Even on my birth day, I feel the need to express my outrage.
I am getting soooooooooo tired of hearing how the lobbyist still control our Congressional representatives in Washington. After you read this article at posted on CNBC' website today you'll immediately understand my outrage of the day.
Here's the first few lines of that article. It reads:
"They may be held in low esteem around the nation, but the country’s largest banks still wield considerable influence in Washington. The banks have made it difficult for Congressional Democrats and the White House to give stretched homeowners a stronger hand in negotiating lower monthly payments on mortgages and to prevent credit card companies from imposing higher fees and interest rates.
Having won some early skirmishes by teaming with Republican allies, the banks now appear to have the upper hand and may wind up killing — or at least substantially diluting — both pro-consumer measures."
Once again big bank lobbyists are linning up their Republican pals and some conservative Democrats in Congress and in the Senate to radically dilute several key provisions contained in an upcoming bill (the legislation is called the Credit Cardholders' Bill of Rights). This legislation would give credit card issuers more than a year to make changes designed to limit the massive fees and charges all the banks currently levy on consumers. And they're winning the battle.
Never mind that the industry collected over 15 BILLION dollars in such fees last year. Taxpayers bailed out the banks in October and now the same taxpayers will be providing the very income the banks will then use to pay down the TARP money they all received. How completely absurd is that?
I once took a negotiating course that taught me several things about the process but what I remember most from that seminar is this: NEVER give up anything without receiving something in return. What are we as taxpayers going to get back? Nothing. We provided the initial bailout funding and we're now also the main source of bank profits(record profits in some cases. I.E.: Bof A).
What's more offensive is that banks are borrowing money at near 0 percent then charging customers usuriously high rates to borrow that same money back. It's the American Taxpayer bailing out the banks and the bank lobbyist making sure they have Congress including the Senate water down the very bills intended to give borrowers a needed break in these impossibly difficult times.
Democrat and Republican Representatives and Senators are being targeted but it is the Republicans in the Senate that are most willing and prepared to help the lobbyists get what they want. Republicans ARE NOT YOUR FRIENDS. Throw the bastards out!!!!
The original bill was introduced months ago. It was to limit many of the ugly practices used by lenders to jack up interest rates by 50% or more, increase fees with only a mere 30 day notice and generally make all our lives even more miserable in the process. Unfortunately, the bill doesn't take effect until mid 2010 so the banks have plenty of time to adjust to the new rules. In the meantime, the banks are raising rates and fees on just about every customer and only giving them 30 day notices. How absurd is that? Lobbyists are making headway in getting the bill watered down to nothing and may even succeed in delaying its implementation until mid 2010 despite the efforts of some lawmakers to accelerate the process.
Enough said. Want to have your voice heard by the banks, call them and demand they lower your interest rate or threaten to stop paying them. Yes that will hurt your credit but if you're unemployed, underemployed or just plain upside down on your debt to income ratio, bail out now, stop paying and wait for the bank to call with an offer to settle for pennies on the dollar. Choose to help yourself first, not the banks.
What do you think?
Wednesday, April 22, 2009
Friday, March 20, 2009
Bear Market Rally and other thoughts
I haven't posted any comments lately because my mother died recently and I've had other more pressing issues to deal with. Having said this, life goes on and so does the economic downturn.
We've been on a pretty wild ride in the stock market since last September. With most of the movement on the DOW and S&P being of a downward nature, long term investors have had little news to cheer about recently. That is until the recent bear market rally of the past several days. Is this the bottom? I don't think so. Not a chance - no way.
My common sense tells me that with most consumers feeling like their financial stability is precarious at best, with about 8 million more mortgages set to reset to higher rates in the coming 12-18 months, with demand for goods and services still down 20-50% and with small businesses closing by the thousands every month, we haven't seen the end of this very deep recession.
With every passing day where businesses fail to get back on track, more pain gets created and the domino effect continues - forget the DOW or the S&P!
If you are working for a company that produces goods or sells services that rely on consumer disposable income for its survival, brace yourselves, it's gonna get worse for you. If you have work skills that are still in demand then make the most of it by saving more and reducing your daily expenses to build up a higher economic security buffer in case you do find yourself out of a job at some point. Deep recessions such as the one we are currently battling don't resolve themselves in short order. They drag on for years.
I realize that my predictions for a long lasting economic downturn are mostly negative but then again, so is the shape of the world's economy. The banks and financial institutions still have secrets they're keeping and the financial industry overall will continue to reel from irresponsible bets made over the past 8-10 years. Buckle up because we're not even close to getting out of the woods on this one. Be prepared to spend the next 3 years adjusting your lifestyle to new standards because I believe that it will take 7-10 years for the economy and personal wealth to recover from the trouncing the commercial and investment banks have spent a decade creating.
What do you think?
We've been on a pretty wild ride in the stock market since last September. With most of the movement on the DOW and S&P being of a downward nature, long term investors have had little news to cheer about recently. That is until the recent bear market rally of the past several days. Is this the bottom? I don't think so. Not a chance - no way.
My common sense tells me that with most consumers feeling like their financial stability is precarious at best, with about 8 million more mortgages set to reset to higher rates in the coming 12-18 months, with demand for goods and services still down 20-50% and with small businesses closing by the thousands every month, we haven't seen the end of this very deep recession.
With every passing day where businesses fail to get back on track, more pain gets created and the domino effect continues - forget the DOW or the S&P!
If you are working for a company that produces goods or sells services that rely on consumer disposable income for its survival, brace yourselves, it's gonna get worse for you. If you have work skills that are still in demand then make the most of it by saving more and reducing your daily expenses to build up a higher economic security buffer in case you do find yourself out of a job at some point. Deep recessions such as the one we are currently battling don't resolve themselves in short order. They drag on for years.
I realize that my predictions for a long lasting economic downturn are mostly negative but then again, so is the shape of the world's economy. The banks and financial institutions still have secrets they're keeping and the financial industry overall will continue to reel from irresponsible bets made over the past 8-10 years. Buckle up because we're not even close to getting out of the woods on this one. Be prepared to spend the next 3 years adjusting your lifestyle to new standards because I believe that it will take 7-10 years for the economy and personal wealth to recover from the trouncing the commercial and investment banks have spent a decade creating.
What do you think?
Wednesday, March 11, 2009
Can things get any worse?
Yesterday we enjoyed a near 5% increase in the value of the DOW. Big deal! Most people long invested in the stock market have lost 30-40 and 50% or more of their investment value.
Anyone that believes this is anything but a bear market rally, and a short lived one at that is kidding him or herself. Look around at any of the main economic indicators:
Home prices continue to drop as do existing home sales
New home construction hits new lows
Unemployment numbers continue to increase
More large companies announce massive job layoffs
Losses at Freddi and Fannie keep mounting - now in the tens of billions of dollars
GM could be forced into bankruptcy as soon as April
And the list goes on and on. Only when employment increases and once home prices have stabilized can we begin to feel somewhat safe again.
The rally in stocks might last a few more months as speculators try their best to regain their losses through shear manipulation but the house of cards will come crashing down again, I am sure of it. When it does, it will send consumers into a near panic as they realize how tough their lives will be for the foreseeable future. Hang on, it's going to be a scary ride.
What do you think?
Thursday, March 5, 2009
The End Of The World As We Know It?
Today the DOW index dropped another near 300 points. With no bottom in sight yet, what is the average American to think about the future?
Well we all know that the "lower the lows", the "higher the highs" right? The problem is that when we finally get to that magical turnaround point, there may not be many of us left standing to take advantage of it.
I've been through many recessions of varying degrees but like many of us, I worked hard all my life to reach a point where I became my own boss. Thirteen years ago, I founded RacingSchools.com. The first couple of years were difficult as starting any new business can be. We experienced some highs and some lows particularly immediately following the 9/11 tragedies. The next few years were great for business and we were all busy making money
In late 2006, my business volume began waining. I wondered if this could be a sign of the beginning of a massive economic adjustment. The decline in sales continued and accelerated towards the end of 2007 and through the first three quarters of 2008. And then, WHAMO, the financial markets collapsed followed by even more dramatic and continued drops in the value of homes nationwide. Consumers were now maxed out and loosing equity and wealth faster than anyone could keep track off.
That meant near disaster for my company and for millions of small business owners during the last holiday season. The beginning of 2009 has seen the catastrophic decline in consumer confidence continue along with the dramatic slide in just about every industry I can think of .
Deep breath. So where do you go from here? If history is any indication, it could take up to a decade for our standard of living to return to 2005 levels. That means that we all need to re evaluate our priorities, tighten our belts and put away as much of our income as possible to weather the storms ahead. In the meantime, don't sweat your credit score. Put your money under your mattress and tell the credit card companies that as soon as you recover your losses, they can look to recover theirs. Put your family FIRST - not your creditors. Why? They're the ones singularly responsible for creating the deplorable conditions we'll have to live under for years to come. That's my story and I'm sticking to it.
What do you think?
Well we all know that the "lower the lows", the "higher the highs" right? The problem is that when we finally get to that magical turnaround point, there may not be many of us left standing to take advantage of it.
I've been through many recessions of varying degrees but like many of us, I worked hard all my life to reach a point where I became my own boss. Thirteen years ago, I founded RacingSchools.com. The first couple of years were difficult as starting any new business can be. We experienced some highs and some lows particularly immediately following the 9/11 tragedies. The next few years were great for business and we were all busy making money
In late 2006, my business volume began waining. I wondered if this could be a sign of the beginning of a massive economic adjustment. The decline in sales continued and accelerated towards the end of 2007 and through the first three quarters of 2008. And then, WHAMO, the financial markets collapsed followed by even more dramatic and continued drops in the value of homes nationwide. Consumers were now maxed out and loosing equity and wealth faster than anyone could keep track off.
That meant near disaster for my company and for millions of small business owners during the last holiday season. The beginning of 2009 has seen the catastrophic decline in consumer confidence continue along with the dramatic slide in just about every industry I can think of .
Deep breath. So where do you go from here? If history is any indication, it could take up to a decade for our standard of living to return to 2005 levels. That means that we all need to re evaluate our priorities, tighten our belts and put away as much of our income as possible to weather the storms ahead. In the meantime, don't sweat your credit score. Put your money under your mattress and tell the credit card companies that as soon as you recover your losses, they can look to recover theirs. Put your family FIRST - not your creditors. Why? They're the ones singularly responsible for creating the deplorable conditions we'll have to live under for years to come. That's my story and I'm sticking to it.
What do you think?
Tuesday, March 3, 2009
JUST SAY NO
The next time your credit card statement rolls in, just say no.
No to paying the bill. Just tell your credit card company that until they repay you the taxpayer, you want to renegotiate your own payment terms with them. Be specific: you want to reduce your monthly payment to say $25 or $50 and you also request that they not report you to the credit agencies as delinquent. If they say no (and I GUARANTEE they will), then I urge you to tell them to take their unsecured debt and write it off because you're not going to be sending them any more money.
After all, you'll never see most of the taxpayer's bailout money again. Don't kid yourself, these companies receiving the bulk of the TARP & TALF money (Citi, BofA, AIG) are BANKRUPT companies that will never bounce back from their bottomless losses. If you as a taxpayer are more concerned with how your family will survive and pay your rent or your mortgage or your electric bills, STOP sending these criminal enterprises your hard earned money.
I call these banks and insurance companies criminal enterprises because although they apparently broke no laws bankrupting the world's economy, they all lied to investors about the enourmous nature of their exposure to risky investments and bad loans. Six months ago, most were telling investors that their fundamentals were sound (kinda like John McCain telling us the fundamentals of our economy were sound, remember that?).
Well unfortunately for these executives, there are laws that govern what executives running publicly held corporations can or cannot say about the state of their businesses. It's simple, they ALL mislead us right up until the total collapse of the financial markets in the last quarter of 2008.
For this, they should all be prosecuted to the fullest extent of the law. Since that means that the SEC would be involved, I wouldn't count on this scenario playing out so:
The only way for you as a taxpayer to recover some of your money that's being dolled out to these criminal enterprises is to STOP paying them. After a few months of collection calls, they'll be willing to negotiate a lesser payoff of your balances. That's when you can make your best offer and potentially save thousands of dollars in principal and interest payments. Just do it.
What do you think?
No to paying the bill. Just tell your credit card company that until they repay you the taxpayer, you want to renegotiate your own payment terms with them. Be specific: you want to reduce your monthly payment to say $25 or $50 and you also request that they not report you to the credit agencies as delinquent. If they say no (and I GUARANTEE they will), then I urge you to tell them to take their unsecured debt and write it off because you're not going to be sending them any more money.
After all, you'll never see most of the taxpayer's bailout money again. Don't kid yourself, these companies receiving the bulk of the TARP & TALF money (Citi, BofA, AIG) are BANKRUPT companies that will never bounce back from their bottomless losses. If you as a taxpayer are more concerned with how your family will survive and pay your rent or your mortgage or your electric bills, STOP sending these criminal enterprises your hard earned money.
I call these banks and insurance companies criminal enterprises because although they apparently broke no laws bankrupting the world's economy, they all lied to investors about the enourmous nature of their exposure to risky investments and bad loans. Six months ago, most were telling investors that their fundamentals were sound (kinda like John McCain telling us the fundamentals of our economy were sound, remember that?).
Well unfortunately for these executives, there are laws that govern what executives running publicly held corporations can or cannot say about the state of their businesses. It's simple, they ALL mislead us right up until the total collapse of the financial markets in the last quarter of 2008.
For this, they should all be prosecuted to the fullest extent of the law. Since that means that the SEC would be involved, I wouldn't count on this scenario playing out so:
The only way for you as a taxpayer to recover some of your money that's being dolled out to these criminal enterprises is to STOP paying them. After a few months of collection calls, they'll be willing to negotiate a lesser payoff of your balances. That's when you can make your best offer and potentially save thousands of dollars in principal and interest payments. Just do it.
What do you think?
Thursday, February 26, 2009
Citigroup's still cheating all of us
A few weeks ago I was "RATE JACKED" by this most irresponsible and arrogant of banks. I received a notice informing me that my credit card rate would skyrocket to almost 17% from under 10%. As a former banker I understand very well the games the banks play so I called them and after speaking with a couple of representatives, I managed to get my interest rate lowered back down to 6%. That's right, 6% FIXED for another 6 months.
But that's not what I wanted to talk to you about today.
Just as Citi is about to absorb BILLIONS more tax dollars into the enormous financial black hole that this enterprise has come to be, another complication has emerged. One of Citigroup's most profitable holdings is in Mexico. Grupo Financiero Banamex. Some Citigroup executives are worried that an increased U.S. stake might subject the bank to pressure to relinquish some or all of its ownership of Grupo Financiero Banamex, the No. 2 bank in Mexico by assets, the Wall Street Journal said today. Really?
This is yet another outrage. Now there's talk that Citi and the Fed could consider "negotiating" with Mexico through diplomatic channels to have them "waive" this requirement in their laws. That's incredible. As the economy has worsened and my business revenue has declined dramatically, I have been forced to put some of my most treasured personal assets up for sale to pay my bills. But Citi is not being asked to do the same.
So while more of my tax dollars are being poured into this virtually bankrupt enterprise, I'm being forced to sell assets while Citi just keeps sucking up Fed money with no pressure to do the same. How is that possible??? Is it actually better to strong arm the Mexican government than to force Citi to unload some of its valuable assets? Apparently so.
I am just about ready to tell Citi to take my $24,000 credit card balance and stick it where the sun don't shine and I'll gladly take the hit on my credit score. It's gotten to that point.
With the economy in such bad shape I need to start looking out for myself and saving $24,000 is the first step in ensuring that I put my family and my financial well being in a position to survive the very crisis that Citi is responsible in great part for causing. I hope other courageous consumers that also have credit card balances with Citi will decide to do the same and send these bastards a clear message. What do you think?
But that's not what I wanted to talk to you about today.
Just as Citi is about to absorb BILLIONS more tax dollars into the enormous financial black hole that this enterprise has come to be, another complication has emerged. One of Citigroup's most profitable holdings is in Mexico. Grupo Financiero Banamex. Some Citigroup executives are worried that an increased U.S. stake might subject the bank to pressure to relinquish some or all of its ownership of Grupo Financiero Banamex, the No. 2 bank in Mexico by assets, the Wall Street Journal said today. Really?
This is yet another outrage. Now there's talk that Citi and the Fed could consider "negotiating" with Mexico through diplomatic channels to have them "waive" this requirement in their laws. That's incredible. As the economy has worsened and my business revenue has declined dramatically, I have been forced to put some of my most treasured personal assets up for sale to pay my bills. But Citi is not being asked to do the same.
So while more of my tax dollars are being poured into this virtually bankrupt enterprise, I'm being forced to sell assets while Citi just keeps sucking up Fed money with no pressure to do the same. How is that possible??? Is it actually better to strong arm the Mexican government than to force Citi to unload some of its valuable assets? Apparently so.
I am just about ready to tell Citi to take my $24,000 credit card balance and stick it where the sun don't shine and I'll gladly take the hit on my credit score. It's gotten to that point.
With the economy in such bad shape I need to start looking out for myself and saving $24,000 is the first step in ensuring that I put my family and my financial well being in a position to survive the very crisis that Citi is responsible in great part for causing. I hope other courageous consumers that also have credit card balances with Citi will decide to do the same and send these bastards a clear message. What do you think?
Tuesday, February 24, 2009
AIG - Need I say more?
Today, Congressman Elijah Cummings said on CNBC that in a meeting with the CEO of AIG in mid January he was told that AIG planned on beginning to repay the money they had borrowed very soon. Yesterday, the Street began suggesting that AIG would report the world's largest ever quarterly loss, 60 BILLION dollars. How in hell will AIG repay taxpayers when their losses continue to mount at this rate??????? They can't. That's the simple answer.
It seems to me that taxpayers still don't know how AIG has used the funds it has already received and that a lot more money will have to be pumped into that irresponsible company to save it from complete collapse. Are we as taxpayers ready to sink more of our limited resources into AIG?
With CEO's of publicly held corporations misrepresenting the soundness of their businesses' financial health on a daily basis, shouldn't the SEC start looking into these officer's misleading statements? Where is the SEC anyway?? And where is Tim Geithner while these financial institutions continue to implode while they hide the true miserable state of their balance sheets and regularly mislead investors???
I suggest that AIG be forced into bankruptcy and the sooner the better. Why? Simply because a bankruptcy filling will force these deadbeat companies to reveal the true nature of their sad state of affairs. Without a bankruptcy filling, taxpayers and our government representatives are having the wool pulled over their eyes and nothing in the short term will change that.
CEOs of these "banks gone bad" have ZERO vested interest in telling us the truth. Let bankruptcy, the truth serum of failing business, be the medicine that sheds light on the current and real state of these enterprises and let the chips fall where they may. What do you think???
It seems to me that taxpayers still don't know how AIG has used the funds it has already received and that a lot more money will have to be pumped into that irresponsible company to save it from complete collapse. Are we as taxpayers ready to sink more of our limited resources into AIG?
With CEO's of publicly held corporations misrepresenting the soundness of their businesses' financial health on a daily basis, shouldn't the SEC start looking into these officer's misleading statements? Where is the SEC anyway?? And where is Tim Geithner while these financial institutions continue to implode while they hide the true miserable state of their balance sheets and regularly mislead investors???
I suggest that AIG be forced into bankruptcy and the sooner the better. Why? Simply because a bankruptcy filling will force these deadbeat companies to reveal the true nature of their sad state of affairs. Without a bankruptcy filling, taxpayers and our government representatives are having the wool pulled over their eyes and nothing in the short term will change that.
CEOs of these "banks gone bad" have ZERO vested interest in telling us the truth. Let bankruptcy, the truth serum of failing business, be the medicine that sheds light on the current and real state of these enterprises and let the chips fall where they may. What do you think???
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