“We’re going to have to make some tough choices” about the deficit and national debt, President Obama said to a crowded gymnasium full of supporters at Indian Hills Community College, after a lengthy riff on how the unsustainable debt would need to be tackled.

This, unlike most of what the president said during the town hall meeting, was met with silence.

“I noticed I didn’t get a lot of clapping about the whole ‘We’re gonna have the hard choices’ thing,” the president ribbed the crowd.

The President is ribbing the crowd? Now that’s what I call “The Audacity of Hope.” Half million dollar pizza parties. The most expensive inauguration in history. After this gentleman spent all of last year more than tripling spending (yes, I know, I know, it was all Bush’s fault) now he wants to tell the American people it is time to make some hard choices?

More frustrating than the endless campaigning and political posturing is the notion that the American people are so bloody stupid, they will not leap to the same conclusions I just did. Further, he tells us this stuff as if he just thought of it. Haven’t the tea partiers, for one, been screaming about these very problems for over a year?

Could it be President Obama is not aware why his audience sat on their hands for his remark about “hard choices?” I cannot prove that the people of Ottumwa, Iowa agree with my assessment but perhaps this might be a reason why he did not receive the adulation he is used to and so craves:

It is offensive to be lectured to about fiscal restraint by a man who has been spending taxpayer money like a drunken sailor for the better part of a year and a half, bailing out and covering for reckless companies with reckless management styles that continue to scam the American people, hiding the true cost of the legislation his Congress has been ramming down our throats and promising transparency while delivering the opposite.

The people of Iowa, and the rest of American for that matter, have been practicing plenty of fiscal retraint as they deal with high unemployment, watching their savings dwindle to dangerously low levels amidst an uncertain future with an administration that appears tone deaf as to their problems.

Any President that keeps trying to sell the bill of goods that cap and trade is going to help solve our economic problems instead of finally planting his feet behind the desk to figure out how to put more people back ot work in this country really needs to talk less to the American people – and listen more.

“This will bear on how we think about our federal budget in the future,” [Obama] said. “Everybody dislikes Washington right now, and everybody wants to lower their taxes. Everybody hates waste in government. But at the same time, you know, government does some important things like helping to make sure you’ve got clean drinking water and that your roads aren’t full of potholes.”

Please Mr. President, stop telling me what I hate. I don’t hate taxes. I am more than happy to pay my fair share and do so regularly. I hate when my taxpayerdollars go to bailout out the actions of corrupt actors who are not held to the same rules as I am. I do not hate government. I hate bloated government, local, state and federal, that enjoys no end of perks and bloated salaries and perks. I appreciate the good things that government does, which is why I pay taxes. What I don’t appreciate is the things my tax money is supposed to pay for – like education – gets “borrowed” away and never returned.

Clearly, the President has no idea what I hate which gives me a clear indication of why his policies have nothing to do with the urgent needs of the American people.
Close attention need by paid to the following:

…Earlier in the day, back in Washington, DC, he’d presided over the first meeting of his Debt Commission, which will issue recommendations after the November 2010 elections on ways to reduce the $12.8 trillion national debt.

“I’ve said that it’s important that we not restrict the review or the recommendations that this commission comes up with in any way,” the president said at the meeting. “Everything has to be on the table. …This means that all of you, our friends in the media, will ask me and others once a week or once a day about what we’re willing to rule out or rule in when it comes to the recommendations of the commission. That’s an old Washington game and it’s one that has made it all but impossible in the past for people to sit down and have an honest discussion about putting our country on a more secure fiscal footing. So I want to deliver this message today: We’re not playing that game. I’m not going to say what’s in. I’m not going to say what’s out. I want this commission to be free to do its work.”

Could it be he is not going to give you any details about what is “in it” until after the midterms because if he told you now, all his herd mentality Dems insistently following Pelosi and Reid off a cliff would be voted down this November? Is that why we are not getting a report from the Debt Commision until after that?

In Ottumwa, the president previewed for the crowd that whatever the commission comes up with, “we’re going to have a very tough debate about how to bring down our deficits.”

He continued, “as this debate unfolds, I just want everybody to pay attention to what folks are saying. A lot of times politicians will tell you, ‘I’m going to cut your taxes, I’m going to lower the deficit, I’m going to expand Medicare.’”

Don’t settle for that, the president told the crowd. “Ask every politician when they say they’re going to balance the budget and deal with the deficit: ‘What exactly are you going to cut? What spending are you willing to eliminate? Are you going to eliminate funding for sewers? Are you going to reduce the cost of Medicare? Because there’s no such thing as a free lunch.”

Who the hell out here has been getting a free lunch. The free lunch has gone to the folks at Goldman Sachs, Fannie and Freddie, and GM (who claim they paid back their bailouts — however they did it with other TARP money).

A free lunch? Why does President Obama insist upon being condescending? Beyond his pronouncements from on high about “bitter voters,” this reminds me of candidate Obama’s pronouncement about Democrats and abortion during the campaign. As reported by CBS News:

“The mistake pro-choice forces have sometimes made in the past, and this is a generalization . . . has been to not acknowledge the wrenching moral issues involved,” he said.

Really? Do we not? Telling us what we do and do not like or believe seems to be a pattern.

Reading the other fine print of his statement in Iowa, he wants us to ask other politicians what THEY are going to do – but we cannot ask the President what HE is going to do. “We’re not going to play that game?” All he is doing is playing games, while taxpayers can only look on in frustration and disbelief.

The president said “the way folks talk about it in Washington,” you might think the debt could be solved by reducing waste and abuse, eliminating foreign aid and earmarks. But those are relatively small parts of the budget, he said.

Which “folks” are these, exactly?

“We could eliminate all foreign aid and all earmarks and we’d still have a huge problem, because most of our budget goes to Social Security, Medicare, Medicaid and defense spending, about 70 percent of the budget. Everything else we do is only about 30 percent of the budget. So this is going to be a tough bunch of choices that we gotta make here.”

Okay – so here is the bitter pill to swallow – get ready folks. Here come the cuts! So that if you have been paying in to Medicare, as my mother has, for example, in her 50 years in the work force, you can expect less. Presidents like to point toward Social Security’s impending insolvency without mentioning part of the reason it is in trouble is because government keeps borrowing money from it that they do not put back.
Remember his economic advisor Austan Goosbee talked about privatizing Social Security? Do not be surprised if you hear rumbings next year, too – the same rumblings President Bush made several years ago. Now I ask you – would you want the private sector – otherwise known as Wall Street crooks – playing with your dough while you’re busy keeping the roof over your head and don’t have enough time to daily monitor their shenanigans?

“I just want everybody to be prepared” for this debate, which will take place over the next couple years. “Remember when I was running for office, I said I will not just tell you what you want to hear, I would tell you what you needed to hear. And you needed to hear that we’re going to have some hard choices about our deficit.”

Oh, that was my favorite comment of all. I have never heard a bigger pile of horse hooey! And that is saying something. He told everybody what they wanted to hear out on the campaign trail – unicorns and giant popsicles. But little else.

Is there anyone with the courage to stand up and insist that this President start telling the truth? The press has already proven themselves to be, almost uniformly, nothing more than notches on his bedpost, cowed from speaking up for fear of a lack of access, which would mean a loss of their $5 million dollar book deals.

Who is speaking for us?

Thank you. Rant over.

Citigroup Inc. is instituting annual fees on some current credit-card accounts in an attempt to offset strict new legislation that could dent its profits.

The move comes on the heels of several warnings from the banking industry, which has said that issuers would be forced to rewrite the playbook on plastic because new credit-card laws would take a bite out of their income.

Rates of between 20% and 30% aren’t sufficient for income purposes? The fact is, current card holders are paying for the undisciplined lending practices of the bank over the last 5 years.

These laws include new limits on interest-rate increases on existing balances and greater disclosures.

The legislation was written to prevent abusive practices on the part of the banks. The fact that it allows for the implementation of practices such as these paints the legislation as the equivalent of a ‘show trial.’

Typically, annual fees are associated only with cards that offer generous rewards programs. In recent years, few issuers have risked losing market share by charging annual fees across the board.

Now, Citigroup’s attempt to charge annual fees—perhaps the first time a large card lender has used such fees in response to the legislation—will be watched closely by competitors.

Card lenders are seeking ways not only to offset the effect of the legislation, but also to cope with growing losses stemming from souring credit-card loans.

Card issuers have been raising interest rates and fees, tweaking rewards programs, reducing credit lines and closing accounts.

“We have adjusted pricing and card terms for some customers as part of our regular account reviews,” said Samuel Wang, a Citigroup spokesman. “These changes also reflect the dramatically higher cost of doing business in our industry as we work to preserve the broad availability of credit. As part of this change in terms, a small number of Citi customers may be notified of an annual fee.”

Higher cost of doing business? What? Borrowing from the Fed at between 0-.25% is too high? These types of statements take a special type of gall. Wow!

The fee increase was reported earlier by blogs such as Bargaineering.com, and American Banker.

In one instance, a Citi cardholder was informed, in a mailer, of a $30 annual fee. This fee may be waived if at least $2,400 in spending is racked up on the card in a year.

Citigroup is experimenting with a range of annual fees, some in excess of $30.

Cardholders notified of these annual fees have two months to opt out, paying off their balances under current rates and terms over the rest of their contract.

Peter Garuccio, a spokesman at the American Bankers Association, an industry trade group, said, “Annual fees are one way that card issuers can reconfigure their card portfolios and reprice their products” following the credit-card legislation.

The new legislation, the bulk of which will be implemented in February 2010, aims to limit fluctuating interest rates and fees, and arm consumers with more information about their debts.

Given that the legislation goes into effect in February 2010, the banks are clearly trying to get all of these income generating, beat-the-consumer maneuvers in place well before then. Thanks Wall Street and Washington.

What a joke. Problem is, once again, the joke is on the American consumer.

LD

Related Sense on Cents Commentary:
    Uncle Sam Just Winked at Citi’s Credit Card Rate Increase (July 1, 2009)
    Banks Build Better Mousetrap (July 9, 2009)

Why is ‘high frequency program trading’ viewed with such skepticism? Select participants with advanced computer programs gain access to market flows prior to other participants and are able to act on it. That playing field is not level. I shared my disdain for this practice in writing, “Why High Frequency Program Trading Smells.”

What other battles are being waged by Wall Street firms looking to defend their turf at the expense of consumers and investors? Credit cards and credit derivatives. Which Wall Street firm has the greatest combined exposure to these businesses? None other than JP Morgan Chase.

The Financial Times highlights how JP Morgan Chief Hits at Credit Card Rules:

Jamie Dimon, chief executive of JP Morgan Chase, on Thursday hit out at strict rules on US credit cards, saying they would cost the bank’s lossmaking card unit up to $700m next year.

While Mr. Dimon is railing on new legislation aimed to protect consumer interests in the credit card space, he conveniently avoids mentioning how both JP Morgan Chase and Bank of America are already implementing procedures to skirt that legislation. How might these financial behemoths do that? Shift from fixed rate credit cards to variable rate. I exposed this maneuver a few weeks back in writing, “Banks Build Better Mousetrap.”

Dimon continues his defense of JP Morgan’s franchise:

He singled out the credit card provisions, which from February (2010..LD’s edit) will constrain lenders’ ability to raise rates for risky borrowers, and rules that propose to move most derivatives trading on to exchanges as two contentious areas.

The tough stance by JPMorgan reflects Wall Street’s new-found confidence in lobbying regulators and the government. After keeping a low profile during the crisis, many of the banks that repaid the bail-out funds are becoming more aggressive in Washington.

In regard to derivatives activity, JP Morgan has a dominant position in the market. Why? Their strong capital position, enormous balance sheet, and strong credit rating make them an attractive counterparty for customers. Make no mistake, JP Morgan has a license to ‘print’ money, and a lot of it, across the entire derivatives platform.

While Washington will tout how they are increasing regulation of the derivatives space, this business is truly multi-pronged. There are plain vanilla derivatives in more highly liquid sectors of the market. These ‘standardized’ derivatives will most certainly move to an exchange to create total transparency. Value added for customers will be minimal only because these markets are already fairly well defined and exposed. JP Morgan and other Wall Street firms will cede this ‘standardized’ space while they fight tooth and nail to maintain their enormously advantageous position in the area of ‘customized’ derivatives.

There is little to no transparency in the world of customized derivatives and as a result the bid-ask spreads are very wide. Cha-ching, cha-ching. Jamie and his friends on Wall Street are working extremely hard to keep it this way.

In their defense, it is likely not functionally feasible to move many customized derivatives to an exchange. What should regulators compel them to do? JP Morgan and every other financial firm on Wall Street should have to report every derivatives transaction to a system known as TRACE, which stands for Trade Reporting and Compliance Engine. This system currently only covers transactions within the cash markets and not derivatives. What does that mean for investors? No transparency and price discovery for investors in the customized derivatives space. As such, Jamie and friends can keep those bid-ask spreads nice and wide and ring up huge profits in the process.

I won’t make many friends on Wall Street, and perhaps lose some of my current friends, but TRACE should be implemented across all product lines. For those involved in the markets, please access the TRACE system to gain a wealth of pricing data while keeping your brokers and financial planners honest!!

LD

Developments within the credit card space have exposed the true colors of these institutions . . . not that there was ever any doubt. Recall how consumer outrage at rapidly rising interest rates on credit cards pressured Washington to rein in the usurious business practices of the financial industry.

New legislation was badly needed as banks clearly utilized abusive business practices. The Wall Street Journal highlighted these developments in writing on May 21st, Credit-Card Fees Curbed:

“Credit cards are a tremendously valuable and useful tool for consumers, providing them with relief during critical moments,” said Senate Banking Committee Chairman Christopher Dodd. “This is a very important industry….We just want it to work better.”

The legislation marked a major defeat for the credit-card industry, as lawmakers complained that consumers are being hit with tricks and traps on their cards.

Well, while the legislators were in the front room having the photo ops, the bankers were in the back room building a new and better mousetrap, at least from their perspective.

The Los Angeles Times sheds light on how Credit Card Firms Try End Run Around New Federal Rules:

Banks are quietly changing the terms of millions of credit card accounts as they brace for a tough new law that will limit rate hikes.

The law would restrict interest rate increases unless a credit card has a variable rate. So at least two major lenders are switching their cards with fixed rates to — you guessed it — variable rates.

“It’s completely unfair,” said Linda Sherry, a spokeswoman for Consumer Action. “It’s an end run around the intent of the new law.”

That law is the Credit Card Accountability, Responsibility and Disclosure Act, which President Obama affixed with his signature in May. Its various provisions will be phased in between next month and February.

Who are these two major lenders? Bank of America and JP Morgan Chase. Given the size of their operations, watch every other credit card issuer set the same trap.

How exactly does the trap work? The banks try to baffle consumers with bull*%!# while sticking their hands ever deeper into our wallets. The Los Angeles Times highlights:

Los Angeles resident Victoria Afonina received a letter from Bank of America the other day informing her that “as a result of a change in our business practices, your annual percentage rate will use a variable rate formula based on the U.S. prime rate.”

“If the prime rate changes,” it said, “your APR will vary accordingly.”

Afonina, 44, told me she had to read the letter several times to understand what BofA was saying.

She said she’d been a cardholder with the bank for about five years and had enjoyed a relatively low fixed rate of 9.9% any time she carried a balance.

“When I finally understood what they were saying, and that my rate could change every month, I was shocked,” Afonina said. “I’m a good customer. Why are they treating me like that?”

Good question.

“The change from fixed to variable rates allows us to better manage our business as market conditions change,” said Betty Riess, a BofA spokeswoman.

And those new federal rules. . . ?

“Legislative and regulatory changes that limit our ability to re-price for risk were a factor in our decision,” Riess acknowledged.

How could Washington possibly write legislation which allows banks to set these traps and negate the very spirit of the law? Are they that stupid? Are the bank lobbying efforts that strong? Are legislators more concerned with the photo op and headlines than truly protecting consumer interests?

Yes, yes, and yes.

In the meantime, Sense on Cents strongly encourages you to pay down your credit card balances as quickly as possible so you will not be subject to this usury!!

LD

Someone PLEASE tell me how, in just FOUR SHORT MONTHS, Obama has managed to take over the banks, kick out the CEO of a private company, hand over a private company, financed with OUR money, to a union? Oh, and let’s not forget his handing over CA to another union, SEIU? How?? How has this happened???

Oh, wait – and how about those of us who pay back our credit card bills regularly now being saddled with having to support the losers who act in bad faith? Why do we have to constantly bail out, and ENABLE, those people who go over their means, be it credit cards or mortgages or car loans? And the Senate can stop acting like they give a crap about this issue – Obama VOTED to enable the credit card companies while a senator, along with many other Democrats. So just stop the charade – and stop laying the burden of irresponsible behavior on those of us who have good credit, or else WE might not have that any longer, either.

If you have not already read it, I recommend to you the following post by my good friend, SusanUnPC, “A Personal Note Only For Those Who Voted For Obama.” And I would add, not only “ditto,” but in the most pastoral way possible to those who did vote for Obama, you can just bite me for what you have unleashed on this country. If only there was a way to make only those people support the UAW/GM, pay the ne’er-do-wells’ credit card bills, etc.

Hmm – that’s a thought – let’s figure out how to do just that – let them pay for Obama’s taking over private companies, banks, and kowtowing to the unions (again – I am not anti-union in general, just when they try to take over states or private companies). A pipe dream, I know, but for this moment, it helps to keep my head from exploding…

“Usurers” is a dirty word. In dark streets, we call them “loan sharks.” Otherwise we call them “credit card companies.” It’s shocking that the interest they can charge along with the other little gouging games they play are legal. But we do have little stones to toss at this Goliath…

Legislation may be afoot to bring some measure of control to the ravenous appetites of the already profit-bloated credit card companies. But as Uppity Woman reported earlier, don’t get too excited about real reform from those who are supposed to be watching out for our interests yet.

There is something that could cut into the credit card profits. According to a report in the Wall Street Journal, a few legislators want to make it much easier for merchants to charge less to patrons who pay cash for products and services. It’s not that this cannot be done now, but merchants are under totalitarian-like restrictions placed on them by the credit card companies.

The law allows merchants to charge less [1-3%] for using cash, but card companies’ contracts with retailers can make it difficult. Merchants say they’re required to post two prices on every product if they want to charge more for credit card use, and that the credit card price be more prominent. Retailers can face penalties if they don’t.

These merchant/vendor fees, amounting to tens of billions of dollars, are also unfair to every customer who currently pays cash for a product purchased from a merchant who also takes credit cards. Proposed legislation would allow discounts for cash, check, and debit card payments and outlaw any reprisal against merchants who charge less for transactions that do not involve credit cards.

Will this go anywhere? Who knows. But in the meantime paying for things the old fashioned way—with cash– deflates some of that huge profit that credit card companies extract from our backsides.

The one thing consumers have been really angered over isn’t going to change at all in this bill. In fact, interest rate caps are no longer even mentioned. This ensures that the House and Senate can continue to enjoy eating at the contribution trough like the pigs they are –while taking their constituents for fools.

WASHINGTON(Reuters) – A bill to curb sharp practices in the credit card business was on track for approval by the U.S. Senate as early as Tuesday, with President Barack Obama expected to sign it into law before the end of the month.

Enactment of the legislation would mark the crest of a political backlash rising for years against the card industry amid sudden interest rate increases, hidden fees and aggressive marketing programs that have angered consumers, analysts said.

What’s the reaction from the Credit Card Companies?

“This is a tough bill and will hurt the profitability of credit card lenders in our view. But the legislation could have been much worse” for card companies, said Jaret Seiberg, financial services policy analyst at Concept Capital.

Translation: “Whoa! We escaped real regulation again! Write that check to Senator Pig, Clyde!”.

Now that our caring Congress has stepped in, your credit card company has to give you a 45 day warning before it arbitrarily hikes your interest rate whenever they need to gouge you.

The Senate bill would limit, but not prohibit, card issuers’ ability to raise interest rates on existing balances.

It would require 45-day notice of most rate increases; limit rate increases for new and promotional-rate accounts; prohibit certain kinds of fees; and bar extension of credit to consumers under the age of 18, with narrow exceptions.

(congressional snowball in summer)
In other words, you are still screwed.

You can receive a letter from your credit card company at any time telling you that your rate is going to change to any number they choose–in 45 days. Most of them already were giving 30 days notice. So biggggg deal.

You have to hand it to these House and Senate hucksters. They have truly mastered the art of handing out snowballs in the summer that melt right in your hand.

Oh and guess what else they ‘Provided for’ in the bill? Are you sitting down?

In addition, the bill would require more disclosure of the terms of card agreements; require periodic review of a cardholders’ interest rate and open the possibility of lowering it if warranted;

In addition to taking you for a fool, these people are a bunch of comedians, aren’t they? As if your credit card company is just chomping at the bit for “permission” to lower your interest rate! These political whores didn’t even have the integrity to define and direct these banks as to what should warrant a lowering of an interest rate: Like say, your FICO score, for instance! Or years of paying on time without ever missing a payment.

Nothing from Congress. Nada. Zilch. A useless piece of legislation from our useless elected contribution whores. Again.

They did manage to do one “good” thing though, only one wonders why they even let the practice of giving charge cards to 10-year-olds happen to begin with, much less allow it to continue on ”unnoticed” for years.

Senator Byron Dorgan on the Senate floor on Monday criticized card issuers, citing what he said was a marketing pitch by a major issuer for a pink, white and yellow “Hello Kitty” credit card aimed at children 10 to 14 years of age.

“I’d just love to know the person who thought this up and to say, ‘Are you nuts?’” Dorgan said. “What on earth are credit companies doing soliciting young kids to get a credit card?”

Yes Senator, and I would like to know how it is that you and the rest of your buddies looked the other way with your heads up your asses for years while this was going on–and now you suddenly notice, but only because we are watching.

To sum things up, this bill isn’t worth the powder to blow it up with, as usual. It doesn’t address a cap on loan shark rates at all. Nor does it reign in the companies from arbitrarily raising your rates for no reason other than they just want to gouge you some more. Both of these issues got removed from consideration right after your Senator and Congress person tallied up all those campaign contributions. Only 33 senators voted “Yes” in roll call to a bill that would have capped interest rates. Only one of them was a Republican, you should know this the next time you have delusions that this party cares about you any more than the Democrats do. As for the Democrats, the number “32″ is a very interesting statement, don’t you think? The Party of The People? At least Republicans are up-front about letting you know they don’t give a rat’s ass about what their biggest donors are doing to you. (See names of “Yes” voters here)

Not only did both parties let you down AGAIN, but this bill doesn’t take affect immediately. The toothless bill that gums credit card companies to death won’t take affect for nine months after the President ceremoniously signs the useless thing. This gives your credit card company plenty of time to figure out how to shove it up your ass a couple of more times first.

…..with President Barack Obama expected to sign it into law before the end of the month.

Barack Obama will sign this Nothing Bill with great fanfare. He might even say something to the effect that “It’s not perfect but it’s better than nothing”. Too bad it is Nothing. It’s always nice to make a big production when you are really screwing the public. It helps give credibility to the pretense that you care.

Now run along. We wouldn’t want you to miss American Idol!

An optimist has been defined as one who would, should a ton of crap be dumped on his doorstep, jump right in and rummage through it, convinced that there must be a pony in there somewhere. I tend towards optimism.

So, while not for one second denying that millions of citizens have been significantly harmed by the economic decline, disaster often has a way of encouraging the the best in human nature to come forward. As our society appears to increasingly embrace a narcissistic, materialistic morality, bearing witness to what this has wrought may shake us all up in a good way.

Here’s my list as to how that could happen.

1. Valuing experiences over accumulating tangible things. The research substantiates that happier people are less interested in stuff and mostly find their joy in experiences. And maybe the best things in life are not free, but some come close. To wit: a picnic in the park, walks through the closest pretty place, potluck dinners with a few friends, bird and other small critter watching (scrub jays are a hoot, especially if you have peanuts–shells and all–to offer them), and checking the paper for free events. (Many communities have slews of them every week.) It kind of takes getting used to after spending $10 for a movie and $20 for a dinner out, but it grows on you. “What is the most fun thing we can do that doesn’t cost anything (or very little)?” A great game for tough times.

2. Finding and exercising your creative self. You may have received a handmade card from a child. That beats Hallmark every time, yes? And with cards now costing as much as a gift did a few years ago, it’s time to get back to the joy of making things from scratch. Cards, wrapping paper (recycle those grocery bags and magazines with a great collage), clothing, beaded jewelry, playing with a food recipe, whatever. I have always taught my students that what is truly special about being human is our capacity to create something from nothing, to transform an idea or raw stuff into something that arose from inside our own selves. Pure joy awaits.

3. Valuing used goods. Just because it is new and no one else has touched it doesn’t mean it’s better. Increasing numbers of my friends are unabashedly buying clothing from thrift and second hand stores, not because they are absolutely forced to, but because it is fun. The bargains and “the look” can be stunning. They also like the idea of giving items another round of wear. Other friends are finding that some old things can be fixed, and sometimes they can even do it them themselves (from which they get the joy as described in #2). Money is saved in the process and for the environment, well that’s #4.

4. Helping Mother Nature. When errand times and routes are planned to conserve gasoline, and when stuff is reused or recycled, we help protect the environment. Bad economic times may help instill some good habits.

5. Learning what you don’t really need. A friend said recently, “You know, I have had to spend wisely because my job was furloughed, but I don’t miss a lot of stuff I thought I absolutely had to have. And I found some good less expensive replacements for things I needed. I’m feeling kind of proud of myself.” I think most people would be able to save money if they realized that some of what they want to replace is quite good enough as it is.

6. The joy of helping others. Another solid finding from the happiness research is that accumulating wealth and material things is not a marker of a satisfying life. One of the primary sources of life satisfaction is quite the opposite—giving of oneself to others. This current economic situation means for most of us that the need is no longer just about writing a check to some charity and sticking it in the mailbox. Rather, the needs are much closer to home now. The local school is short on basic supplies, the food bank is desperate for donations, a niece lost her home and needs a refrigerator for an apartment, a neighbor’s home was stripped bare by burglars when they were away for the day and they need a lot of things that the rest of us can spare. Giving is getting up close and personal—and doing it nourishes our souls.

7. A good time to drop bad habits. For those who eat or drink way too much, smoke, are dependent on unnecessary chemicals, to work on cutting them out not only saves cash but will help out with health costs–if not now, down the line. Indeed, taking care of ourselves in every way not only will cost less but maximizes the chances of a more vibrant life (while saving the rest of us money as well).

8. Grow some food. Even those with small places, so long as you have some sun and a place to put a pot or two, you can know the real taste of a tomato. I only recently started “farming” my yard. I made some mistakes (trying veggies that really don’t like my climate) but the successes are glorious. Besides tomatoes there are herbs, zucchini, oranges, peaches, pomegranates, guavas, and carrots. They don’t taste anything like what you buy in the store. They taste like…heaven. Maybe you don’t save a ton of money, and it does take some time to watch over them as they grow, but there is something deeply satisfying to be found here. Back to the land, I guess. (Oh, and help our landfill crisis by putting veggie, fruit scraps, and coffee grounds in a big container that you turn from time to time, and after some weeks you will have the greatest soil ever. You don’t absolutely have to add worms. The right bugs will find it on their own.)

9. Remembering how to save. I was so good as a kid. I would save up those pennies until I could buy something really cool. Then adulthood hits—earn a dollar and quickly spend it on something that beckons from TV. After all, we had to have “one of those” to be perceived is as successful human beings, right? Americans are not saving, and the ramifications are destructive for us all as the bankruptcy rate skyrockets and many people cannot even buy what they really need. Maybe after things settle down (fingers crossing here) savings accounts will become popular, and having one a source of family pride.

10. Lessons passed on to the children. If we do come to value each other more, conserve better, appreciate what we do have more, and place an emphasis on meaningful experiences and maintaining good health, our kids will pick up on it. Now, that would be priceless!

What do you think? Any ideas to add or expand upon?

Congress said nothing, the President said nothing. Nobody stopped every major credit card company in the USA from screwing with everyone’s credit scores by cranking up their interest rates in mid-stream and offering customers no options other than to “freeze” their cards, which of course would also affect their credit ratings. The Screwing of American credit card holders is pretty much completed.

Even the best, most reliable customers were burned without a place to turn. Very few people knew that they could call their credit card companies and refuse to allow them to do this. Even then, this would involve threatening to pay the card off and refusing to use it again until the company reinstated the original interest rate.

That’s not the only thing these thieves got away with. As far back as February of this year, the usual suspects made arrangements with 30 states to have unemployment checks deposited into debit cards they owned. Then they gouged the Unemployed by charging them fees and squeezing some of their unemployment money out of them. Nobody with any power said boo on their behalf. All the while, these same companies had taken billions in bailout money.

Companies like Chase, Citigroup, Capital One, AMEX, and Bank Of America have completed their gouging plan. The only effort to stop them came from the Fed with a rule that they couldn’t arbitrarily raise rates……after the year 2010, a rule that was designed to give their goombahs in the banking industry plenty of time to screw America first.

So now that it’s all pretty much over and everyone is duly screwed, President Obama had a meeting with these thieves and he means to make sure credit card reform happens. Unless this is going to be retroactive, it’s all bullcrap.

This is also same man who, as Senator, voted “No” to capping interest rates. His claim early on during the Presidential Primaries was that “30% cap was still too high”. Damned right it was. But apparently, in his own brand of wisdom, Obama deduced that NO cap was better than a 30% cap. In other words, he voted “Present”. See 10:00 in this debate video where that pig John Edwards comes right out and laughs about Obama’s ‘rationale’.

Here’s a video of President Obama roaring like a lion at Credit Card company big shots–now that most all Americans who have credit cards have already been F*cked.

Thanks Barack! Put your teeth back in and make this retroactive, else it will be clear that this is just another pretend photo opportunity where you hand out snowballs in the summertime and the public watches them melt right in their hands. But we can at least say that you stayed awake. Your “Top” financial advisor Larry Summers didn’t. When you you going to fire that arrogant ass? Just wondering.

This past Sunday evening on NQR’s Sense on Cents with Larry Doyle, I spoke extensively about the massive financial shortfall within the insurance industry. In addition, relatively early on I warned that the hedge fund industry had likely been severely mismarking many investments. From a piece I wrote on November 12, 2008:

Give it time, because hedge funds do not have to report to anybody as to what their positions are and where they have them marked. There is no doubt they have positions that are grossly mismarked and have many positions that are totally illiquid. For many investors in these funds, these are truly “roach motels.” Hedge funds will sell what is most liquid when they can to meet redemption requests. We should expect a significant number of hedge fund liquidations, consolidations, and out and out disasters.

The same can be said for a number of private equity shops. Consumer finance companies with large holdings of a variety of consumer assets are fighting for their lives as delinquencies and defaults on these assets ratchet higher.

With massive debt obligations along with capital redemptions coming due, a number of companies within these industries will be unable to refinance that debt or replace that capital.

State guarantee funds to support insolvent insurance companies total a mere $8 billion. Who would step in to support some of these other entities as they approach financial armageddon? Are banks in a position to take over these entities and liquidate assets in a quick and orderly fashion? The markets are in no position to provide the necessary liquidity without massive discounts in price.

Enter Turbo-man, Tim Geithner. U.S. Seeks Expanded Power to Seize Firms is not a mere power grab by our government, but an indication that a number of companies are on the precipice of default. The manpower shortage at Treasury to handle these upcoming situations is a very real concern.

A disorderly collapse of a number of these companies could quickly throw our markets and economy into a further tailspin. The cost of the government assuming and exercising this power, though, is not fully known and should not be underestimated.

How are contracts and outstanding liabilities handled? How are assets liquidated? Who has access to purchasing assets? The transferral of assets and wealth presents enormous challenges and opportunities. Will our government promote financial protectionism in this process? Will certain financial entities be accorded preferable treatment?

So many questions to be asked and answered in the weeks and months ahead. Make no mistake, though, this move by Treasury is an indication that a number of companies are close to going down.

LD

I LOVE SUZY’s STORY ABOUT HER DRIVER JOHN! JOHN is not a dead-beat, a bum, a liar or a cheat! Yet he is on the edge of losing his home too! It’s a must-listen:

She is also great on what the credit card companies are doing — how poorly they are treating their customers. BASTARDS.

What else is going on in YOUR life? Your financial picture?

While I have written twice over the last week about eastern Europe being the weakest link in the world of global finance, Mauldin and his colleague Niels Jensen of Absolute Return Partners provided insights and analysis that is numbing.

Why is George Soros short the euro? Let me provide a synopsis of Mauldin’s and Jensen’s “Europe On the Ropes.” This piece is somewhat lengthy, but a MUST READ!! A link is provided at the end of my review.

Jensen initially provides a backdrop of the collective guilt across all market participants in this global economic meltdown. The U.K. government is targeted by Jensen for their total lack of fiscal discipline in the process. He further adds that the outlandish banking compensation was a direct correlation of the leverage employed. Jensen focuses on the preponderance of supposed AAA rated CLOs (Collateralized Loan Obligations) backed by corporate loans and credit cards. The leverage employed by the European banks dwarfed the leverage employed by U.S. banks.

To this point Jensen’s analysis is enlightening but not earth shattering. He then enters into the rate of expected defaults on the European banks’ balance sheets, the exposures to eastern Europe, and the specifics of mortgage borrowing by eastern European citizens from European banks. I started to get a little queasy.

Jensen’s comparisons of the details in this crisis relative to the Asian crisis experienced in the late 90′s is scary. His focus specifically on Austria and the level of their debt exposure is also daunting. My queasiness increased.

Please read the Mauldin/Jensen report in its entirety so you can gain a further appreciation of the pressure in that part of the world and the implications for these economies, countries, and their political stability. Last Sunday evening on NQR’s Dollars & Sense, I spoke at length about the global government funding needs. On that very topic, Jensen writes:

Public debt to rise and rise

. . . the banking sector cannot, in the current environment at least, raise sufficient capital to stay afloat, so more, possibly a lot more, tax payers’ money will have to be put forward. This can only mean one thing. Public debt will rise and rise. The official estimate for the UK for next year is already approaching 10% of GDP, an estimate which will almost certainly rise further. We probably have to get used to running 10-15% deficits for a few years, a fact which seriously undermines the notion of government bonds being next to risk-free.

BCA Research has calculated the effect on public debt in a number of countries, as a result of further bank losses being underwritten by tax payers. Obviously, those countries with the largest banking industries (as a % of GDP) will be hit the hardest.

Mauldin and Jensen are clearly on the cutting edge of the weakest link in the global economy today. In light of this color, there is no surprise why George Soros is short the Euro.

I would never raise undue anxiety, but this situation is very fluid and needs to be watched daily. I will be doing that as I try to help you navigate the economic landscape!!

LD

We’ll be departing from “LD’s Central Station” on Saturday at 9:00 am EST until 12 noon to attempt to put some clarity into this madness!!

We thought the month of January was challenging but it seems we were just getting going. With the turns on the track getting ever more challenging, we will do our best to keep you informed and ahead of the curve.

Our train was packed last week so we will make sure to keep those extra cars. Make sure you board promptly, get settled, grab a coffee, and settle down for an engaging online Q/A chat as we “navigate the economic landscape.” Bring a friend along as well.

For our newer riders, your conductor is not a professional financial planner but merely a Wall Street veteran who welcomes sharing his instincts and experience.

While we board, let me preannounce that we will have a very special show Sunday evening on LD’s Dollars and Sense on No Quarter Radio from 8-9pm.

We have two very interesting guests joining us. Lynn Marshall has one of the most unique backgrounds in the world of finance today. How does one develop a background that includes senior level experience in investment banking, agriculture, and community banking? Think Lynn has some amazing perspectives on the economy and markets? Don’t miss him.

Additionally in light of the developments at Stanford Financial, we are very happy to have John Moynihan return to our show to discuss the dynamics in the world of offshore banking. Find out more than you could ever imagine by talking to these enlightened experts on LD’s Dollars and Sense on No Quarter Radio this Sunday evening from 8-9pm.

Aaaaaaaaaaaall Aboard!!

Join me and my special guest in minutes, from 8:00 to 9:00 p.m. ET as we discuss a wide array of financial and economic issues from Wall Street and around the world.

We encourage you to call in at (347) 677-0792 to ask questions and offer your commentaries.

LD’s Dollars and Sense is honored to have Steve Rehm join us for an inside view of the world of banking, regulators, and Wall Street. Steve is a “bank doctor” without peer in today’s world of global finance!

Steve is not only a dear friend but simply the best in his field of expertise. Steve has “operated” in this realm for over the last thirty years.

-4 years at Freddie Mac working on the growth of the secondary mortgage market…

-22 years at Citi/Salomon Brothers, the pre-eminent mortgage shop on Wall Street. Worked with some of the legends of “the game” and across a wide range of client initiatives including asset-liability management, debt structurings, M&A transactions, and equity issuance. Heavily involved with assessing and interacting on a number of legislative, regulatory, and accounting issues.

-6 years between JP Morgan Chase, Royal Bank of Scotland, and Barclays growing and developing the initiatives at these firms and teaching them the intricacies and nuances of financial “surgery” within and throughout a community challenged by a variety of illneses and plagues!!

Steve Rehm has more personal relationships and overall experience in these “operating rooms” than anybody in global finance today. DON”T MISS the chance to get the review of “the internals” from “the doctor”, Steve Rehm!! We are honored and humbled to have him join us at LD’s Dollars and Sense on No Quarter Radio!!

We are living through a truly historic and challenging economic period. We want to help you make sense of it all.

A few weeks ago, for example, we were joined by insurance expert Sean D’Arcy of Northwestern Mutual (this show is a must for everyone who has an insurance policy and, since we all do, make sure you catch this important program). LD also wrote up the discussion in this story, “Got Insurance? 529 Plans? Financial Aid?…Read On….”

The week before, Kevin Doyle, founder of 12th Street Capital and former senior executive at Countrywide, joined us from 8:15-8:45pm. We discussed the dynamics and development of the sub-prime mortgage business, the outlook for regulations and the rating agencies, and much more. Fascinating discussion. For those who care the shows are archived.

Larry Johnson’s business partner, John Moynihan, joined us on December 21st. John is an expert in forensic accounting and money laundering. We discussed the Bernie Madoff situation and fraudulent activities in general. Also fascinating.

Get the real “behind the scenes” look from financial experts only here at “No Quarter’s Dollars and Sense with LD.”

::::::::::::::::::::::::

Afterwards, the archived show will be up at BlogTalkRadio or via iTunes/iPod (see our instructions in the right column under No Quarter Radio).)

ALSO: Check out Larry’s series of “Central Station” posts in which he takes questions from you, and answers them at NoQuarter blog

The tracks remain steeply sloped with many curves along the way. With all eyes and ears and hearts focused on the wide range of developments in the economy, the markets, and the world of global finance we have added a few extra cars for the ride. Come early to make sure you get a good seat.

For newer riders, this is a Q/A forum/discussion on all financial issues. As we move along, we welcome any and all questions, comments, observations, and critiques of any and all economic issues from both a macro and micro level. We especially would welcome perspectives from overseas “travelers” as we are truly all in this ride together.

Don’t be bashful, grab a coffee, settle down, you’re amongst friends here. So much to talk about!! Stimulus bill, “bad bank”, interest rates, mortgage markets, municipal finance, employment report, global trade…….!!!!

For our newer riders, your conductor is not a professional financial planner but merely a Wall St. veteran who welcomes the opportunity to share his views and instincts on the economy, the markets, and world of global finance. All you will get are honest opinions and thoughtful advice.

While people are boarding, your conductor wants to take this opportunity to highlight our guest for tomorrow evening’s special guest on LD’s Dollars and Sense radio show on No Quarter radio.

*** LD’s Dollars and Sense is pleased to have Steve Rehm join us this Sunday eveningat 8 p.m. ET for an inside view of the world of banking, regulators, and Wall Street from a “bank doctor” without peer in global finance today!!

Steve is not only a dear friend but simply the best in his field of expertise. Steve has “operated” in this realm for over the last thirty years.

-4 years at Freddie Mac working on the growth of the secondary mortgage market…

-22 years at Citi/Salomon Brothers, the preeminent mortgage shop on Wall Street. Worked with some of the legends of “the game” and across a wide range of client initiatives including asset-liability management, debt structurings, M&A transactions, and equity issuance. Heavily involved with assessing and interacting on a number of legislative, regulatory, and accounting issues.

-6 years between JP Morgan Chase, Royal Bank of Scotland, and Barclays growing and developing the initiatives at these firms and teaching them the intricacies and nuances of financial “surgery” within and throughout a community challenged by a variety of illneses and plagues!!

Steve Rehm has more personal relationships and overall experience in these “operating rooms” than anybody in global finance today. DON”T MISS the chance to get the review of “the internals” from “the doctor”, Steve Rehm!! We are thrilled to have him join us at LD’s Dollars and Sense on No Quarter Radio!!

Aaaaaaaaaaaaaall Aboard!!!