Showing posts with label Finance. Show all posts
Showing posts with label Finance. Show all posts

Monday, August 10, 2020

What the Hell Happened With Kodak?

When I wrote about this earlier, I was convinced that this was an example of Trump-era insider trading. It's the kind of thing that is blatant, out in the open, and will largely go unpunished because there's no one minding the store.

Turns out, there are some legs to this story:
Shares of Eastman Kodak Co. KODK, -24.93% plummeted 45% in active premarket trading Monday, after reports the U.S. International Development Finance Corp. is withholding its planned $765 million loan after the deal came under regulatory scrutiny. The stock had rocketed 13-fold in two days, after it was announced on July 28 that the IDFC would provide Kodak a the loan to help produce the ingredients to maker generic drugs. Under question how Kodak controlled the disclosure of the loan, as the stock soared 25% in active trading the day before the news was reported, amid active stock option trading. Kodak disclosed on Friday that it appointed a special committee to oversee and internal review of recent activity by the company and related parties in connection with the announcement of the potential government loan. As of Friday's close of $14.88, the stock had pulled back 55% since July 29.
I'm still not convinced anything will come of it. Senator Kelly Loeffler and Senator Richard Burr should have been forced to resign for their COVID-19 profiteering. In the Trump era, the only maxim that applies is, "you must let me wet my beak."

Monday, June 9, 2014

Look What Happens When You Ruin the Economy

We have not recovered from the financial crisis of the late 2000s because nobody has any money:

U.S. fertility is not recovering from the financial crisis — and demographers aren’t sure why.

The fertility rate fell to a record low 62.9 births per 1,000 women aged 15-44 in 2013, according to the National Center for Health Statistics.

The total number of births, at 3.96 million, inched up by a mere 4,000 from 2012, the first increase since the financial crisis. But the total fertility rate, or TFR, the average number of children a woman would have during her child-bearing years, fell to just 1.86, the lowest rate in 27 years. TFR is considered the best metric of fertility. A TFR of 2.1 represents a stable population, with children replacing parents as they die off.

Demographers expected the fertility rate to fall during recession, as financially strapped families put off childbearing. But what has surprised some demographers is both the depth of the decline and the fact that fertility has continued to drop even over the course of the country's five years of slow but steady recovery. The rate has fallen steadily each year since 2007, when it stood at 2.1 percent.

Wages have not kept up with this soft "recovery" and we still have far too many people who are unemployed. Couple that with the fact that your average job is rapidly becoming a two year temp-to-hire position paying less than what you made before and you have the recipe for a sharp demographic shift. Women would have more children if this were a more secure economy, and it isn't secure enough right now.

The very same people terrified of a foreign invasion of anchor babies have perpetrated this situation by ruining the economy, confiscating the wealth and assets of the Middle Class, and paying CEOs ridiculous amounts of money. Thomas Piketty scared the crap out of them because he was right--we have far too much inequality in America.

Thursday, October 4, 2012

Romney's Medicare Lie

This is one of those cases where Mitt Romney is going to lie, and then not get away with it, and his handlers and supporters are going to have an aneurysm when they realize that they simply cannot make stuff up and get away with it.

I really, really hope that Romney's lies from the first debate are called out for what they are--distortions of reality that bear no resemblance to actually governing this country. NBC news has that piece, cited on top, on their front page and I hope it gets more coverage.

"Obamacare" actually helped Medicare, and the more people who know that, the better.

Thursday, June 28, 2012

Brad DeLong Buries Austerity

The move to austerity crippled Europe; I don't think there is a sane person who would argue otherwise. But, austerity in America has been a huge bust, and you have to champion those who called it for what it was--stupid, irresponsible, and utterly, utterly ruinous.

One quibble--when DeLong celebrates Larry Summers, I know he's praising him in the big picture sense. In the small picture, however, it was Summers who argued against using TARP funds to aid small businesses.

I would argue that America's problem, economically, stems from the fact that not enough was done, or is being done, to stimulate small business activity.

This is the sort of madness that true economists face.

How much faith would you put in that nonsense? And yet, I can guarantee you that far too many decision-makers follow the line of thinking espoused by Pethokoukis rather than Krugman, et al.

Sunday, June 17, 2012

CEO Pay Continues to Rise

There is a great deal of suffering in the United States, but none of it is being experienced at the top. The pay of CEOs, on average, rose 2 percent in 2010 and 5 percent in 2011. Despite the fact that tax rates are incredibly low on the wealthy, job creation is still muddled and troubled and the rich are getting richer. At what point do people begin to realize that the shakedown of the American people has entered a tenth calendar year and is shooting for an eleventh with no break in sight?

So, if we were to raise the tax rate on everyone who makes more than a half a million per year by six percent, we'd fall into revolution and anarchy, would we not?

It is patently unethical to continue in this manner. The wealthy in America enjoy a standard of living completely unheard of on Earth as it is in Heaven. The suffering at the bottom grows and the comfort of those at the top races into the stratosphere. And Mitt Romney could very well be the next President, guaranteeing four straight years of unrestrained corporate greed with zero accountability.


Saturday, June 16, 2012

What Happens When the Banks Are Empty?

Correct me if I am wrong, but, when the banks are empty of deposits, there really is no reason to consider them banks anymore, right? And, when that happens, the economies of Spain and Greece are going to collapse further, and whatever cash these poor people have hoarded is going to be worthless anyway, wouldn't you say? Because that is what is happening right now--in parts of Europe, people are taking their cash out of the banks. These would be the same banks everyone is trying to prop up.

So, what we have here is a self-fulfilling prophecy. If you believe everything is failing, then your actions will contribute to that failure, especially if you no longer trust the institutions of the society in which you live.

Has anybody figured out what will happen when these countries tip into anarchy, revolution, and civil war? Or is everyone of the opinion that people are just going to sit around with no money, no jobs, no food, no homes and enjoy the summer weather?

About a hundred years ago, all of Europe fell into a massive war over far, far less than what is happening right now. Then, it was a misunderstanding among cousins and the death of some fat member of one of the royal families. Now, it is the story of millions and millions of people being asked to suffer needlessly for the sins of the elites.

Thursday, May 17, 2012

They Should Let Him Go

They should just let him go.

In America, when someone takes your money, you have the full resources of the courts and the rule of law to back you up and allow you to maintain your wealth.

In many countries, the legal system favors the government, or the power structure of the elites in that country. There are no protections. This is why, in Russia, for example, you can have a massive fortune and find yourself sitting in prison on trumped up charges and your fortune parsed out amongst Kremlin insiders.

Mr. Saverin doesn't understand how overseas banks can fail, and fail without notice, and how he can run afoul of the wrong bureaucracy and lose everything. In America, you have recourse. Anywhere else? Forget it.

The real outrage should be directed at corporations that pay no tax whatsoever while enjoying the protections of doing business in a country that has the rule of law. Those same people are sending a little coin towards Senator Schumer, however, so maybe that's what Saverin is really guilty of--failing to make a few timely donations to a handful of re-election campaigns.

Thursday, April 26, 2012

The Same Old Song and Dance

Our elites are scared.

What more can you say about a blaring headline and a story like this on MSNBC as we head towards the weekend? One authored by "senior producer" John W. Schoen? One that posits that our economy will be crushed if the Bush tax cuts expire?

Well, this is where you have to scream bullshit.

It's a very neat trick to link spending cuts with the expiration of the Bush tax cuts. They are not the "Bush-era" tax cuts; they are the tax cuts that gutless Democrats helped pass in the early 2000s and we are still paying a steep price for this neat little piece of fiscal insanity and monetary redistribution. They are what's killing this country. They are what is allowing the One Percenters to continue their scam. And their scam is obvious. In exchange for "creating jobs" they are going to continue to demand their tax cuts.

The problem with this scenario is that they're not creating jobs. They're hoarding their wealth.

I'm all for a rollback on these tax cuts. If they want to replace them with targeted incentives--like actually hiring people or investing in green technology--fine and dandy. But don't link these tax cuts to a "crushing" of America's economy. That's absurd.

Our elites--Bernanke especially--have failed to accomplish much of anything with regards to restarting America's economy. It's time to end the cozy relationship between failed Wall Street bankers and failed ex-Wall Street politicians and go back to a tax rate of 39% for everyone who makes more than $250,000 per year and a 45% tax rate for everyone who makes more than a million dollars a year. And if you have more than a billion dollars in assets, we'll be taking half, please.

It's the least you could pay for living in the one country on Earth where such wealth actually allows you to live without fear of paying a 90% rate or being thrown in prison with the other oligarchs because the Prime Minister thinks you may be too popular for your own good.

Tuesday, December 6, 2011


Paul Singer's article leads with a whopper of a mistake. To say that Newt Gingrich, circa 1979, was "impoverished" is ludicrous.

Impoverished by Washington standards? Impoverished, as seen through the filter of modern journalistic integrity, whatever that is? Impoverished by whose standards, I want to know.

The article says that Gingrich was making a little over $10,000 per year in 1979, after having been denied tenure (which was for being too focused on running for Congress in the 1970s, apparently). His "debt" was probably some sort of loan or something of that nature, and I'm surprised that he did not own a home at that point in his life, but oh well.

In any event, this is what poverty looked like in 1979:

Now, I'm an idiot. And if I can look up something like this, and find where the poverty line was in 1979, why can't a big shot reporter with editors and a full-time job look it up? Given his family situation (a wife, several kids), Gingrich would have been at least two or three thousand dollars above the poverty line, and living in Georgia, to boot. Georgia, in case you didn't know, has traditionally enjoyed a lower cost of living than, say, Washington D.C. or the Mid-Atlantic region.

In other words, Gingrich wasn't "impoverished" by any stretch of the imagination. His "debt" was probably being serviced and his family was probably living at a level no better or worse than any of their contemporaries.

Friday, November 11, 2011

MF Global Holdings Terminates Everyone

I think it's a fairly safe bet that a lot of those people were prepared for this to happen. I don't think it was quite the "aftershock" that they are making it out to be here. When the whole rotten edifice collapsed at the end of October, John Corzine was the one holding the bag.

It is highly likely that he will be the face of this collapse, but was he the person with the sole responsibility for what happened? Probably not. I do not think he's going to walk away from this and go back into politics any time soon.

The end result is that a lot of people are thrown out of work. How do you muster up feelings of sympathy for people who worked for a firm that basically placed bets on what was going to go seriously right or wrong for various economic systems around the world? How do you feel anything for an employee of a brokerage firm that played a small part in helping to further wreck the economy of the world by placing bets on whether or not this bank or this country would get a bailout?

I suppose there were people at the bottom of the spectrum from Corzine who were not involved in the crapshoot. Feeling sorry for those people is admirable. I still don't know how to muster up that kind of sympathy, but I'll try.

Tuesday, November 1, 2011

Does Corzine Sound Like a Crook?

While shocking, this story fails to put the lede in the right place. Former Governor of New Jersey John Corzine has not been accused of wrongdoing. Customer funds have been misallocated. And there is no allegation, at this time, of wrongdoing. The article does make it look like Corzine is a crook, however, and that's why the whole thing sounds pretty fishy right now.

So what's really happening here?

Our moneyed elites can't run anything and the complexities of modern finance are too much for a class of people that has skated for decades on good looks, connections, and buying the answers to tests. Is Corzine a symbol of incompetence, greed, or laziness? Or does he just have trouble finding good help?

Saturday, October 29, 2011

The Truth Comes Out When The Party Starts

This is fairly sickening, but probably goes on more than people realize. It is news that there really are people making money off of the misery of their fellow Americans? No, but it is news when it can be presented in a visual way. These photos are the real story.

Who has the karma to be this callous?

The young lady pictured above is not homeless. She is mocking someone who has been made homeless by the predatory tactics of the law firm for which she works or is associated with. She is making light of the fact that Americans are being thrown out of their homes because the Steven J. Baum law firm makes money taking away the homes of people who aren't able to keep up with their mortgage payments. And while someone has to do this work, it is more than apparent that the Baum firm sees this sort of predatory behavior as necessary and justified.

Again, karma is a real bitch. Economic disaster can hit any time and anywhere. And now the world knows what the Baum firm thinks of itself and the people it has spent the last few years tearing apart. Well, 'may you live in interesting times' was never more apt.

Wednesday, August 17, 2011

Governor Chris Christie is Firmly on the Side of the Millionaires

It doesn't get any more blatant than this:

This would have taken an extra 1.78% out of the pockets of millionaires and businesses that make over a million dollars in taxable gross income, something that doesn't even seem too unreasonable, given the times in which we live.

I think what is happening here is a microcosm of the problems that we face. Tax rates are almost artificially too low. Many Americans enjoy tax rates that are almost absurdly low and many corporations pay virtually no income taxes. I live in Europe where there are tax rates that would give an American millionaire a heart attack. And we can't discuss a meager increase in taxes to help make up enormous budget shortfalls?

Where's the room for debate? What is, and what is not acceptable?

Here in this one veto message from New Jersey Governor Chris Christie, which has exactly three "reads" in his Scribd account as I'm looking at it now, is the American problem, writ large. No matter what, taxes cannot be raised. Not even by small, pithy amounts. Not for any reason.

Where, then, do you find the middle ground to compromise on anything? You can't.

This is, of course, a veto message. The legislative process is very complex, so I'm sure that this is not the only reason why the bill was vetoed. I get that. But what struck me was how small the increase on tax rates for people making over a million dollars per year was. It was almost nothing. Well, it would mean a lot to a person making nothing per year, of course, but I think we are well past being able to argue that cutting taxes creates jobs. It doesn't.

Fine. If taxes can't be raised, then we have to cut spending. Let's start with all the things that have to be cut, and let's let the Republicans explain why old people have to starve or go without medicine and let's watch them pitch wounded Veterans out onto the street by the busload. Let's cut Medicare and Social Security and plunge the country into Dickensian poverty.

Run on that come election day.

Monday, August 8, 2011

So Long to Whatever is Left of Your 401K

So many Americans have bailed on saving for retirement that I don't think this is such a huge thing right now. But there is a real danger that what is left of the retirement savings for millions of Americans could be wiped out in a major, prolonged stock drop.

I'm less concerned about large companies and more concerned about people who have dwindling retirement portfolios (yes, the two are intrinsically linked, but I think Bank of America can absorb a loss much easier than a family with one breadwinner who has $75,000 in a 401K or something to that effect).  There's very little left to give in this economy. The margin of error keeps shrinking--that margin between giving up food, medicine, or a payment on a credit card or the mortgage and the dwindling value of the weekly paycheck--and if it shrinks to the point where enough Americans are hurting, who are they going to blame?

I'm afraid they'll blame the political class. And if so, what does that mean? Does that mean a wave of amateurs will take over and run things? They certainly couldn't do any worse than the crew running things now. But that sentiment is a dangerous one. The American form of government is too complex to entrust to amateurs. What we need is reform, both in terms of how money is used to buy influence and in how the media is incapable of explaining the hard choices ahead. Ethics and information are the key elements of reform. We need hard and fast rules to deal with soft money and we need a population that is better informed.

Overwhelmingly, this crisis was triggered by the failure of the Republican Party to negotiate in good faith on the debt ceiling. The Democrats conceded a great deal, and governed with a great deal of pragmatism. There is none of this "both sides are to blame" nonsense being spread around here. If you haven't been paying attention, don't blame those of us who see the modern Republican Party as an extremist organization bent on destroying the American economy for political gain.

Thursday, August 4, 2011

When Will the Recipients of Tax Cuts Start Creating Jobs?

So, that's how it's going to be, huh? The American people have suffered through nearly a decade of spiraling debt, reduced purchasing power, and stagnating wages. We keep hearing about how the economy will improve if only we can keep taxes on the richest Americans low. We keep hearing about how much worse things will get if rich people have to pay more in taxes. We keep hearing about economic armageddon if someone with a private jet has to pay more to Uncle Sam at the end of the tax year.

The problem with that kind of thinking is that it rewards the laziness of the media and tricks the American people into voting against their economic self-interest. If cutting taxes on the wealthy actually created jobs, we'd have jobs flying out of our asses. Instead, we have nothing but crap everywhere. Wow, you made it this far? Might as well keep going, huh?

And what do we see after extending the Bush tax cuts? A limp, almost indescribably bad job market. Millions unemployed, millions more under-employed, and untold numbers of young people living at home, unable to find decent jobs.

David Frum begins the soul searching here, but that's not what needs searching:
Frum doesn't go far enough. It's time to attack the idea that tax cuts will produce anything other than deficits and unemployment. Because that's what you get when you cut the wrong taxes for the wrong people--you reward bad economic behavior and end up with bad economic results. The American economy will not recover unless good behavior is rewarded. Do you think I would shed a tear if someone got a tax cut in exchange for hiring ten people? Or for extending benefits or for investing in worker training? Hell no. That's a tax cut I would happily defend.

We need to find a way to bring revenues up (at the state, local, and Federal levels) without causing America's rich to panic and go live in Switzerland. This has to be a gradual thing, because, after all, everyone knows that as soon as taxes in the U.S. go up, the rich will flee.

Yeah, right.

Monday, May 23, 2011

Foreclosure Blight and the Responsibility of Banks

Banks have become homeowners, and so it stands to reason that banks should be treated like homeowners when it comes to blight:

[...] the foreclosure crisis is riddling communities with blight because no one wants to shoulder the responsibility of maintaining foreclosed homes.
"There's one on every block," said Elenes, a community organizer with the Alliance of Californians for Community Empowerment in Watts, a low-income South Los Angeles neighborhood pockmarked with foreclosed homes. "All we want is for the banks to step up and be good citizens."
Communities across the nation have made little progress in getting banks to maintain foreclosed properties, and as the ongoing crisis matures and bank-owned homes fall into advanced stages of disrepair, cities and residents are getting desperate. In a keenly watched move this month, Los Angeles forged a new strategy — it sued one of the world's major financial institutions, Deutsche Bank, to force it to take care of 166 properties, both vacant and renter-occupied, charging the blue-chip German giant has turned into the city's largest slumlord.
"The buck stops with the owner of record. We're saying, 'You are an owner like any other owner,'" said Julia Figueira-McDonough, deputy city attorney.

It's only fair. If you want to take away an asset, then that asset becomes your problem, not the problem of the people who live around your blighted property. A severely blighted property can drive down the value of the homes around it--and this creates a liability issue for banks. An entrepreneur could start a company specializing in preventing, maintaining, and rehabilitating blighted properties and the banks should be forced to use that sort of service in order to prevent creating "holes" in neighborhoods all over the country.
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Tuesday, May 10, 2011

Another Refinancing Craze?

Americans are refinancing their homes these days, and I don't know if this is because they want to save themselves from foreclosure or help build up another bubble in the housing market:
Applications for U.S. home mortgages rose last week, helped by refinancing demand as interest rates fell for the third week in a row, an industry group said on Wednesday.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, rose 4 percent in the week ended April 29.
The MBA's seasonally adjusted index of refinancing applications climbed 6 percent, while the gauge of loan requests for home purchases added 0.3 percent.
It makes sense on the surface--lower interest rates are triggering refinancing--but what does it mean in the long term? Is it really saving people money or are they getting involved in the creation of another housing bubble? Are strapped consumers taking "equity" out of a home that they are under water in (where possible) or are people taking what little equity they still have out of their home in order to compensate for lower wages and under-employment?

I don't think we ever really got a handle on the mortgage industry. I don't think it has been reformed, re-regulated and restructured in such a way as to benefit American homeowners and it could, I suppose, be so badly structure right now that any surge in refinancing might trigger the creation of another mini-bubble.

There are a vast number of homes on the market--adding in foreclosed homes puts the number at the high end of nine million previously owned homes being available for purchase. And, given all of that inventory, which has caused a drastic decrease in property values, why would you go and "reset" everything, given that no one really knows where the market is headed? Can you continually refinance yourself into oblivion if the value of your home doesn't stabilize? 

If I was a homeowner right now (got out a year ago and it wasn't pleasant), I'd think long and hard about any kind of refinancing arrangement. You might save yourself a little money. But you might end up dealing with an unscrupulous new lender that might engage in unethical or nefarious practices. There is a real problem in this country with banks taking away homes that that they cannot prove they own because the deeds and the financing paperwork are not squared away. Why would you wade into this mess and create another opportunity for a lender to take a mortgage (yours) and bundle it with others and then refinance or resell those loans?

Sounds like a recipe for disaster to me. And, for what? Saving a hundred bucks a month or not much more? Is that worth losing a home over?
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