Apr 17

AIG Illustrates Further Treasury Department Incompetence

Timothy GeithnerEvidence of further incompetence from Timothy Geithner and friends over at the Treasury Department surfaced recently in a report that uncovered a disturbing tax deal flowing from the 2008 $182 billion bailout of AIG and other companies. A tax loophole that under normal circumstances serves the important function of providing a corporation with a mechanism to reduce its tax burden following periods of significant loss was not closed to AIG following negotiations with the Treasury Department in 2008. In fact, the loophole was expanded through a special exemption. The tax mechanism referred to as a tax loss carryforward is part of the tax code at section 382 and it allows a corporation to essentially offset future profits with past net operating losses for a period of seven years in order to reduce its tax liability. Normally corporations that acquire other entities, or are acquired as in AIG’s case, are forbidden from claiming the tax loss carryfroward in order to disincentivise purchases or sales executed for the sole purpose of claiming another companies’ losses.

However, during the turbulent period following the bursting of the housing bubble, sub-prime mortgage debacle, and derivatives crash, Timmy Geithner hatched a plan to allow companies being asked, or asking, to take over troubled or failing companies an exception to an IRS rule amended in 1986 to specifically address the issue in controversy here. In AIG’s case, the exemption served to nullify the ownership change that took place when the United States government purchased a significant stake in the company. As such, AIG, which showed a near $20 billion profit in 2011, but will offset nearly 90% of its tax liability by writing down $17.7 billion.

“It’s an arcane and hard-to-follow way of disguising billion of dollars paid to firms that, for whatever reason, are politically favored,” says J. Mark Ramseyer, a Harvard law professor who wrote a paper on a similar tax treatment given to General Motors when it was taken over. “It’s one thing to announce through TARP that you’re going to give a firm a billion dollars. But if you issue a letter saying that the company can use a net operating loss that they would otherwise lose, that’s harder for people to follow,” he says, referring to the Troubled Asset Relief Program enacted in 2008 by the U.S. government to buy assets and equity from financial institutions to strengthen them. Besides AIG and GM, Citigroup, Fannie Mae, and Freddie Mac got tax breaks as part of their bailouts.

The Treasury Department argues that following nearly $200 billion in bailout cash, that AIG couldn’t make ends meet or attract capital, notwithstanding the obvious message that Treasury was sending to investors through the bailout: That AIG would not be permitted to fail. It is the height of arrogance to ask the American people to believe that attracting private capital would be difficult for a company guaranteed to remain viable by the United States Treasury Department. Yet Treasury continues its sell its pyramid scheme based primarily on the false idea that the entire world would have been eaten by dinosaurs if it did not funnel trillions of dollars to corporations.

“Allowing those companies to keep their NOLs made them stronger businesses, helped attract private capital and further stabilized the overall financial system,” Emily McMahon, the acting assistant secretary for tax policy, wrote in a Treasury blog post March 1. “It would have been counterproductive — and perhaps irresponsible to undermine the stability of those same institutions, at the height of the financial crisis, by imposing a tax code provision that was never intended to apply in this context,” she wrote.

Elizabeth Warren, architect of the Consumer Financial Protection Bureau (CFTC)–an agency many have high hopes will offer significant financial protections to the public–has called the AIG loophole a stealth bailout. It represents much more than that however. It represents more evidence that the Obama administration and the Treasury Department had and has in place a policy of providing any and every resource to corporations that caused the collapse of the world economy, while doing next to nothing to provide assistance to the public. Whether the efforts were conspiratorial in nature is irrelevant, as the ultimate effect is the same: The public retained its debts and losses, while the corporations were provided cash and loans to service their debts and a mechanism to further limit future liability through tax provisions not extended to the American people.

Perhaps lost in all of this is that as a result of this disturbing decisions at Treasury, that executives at AIG and other companies bailed out by the American taxpayer will receive larger bonuses, as their bonuses are tied to overall profitability. Less tax liability equals greater profits. While the Obama administration is fond of pointing out that many of the companies that were bailed our during the crisis have “paid the government back and have returned to profitability,” the bailout of AIG will ultimately cost the American people at least $22 billion. The President failed to remove Timothy Geithner after reports surfaced that he unabashedly failed to follow his directive to break up Citi. We have now learned that he cut private tax deals with AIG and other companies to guarantee limited tax liability for nearly a decade. President Obama’s retention of perhaps the most incompetent Treasury Secretary serving during my lifetime leads me to only one conclusion: That the President either tacitly or directly approved of his decisions.

Apr 13

Don’t Listen to Jeremy Siegal

Perma-bull and Wharton professor Jeremy Siegel is predicting that the Dow Jones Industrial Average could reach 15,000 by the end of 2013 and 17,000 shortly thereafter. Regular folk and students enrolled in second and third tier business schools should be heartened by the fact that Wharton employs Mr. Siegal. After all, if Wharton sees fit to continue to employ a chronic failure, how “premier” can the school really be? For example, Mr. Siegal predicted that the mortgage mess would right itself, the economy would come out of recession, the S&P would gain 8%-10%, financial stocks would boom, and the Federal Reserve would raise rates in 2008. The poorest performing group of stocks over the past few years, internationals and foreign sticks, he predicted would have banner returns. He even predicted–or hoped–that Rudy Giuliani would win the Republican nomination. The S&P 500 lost 38.49 percent in 2008, its worst year since 1937. Financials underperformed all market sectors, losing 56.95 percent. The Federal Reserve lowered rates further, and well, you all know how Rudy “Florida or Bust” Giuliani fared in the 2008 election. The bottom line is that there is a good living to be made in concocting eloquent charts, graphs, and reasons for an increase in stock values. The public does not tune in to be put to sleep by facts and figure and astute and honest analysis. Siegal is no different that the perpetual stock-picking flop Jim Cramer. Siegal however carries the cache of respect that inures to professors at Ivy League institutions, making him far more dangerous than the Cramer sideshow. He was among the voices calling for the massive Bush tax cuts, deregulation, and the end of the estate tax.

As I have written before, historical gains in the stock market have been inextricably tied to the United States rigorous system of regulation. It is this very regulation that has been unwound, shot, tied up, disemboweled, and sent to the wood-pile that has for generations attracted investors from around the globe to United States equities. Our equities were perceived as being extraordinarily safe investments, and as such investors were willing to pay a far higher premium to own them. The result of a fierce regulatory regime had been nearly a century of fairly consistent and predictable returns near 10% annually. Those days are long gone. With the dismantling of Glass-Steagall, leverage requirements, derivative regulation, and recent wild west IPO deregulation in the form of the JOBS Act, so too has worldwide confidence in our markets deteriorated. The consequence of these actions will be slow or stagnant growth of United States equities and more and more frequent periods of boom and bust brought about by one get rich quick scheme after another.

Evidence of investor flight is quietly emerging. Investments in so-called frontier markets are on the rise. With the perception of safety all but vanished from the United States and other western powers such as the U.K., large investors are seeking more reward for what many of them believe to be similar levels of overall risk. In other words, if the upside potential in U.S. equities is limited but the downside risk is significant, why not invest in regions and countries with equal upside and downside risk? It make a lot of sense.

It isn’t to say that investors have dumped trillions of dollars of U.S. equity investments and Treasury Bond holdings and abandoned us altogether. It is to say that the U.S. is on a path in that direction. As such, any predictions of where the stock market will be two years from now, or twenty years from now are meaningless. The carpet-bombing of financial regulation has, to my mind at least, even put the stalwart Case-Shiller CAPE under intense scrutiny. CAPE measures PE ratios of the S&P 500 companies in ten year averages rather than in one years or shorter time periods, giving a more accurate indication of where current prices are relative to long term averages. CAPE also serves to smooth out periods of extreme exuberance and put the bullish television and radio talking heads in perspective. With regulation dismantled, the measurement going forward is inherently misleading, and will continue to be so until many years pass under the new regulatory environment.

This situation has been caused equally by Democratic and Republican administrations. Admittedly, the predominant share of deregulatory legislation and administrative changes have taken place at the behest of Republican lawmakers or under Republican Administrations. However, Democratic Presidents have signed off on rather than fought the legislation, and most recently President Obama’s economic policies have reinforced the spurious notion that regulation hinders growth and job creation. Moreover, the voice of the people has not been sufficiently loud since the housing collapse to force lawmakers to enact new tougher regulations. We the people bear equal blame with the two parties. The repercussions are frightening. We are left with the onerous and ultimately ineffective Dodd-Frank Act, and a host of other half-measures and changes within the federal regulatory agencies that are not only inadequate but under-funded. It is time to avert your eyes and ears from the professors and pundits who attempt to sell you on the idea that the U.S. stock market will continue to perform as it has in the past. At least until we return to the regulatory regime of the past.

Apr 13

Wells Fargo and JP Morgan Chase Release Earnings

Earnings season is upon us, and no sector will be more closely watched by economists than the banking sector. Fresh from reports that the large banks are not cooperating with the Treasury Department on a floundering little known program to assist unemployed homeowners and underwater homeowners,  the large banks reported earnings that exceeded economic forecasts.

JP Morgan came in with EPS of $1.31 on $26.7b in revenues; impressively above the estimates of EPS $1.18 and revenues of $24.6b. Under the headline were murky details like credit cards swinging from a loss to a gain largely as a result of the release of $2billion in loan loss reserves.

Wells Fargo delivered earnings of $0.75 on $21.6b in revenues, handily ahead of estimates of $0.73 and $20.4b, respectively.

With similar failures–due in large part to banking push-back–of the HAMP and HARP programs to assist struggling homeowners modify and refinance their mortgages following the fraudulent run-up in home values due in part to large financial institutions like Wells Fargo and JP Morgan Chase, it is reassuring to know that the behemoths’ bottom lines are sound.

I have long since thrown in the towel on any hopes that the current administration will force the large banks to adhere to the terms if the various governmental programs set-up to offer real help to struggling homeowners. However, it is important that we not allow these large financial institutions to return to staggering profitability without calling attention to it.

Apr 13

Does Equality Matter?

For the past several decades, the middle class and the poor have seen their after-tax incomes fail to keep pace with inflation, while the after-tax income of the top 1% and top 20% have seen dramatic gains. Jared Bernstein recently published a piece on the subject on his economics blog.

In the 2000s, the median income of working age families stagnated and poverty went up, even as the economy grew and the capital-gains powered income of the top 1% soared (see figure). Since the current recovery began, profits have soared, inequality is back on the rise, and the pay of average workers has stagnated of late. My own longer-term analysis of the factors responsible for the diminished elasticity of poverty with respect to growth finds inequality to be the most important factor (see figure here).

The latter 1990s provides a very useful counterexample. With true full employment upon the land–my favorite inequality antidote–inequality actually diminished between the middle and bottom (the top continued to pull away—cap gains, again), low wages grew with productivity for a New York minute, and poverty rates fell sharply. Inequality, at least in the bottom half of the wage scale, compressed and a lot more growth reached a lot more people.

Mr. Bernstein recently debated two right-leaning economists ion the subject, and this debate formed the basis of his article. It’s an interesting read.

Apr 11

Tax Day 2012

The good folks over at the National Priorities Project have published their 2011 report detailing where your tax dollars were spent last year. The federal government had in the past issued its own report each year to the public in which in included the identical information. However, George W. Bush determined in 2002 that the people did not need to know where their tax dollars went.

As you can see from a quick view of the report, our tax dollars are clearly not being allocated in such a way as to reflect the priorities of the majority of Americans. For example, nearly 32% of each tax dollar funds the military and military benefits, while 1% funds science, and 2.5% funds education. The so-called “bloated” government of Republicans and the recently scared-straight Democrats sucks up an earth shattering 4.5% of each tax dollar.

The site is well designed and includes a host of interactive and educational features, including an application that allows anyone to see precisely where their tax dollars were spent based on individual taxes paid. It includes an interesting application in which you can design your own budget. The organization also maintains staggering amounts of data that you can search through and customize. There are also several articles on the subject of taxes, revenues, and our national priorities. I recommend that you check it out.

On April 10, 2012 Ian Masters talked to Mattea Kramer, a senior research analyst at the National Priorities Project. His interview is below.

Audio clip: Adobe Flash Player (version 9 or above) is required to play this audio clip. Download the latest version here. You also need to have JavaScript enabled in your browser.

Apr 11

Oil Speculation

I have written on the subject of oil speculation before, here, and here. Kendaleth C. VanLue, a guest blogger over at Think Progress published a piece today in which he lays out each of the recent indicators that oil speculation on Wall Street in indeed driving up the price of oil, affecting gasoline prices and heating oil dramatically.  Shippers, parcel delivery companies, and airlines among other trade groups have repeatedly called on the administration to crack down on the practice, or at the very least open investigations. Experts have offered testimony to Senate and House leadership. However, other than veiled threats in recent stump speeches from President Obama, there has been no action from the Department of Justice or the CFTC.

The article lays out a sample of recent indicators of rampant oil speculation:

Think Progress has links to the data to back up each of the indicators.

Apr 09

Wall Street Hates Elizabeth Warren

Warren, ElizabethNormally Wall Street–much as it does even if in direct conflict with clients’ interests–hedges its bets when it comes to campaign contributions, donating equal amounts to both Democrats and Republicans. Not coincidentally it generally reaps similar benefits from each. How else can you explain Bill Clinton’s near dismantling of the derivatives market and imploding of Glass-Steagall? Occasionally however Wall Street comes across a candidate it revels in despising to its very core, and it has apparently found that candidate in Elizabeth Warren.

Warren more than doubled the fundraising totals in the first three months of 2012 of her Republican opponent Scott Brown. This fact alone is not all that interesting, as Brown is perceived as being vulnerable in the 2012 election. It is not surprising that campaign cash is finding its way to Warren given that the Democrats have an interest in winning back the seat once occupied by Ted Kennedy, most notably because recent polling has been favorable to the Harvard professor.

What is interesting is the staggering advantage that Scott Brown continues to maintain over Warren in campaign contributions from Wall Street. Brown has a thirteen to one advantage in raising cash from the financial, securities and investment sector. Warren is a well known proponent of investor rights. She served President Obama as an economic adviser helping to set up the Consumer Financial Protection Bureau, and would have been tapped to head up that agency if President Obama had not caved to pressure from conservatives and Wall Street who claimed that Warren would be incapable of regulating fairly.

We certainly should not read into this that challenging and outing Wall Street represents a new and lucrative blueprint for electoral success. This course of action remains an almost certain path to election day suicide for the rank and file candidate. However, the strange times in which we live wherein Occupy Wall Street is able to occupy time on even the most conservative media outlets may just lift Warren to victory, and with any luck will provide the American public with a real voice on their behalf in fighting for investor rights.

I find it interesting that Wall Street, through its near complete ostracizing of Warren, indicates it has no faith in its own ability to corrupt her once she is elected. Many Mr. Smith’s have waltzed into two-party Washington with grand ideas of righting wrongs and vindicating the rights of small investors and the public generally, only to leave having governed much more like Bill Clinton. Quite frankly Wall Street has disappointed me this time, much like each of the pitchers who intentionally walked Barry Bonds during his record-shattering year. But Wall Street doesn’t like a challenge, which is why they hedge their political bets and dump billions into investments that are in direct conflict with their clients to begin with.

Apr 09

Matt Taibbi Weighs In

I have written extensively about the mis-titled JOBS Act here and here. Today, Matt Taibbi over at Rolling Stone offered up his analysis of the fraud inducing measure. But most importantly, he adds his voice to the choir of us who understand that the administration of Barack Obama is far to friendly to Wall Street.

In the meantime, let’s just say this is a dramatic step taken by Barack Obama. Nobody should have any illusions about where he stands on Wall Street corruption after this thing. Boss Tweed himself couldn’t have done any worse.

As I’ve said before, what makes this cozy relationship with Wall Street so extraordinarily sad, is that it has been utterly unnecessary. While certain Wall Street friendly policies immediately following the housing collapse were wrongheaded yet understandable to some degree, these more recent overtures to those who cost millions their jobs and homes, are not.

Apr 09

Republican Spenders

Goldman SachsFrom the not so historically ironic yet perceptually ironic department, the great Vampire Squid itself, Goldman Sachs, is predicting that status-quo control of the Presidency, the Senate and House come November 6, 2012 would result in the most fiscally conservative federal policies in 2013 and beyond. In a recent  research report titles “US Daily : The Election and the “Fiscal Cliff,”" Goldman Sachs predicts that an Obama victory and no change in power in the Congress would likely lead to the scheduled defense and discretionary spending cuts that were negotiated last year as part of the debt ceiling agreement taking effect. They also predict that in the case that Republicans win the White House or the Senate that they would likely attempt to delay or modify the scheduled deficit reducing cuts. Moreover, Republicans would likely hold off until 2013 before they enact further tax cuts or co-called conservative fiscal policies. If Obama retains control, he will likely demand changes at high income levels prior to agreeing to any tax cut extension.

By contrast, a status-quo election (i.e., President Obama is reelected with continued Democratic control of the Senate and Republican control of the House) would imply a higher likelihood that an agreement would be reached this year, before the various policies are set to phase in or phase out. However, since the two parties currently hold very different views whether tax increases should play a role in deficit reduction, even under this scenario an extension would be difficult to negotiate before year end. While a permanent extension of the middle-income rates is possible (perhaps with a higher threshold than the President proposes) this seems less likely than a shorter-term extension lasting one year or less, as discussed below.

It won’t shock an interested observer, but it is a rather profound revelation that Goldman Sachs readily admits that if President Obama is reelected, fiscal restraint and deficit reduction is more likely than under Republican control. The reasons are fairly straightforward. It will be difficult if not impossible to negotiate a deal with Democrats to delay the scheduled defense and domestic spending cuts in the sequester if Republicans hold firm to their ridiculous position that only domestic spending should be cut while the defense budget remain untouched. It is also less likely that a long-term extension of the Bush tax cuts will be passed into law because Democrats will require some modification of tax rates for high wage earners in return. It will also be extraordinarily unlikely that Republicans will agree to any new stimulus spending.

So, if the deficit is an important issue for voters this fall, only a fool would believe that electing a Republican President would lead to that end. It must be true because Goldman Sachs says so.

Apr 06

HARP Continues to Flounder

new report by Cora Currier over at ProPublica chronicles the massive practical shortcomings of the Democratic administration’s Home Affordable Refinance Program, or HARP, and why it continues to fail to offer underwater homeowners  any real relief. The program has also fizzled in offering meaningful rate reductions to those stuck with high percentage rates or adjustable ARM mortgages.

Large banks, although permitted to do so, are not offering those holding loans with competing banks refinancing under HARP because the banks view these outside loans as carrying more risk, which of course is only marginally accurate. This leaves the homeowner in the precarious position of being captive to whatever rate the bank currently servicing the mortgage offers. However, even with this fractional increase in risk, the administration is doing nothing to cajole the banks into offering customers more competitive rates and accepting outside business in return for saving them from the brink of disaster in 2009-2012.  Because the banks are refusing to compete with one another, customers are often left with higher long term mortgage rates than they would have otherwise qualified for under HARP or in the marketplace.

The reason for all of this, as it has always been, is that these programs fail to address the basic problems in the housing market. Unfortunately, the profound apprehension and outright fear on the part of the administration to forcefully attack the large banks continues to result in these half-assed band-aids and workarounds to address the housing market dilemma. The proof is in the pudding. The administration can not on its best day ever administer a program under which homeowners are stuck refinancing more than the home is worth. Leaving aside how awful the notion is of forcing homeowners to ultimately pay an inflated amount based squarely on the fraud of the banks and mortgage originators for a moment, the banks will not even cooperate in this scheme of forcing homeowners to lock in lower rates to pay them back money that they would not otherwise owe.

The bottom line is that this problem will persist for much longer and continue to create a drag on the overall economy until either the Republican or Democratic party, or both, stand up and force the banks to write-down millions of fraudulently inflated mortgages to fair value. To this point neither party seems willing to offer even an iota of evidence that Wall Street and the banks have not simply been given a blank check with nothing significant expected in return for their very lives.

I should also mention that I do in fact believe that President Obama understands this problem, and is well aware of the shortcomings of each of the programs offered as a remedy. I would even confess that it is extraordinarily likely that he honestly would love to force the banking sector to refinance and write-down the mortgage mess that it created. However, while the United Auto Workers and General Motors and Chrysler have had to accept onerous loan terms and drastic reductions in wages and benefits in return for the government’s assistance, the banks have suffered no similar consequences notwithstanding their far greater responsibility in the overall disaster. Why this has been the case has been fodder for much speculation. I sincerely hope that the American people do not have to wait for President’s Obama’s inevitable memoirs for an answer.

Apr 05

Wall Street Wins Again

Obama is expected to sign the so-called JOBS Act into law this moring in Washington D.C. In doing so, the President, in a misguided effort to obtain a “bi-partisan” win will open the door for more financial fraud and enable unscrupulous financial firms to bilk unsuspecting investors of their money. The public rationale touted by the administration is that the law will make it easier for small “emerging” companies to obtain the capital required to grow, and eventually take the company public in an IPO. The law guts the the current regulatory reporting requirements that provide transparency to both investors and regulators for companies with less than $1 billion in annual revenue. He is also making it much more likely that equity research firms will engage in behavior that creates a conflict of interest between the firms seeking capital and themselves, at the expense of investors and the public. The large banks that currently underwrite IPOs will also have an incentive to engage in perfidious behavior in an attempt to win over potential IPOs in order to generate fees.

While regulators are still examining the law, even the SEC chief, Mary Schapiro, hardly a dutiful advocate for investor rights, is dubious. She said that the law will simply “weaken investor rights,” and:

We should not walk backwards here…. Collusive behavior between analysts and bankers cost investors huge sums, shattered confidence in the integrity of research, and damaged the markets themselves.

Too often, investors are the target of fraudulent schemes disguised as investment opportunities…. As you know, if the balance is tipped to the point where investors are not confident that there are appropriate protections, investors will lose confidence in our markets, and capital formation will ultimately be made more difficult and expensive.

Eliot Spitzer, who is responsible for part of the existing rules the new law nullifies had some choice words for those in power:

It is a bad sequel to a bad movie…. It shouldn’t be called the JOBS Act, it should be called the Bring Fraud Back to Wall Street Act.

After the recent rampant fraud that led to the largest depression since the 1920′s, President Obama has made decision to further loosen the rules regulating those who caused the disaster, placing himself in the familiar position of abandoning his progressive and Democratic base in favor of Wall Street.

You can read further coverage from the New York Times here.

Apr 04

More Dead End Jobs in March

The ADP National Employment Report released today showed that the private sector added 209,000 jobs last month, just marginally above economists’ and others’ expectations for a gain of 200,000 jobs. The report unfortunately discovered–yet again–that the vast majority of the jobs created exist in the low wage service sector with goods producing jobs remaining generally stagnant offsetting for concurrent job losses.

The service sector continues to make up far too large a percentage of the United States economy at 70%. Some analysts believe that wage gains in existing and newly created jobs will help sustain and grow consumer spending levels. I do not share this view. Wage gains continue to lag inflation across all major sectors, and with an ongoing oversupply of job-seekers relative to available jobs, employers will continue to lack any motivation absent regulatory action to increase real wages appreciably. The Bureau of labor Statistics reported compensation growth across all sectors at a lousy 1.6% over the last 12 months. 12 month inflation just recently reported came in at 2.9%.

While it is possible to drill down into the data and uncover a more detailed picture of the plight of service sector and other workers, the trend of wages failing to keep pace with inflation is clear. It is hard to imagine an economy sustaining growth given this situation. Neither the Democratic or Republican party has put forth any concrete plans to increase real wages for the vast majority of Americans. So long as this remains the case, the economy will continue to muddle along awaiting the next crisis that the average worker will ultimately be unable to absorb. We need a real plan to produce jobs paying more significant wages and a move away from an economy driven by consumer spending and the service sector.

Update: April 6, 2012: The Labor Department released its jobs report today unsing its own methodolgy, which showed that nonfarm payroll employment rose by 120,000 in March, and the unemployment rate was little changed at 8.2 percent. Apparently employment rose in manufacturing, food services and drinking places, and health care, but was down in retail trade.

Some Good News


While the federal regulators and the Department of Justice continue to treat the symptoms rather than the cause of the recent housing collapse, the Federal Reserve announced that it will force Morgan Stanley to review thousands of foreclosures processed by a former subsidiary. The goal is to compensate those foreclosed upon improperly.

Among the allegations made by the Fed against Saxon are claims that employees filed foreclosure documents without verifying their contents and that they filed mortgage documents with courts that were not properly notarized.

While each regulator and prosecutorial agency continues to trip all over itself in an effort to avoid going after any of the large banks at the heart of the crisis, something is better than nothing.

Apr 03

Student Loan Supply and Demand

I shouldn’t have been surprised, but yet I was surprised when I discovered a law firm that has concentrated its practice in the area of student loan law and assistance. While I consider myself a bit of an expert on the subject, having navigated each and every street and avenue of the federal program and its various payment plans, consolidation offerings, forbearance and deferment options, as well as having created an Excel spreadsheet of the various telephone numbers and extensions to assist my friends and family through the process, I am heartened that law firms are beginning to fill the niche now occupied by shady and often bogus and fee-laden student loan and credit “counseling” entities. I wish The Law Office of Adam S. Minsky much success and I sincerely hope he offers his clients sound counsel as they meander through the morass of the student loan puzzle.

Apr 02

Federal Reserve Calls for End to Too Big to Fail Banks

The Dallas Federal Reserve has recently released its annual report, which has Wall Street a tad nervous. In the report, Harvey Rosenblum, the head of the Dallas Fed’s research department, openly encourages  the organized dismantling of America’s mega-banks like Bank of America, Chase, and Citigroup. It is interesting to hear this rhetoric coming from a mainstream banking entity such as the Dallas Fed. Has the widespread consensus that the current banking system can not continue to operate in its own interest and at the detriment of ordinary citizens finally grown up and gone official? Matt Taibbi over at Rolling Stone has a write-up.

The entire report can be read here.