Economic Articles from 2018
Guess Who’s Making Sure Many Huge Corporations Stay Profitable?
By Jim Hightower
Posted February 25, 2018
The hustlers claim that job incentives are a sound investment of our tax dollars, because those new jobs create new taxpayers, meaning investments soon pay for themselves. Hmmm … not quite. In fact, not even close.
Last year, Good Jobs First tracked the 386 incentive deals since 1976 that gave at least $50 million to a corporation, and then it tallied the number of jobs created. The average cost per job was $658,427. Each! That’s likely far more than cities and states can recover through sales, property, income and all other taxes those jobholders would pay in their lifetimes. Worse, the rise of megadeals in the past 10 years has made the job-incentive argument mega-ridiculous: New York gave a $258-million subsidy to Yahoo and got 125 jobs — costing taxpayers $2 million per job. More…
Big banks rack up $6.4 billion in ATM and overdraft fees
by Heather Long
Posted February 22, 2018
If you’ve ever had to pay $3 (or more) to get your own money out of an ATM machine, you aren’t alone.
Nobody likes those fees. Except banks.
America’s three biggest banks — JPMorgan Chase (JPM), Bank of America (BAC) and Wells Fargo (WFC) — earned more than $6.4 billion last year from ATM and overdraft fees, according to an analysis by CNNMoney that was verified by S&P Global Market Intelligence.
That works out to over $25 in fees annually for every adult American.
Despite public outcry, banks show no sign of scaling back on fees. The big three banks collected nearly $300 million more in ATM and overdraft fees in 2016 than they did in 2015. More…
No justice for consumers in Equifax probe?
by Alexandra Jacobo
Posted February 16, 2018
The head of the Consumer Financial Protection Bureau , Mick Mulvaney, has decided to retreat from a full-scale probe of Equifax’s inability to protect the personal data of U.S. consumers.
According to Reuters, government and industry sources CFPB efforts to investigate Equifax have “stuttered” since Mulbaney took over from previous CFPB direction Richard Cordray, who resigned in November.
CFPB claims that they have “The desire, expertise, and know-how in-house to vigorously pursue hypothetical matters such as these.” Yet, sources for Reuters say Mulvaney has “not ordered subpoenas against Equifax or sought sworn testimony from executives,” normally these are routine steps when launching a full-scale probe. More…
California Is Pondering a New Kind of Bank
by Kevin Drum
Posted February 12, 2018
States can legalize marijuana all they want, but it’s still a federally prohibited Schedule I drug. This presents legal marijuana dealers with a problem: where do they keep their money? Banks are under federal supervision, and few of them want to take the chance of knowingly accepting drug money that might later get them in trouble with the feds. California, as always a bellwether for the nation, thinks it might have an answer:
California’s treasurer and attorney general will study whether the state should create its own publicly owned bank to serve the state’s now-legal cannabis industry….There are numerous obstacles to creating such an institution, especially if the plan is for the bank to openly work with cannabis companies.
John Chiang and other public officials have said the lack of banking access for cannabis companies, which has left the industry largely reliant on cash, poses public safety risks and makes it more difficult for the state and local agencies to monitor the industry and ensure businesses are paying their taxes. More…
2018: Yearly Forecasts for Systemic Breakdown
By Jim Willie CB
Posted February 9, 2018
The magnificent event that occurred ten years ago has been called the Global Financial Crisis, centered and triggered by the Lehman Brothers failure as a firm. It was actually a suffocation event with killjob, whereby both Goldman Sachs and JPMorgan bought several $billion in Lehman mortgage bonds and never paid for them, thereby killing Lehman from a very severe sudden liquidity drain. What happened in 2007 (initial bust symptoms) and 2008 (final crisis unfolding) was horrible and quite devastating. What comes in 2018 in the systemic breakdown and global crisis will be triple in magnitude of damage and triple in breadth with range of extended wreckage. This year will see sovereign bonds enter failure, in an unprecedented manner.
Since the Lehman failure, all insolvent structures have become more insolvent, fortified with more leverage, flushed with more funny money, and been kept in place as the power center for the USGovt istelf. The Wall Street banks stole the $700 billion in TARP Funds as a launching pad for sacking Washington DC in a grand fascist display.
The broken silos of financial corruption have grabbed political powers, and written US legislation. In the last ten years, nothing has been fixed, or event attempted toward remedy. Nothing has been liquidated due to deep insolvency and rot. No amplified credit or monetary spigots have been turned off or even turned down. No power control rooms have been put to pasture and removed from the corrupt helm despite their failures. No economic development in the West has even been attempted. All the broken elements have been ramped up with bloated largesse. Wreck, wash, rinse, repeat, but with greater volume and emphasis, while the propaganda blasts on. What was seen in 2008 with Lehman failure will next be seen on a systemic level, since instead of remedy, the entire system has been subjected to same abuses that led to the mortgage finance and housing bust. More…
How $10,000 of original student loan debt turned into a repayment scheme of 30 plus years
by Lynn Petrovich
Posted February 8, 2018
Between 1984 and 1987 Monica took out $10,000 in student loans. Over the next 30 years she made payments totaling over $24,000, yet she still owes more than $3,000 on her loans.
Monica, like most students entering college right after high school, was a teenager when she signed her student loan contracts. It is apparent she had no idea what kind of indenture she’d “agreed to.” This can be said for the majority of student loan borrowers.
Financial education at the high school level is seriously lacking, if existent at all. Student loans are originated between borrower (student) and lender without much scrutiny, oversight, awareness, or repayment considerations (seriously, what sane person could have thought up this repayment scheme?)
Over the past decade, through tax preparation work – both pro bono and paid – I’ve seen many student loan borrowers who, like Monica, have struggled not only to make ends meet, but also try to understand what’s happening with regard to their student loans. I’ve watched as refundable credits in the thousandsof dollars have been seized by federal and state agencies year after year to pay for student loan debt. More…
The day I found out it was all rigged
by Simon Black
Posted February 5, 2018
Several of the largest banks had developed autonomous software that was capable of trading billions of dollars without the need for human beings.
On May 6, 2010 at 2:45PM, their software started to fail… inexplicably selling stocks to the point that prices collapsed nearly 10% in minutes. They called it the Flash Crash, and, even though stocks had largely recovered by the end of the day, the banks lost an enormous amount of money.
Then something interesting happened. Within a few days, the major exchanges announced that they would CANCEL many of the trades that took place during the Flash Crash window. In other words, they were handing the banks their money back.
They were canceling a profitable trade that I had placed during the Flash Crash window, effectively giving it back to the banks. When the banks’ trading algorithms performed well and they all made money, the profit was theirs to keep. More…
How the banks won over Washington again
By Zachary Warmbrodt
Posted January 28, 2018
Less than a decade after being blamed for fueling the worst financial crisis since the Great Depression, banks are winning again in Washington.
The rebound for the lenders has been so remarkable that Republicans and Democrats in Congress are pushing to scale back financial regulations imposed in the wake of the meltdown — one of the few areas where the two parties agree.
President Donald Trump, who once vowed not to let Wall Street “get away with murder,” has dropped the demonizing campaign rhetoric and recruited industry veterans to his administration. His Treasury Department has drawn up a series of recommendations for trimming the post-crisis rule book. Even the Federal Reserve, the top banking regulator, is working to relax safeguards. More…
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