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Old 03-08-2011, 09:30 AM   #31
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I read this as soon as I got the magazine in the mail. This article made me cry. Imagin that, wall street articles causing depression. But as long as the revolving door between Wall Street, the SEC and Washington keeps spinning we are shit out of luck for regulations. I don't know if this can be fixed and who can fix it or would even try. Look at the sheer amount of money they made and quite frankly the money they still can make by continuing it.
I truly hoped Obama would make a difference - but seriously - this is out of his league.
It would help a tiny bit if we raised the top income tax bracket rate and raise the capital gains tax. It wouldn't solve it, but at least we would get some much needed revenue.
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Old 03-14-2011, 09:27 PM   #32
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Reuters, March 14
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More than 4 out of 10 American millionaires say they do not feel rich. Indeed many would need to have at least $7.5 million in order to feel they were truly rich, according to a Fidelity Investments survey.

Some 42% of the more than 1000 millionaires surveyed by Fidelity said they did not feel wealthy. Respondents had at least $1 million in investable assets, excluding any real estate or retirement accounts. "Every person in the survey is wealthy," said Sanjiv Mirchandani, president of National Financial, a unit of Fidelity. "But they are still worried about outliving their assets."

The average age of respondents was 56 years old with a mean of $3.5 million of investable assets. The threshold for "rich" rose with age. "They compare themselves to their peer group...and they are also thinking about the long period they will have in retirement and want more assets" to fund their lifestyle, said Michael Durbin, president of Fidelity Institutional Wealth Services.

Fidelity noted the wealthiest 5% of Americans hold more than 55% of the nation's wealth.
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Old 03-15-2011, 12:13 AM   #33
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Old 03-15-2011, 11:21 PM   #34
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Last I heard, my cousin is still a millionaire. He and his wife retired years ago, in their early to mid-thirties, living off the interest of the mint they made from their AOL stock (back when it was worth more than I'm sure it is now).

They live a pretty normal life (beyond not depending on work to make a living).
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Old 03-16-2011, 12:39 AM   #35
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The millionaires were later overheard complaining that their diamond shoes were too tight.
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Old 03-21-2011, 01:14 AM   #36
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I just watched Inside Job.


I can't even come up with any kind of coherent comment about it.
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Old 03-21-2011, 09:22 AM   #37
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I just watched Inside Job.


I can't even come up with any kind of coherent comment about it.
I just got that from Netflix on Sat. I haven't steeled myself enough to watch it yet.
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Old 03-21-2011, 12:23 PM   #38
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Yeah, I had it over a week before I settled in to watch it. I've been feeling overwhelmed with general dismay, anger and frustration about so many things in the US right now (not to mention the stuff going on worldwide) that I was putting it off, knowing that this would just add to it.
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Old 03-21-2011, 12:33 PM   #39
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Yeah, I had it over a week before I settled in to watch it. I've been feeling overwhelmed with general dismay, anger and frustration about so many things in the US right now (not to mention the stuff going on worldwide) that I was putting it off, knowing that this would just add to it.
"The One Percent" and "I.O.U.S.A" are available as an Instant watch on Netflix, too, in case your outrage isn't complete.
I haven't watched those yet either, but I've heard good things.
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Old 03-29-2011, 09:29 PM   #40
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A couple of weeks ago, the government started signaling, at long last, that it was ready to get tough on the bankers who caused the 2008 financial crisis. On March 16 the Federal Deposit Insurance Corporation, or FDIC, sued three former top executives of Washington Mutual, or WaMu, for taking "extreme and historically unprecedented risks," thereby causing the bank to lose "billions of dollars." That same day, the New York Times reported that the Securities and Exchange Commission [SEC] had sent so-called Wells notices—often a sign that civil charges are imminent—to a handful of former executives at mortgage-securitization giants Fannie Mae and Freddie Mac. The targets seem well-chosen. The collapse of WaMu, acquired by JPMorgan Chase at a fire-sale price in the fall of 2008 was, according to the FDIC, the biggest bank failure in US history. The FDIC is seeking to recover $900 million from the three bankers. Fannie and Freddie were taken over by the government in the fall of 2008. So far, they have cost taxpayers about $130 billion.

Perhaps you're thinking: If only the government had known at the time what these scoundrels were up to, we could all have been spared a great deal of pain. The trouble with that line of reasoning is that, um, the government did know what was going on. The Office of Thrift Supervision [OTS], which regulated WaMu, and the Office of Housing Enterprise Oversight, which regulated Fannie and Freddie, were supervising the very behavior that their sister agencies are now suing over. The government's lawsuits call to mind a cynical boast by Burt Lancaster, playing tabloid power broker JJ Hunsecker, in the 1957 noir classic Sweet Smell of Success: "My right hand hasn't seen my left hand in 30 years."

The FDIC's complaint against WaMu alleges that the three executives—former CEO Kerry Killinger, former Chief Operating Officer Stephen Rotella, and former President of Home Lending David Schneider—"focused on short term gains to increase their own compensation, with reckless disregard for WaMu's longer term safety and soundness." Or as Killinger put it in a June 2004 memo, "Above average creation of shareholder value requires significant risk taking." The FDIC complaint basically says that as experienced bankers, the three should have known better. Yet they repeatedly ignored warnings from risk managers, including one who said that WaMu was "putting borrowers into homes that they simply cannot afford." According to the complaint, the three not only embraced risky loans, but "layered these already risky products with additional risk factors." Both Killinger and Rotella were "heard to deride risk managers as 'checkers, checkers, checkers.' " Both Killinger and Rotella have come out swinging in their own defense, insisting that they took what steps they could to save WaMu. (Schneider has been silent.)

...One reason the OTS didn't act, according to [Senate Investigations chairman Carl] Levin, was that OTS was almost as fixated on short-term profits as WaMu was. These "precluded enforcement action to stop the bank's use of shoddy lending," the Senate committee concluded. One OTS employee wrote to another in September 2005: "It has been hard for us to justify doing much more than constantly nagging (okay, 'chastising')…since they [WaMu] have not been really adversely impacted in terms of losses." While WaMu executives layered risk upon risk in subprime loans, the regulators did nothing to stop them. Rather than issue regulations to prohibit banks' risky mortgage practices, the regulators issued a tepid "guidance" instead—and that "Interagency Guidance on Nontraditional Mortgage Products" wasn't issued until the fall of 2006, by which time the horse was already pretty much out of the barn. While WaMu's executives allegedly ignored their own risk managers telling them that borrowers couldn't pay back their loans, federal banking regulators ignored consumer advocates telling them exactly the same thing!

...While the evidence of the government's complicity is infuriating, it may not hurt the FDIC's case, legally speaking. Indeed, a legal source says that at trial, the FDIC will argue that the OTS's actions (or rather, lack of actions) are irrelevant, and shouldn't be admitted as evidence, because the OTS had no legal obligation to force WaMu's executives to do anything. Of course, the defense lawyers will try mightily to get the jury to hear all about OTS's cluelessness.

In the meantime, the SEC, which is reportedly contemplating charges against former Fannie and Freddie executives, has its own left-hand/right-hand paradox. The SEC is said to be weighing whether to charge Fannie executives with classifying mortgage loans as "prime," or relatively safe, when they should have been put in a category that reflected more risk. The SEC is similarly pondering whether to charge Freddie executives with not fully warning investors about the risks associated with its subprime mortgage portfolio. But as the Wall Street Journal noted, such accusations put another government regulator in the line of fire. That agency was formerly known as the Office of Federal Housing Enterprise Oversight, or OFHEO; it has lately been renamed the Federal Housing Finance Agency. The Journal reported that this successor agency to OFHEO sent a letter to the SEC opposing the charges. As the Journal pointed out, OFHEO's blessing of Fannie's financial filings was one reason a federal judge threw out some charges in a shareholder lawsuit against Fannie executives. Fannie, the judge said, "operated in a heavily regulated environment." Since the government takeover, the judge added, "no restatements of Fannie's financials have been ordered." Perhaps you could argue that the Fannie and Freddie executives misled OFHEO—but that is not an argument OFHEO has made, at least not publicly, possibly because reporters were already writing about Fannie and Freddie's problems well before their collapse.

Sources tell me that there was a general complicity on the part of federal regulators—not just OFHEO, but Treasury too—as the financial crisis got into full swing. The hope was that if regulators didn't force Fannie and Freddie to own up to just how bad the losses might be—they call this "regulatory forbearance"—then Fannie and Freddie would outrun their bad loans. Regulators were also reluctant to take a hard line because they knew it might force a government takeover, for which there was no political appetite.

Such left-hand/right-hand problems don't arise when the litigant resides in the private sector.
Earlier this month, the National Credit Union Association threatened to sue several investment banks unless they refunded more than $50 billion in mortgage-backed securities sold to five credit unions that subsequently collapsed. I have not been able to understand why federal regulators have been so reluctant to hold Wall Street accountable for its role in packaging up bad mortgages. Could it be that failed firms make easier targets than the too-big-to-fail banks that now dominate our financial landscape?
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Old 05-09-2011, 07:29 PM   #41
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As for taxes, having to pay them is no longer a sure thing either, especially if you’re a corporate giant like General Electric, with a thousand employees in its tax department, skilled in creative accounting. You’ll recall recent reports that although GE made profits last year of $5.1 billion in the United States and $14.2 billion worldwide they would pay not a penny of federal income tax. Chalk it up to billions of dollar of losses at GE Capital during the financial meltdown and a government tax break that allows companies to avoid paying US taxes on profits made overseas while "actively financing" different kinds of deals. It gets worse. In 2009, Exxon-Mobil didn’t pay any taxes either, and last year, they had worldwide profits of $30.46 billion. Neither did Bank of America or Chevron or Boeing. According to a report last week from the office of the New York City Public Advocate, in 2009, the five companies, including GE, received a total of $3.7 billion in federal tax benefits.

As The New York Times’ David Kocieniewski reported in March:
Although the top corporate tax rate in the United States is 35%, one of the highest in the world, companies have been increasingly using a maze of shelters, tax credits and subsidies to pay far less… Such strategies, as well as changes in tax laws that encouraged some businesses and professionals to file as individuals, have pushed down the corporate share of the nation’s tax receipts--from 30% of all federal revenue in the mid-1950s to 6.6% in 2009.
What’s greasing the wheels for these advantages is, hold on to your hats, cash. Over the last decade, according to the New York City public advocate’s report, those same five companies--GE, Exxon-Mobil, Bank of America, Chevron and Boeing--gave more than $43.1 million to political campaigns.
During the 2009-2010 election cycle, the five spent a combined $7.86 million in campaign contributions, a 7% jump over their 2007-2008 political spending. “These tax breaks were put in place to promote growth and create jobs, not bankroll the political causes of corporate executives," Public Advocate Bill de Blasio said. "…No company that can afford to spend millions of dollars to influence our elections should be pleading poverty come tax time."

And by the way, those campaign cash figures don’t even include all the money those companies funneled into the 2010 campaigns via trade associations and tax-exempt non-profits. Thanks to the Supreme Court Citizens United decision, we don’t know the numbers because, as per the court, the corporate biggies don’t have to tell us.
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Old 05-09-2011, 07:35 PM   #42
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Inside Job is fantastic. After watching it, my wife asked how none of these people could be in jail. I pointed out that when the criminals change the laws to suit them, and then take advantage of the changed laws, in their mind they haven't broken any laws. It's just good business.

Terrifying.

Sadly, under Obama, it is just more business as usual. We need serious campaign finance reform, but I'm skeptical that any change would be possible, given how deeply big business has its hands in the government's pockets.
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