Plan B Entertainment, is closing on a deal to option Lewis’s next book, The Big Short: Inside the Doomsday Machine, a chronicle of Wall Street greed and the swollen U.S. housing market. Pitt is also considering starring.
I swear if someone doesn’t start making a movie about Liar’s Poker soon, I’m going to start typing in all caps. And I’ll mean it, too. The fact that it’s not a movie yet makes me itchy.
8. Notice that the amount of your pay withheld to pay for your health insurance is a lot more than it was last year.
I won’t ask you to dig up old paychecks from 2008 and 2007, but this has been going on for a long time. Every year, the amount of your paycheck withheld to pay for your health insurance goes up. A lot.
Recently, Airan-Pace secured a modification for a Miami Beach client that shrank his monthly payment from $3,700 to $1,600. But it was only a reduction in interest rate — allowed by the Home Affordable Modification Program to go as low as 2 percent.
“I called him in and he said, ‘I’m not signing this,’ ” Airan-Pace recalled.
He owed $470,000 on a property worth less than half that.
The NY Times discusses the problems caused by rewards earning credit/debit cards for merchants and consumers alike. Visa, and to a lesser extent Mastercard, come off looking like health insurance companies. Entities who don’t add significant value to the economy, but manage to skim huge profits and act as a burden anyway. One solution:
Life might be simpler and more efficient if retailers could levy a surcharge that covers their costs to accept cards and let consumers figure out whether to pay it. But the card companies don’t allow that, and Congress hasn’t yet forced their hand, though this is now how things work in Australia (where some retailers charge excessive fees, alas).
The banks have used interchange fees as a growing profit center and to pay for cardholder perks like rewards programs. Interchange revenue has increased to $45 billion today, from $20 billion in 2002, driven in part by the surge in debit card use.
I missed this NYTimes piece by Roger Lowenstein discussing how incongruous it is for big banks to be the main cheerleaders for the idea that people have a moral imperative to continue paying mortgages when their homes are underwater. This concept seems perilously close to a tipping point that would have disastrous results for the economy. What would the banks do then? Lowenstein, by the way, wrote the great, “Rise and Fall of Long Term Capital Management”, which is as good as, “Liar’s Poker” at helping to explain the genesis of this entire mess.
Think of private-equity firms that close a factory — essentially deciding that the company is worth more dead than alive. Or the New York Yankees and their World Series M.V.P. Hideki Matsui, who parted company as soon as the cheering stopped. Or money-losing hedge-fund managers: rather than try to earn back their investors’ lost capital, they start new funds so they can rake in fresh incentives. Sam Zell, a billionaire, let the Tribune Company, which he had previously acquired, file for bankruptcy. Indeed, the owners of any company that defaults on bonds and chooses to let the company fail rather than invest more capital in it are practicing “strategic default.” Banks signal their complicity with this ethos when they send new credit cards to people who failed to stay current on old ones.
For some reason, Washington is afraid to push reform onto Wall St. It doesn’t make any sense, and now probably won’t happen. Incidentally, Wall St has determined they have more to gain propping up Republicans than they do donating to Democrats, who, you know, are actually nominally in charge. At least until 2010.
The big guns on Wall Street increased their political donations last month after increasing their lobbying muscle. Morgan Stanley’s Political Action Committee donated $110,000 in September, for example, of which Democrats got $43,000.
It’s going to be so awesome when this happens again and it’s worse!
Two links from two weeks ago that you may or may not have seen, but I had saved to share and not gotten around to it yet.
The Yes Men sent out a hoax press release from the US Chamber of Commerce saying they had changed their position on climate change. Obviously the media was interested in this so the Yes Men rented a room at the DC Press Club and gave a fake press conference. Then it gets really awesome when a representative of the Chamber shows up and shuts down the presser. And now, they’re getting sued for it
If you saw the profits made by the big banks last quarter and wondered how they were doing it, Philip Greenspun has an answer:
Because of the Collapse of 2008 financial reforms, the big investment banks are able to borrow money from the U.S. government at 0 percent interest. Then they can turn around and buy short-term bonds that pay 2 or 3 percent annual interest. Now they’re making 2 percent on whatever they borrowed. They can use leverage to increase this number, by pledging some of the bonds that they’ve already bought as collateral on additional bonds.
I wanted to post this Olly Moss Alice in Wonderland poster here, but since images don't seem to work in RSS anymore and Flickr makes it hard, maybe just click over and check it out.
Recent Comments