An old news article worth sharing: “Dividend tax hike ‘could have been worse'”

While organizing some of my files today I stumbled across a CNN Money article on the dividend tax hike “compromise” reached earlier this year: 20130102_dividend_tax_hike

Most of you probably already know where I am going with this.  🙂  It is yet another reminder of how the wealthy (in this case those earning more than $400,000 AGI) avoided a restoration of taxes to pre-great recession / pre-Bush rates.  However, as I mentioned in my Cadence of Finance presentation, taxes are not the main driver behind the widening wealth gap.  See the presentation for more details.

Another government lawsuit against Bank of America related to $850M in bad mortgages

Sure Bank of America (BofA) has been sued a time or two by the government.  Just take a look at my Cadence of Finance presentation slides 9 and 11. But they were also bailed out by the government.  Are we being forced to watch and participate (via our tax dollars) in some sick (and expensive) good-cop bad-cop show?  Nevertheless, if you like reading about BofA’s latest lawsuit, checkout this Forbes article.

As mentioned in the Cadence of Finance presentation, BofA was already sued for misleading investors about $16.5B (that’s B as in Billion). They eventually settled for a $315M judgement.  What about the other $16.2B dollars?  Where did that go?  Nevertheless, it appears the only differences this time are the “lower” amount of bad mortgages ($850M) and their source (from “wholesale channels” rather than originated by BofA).

I hope everyone has made, or at least begun, the transition to banking with credit unions. See page 26 of “The Cadence of Finance” for a few reasons to make the switch.  Those are in addition to the fact BofA laid off 30,000 workers after being bailed out, paying bonuses, and settling for pennies on the dollar (page 11).

Revamped home page, financial crisis presentations

First, I would like to thank all of those who follow my blog.  I hope you find the material interesting and thought provoking.  To make material more accessible to students, businesses, and curious readers alike I have revamped the homepage.

After a discussion regarding the debt ceiling this weekend I asked myself: “didn’t I write something about this before?”  It turns out I did!  You will notice a “2011 Debt Ceiling Crisis” presentation under the “Seminars” column on the home page.  That presentation was created two years ago.  It turns out the debt ceiling is in the news again.

If you like the debt ceiling presentation also take a look at “The Cadence of Finance” and the “2008 Financial Crisis” presentations.  It appears that observations and concerns in those presentations keep coming up again and again.

Enjoy the reading!

BBC News – South African chef ‘too fat’ to live in New Zealand

Here is one approach to making socialized health care work: kick the unhealthy people out of your country.  Personally, I would think a rehabilitative plan with wellness goals is a better alternative.  But then again, I have never run the health care system of an entire country.

LA Times – At a Rio favela, Pope Francis’ upcoming visit brings side benefits

So when the Pope visits one slum in Brazil some basic services are established.  Specifically, the road the Pope will travel on is repaved,  the electrical grid is fixed to allow lighting on that street, and more electrical work is ongoing to restore power to the chapel he will visit.  This brings a few questions to mind:

  1. Do more “VIPs” (and I use quotes intentionally there) need to visit every street of every slum in Brazil to get basic services restored?
  2. Does the fact that so much work being done so spur of the moment negate the “we don’t have the resources” argument?
  3. What about the schools and hospitals?  Are they just as important as the street and chapel that will host the Pope?

Brazil, with all of its recent economic growth, is leaving the masses behind.  This smells a lot like the widening wealth gap going on right here in the United States  See slides 14 and 15 of The Cadence of Finance for example.

Make no mistake, Brazil has a 99%/1% problem as does the United States.  Hopefully the U.S. will win the race towards shared prosperity.  Hopefully we will be the first to begin reversing the widening wealth gap…

Here is the LA Times article.

Goldman Sachs doubles profits

The monetary policy was supposed to boost the economy via quantitative easing (QE).  However, unemployment and under-employment are relatively high.  Wages for the 99% are flat or declining.  Yet profits at Goldman Sachs doubled.  This is likely due to Gold-man’s ability to borrow at low rates (QE) and gamble with that borrowed money.  But when those gambles don’t work out (e.g., the depression and recent recession) we taxpayers bail them out. 

Meanwhile, the 99% earn near zero interest paid on savings accounts.  QE, unemployment high, wages flat, deposit rates zero, and Goldman Sachs profit doubles?  Sure seems like wealth transfer from the 99% to the 1%…

Mexico more obese than the US?

This was a surprise to me at first.  After reading further in the article you will note the involvement of agribusiness and lobbyists.  No longer a surprise.  Sacrifice the health of the 99% so the 1% can increase their wealth.

Food is another major front on the battle of the 99% vs the 1%.  It may be the most important front.  With a poor diet comes poor health.  With poor health comes medical expenses. So, in the end, those who buy junk food transfer wealth to big companies.  Then those who get sick transfer wealth to big pharma and doctor co-conspirators (yes, I said it!).

Try to eat healthy my friends.  Try to buy from local farmers.  In so doing you may live a healthier life and do your part in reducing the wealth gap.  Circulate money within your community and minimize doctor office visits.  Win-win.

$350 million renovation of NYPL’s Fifth Avenue branch will endanger iconic Rose Reading Room: suit  – Daily News

Renovations to the New York public library’s 5’th avenue location will result in the removal of 2 million books.  Is that a problem?  Possibly, given there was no mention of making those books available in digital format at that location.

I must admit I am a late adopter to e-books.  But after my recent move, where I carried countless boxes of books, I could not help but wonder “what if I had all my books in my iPad?”  No more dragging books around from state to state.

Nevertheless, I am concerned about the state of libraries as centers for learning.  For example, while at the University of Memphis I watched the administration fund a $50M university “center” complete with a donut shop.  Meanwhile, the library was underfunded and losing subscriptions to resources.  Why isn’t the library the “center” of a university?

I suspect the goal has shifted from educating young people to drawing them in with a social “center,” capturing and raising their tuition, and funding faculty research on topics that won’t help the students at the school where they “teach.”

So, NYPL plans to remove up to 2 million books from the 5th avenue location without making them available digitally.  The University of Memphis chose to fund a party center over a learning center.  How many out there have seen similar patterns in their respective locales?

P.S.  Don’t get me started on questioning who decides which books go and which books stay…

Paid via Card, Workers Feel Sting of Fees –

Yet another way for big banks to extract wealth from the poor masses and ultimately give it to the few wealthy executives by way of bonuses.  The sad thing in this case is that employers are in on the deal.  As an employer I will force you, my low wage worker, to incur fees to access your paycheck so I can save on my payroll administration costs and perhaps even get a kickback from the big banks.

Everyone: get a checking account at a credit union and demand that your employer direct deposit there.  If the employer will not, quickly find one that will.  Sooner or later the boss will realize they can’t hire anybody while forcing workers to incur fees to access their paycheck.