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Monday, January 4th, 2010   7:12 am | Author: Jerry | Life, Money
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The Wall Street Journal reports that banks and financial firms are gearing up to screw you just a little more.
They are planning on raising fees on checking accounts and credit cards ”to replace more than $50 billion in revenue wiped out by new rules that clamp down on certain business practices”.
“Credit-card issuers collected $22.9 billion in penalty fees—such as those assessed for late payments—in 2009, up from $19 billion in 2008.”
“Credit-card companies already have been racing to slip new fees and practices into customer contracts ahead of the law (that becomes effective in February). Issuers are closing accounts, switching cards with fixed interest rates to variable rates and introducing cards that have an annual fee.”
“The Fed estimates that banks generate $25 billion to $38 billion a year in overdraft fees.”
“..banks are expected to eliminate free checking completely, raise fees on safe-deposit boxes and charge customers more for issuing a stop-payment on ..continue reading
Saturday, January 2nd, 2010   4:03 pm | Author: Jerry | Money
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It seems that no matter what Wall Street firms do they win.
First they are on the brink of disaster, or so we are told and the government bails them out with taxpayer money. No problem as long as the economy doesn’t collapse.
The economy doesn’t collapse although many individual investors lose much of their net worth. But not these firms.
The firms (Goldman Sachs, JP Morgan, etc.) wind up raking it from various fees, including fees charged to the government.
In fact the Wall Street firms did so well that they are handing out $200 billion in bonuses for 2009.
And to add insult to injury the compensation packages, including bonuses that the firms have given their employees will wind up saving the top three firms a fortune in taxes.
The NYT reports that “Many American banks already pay minuscule federal income taxes, because of various deductions and clever tax planning; the payout-related breaks will ..continue reading
While many are out of jobs or struggling to make ends meet some are raking it in.
In the last few months we have heard over and over again how the financial institutions that were on the brink of collapse decided to reward top executives with huge bonuses worth million of dollars.
The good times also apply to Fannie Mae and Freddie Mac who were in the middle of the mortgage mess. Both mortgage finance giants have been under government control since last year.
According to CNN Money:
“Fannie Mae CEO Michael Williams, who was promoted to CEO on April 21, will receive about $4.2 million in base salary and deferred cash payments for his time in the top job. The filing does not detail how much he was paid for his time as chief operating officer before his promotion, or what he will earn in 2010.”
“David Johnson, the chief financial officer and No. 2 at ..continue reading
Thursday, December 24th, 2009   7:44 am | Author: Jerry | Economy, Money
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The NYT published an article about Goldman Sachs and their creation of complex mortgage related securities and selling them to their top clients.
Other financial institutions including Morgan Stanley and Deutsche Bank also created similar securities.
The problem is that these institutions created these securities so that they could bet against them in case the mortgage market imploded. Basically they sold short.
Goldman clients including “Pension funds and insurance companies lost billions of dollars on securities that they believed were solid investments.”
Meanwhile Goldman raked in the profits first on the fees they collected on selling these securities to their clients and then on their bets that these securities would tank, which they did.
“How these disastrously performing securities were devised is now the subject of scrutiny by investigators in Congress, at the Securities and Exchange Commission and at the Financial Industry Regulatory Authority.”
“..authorities appear to be looking at whether securities laws or rules of fair dealing were ..continue reading
Isn’t this a great country?
Where else can you help defraud the government for hundreds of millions of dollars and then turn around get yourself the best lawyer around and claim that you are owed billions of dollars?
Meet Bardley Birkenfeld, former banker at UBS.
Birkenfled helped his rich clients hide millions of dollars offshore evading U.S. taxes.
He was caught and prosecuted and is to begin his 40 month sentence early next year.
But when he gets out he may be a very rich man. Maybe he will make the Forbes richest Americans list when he is released.
As the NYT reports Birkenfeld decided to work with the government and exposed UBS’ tax evasion techniques. The government decided to offer amnesty to Americans who pay their back taxes and penalties. As a result of a settlement with UBS the names and accounts of over 4,000 UBS clients were turned over to the government. The ..continue reading