Posted by Al Lewison March 30, 2012 Mr. Ponzi /
What if you put a big chunk of your retirement in Certificates of Deposit, and then found out it was a $7 billion Ponzi scheme, cleverly disguised as CDs.
Richard Cochran, 79, is just one of thousands duped by convicted Ponzi schemer Allen Stanford. He thought his bank deposits were insured by the Securities Investor Protection Corporation.
The Securities and Exchange Commission has asked SIPC to accept claims from Stanford victims, but SIPC argues the CDs Stanford issued from a bogus bank in Antigua aren’t covered. The matter is about to be decided by a judge. Meantime, Cocharan is look for work in the construction industry as he approaches 80 years of age.
Observers have been calling America’s $1 trillion pile a bubble for years, now.
Spotting a bubble is easy. (Click here for an article that does it quite handily, quoting former Clinton Labor Secretary Robert Reich.) The trick is predicting when it is going to pop.
Student loan defaults have been on the rise throughout the Great Recession and not-so-great recovery. Students have been leaving schools with tens of thousands of dollars in debt only to find low-paying work, or get this, internships where they work for free.
I can’t tell you how many young people I’ve met fetching coffee, and attending to other grunt work, at offices all over the nation – for free. I can’t believe people put up with this. I like to call it “intern abuse.”
How long can this go on before there’s a crisis? A generation of students who cannot repay their student loans? I’m frankly it’s lasted this long with unemployment hanging as high as it has for the past four years. But unlike a house, you can’t walk away from a college education. Not even a personal bankruptcy filing will allow you to ditch your student loan debt..
Meantime, many people who can’t land jobs, can land another student loan to start work on their Masters’ and Doctorates, so the bubble blows on with no end in sight.
Posted by Al Lewison March 28, 2012 Al's Mailbag /
I thought your column today was really good. Thanks for what you do.
In keeping with your topic I thought I’d pass on a music video I made recently in collaboration with your old colleague, [Denver Post cartoonist] Mike Keefe. It’s called “Banker’s Holiday” and I think you’ll appreciate it. I’ve also got Garry Tallent, 40 year bass player with the E Street Band, playing bass and some electric guitar on the track.
With my background in the brokerage world, I’m kind of familiar with the subject matter. I was fortunate enough to walk away in 2005. If you like it, feel free to share, as they say…
Posted by Al Lewison March 27, 2012 Economy /
Who says inflation is under control? A dozen rubber chickens now costs $78, the highest Malcolm Kushner has ever seen it.
“That’s an 8% increase since last year and a 53% increase since 2009,” said Kushner who has long maintained a national economic indicator called the Cost of Laughing Index.
“When the Index began in 1987, the price was only $43.20 a dozen,” he said. “If this keeps up, we’ll have to put rubber chickens on the endangered species list.”
Overall, however, the index is only up about 2% over last year – not nearly as dramatic as say, the price of gasoline.
The index is a compilation of 16 leading humor indicators, including the annual price change in admissions to comedy clubs, Groucho glasses, whoopee cushions, an issue of Mad Magazine, singing telegrams, and the fee for writing a TV sitcom.
The good news is, Kushner, who recently wrote a book called “The Official Book of Mob Humor,” is not in the witness protection program and can still move about freely to calculate the index. Click here to read a column I wrote on Kushner earlier this year.
America’s upper-classes live in a bubble, out of touch with the classes below them, and it’s lower-classes are in decline, says controversial author Charles Murray.
Murray says America’s elite should be teaching those below them how to live more virtuously. Here’s his interview with PBS.
It also comes with a quiz designed to measure the thickness of your bubble.
I scored 64, dubbing me “a first-generation middle-class person with working-class parents and average television and movie going habits” which is more-or-less true of my bubble, although I hate TV. Click here to take the quiz and tell me what you think of this sociological speculation.
Posted by Al Lewison March 25, 2012 Wall Street /
If you don’t like your bank, why do you bank there?
You may be one of the millions of reasons why a handful of banks are too big to fail.
Click here to read my column in The Sunday Wall Street Journal. And click here to read a letter from Richard Fisher, president of the Dallas Federal Reserve Bank, explaining why too-big-to-fail banks must be broken up.
Posted by Al Lewison March 23, 2012 Main Street /
The protesters picketing Bank of America on Chicago’s LaSalle Street outnumbered some of the Occupy crowds I’ve seen on that same block.
They claimed the giant bank was wiping out their jobs , but the story is complicated.
The bank they were protesting has become a target of national outrage.
Meantime, the banker they work for is a local outrage.
The company were they are employed provides work for 1,400 people around the Chicago area, about 1,000 of whom are Hispanic. If the company is shut down, HR executive Queta Ramirez, left, will be one of the people handing out the pink slips.
Where have all the profits gone? Not into your paycheck. But if you own dividend-paying stocks, you are in the money.
The Council on Foreign Relations’ Center for Geoeconomic Studies put out a telling graphic showing the trend between labor and dividend income since 1959. It forms almost a perfect X with labor income going down as dividend income going up. Click here to check it out.
The working man gets less. The capitalist man gets more. And we’ve become a nation that doesn’t value working for a living.
“The fuller picture is one of growing inequality,” the report concludes.