Finance

Bipartisan Deal Will Raise Student Interest Rates 20%

July 3, 2014 Kimberly Hefling, www.AP.org Educate! Barack Obama, Finance, Finance and the Economy, Interest Rates, Student Debt

Interest rates go up Tuesday for students taking out new federal loans. This hike is relatively minimal but could foreshadow more increases to come. The change stems from a high-profile, bipartisan deal brokered last year by Congress and signed by President Barack Obama that ties the rates to the financial markets. Interest rates go from 3.86 to 4.66 percent on undergraduate Stafford loans. Graduate student loans go from 5.41 percent to 6.21 percent. Interest rates on Plus loans for parents go from 6.41 percent to 7.21 percent. For every $10,000 borrowed, the average borrower under the hike will pay back about $4 more every month when they begin paying back the money - about the price of a fancy latte. If the economy continues to improve, however, these kinds of rate hikes could continue. Congress stipulated that the rates for new loans be reset annually, but that borrowers keep the rate they were given for the life of the loan. The compromise in Congress was reached after rates doubled last July.

U.S. Council of Mayors Endorse Postal Banking

July 2, 2014 Matt Stannard, www.bankact.org Create! Banks, Finance, Mayors, Postal Banking, Postal Service

At its June 20-23, 2014 annual meeting, the US Conference of Mayors (USCM) adopted a pair of resolutions endorsing postal banking, co-signed by eight mayors from six states. Their goal is to bring $1 trillion of job-creating economic stimulus primarily to low-income neighborhoods, over the next decade, at zero cost to taxpayers. Post office-based financial services will generate sales tax revenues of as much as $3 billion a year, benefiting cities of the more than 200 mayors attending the USCM meeting, according to BankACT, a nonprofit advocacy group. In one resolution, the USCM calls upon the United States Postal Service (USPS) to offer basic financial services, such as small payday loans and reloadable money cards. Payday lenders and other financial predators target low-income working families and retirees at exorbitant cost, totaling nearly $100 billion a year, noted BankACT president Marc Armstrong. “By offering inexpensive financial services,” he said, “the USPS can help drive out financial predators, restoring billions of dollars to low-income neighborhoods at no cost to taxpayers.” The other USCM resolution urges the Postal Service to bring back once-popular postal savings accounts and use the deposits to help fund a national infrastructure bank. This specialized bank will reduce the high cost of financing public construction projects — a boon to local governments, Armstrong added, that can generate thousands of jobs.

Investors Beware: Enbridge Not As Safe As It Seems

June 30, 2014 Franklin Cameron, www.bnn.ca Educate! Canada, Enbridge, Finance, Investment

For many investors looking for a safe and steady income, dividend-paying Canadian pipeline companies have been a natural choice. And with a yield of almost 3 percent, Enbridge (ENB.TO 50.66 0.06 0.12%) would seem to fit the bill. However, according to Toronto-based money manager, Patrick Horan, Principal at Agilith Capital, investors might want to look elsewhere. "Enbridge is actually quite a dangerous stock," Horan tells BNN. "Their growth strategy is at risk." For Horan, who is actively short Enbridge stock, the issue lies with the company's dividend policy. Enbridge has raised its dividend steadily about 7-10 percent a year over the past three years, he explains. However at the same time, they have been issuing new shares to raise equity. "This is a conflicting strategy," says Horan. "Why raise the dividend and then go issue shares?" According to Horan, Enbridge is using all its free cash flow to support the dividend. "There's nothing in the tank for growth," he says.

Argentina President Blasts US Bank ‘Extortion’

June 19, 2014 Lauren McCauley, www.commondreams.org Educate! Argentina, Banks, Debt, Finance, Supreme Court

Argentina will not submit to Wall Street's "extortion" of their debt, said President Cristina Fernández de Kirchner in a national address Tuesday night. De Kirchner's comments came after it was announced that the U.S. Supreme Court refused to hear an appeal by the South American country despite their argument that obliging predator banks would "encourage creditor free-for-alls" and "intensify and prolong the suffering of the poor in countries undergoing sovereign debt crisis." On Wednesday, following news that the Supreme Court would uphold two lower court rulings which demanded that Argentina pay $1.3 billion in debt holdouts to "vulture" funds before repaying their other restructured debts, Standard & Poor lowered the country’s rating to CCC-. According to the credit rating bureau and reported by Bloomberg News, this is the lowest rating for any nation that’s currently assessed by the company and is nine levels below "investment grade."

Business Groups Fear Hong Kong Occupy Protest

June 18, 2014 Kelvin Chan, www.thestate.com Resist! China, Finance, Hong Kong, Occupy, Protest

Foreign business groups in Hong Kong on Wednesday joined the city's billionaire tycoons in opposing a pro-democracy group's plans for an Occupy-style protest while activists burned copies of a policy document asserting Beijing's authority over the Asian financial center. In a newspaper ad, the Canadian, Indian, Italian and Bahraini groups called for organizers to rethink plans to blockade the central business district to press for full democracy. It's the first time foreign businesses have waded into the debate over Hong Kong's political future, which intensified after Beijing released a policy paper Tuesday reiterating that it has ultimate control over the former British colony. The document was seen as a warning ahead of the protest. Outraged pro-democracy activists reacted by burning copies of the paper in front of the Chinese central government's liaison office. Hong Kong became a special administrative region of China in 1997. Under a principle known as "one country, two systems," the freewheeling capitalist bastion is allowed to keep Western-style civil liberties until 2047.

Band-aids On The Gaping Wound Of Student Debt

June 10, 2014 Because Finance Is BORING, www.becausefinanceisboring.com Educate! Finance, History, Student Debt

In the 1960s, Ronald Reagan helped kill free higher education in the United States. Today, in the face of the student debt crisis, the best fight the Democrats are mustering is to try and lessen the pain of Reagan’s legacy. Everyone agrees we are in a student debt crisis, even the Federal Reserve. Over 38.8 million Americans have student debt (as of the end of 2012). 7 million of them are in default on their loans. Worse still, it is now accepted as fact that college, whether public or private, will be an undue financial burden that students may never get out of. The best one can hope is for a parent or relative to plan early for college. Put money away in a 529 plan (with Wall Street skimming money, as always, off the top). It wasn’t always this way. Once Upon A Time, America Had Free Higher Ed As Mike Konzcal and Aaron Bady wrote in “From Master Plan to No Plan: The Slow Death of Public Higher Education," there really used to be free higher education all across the state of California. And then, Governor Ronald Reagan took office, griped about the “orgies” happening on campuses, and proceeded to dismantle free higher education in the state:

Even When Admitting Crimes Banks Too Big To Punish

May 24, 2014 Phil Mattera, www.dirtdiggersdigest.org Educate! Bankers, Criminal Justice and Prisons, Finance

Ever since the financial meltdown, corporate critics have been clamoring for criminal charges to be brought against major financial institutions. With the exception of the guilty plea extracted from an obscure subsidiary of UBS in a case involving manipulation of the LIBOR interest rate index, the Obama Administration long resisted these calls, continuing the dubious practice of offering corporate miscreants deferred prosecution agreements and escalating but still affordable fines. The Justice Department has now given in to the pressure, forcing Credit Suisse’s parent company to plead guilty to a criminal charge of conspiring to aid tax evasion by helping American citizens conceal their wealth through secret offshore accounts. Yet what should be a watershed moment in corporate accountability is starting to feel like a big letdown. Despite weeks of handwringing by corporate apologists about the risks for a bank of having a criminal conviction, along with impassioned pleas for mercy by Credit Suisse lawyers, the world has hardly come tumbling down for the Swiss financial giant since Attorney General Eric Holder announced the plea.

Colorado Prepares Banking System For Marijuana Sellers

May 9, 2014 AP, www.theguardian.com Create! Colorado, Finance, Marijuana

Colorado lawmakers have approved the world's first financial system for the marijuana industry, a network of uninsured co-operatives designed to give pot businesses a way to access basic banking services. The plan, approved Wednesday, seeks to move the marijuana industry away from its cash-only roots. Banks routinely reject pot businesses for even basic services such as checking accounts because they fear running afoul of federal law, which considers marijuana and its proceeds illegal. The result: pot shop owners deal in large amounts of cash, which makes them targets for criminals. Or they try to find ways around the problem, like drenching their proceeds in air freshener to remove the stink of marijuana and try to fool traditional banks into accepting their money. "This is our main problem: financial services for marijuana businesses," said Senator David Balmer. "We are trying to improvise and come up with something in Colorado to give marijuana business some opportunity, so they do not have to store large amounts of cash."

Spain’s ‘Robin Hood’ Swindled Banks To Help Fight Capitalism

April 22, 2014 Ashifa Kassam, www.theguardian.com Resist! Civil Disobedience, Finance

From 2006 to 2008, Duran took out 68 commercial and personal loans from 39 banks in Spain. He farmed the money out to social activists, funding speaking tours against capitalism and TV cameras for a media network. "I saw that on one side, these social movements were building alternatives but that they lacked resources and communication capacities," he said. "Meanwhile, our reliance on perpetual growth was creating a system that created money out of nothing." They call him the Robin Hood of the banks, a man who took out dozens of loans worth almost half a million euros with no intention of ever paying them back. Instead, Enric Duran farmed the money out to projects that created and promoted alternatives to capitalism. After 14 months in hiding, Duran is unapologetic even though his activities could land him in jail. "I'm proud of this action," he said in an interview by Skype from an undisclosed location. The money, he said, had created opportunities. "It generated a movement that allowed us to push forward with the construction of alternatives. And it allowed us to build a powerful network that groups together these initiatives."

Days of Action Against Wells Fargo, April 28th and 29th

April 15, 2014 FANG, www.docs.google.com Resist! Finance, Occupy

All injustices are inherently linked. In the 21st century one of the strongest links can be found in the massive financial institutions that fund myriad forms of economic, social and environmental destruction. In 2013 Wells Fargo became the most profitable bank in America, raking in $21.9 Billion. This money was largely made by taking advantage of working-class people, funding the prison/deportation industrial complex, and from investing in the fossil fuel industry. Wells Fargo is perhaps most notorious for their abusive and criminal housing practices - foreclosing on tens of thousands of people a year and doctoring paperwork to speed up this process. To call attention to these abuses, Occupy Our Homes and the Home Defenders League have called for National Days of Action against Wells Fargo on April 28-29th. The organizers for this mobilization are asking groups to hit Wells Fargo on all fronts.

Who Does The Chamber Of Commerce Represent?

February 7, 2014 Staff, www.citizen.org Educate! Chamber of Commerce, Democracy, Finance, Finance and the Economy

More than half of the U.S. Chamber of Commerce’s contributions in 2012 came from just 64 donors, according to a new report released today by Public Citizen’s U.S. Chamber Watch program. The report, “The Gilded Chamber: Despite Claims of Representing Millions of Businesses, the U.S. Chamber of Commerce Gets Most of Its Money From Just 64 Donors,” analyzes the 1,619 contributions listed by the Chamber and its affiliate working against consumer access to courts, the U.S. Chamber Institute for Legal Reform (ILR), on their 2012 Form 990 tax returns. Just a tiny fraction of their donors account for most of their contributions, Public Citizen found. The average reported contribution to the U.S. Chamber was $111,254, with the top 43 entities donating a combined $80.4 million. “The U.S. Chamber is one of the largest conduits of dark money in the country, but it refuses to disclose its donors,” said Lisa Gilbert, director of Public Citizen’s Congress Watch division, where U.S. Chamber Watch is housed.

Don’t Take our Post Office Away: Saving the US Postal Service with Jim Sauber

August 28, 2013 Podcast Banks, Finance, Infrastructure, Jobs, Post Office, Privatization, Voting

Economist Jim Sauber who serves as Chief of Staff to the President of the National Association of Letter Carriers (NALC)

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