interest, generally passes up GATA coverage, even though the implications for the citizens of the United States and the world include constitutioality and civil rights.
That may be changing.
The excesses of the personalities attracted to such an industry demands that episodes of gross rapaciousness should regularly come to light in the press, and such incidents are generally followed closely by censureship by government, a distancing between banking and government, vigorous regulation, and public revulsion.
Is it conceivable that an independent wind is blowing through the halls of justice? Or is this merely the set stage for the sacrifice of a few lambs to render complete the getaway of the real culprits higher up the food chain?
Speculation aside, one of the unavoidable results of this first volley across the hallowed bows of Big Banking is the focus that is now being directed to the futures and derivatives business, which is where the accumulated real losses of these institutions is perrenially stored as liabilities so they can be booked as profit on their balance sheets. The figure, according to the Commodities and Futures Trading Commission own numbers, of $600 trillion is the amount which lurks under the auspices of "notional" value in unwound transactions encumbering the heretofore dark and mostly unregulated market.
If the CFTC and SEC are genuinely determined to rectify the now public disgrace of such nepotistic administration, we could be on the verge of a major re-ordering of the financial industry landscape world wide.
The manipulation long present in this market according to the allegations of organizations such as the Gold Anti Trust Action Committee (GATA) has been responsible for the depressed price of precious metals, and outside of GATA, the super-inflated price of oil which peaked in July of 2008 at $148 a barrel.
Now they're coming out of the woodwork in Goldman's defense, thought the defenders are hardly credible and without bias. Warren Buffett today said he has "full confidence" in Goldman Sachs, while private equity firm Blackstone came out with a more forceful endorsement.
Blackstone CEO Stephen Schwarzman is quoted as saying, "We have been working with Goldman Sachs for the 25 years since Blackstone was formed and we never had any circumstance where there was any question about ethical character or behaviour. We are a major client of Goldman's and we will continue to remain a major client."
A week after the first allegations, we are now seeing the predictable flood of corrobaratory evidence unearthed by the press that suggests the moral decay among the foot soldiers now receiving blame originates at the top. (Emails show Goldman Sachs execs boasting about the profit they were making from horribly misappropriated lending.)
Goldman Sachs though isn't going to lay down like Lehman Brothers was forced to. The tentacles of the Goldman monster penetrate global governments on every level that matters, as many of the Treasury and Federal Reserve alumni identities prove. Goldman is certainly at the forefront of the "Too Big to Fail" propaganda, which is true only if caveated with "because that would bring down the government".
We reiterate the position "Too big to fail means too big too exist". If institutions that can deflect any responsibility for their actions to junior scapegoats are permitted to run amok with their massively influential capital concentrations, we are institutionalizing criminal destructive forces and protecting them. Its like breeding giant elephants in your living room. Sure, they're big and healthy, but look at the state of your house!
Among the many lessons we should be learning in this era of daylight robbery by our institutional and individual pillars of society is the obvious reality that people only aspire to be bankers because they feel entitled to a greater share of personal wealth, and not just despite the impoverishment of a broad social group to accommodate such plunder, but that is precisely how they demand it is done. This is morally reprehensible. In 200 years, if we survive, these bankers and that mentality will be deemed criminal, and those crooks will go to jail.
Through our evolution in the developed world over the last thousand years, there was a long-running battle between those who would let the church govern, and those who, successfully, argued for the separation of church and state. A democratic government is obliged to refrain from permitting special interest groups from influencing and especially infiltrating policy. The current practice of recruiting treasury and government financial advisors from the top personnel of banking is a despicable and blatant conflict of interest.
What these elitists perennially fail to recognize is it is precisely this smug refusal to eliinate such glaring abdications of government responsibility that incites riots and revolutions. When the financial misery inflicted by these institutions begins to affect even its middle and upper middle classes, rebellious organization and literature manifests.
At some point, the unemployed will see that there is an emergent moral obligation to correct such injustice, rather than seek employment or financial assitance. The United States is right now failing to make that distinction, and at its own peril.
I am Canadian with a long family history of intermarriage and American - Canadian residence and business. With a thoroughly bi-national perspective, it is now abundantly clear to me that one of the greatest distinctions between Canadians and Americans is that the Canadian business elite don't underestimate the importance of a more-or-less uniform standard of living for all citizens - even at their own expense. Consumer rights are defended, sure, but we don't have to worry about predatory lending by financial institutions against the credit-unworthy because it runs contrary to Canadian ethical thinking. Bad loans are bad business, and the integrity of the Canadian economy throughout the crisis is testimony to Canadian ethical and business fortitude.
This is why Goldman Sachs should be the first domino to fall. The United States government needs to stop shielding the super elite and thinking that they're getting away with it. They are not. There will be a day of comeuppance, and its likely not that far off.
The opportunity for President Barack Obama is to now demonstrate genuine leadership by attacking the corruption that continues to aid and abet the illegal manipulation of markets through excessivley large and influential institutions. Corporations can't go to jail, but their charters can be revoked for cause. If the government of the United States doesn't act decisively and meaningfully, the people eventually will.
World recognized trends forecasters, known by many around the world most addictive & highly accurate. Sign up for a FREE Trends alert at: http://www.forecastfortomorrow.com
Tuesday, April 27, 2010
Tuesday, March 30, 2010
A few months ago, the crumbling global economy was atop the
agenda of many G20 leaders. Social unrest, banking sector
meltdown, global growth conundrum, and stock market yo-yos were
the main discussion topics among the planetary leadership.
Governments the world over addressed the most imperative issue,
the banking pandemonium, with massive cash inflows into a sector
that hitherto epitomized capitalism at its best (and worst),
with a modus operandi more akin to central intervention in
The global tab ranges from 4 to 5 trillion US dollars according
to the most optimistic estimates, but the overall costs may run
higher in the future.
The financial rescue of the ailing banking sector, in principle,
was the right course of action and various experts across the
political spectrum saw eye to eye on its criticality, including
the staunchest free-market theorizers who routinely treat as
leftist energumens out of the antediluvian era those who dare
buck conventional wisdom regarding the role of government in
It was flummoxing, however, to observe how lenient authorities
were vis-à-vis banks throughout the bailout process on top of
the very favorable terms under which funds were disbursed.
Hence, financial institutions that benefited from state largesse
were able to quickly use monies received to regain profitability
and reimburse their respective governments.
Other parts of the economy didn't experience so swift a
recovery. Unemployment is still high; the mortgage sector is
still in a shambles. Banks have been reluctant to lend, creating
an underperforming productive sector and a lethargic private
consumption. The stock market may be up but, debatably, the
"real economy" is still down.
Banks played a crucial role in the current economic malaise but
anti-bailout commentators were wrong to vilify them and to
affirm that such guilt should have precluded public rescue.
Financial intermediaries are an epochal pillar of our
post-modern economies and it would have been socio-economically
ruinous and politically unpalatable to let them sink.
Admittedly, a majority of banks are today more cash awash and
profitable than a year ago albeit some pockets of the industry
are still comatose owing to the liquidity hemorrhage that has
devastated them since the recession erupted.
Regrettably, nothing has changed. These institutions are
resorting again to the erstwhile practices that wrought havoc to
the economy in the first place, under the aegis of a regulatory
body eerily blind, deaf and tongue-tied.
Banks, evidently, should be encouraged to pursue and make
profits as any private concern. But when such a financial quest
comes at the expense of an entire system or poses a systemic
threat to the productive sector of the economy, the argument in
favor of tougher regulation becomes of preeminent import.
Companies need to utilize hedging for exposure control; yet,
speculators lately seem to use derivatives to bet against their
very benefactors. Although outrageous to vast swaths of the
populace, such practices are explicable if one considers that
the speculating camp only furthers private interests of elites
(their investors) who seldom factor morality into the
Case in point: Greece. The Hellenic government bailed out its
banking sector with billions of dollars only to see their
country downgraded a few months later because of an perceived
At this moment, elected officials and central bankers should
ponder the following question: did the bailout work? Or, stated
differently, did the mammoth cash infusion into banks and the
associated supplemental initiatives reach the initial goals?
Seasoned economists and social scientists will grapple amply
with issues regarding program effectiveness and efficiency in
the future, but prominent experts currently believe the answers
to such interrogations are negative. George Mason University
economist Peter Boettke posited that bank bailouts have created
a "cycle of debt, deficits and government expansion" that in the
end "will be economically crippling" to major economies, whereas
Barry Ritholtz, famed author of Bailout Nation and CEO of
research firm FusionIQ, thinks the rescue programs could have
been conducted better.
It can be argued that the initial rescue phase of the bailouts
program was effectual in that it helped avert a domestic and
global banking hubbub. But, contrary to popular credence, that
was the easiest part. The courageous headship of political
leaders and regulators cannot be underrated in the process, but
it is indisputably far facile for a powerful central bank, like
the US Federal Reserve, to make journal entries to the credit of
targeted institutions and replenish their corporate coffers via
the much celebrated "quantitative easing".
The Fed, just like other G8 central banks, is in an enviable
position because it can create money 'out of nothing' by
increasing the credit in its own bank account.
Regulation is where actual political bravery need be shown from
authorities, and so far the lack of sweeping reforms in the
financial sector may obliterate the latter's plodding recovery.
At present, there are five distinct reasons explicating the
mediocre results obtained so far from the bailout scheme.
First, the much needed financial overhaul is taking longer to
move up the legislative ladder and reach US President Barack
Obama's desk because not only financial lobbies - such as the
über-powerful American Bankers Association - are exerting strong
pressure, but the political agenda is also crowded with the
healthcare reform and the geostrategic concerns linked to the
conflicts in Afghanistan and Iraq.
The fact that Senate Banking chief Chris Dodd, D-Conn., wants to
introduce reform in the sector will probably change little in
the short-term. Second, President Obama's own senior level
financial staff is composed of former Wall Street alumni and
lobbyists, and many skeptics are incredulous that a clique so
tied to financial interests can spearhead true reforms in an
industry that was previously munificent to them.
The next two factors are endogenous to the banking industry. One
is the past experience of regulation and deregulation cycles
that usually make laws dissipate over time, and the other stems
from the idiosyncratic ability of financial engineers and
investment bankers to design new products and techniques to
counter existing laws.
Finally, the regulatory endeavor should be global in scope, and
the present lack of geographic cooperation and the practical
difficulty to track systemic risk within the industry are
currently handicapping further advances.
(Article initially published at http://wp.me/pMqmW-8y)
About the author:
I'm a finance professional with a solid, varied risk management
experience in the financial services arena. I have been involved
in capital markets for a few years now, in the course of my work
but also as a trader. I'm an MBA graduate from Rutgers
University Graduate School of Business at New Brunswick, New
Jersey, and a CPA (Certified Public Accountant). Read expanded
bio at http://marquisc.wordpress.com/about/
Tuesday, March 23, 2010
Note to republicans and conservatives: this is so petty an issue and using it only illustrates how impotent you've become. If you hadn't dropped the ball over the last ten years and sold out to corporate handlers this health care bill would probably still be dead on arrival like all the previous attempts.
Sunday, March 21, 2010
In the rush to pass healthcare reform congress and the president are failing to address the fundamental issues corrupting the system: Americans' approach to aging and mortality and the growing opportunity to siphon profits from an uncontrolled system. As the misguided debate rages on Capitol Hill attempting to infuse more funds into an already bloated system, opportunists continue to divert health related revenue to pad the bottom line. Instead of committing more resources we must take three aggressive steps to refashion American healthcare. We must limit profit; empower consumers; and promote healthy lifestyles.
The American healthcare system is a nearly perfect money machine: consumable services of universal demand which are easily manipulated by fear and greed. This money machine, however, is draining resources from virtually every aspect of the economy. We must institute well thought out measures to address highly charged emotional issues - literally the realities of life: death and taxes. And we need effective means to dissuade parasites from feeding off the system. We must turn off the road to financial ruin now and steer a new course.
Currently health related services account for 17.3 percent of the U.S. gross domestic product. By the end of this decade healthcare is expected to represent nearly one fifth of all domestic spending. With trillions of dollars in play lots of people are mining for healthcare gold. Today hundreds of billions of dollars of non health-related healthcare resources are siphoned off for at best marginal benefit enriching overpaid corporate executives, lawyers, politicians and an army of bureaucrats. The damage the parasites inflict amount, by some estimates, to one third or more of all healthcare costs. The first step to fix the healthcare system is to get the focus off profit and get it squarely on health.
Powerful corporations control access to healthcare services leaving consumers to fend for themselves mainly ill-informed and largely powerless, in often emotionally charged circumstances. Because of built in firewalls people have no incentive to, nor way of comparing healthcare related costs, services or records of performance. In addition to the lack of transparency consumers rarely have the power or incentive to choose more cost effective options. The system is designed like the games in Las Vegas - to ensure the house always wins. Special interests overwhelm individual consumers at every turn. Choices by informed, responsible individuals sustain rational, market-driven systems. To fix American healthcare we must empower and incentivize individual consumers to determine "best value" in a transparent healthcare system.
Every economic endeavor is a dance of supply and demand. While the current healthcare system primarily manipulates the supply side of the equation it is time Americans get serious addressing the demand side.
A lifetime is a temporary adventure. As troubling as this realization is, as a society we must come to terms with mortality and the components of modern life undermining wellbeing. We each are responsible for our own health and fitness, and collectively we are responsible for the environment driving the pace and quality of life. Improving the health, wellbeing and fitness of Americans in all stages of life will drastically reduce demand on the healthcare system. The most significant step to fix American healthcare is to honestly assess our circumstances and act uncompromisingly to promote health and wellness from cradle to grave.
Continuing down the current path, funneling national resources at an ever increasing rate to sustain an aging population and inflate opportunists' profits, will cause our healthcare system and then our national economy to collapse. While congress debates ways to increase the power and reach of the system, realize the solution lies with the people. Three steps are required to fix American healthcare: limiting profit, empowering individuals and improving lifestyles. We can stay our current course or we can fix the system - it is time to choose.
Scott F Paradis, author of "Promise and Potential - A Life of Wisdom, Courage, Strength and Will" http://www.promiseandpotential.com
publishes a free weekly ezine, "Money, Power and the Path to True Prosperity". Subscribe now at: http://www.c-achieve.com
Friday, March 19, 2010
A few of the large banks have offered personal financial education in an attempt to overcome those ethical issues. Despite those efforts, 84% of students have at least one credit card, with the average student having 4.6. The average balance on a student card is $3,000. On top of student loans, the average student is leaving college with more debt than they typically can handle.
So, how will the act attempt to provide credit card debt help?
- No more freebies! Issuers cannot offer free items like t-shirts and pizza slices to entice students to sign up for credit cards on college campuses, college sponsored events (including sporting events), or within 1,000 feet of the campus.
- Anyone under 21 cannot secure a credit card without either an adult co-signer or proof of enough income to pay at least the minimum payment.
I hope that the new rules set forth will be able to put a dent in the massive amount of student debt. Unfortunately, something tells me that without any sort of education or free information about good spending practices and building credit, students can get into just as much trouble. They will be fair game to the credit industry after 21-and their naivety will only serve the interests of the credit card companies.
What other changes have come with the new credit card laws? The biggest change you will notice will probably be the ones to your statement. The highlights of the new format include:
- A structured format that features the fees and interests involved in your bill.
- A special section that explains how much time you will spend and how much interest you will pay for simply making the minimum payment every month. Some statements will even include a comparison of what paying more than they minimum can do to your balance.
- A toll free number for credit counseling. On top of those changes, everyone should receive their credit card statement at least 21 days before the due date.
There are many things these new laws can help us see-for a large amount of people, the newest format will only make it more clear that their need for credit card debt help is dire.
If you've already gotten in trouble with your credit cards and are looking for a permanent solution to your credit card debt, consider Missouri and Illinois Chapter 7 bankruptcy. You could be doing yourself the biggest favor by simply researching what kind of help Missouri and Illinois Chapter 7 can offer in your situation. Find an reputable attorney in your area who is willing to offer you free articles, blogs, bankruptcy faq, and even publications to educate you before you even step foot in an office.
Missouri Bankruptcy attorney James Brown has been working to relieve the debt of hard-working American families for over 15 years. He has dedicated his career to educating consumers about options for debt relief and has released 5 publications, including, "Get Out of Debt: Secrets Your Creditors Don't Want You to Know." You can request a free copy at http://www.castlelaw.net
Thursday, March 11, 2010
A Bumpy Ride for Commercial Loans
By Stephen Bush
With business financing and working capital loans, commercial borrowers need to be prepared for a long and bumpy ride. Based on how chaotic the commercial banking climate is currently, this situation is expected to prevail for a long (but unpredictable) period of time. In spite of the frustrating and confusing business lending environment, a prudent commercial loans strategy is likely to produce the most effective results that can be hoped for by small business owners.
Misinformation and insufficient information will play a somewhat unpredictable role in achieving the desired outcome of business borrowers finding appropriate commercial finance solutions. The eventual success of commercial financing efforts will depend on an individualized and detailed assessment of the unique financial circumstances for a specific business, although it is appropriate to note that there are new and effective business loan options that will satisfactorily fill the commercial funding gap for many small business owners impacted by their current ineffective commercial bankers.
Anticipating the long and bumpy ride that lies ahead for even the most ordinary business financing request will be prudent and wise for small businesses. It has not been unusual for commercial borrowers to wait for one to two months before their bank finally declines to make a commercial loan that had appeared to be a mere formality when the lending process began, either because banks do not want to publicly admit that they are not presently making business loans or perhaps due to their somewhat secretive and changing guidelines for making such loans. Regardless of their prior description of "normal" for working capital management and commercial financing options, many business owners have already discovered how much and how quickly this has changed.
The rationale for describing the journey to business financing success as being both long and bumpy is based on a prevailing banking climate that is characterized by misinformation as well as insufficient information about current commercial finance options for small businesses. After they have finally been informed by their current bank that needed business finance help is not forthcoming, because they simply do not have enough information to successfully complete their task, a small business owner might be unsuccessful in their attempt to find a new source of commercial funding in one typical scenario involving insufficient information. When a commercial banker misleads a prospective business borrower by advising the business owner that the bank will be able to help in providing an unsecured working capital loan when the banker has already been told by senior bank officials that such financing will not be provided except for specific established business clients, this is an increasingly frequent misinformation scenario. Most banks are in fact eliminating or reducing working capital financing to small businesses as indicated by one public report after another.
Realistic expectations of what lies ahead in business financing efforts should produce more successful results. This article represents a sincere attempt to accurately portray the recent confusing and unpredictable state of commercial banking for small business owners, and this fulfills a primary purpose in describing current attempts to obtain small business loans as potentially being a long and bumpy ride.
Stephen Bush and AEX Commercial Financing Group provide help for small business finance programs and working capital loans:
Friday, March 5, 2010
Here's an excellent article explaining why the road we're headed on is paved with rocks:
Bailing Is Not The Way Out!
Copyright (c) 2010 Scott F Paradis
As the government continues to attempt to bail out the sinking ship known as the U.S. economy, we find ourselves in the dubious position of realizing an infusion of cash only adds ballast weighing down the listing vessel. We are paying one credit card with another - a practice that may well end the grand American experiment.
While we deride Friedman's monetary policy and look to Keynesian fiscal policy for answers, we can't escape the reality - time and circumstances have changed. Old solutions will not work on this new problem.
Our mistaken national policy of installing finance as king, unleashed the unchecked creativity of Wall Street. The leverage invoked by wanton and reckless financial malfeasance left a wreck with two defining characteristics: a destabilized middle class and a penchant for needless consumption.
Through our desire to reside in more prestigious residences, drive ever more grand SUV's, and accumulate more impressive toys we have fallen prey to misguided financial policy, counter productive energy policy, and imprudent foreign policy. We have leveraged our future, willingly accepting the reward of trinkets for Manhattan while simultaneously shackling ourselves and future generations into lifetimes of debt service.
Addressing the crisis by plowing more money into the hands of the elite that brought us to this precipice only reinforced previous mistakes. It is time to stop concentrating wealth in the hands of the few while building debt for the working classes. We have undermined trust in what once had been the enabler of global stability - the U.S. economic engine. That engine is fueled by the optimism, innovation, and engagement of ordinary people with extraordinary vision.
Unfortunately, most often, real solutions, those demanding sacrifice, are left until all easy options are exhausted and the wreck rests on rock bottom. We haven't hit bottom yet, so we likely won't entertain real solutions soon. Those solutions, in the end however, will come from the people - a top down approach in our current political environment will not work.
As our financial system crumbled we are forced to reconnect to what matters most - to enduring values - to one another. Economic nepotism must be laid to rest. We must embrace a system whereby the moneyed elite and the masses act together in a collective self-interest based on universal, enduring principles. We must come to realize the material excess of wealth is a false idol leading us astray. We must come to recognize and embrace ideals more appealing than appearances and more enduring then accumulation.
Overcoming the greatest challenge of our time, demands we overcome the greatest challenge of all time - the double-edged sword of human nature: fear and hubris. The debt bubble and the aftermath of its demise is a flaunted example of the frailties of human nature. Admitting we have a problem is the fist step to fixing it.
Though we have strayed into believing accumulating is our highest purpose, this crisis may yet cause us to see a greater truth. We are here to experience, to act, to grow, to love. The stuff we accumulate does not endure. For in the end, it is the people we become and the love we share that matters. Bailing is not the way out. A coming together and a commitment to one another is.
Scott F. Paradis, author of "Promise and Potential: A Life of Wisdom, Courage, Strength and Will" http://www.promiseandpotential.com publishes "Insights" and a free weekly ezine, "Money, Power and the True Path to Prosperity". Subscribe now at: http://www.c-achieve.com
Monday, March 1, 2010
Corporate downsizing is in vogue again after the recession hit. What concerns people is when companies making huge profits take these measures it seems unfair to the employees who helped build that profit. It probably is and a severance package most likely will be used to pay down credit cards, car payments, and perhaps get ahead on a mortgage. After that, there's a another paycheck taken out of the system and little spending money left to grease the economy. It's belt tightening time.
Another concern about this is the state of IT workers in the USA. During the technology boom of the '90's, jobs were created at breathless rates and the wages were outstanding. Things haven't been so rosy over the last ten years. A lot of jobs and production facilities were outsourced overseas, investment fell off after the dotcom bust, big companies gobbled up smaller ones and the software and hardware became much more user friendly therefore eliminating a lot of support positions. There's a lot of people with computer science degrees cleaning restrooms.
One could argue that this is the natural state of things in a dynamic free market economy where creative destruction of businesses fuels new advances and makes things better and stronger. My concern is that the IT industry is going in the same direction as steel and autos. Let's hope that this pending action doesn't include plans to outsource more work overseas.
I find it hard to believe that the economy can fully recover, much less expand, when our industrial base is shipped to China, good jobs are eliminated by downsizing, and the US government attacks the problem by throwing money we don't have at it. The bottom line is always a concern but when a company makes record profits and then eliminates jobs there's something a little out of kilter with fair play.
Thursday, February 25, 2010
FINALLY...Wake up SHEEPLE...Your CONgressman is not your friend, he/she is a paid off shill for sociopaths who don't give a rat's ass about God, Country and Liberty.
Monday, February 22, 2010
Do New Credit Card Laws in February Mean a Solution to Credit Card Debt?
Though the new credit card rules were put forth in 2009, many of the biggest consumer protections won't go into effect until February 22nd. So, what are these big consumer protections? Here are some of the highlights:
- Any credit card holder now reserves the right to say no to any account changes. His or her account will be closed based on the old terms and he or she will be given 5 years, if they choose to opt out.
- People under 21 cannot get a credit card unless they have an adult co-signer or they can show proof of enough income. The new laws have also included some extra protection for students, going as far as to specify the amount of yards a credit card company must be away from the campus in order to make any sort of offer.
- Companies will now give card holders at least 21 days to make any monthly payments. This should stop credit card companies from arbitrarily moving up or changing due dates in order to collect late fees. - Card companies are now required to disclose to the card holder the consequences of making a minimum payment every month. Companies will finally tell their card holders how much time it will truly take to pay off, how much interest they are looking at, and more.
- In the event that a card holder has multiple accounts, payments that exceed the minimum payment will be applied to accounts with higher interest balances first.
If you are thinking that these new laws are the answer to your prayers for finding a solution to credit card debt, you may not be thinking about the big picture. It sounds wonderful that they are giving you the option to close your account if the terms of service are changed but, how likely are you to go without a credit card? Credit card debt statistics show that the dependency Americans have on credit cards has only grown—and a change in interest rate just might not be enough to make you break things off with your MasterCard.
These new rules will undoubtedly cut into the profits of the big card companies, also. So, if they can't collect late fees or extend the terms of payment for card holders, will they just take it as a loss? Doubt it. Credit card companies will want to protect their profits. They will find another way to make money—and one way that they will probably do it is to get more serious with their collection efforts. The need for a St. Louis Missouri or Fairview Heights Illinois bankruptcy attorney to provide credit card debt help may not be over.
If you need help with your credit card debt help now, these laws are probably a little late. Contact the best bankruptcy attorney in your area to find out if Chapter 7 or Chapter 13 bankruptcy in Missouri and Illinois could be the solution to credit card debt for which you've been looking.
Missouri Bankruptcy attorney James Brown has been working to relieve the debt of hard-working American families for over 15 years. He has dedicated his career to educating consumers about options for debt relief and has released 5 publications, including, "Get Out of Debt: Secrets Your Creditors Don't Want You to Know." You can request a free copy at http://www.castlelaw.net
Friday, February 12, 2010
This is the conventional "wisdom" that has been foisted on so many children during their formative years - when we all formed our view of the world, how it works and our place in it. It suggests that hard work will be rewarded and that you have to work hard to be a success. It suggests that higher level education will make you a better person and will secure your future. And, of course, it suggests that a good job will provide the necessities of life on an ongoing basis and, indeed, security into old age.
All of these myths have been busted over the last couple of years. Not only are they the myths of an economic and social system that is in disarray, they are myths that squeeze the very spark of creativity, ingenuity, adventure, enterprise and excitement out of us. And, unfortunately, as psychology tells us, these myths become our beliefs at a very early age - probably, eleven or twelve. And it is for the very reason that these myths are held as subconscious beliefs that so many people are now lost - wondering what has gone wrong, hurting because they see no other way, fearful that if they haven't lost their "good job" already, there is certainly no such thing, any more, as job security.
The personal world view encapsulated in the "work hard, go to college, get a good job" attitude diminishes the believer right from the word go. It say that you must conform, it says that this is the path of least resistance, the path that sets out your whole life ahead of you. It closes down your options - not because those options are not there, but because you don't believe that you have them. Above all, it subliminally suggests that you are a flawed person, in need of betterment through an education system that, in its very nature, demands conformity. In short, it squeezes the life out of the vast majority of people - and perpetuates a system whereby very few people rise above the crowd to achieve uncommon success - and system where very few of us find or live our true passion.
And, what's the point of getting up in the morning without passion? Over 70% of Americans don't like their job - they're the lucky ones, of course, that have one. How can you do your best, in your daily life, if you don't like what you're doing? The answer, of course, is that you cannot. Research tells us that to say that normal people only half-heartedly do what they're doing would be to vastly overstate the reality of the situation. Normal people only pay about 1% attention to what they're doing - the rest of their attention or mental energy is lost in the void of those early-created beliefs that have led them to this sorry state.
You need to have excitement in your life - the normal life is boring, in comparison to what life can be, because normal people follow mundane patterns which amount to little more than going through the motions of living. You need to find and to follow your passion - otherwise you are missing out on the true joy of living. Excitement and passion have nothing to do with what is going on around you - they have nothing to do with economic trends or, indeed, what other people think about you. Excitement and passion are all to do with what's going on within. As a result, you don't have to go looking for excitement and passion - let them find you.
Let's take a practical example near to so many people's heart. What if you're doing a job you hate? You have two choices. You can decide to stop hating it or you can do something else. "I hate my job" is a useless thought. In entertaining that useless thought, you diver your energy into the thought, devote less attention to what you're supposed to be doing, as a result of which the job becomes ever more difficult and you end up proving yourself right - it's a self-fulfilling prophecy. Research from the University of Chicago shows that some of the most fulfilled people are doing some of the most boring, repetitive jobs - but they choose not to see the job as such. The second option is to take the plunge - do something different, perhaps completely different, something that truly turns you on. This requires what normal people would call courage, but if you're in the right state of mind, such leaps are not courageous, they're simply the obvious thing to do.
Either option requires the correct state of mind - one that is clear and present. A clear and present mind will not give any quarter to useless thought. A clear and present mind will know what to do if a "leap of faith" is called for. By clear and present I simply mean what the words themselves, in their simplicity, actually suggest: clear of thought and focused in the present - the two go hand in hand. You develop this clarity and presence by dismantling your mundane life - in simply, non-threatening ways for starters. More practical examples: eat your breakfast before your shower tomorrow instead of after it; dress yourself starting with the leg and arm that you do not habitually lead with; get up ten minutes earlier and meditate - the list is endless, you can make up your own.
At the end of the day, your passion, excitement, success and happiness is entirely up to you and your state of mind. The ball is in your court - you can stay on the normal set of rails that take you round and round the same little track, or you can jump aboard the express train of clarity and presence and see where it takes you.
Willie Horton, an Irish ex-accountant and ex-banker, has worked as a success coach to business leaders and sports people since 1996. He moved to the French Alps in 2002, from where his free weekly Self-Help video seminar is sent to thousands of people worldwide. His Online Personal Development Self Help Workshop is used all over the world, clients say it's life-changing. Info: http://www.gurdy.net
Sunday, February 7, 2010
Copyright (c) 2010 Gareth Schweitzer
Since the economy began its downward spiral into recession in early 2008, we have seen changes in consumer behaviors and habits. Studies have shown that mindsets have shifted and that the current consumer is a very different person than the consumer of several years ago. Many marketing research services have begun to create their own surveys and reports to gain insight into this new consumer that we are dealing with today.
What most marketing research services begin with is an analysis of consumer behaviors - what are the top drivers of purchase decision making? Are people considering their purchase decisions with more thought to the future consequences? What are people buying more of? Less of? These questions and more can produce an effective study with meaningful results.
So far, various market research services have discovered that durability is a key propeller of consumers' purchase decision making. This suggests that consumers are looking to the future and considering the long-term implications to their current purchasing actions. It means that consumers believe the economic recession is here to stay, at least for a while. Consumers expect spending levels to remain at these reduced levels indefinitely, and they are making their decisions accordingly. A study that questioned consumers regarding their top reasons for buying a product produced the following results: the top three reasons for buying a product are
1) it is durable and will last for a long time;
2) the product will make the consumer's life easier; and
3) it is something the consumer has always wanted to have.
In another study by a marketing research services company, questions deconstructed what purchases and experiences people miss the most since the economic downturn. The questions posed elicited four main responses:
1) 24% of respondents said they miss dining out in restaurants (including fast food restaurants);
2) 15% said they miss traveling and taking vacations;
3) 14% said they miss buying apparel (clothes and shoes) that they used to purchase; and
4) 10% said they miss the ability to buy something on a whim, and the freedom to buy whatever they want without having to worry about the future. Sentiments like these will likely lead to an increasing desire for these more luxury items and behaviors, and eventually will bring forth increased spending. It is uncertain when this increased spending will begin, but it is clear that it will happen eventually.
Market research services have pressed consumers for more information regarding their opinions of luxury goods. We've found that after consumers made attempts to forgo luxury items, they realized that it is not too difficult to go without these goods; many consumers say now that their current budgets reflect the fact that luxury items seem unnecessary to them now. Out of people who declared that they are on a permanently stricter budget with respect to luxury goods, 42% of them said the reason is because they no longer feel a need to have these luxury items.
In fact, the definition of luxury seems to have changed. In one market research services study, consumers declared that small splurges are now luxuries to them: they feel guilt over eating out (even if it's inexpensive) or buying an item at full price. In the past, luxury items were more extravagant: expensive cars, high-tech electronics, and fancy clothes. Consumers indicate that they, in fact, do not want to be associated with these big-ticket displays of wealth. The recession has brought about a fundamental shift in the way people view happiness. Consumers now say that the things they want most in life are not material, but emotional. People want to be happy and spend time with family and friends. One survey reveals that the top indicators of success (according to the consumers surveyed) are 1) being able to have dinner with family often; and 2) being able to exercise every day.
From these survey results and from the current state of the economy, it is clear that the current American consumer is very different now than he or she was several years ago. As the definition of luxury changes, producers must adapt their products and marketing strategies to fit the current spending conditions. In the next few months and years we will experience changes (some lasting, some temporary) in the market and economy. As these changes evolve, market research will be crucial to determining successful strategies for producers.
Gareth Schweitzer is President of The Omnibus Company. The Omnibus Company, a division of Kelton Research, provides fast and accurate Omnibus surveys, Omnibus studies, and strategic consumer insights to public relations and marketing professionals looking for newsworthy, actionable data. http://www.omnibus.com
Wednesday, January 27, 2010
I am in business for myself. My number one goal, besides making
a profit, is not having employees. I wonder how many other small
business owners feel the same way? It's no surprise that the
unemployment rate hangs above 10%. The government is smothering
small business. Too bad Obama only hires Ivy League academics
with big business buddies for advisers.
I used to have employees. My business was providing marketing
research, sales consulting, and sales services to small
technology companies. All my employees worked from home and were
located in several states. The work was all on computers and
phones. It seemed so simple.
Enter the IRS. They have rules. You can buy the 20 volume "US
Code of Federal Regulations" written by the IRS from the
Government Printing Office for $974. This does not include
around 100 volumes of the court tax cases nor individual state
tax laws. If a business has employees they are required to know
the latest tax rules and pay federal taxes, state taxes, social
security taxes, and employment security taxes for each employee.
If you happen to make a mistake you could face interest, fines,
I had one employee in Oklahoma who I had to let go due to tax
issues. Oklahoma could not agree on how to classify my business,
so they were going to charge a tax on my services. It is really
important to know which box to check on these government
Deductions are another wild ride on the IRS train. I guess it is
made complicated by all the big shots paying for legislators to
give them loopholes. I spend a lot of time looking for
loopholes. For example, take the vehicle deduction. Everyone I
know uses the per mile formula for getting their deduction. It
is certainly easy. Did you know there is another way to deduct
your car? It is called the Actual Method. You deduct all
expenses of the vehicle including depreciation. It is
complicated to do, but you will have a much larger deduction.
IRS = time and money. Good for lawyers and accountants, bad for
Enter the Obama administration. They were elected on the
promises of higher taxes, nationalized healthcare, and Cap and
Trade. All the stimulus money given to Wall Street and state
governments are just late additions to the power game. All of
this spells death to the small business. Thank goodness we are
still a capitalist economy with the hope of large profits to
cover massive government intrusions.
Now that the banks have been saved, everyone wonders why people
are not lining up to borrow money. I can answer that - small
business owners are scared to death! Why would they take a risk
and borrow money knowing they will have to adjust their business
to every whim of this gigantic government?
If I need help now, I pay independent contractors. A 1099 form
for each contractor at the end of the year and it's done. It's
not the best way to do business, but it's safe. Nationwide, this
is not good for the economy.
Small business is not looking for a government handout or
bailout. We just need the government to get out. If the
government really wants people working and the economy to grow,
look to small business. Reduce the tax burden, relax the rules
on employment, and stop protecting big business.
About the author:
Bill does online marketing for small business. Check out his
political blog at questionsbybill.com
Wednesday, January 13, 2010
From Bloomberg: Blankfein Says He Wasn’t Asked to Take AIG Haircut
Reuters: Goldman's Blankfein defends business practices
Huffington Post: I didn't see Blankfein honestly answer one question
Here's some snippets of the questioning from New York Times:
"Mr. Angelides pressed Mr. Blankfein about selling securities tied to subprime mortgages while at the same time betting against them. Mr. Blankfein said he “really needs to explain this because the press swirling around this. Because the firm was accumulating positions, “we have to go out ourselves and source the other side of the transaction,” he said. He said there was no simultaneous selling of securities and then betting against them."
"Mr. Angelides asked Mr. Blankfein what the two most significant instances of negligent behavior by Goldman Sachs. In response, Mr. Blankfein said his firm got caught up in extending more and more leverage to private equity firms and other and, thus contributed to the froth in the market. Mr. Blankfein stops short of saying the firm was negligent."
"Mr. Blankfein said that his firm noticed that lending standards and covenants on large corporate loans were much lower than usual, but that like the rest of the industry, the firm rationalized those looser standards by arguing that the world was getting wealthier and other excuses. “We talked ourselves into a place of complacency,” he said."
"“When was Goldman first alerted to the fact there were serious problems with subprime mortgages?” Mr. Wallison asked. Mr. Blankfein didn’t know exactly when the firm became aware of the the crisis, but he said the firm had turned bearish on housing prices in late 2006 and thought problems in the mortgage market would grow out of declining home prices."