Entries in the Category "Financial"

Bank of America boosting credit card rates

The Wall Street Journal is reporting that Bank of America is increasing its credit card rates on 4 million of its customers who carry a balance beginning in June.

A BofA spokesperson stated that fewer than 10 percent of its customers who are "underpriced relative to market conditions" will see these changes.

The customers chosen for this rate hike are ones who both carry a balance and have low APRs—averaging 8.5 percent currently. Their rates will now rise into the low-to-mid teens.


I am currently at 14.99% and I received a notice from BofA that my APR's (purchases, cash advances, and balance transfers) are going up to 28.49% after my May statement!!!

Of course, they also decided to knock off a couple hundred dollars off my credit line without telling me last week. It seems that their plan was to reduce my credit line bit by bit as I pay it off. The downside is not informing me in advance, I have to find out through my online account.

So I will be calling them to opt-out from this rate increase. Then pay off the total balance, and just leave it at zero. Who knows by then if BofA goes and reduce my credit line to just a few hundred just to screw me over.

Thank you Bank of Shame!


Latest National Debt - passing $11.1 trillion

As of 03/31/2009

Debt Held by the Public

Intragovernmental Holdings

Total Public Debt Outstanding

What does one trillion dollars look like?

PageTutor.com shows us! - Link

Stop Intervening in the Economy

Stop Intervening in the Economy - Ron Paul

Before the House Financial Services Committee, Humphrey Hawkins Hearing, February 25, 2009



If you thought incurring a federal deficit of $450-500 billion was bad, try $1.75 trillion!

Link - Official: Obama budget sees $1.75 trillion deficit

Here's a good read from the Wall Street Journal:
The 2% Illusion: Take Everything they earn, and it still won't be enough

From the Article:
Consider the IRS data for 2006, the most recent year that such tax data are available and a good year for the economy and "the wealthiest 2%." Roughly 3.8 million filers had adjusted gross incomes above $200,000 in 2006. (That's about 7% of all returns; the data aren't broken down at the $250,000 point.) These people paid about $522 billion in income taxes, or roughly 62% of all federal individual income receipts. The richest 1% -- about 1.65 million filers making above $388,806 -- paid some $408 billion, or 39.9% of all income tax revenues, while earning about 22% of all reported U.S. income.

Even with raising taxes on the wealthy, capital gains, and dividend rates, Obama is still short hundreds of billions of dollars he will need for his agenda.

How can we believe that Obama can promise that households earning less than $250,000 won't see their taxes increased by "one single dime?"

The middle class is going to get taxed. It is simple as that.

Bail out the bad borrowers too?

Time.com - I Bought an Expensive House. My Bad, Not Yours

Yahoo Finance - Bernanke: Bail out bad borrowers too

Rick Santelli responds back to White House

Trader Buzz on the Government's Plan

Link - http://www.cnbc.com/id/15840232?video=1039849853

VIDEO: 'The government is promoting bad behavior... do we really want to subsidize the losers' mortgages... This is America! How many of you people want to pay for your neighbor's mortgage? President Obama are you listening? How about we all stop paying our mortgage! It's a moral hazard'

Ron Paul v Ben Bernanke 2/10/2009

Ron Paul v Ben Bernanke 2/10/2009

Ron Paul on Fox Business 10/23 - He was right!

Ron Paul commenting on Greenspan on CNN 10/24

National Debt Clock too small

BBC: US ideology takes a knock

Watch this video at:


Hacker steal Best Western information

Best Western has confirmed an investigation is underway into how the chain's computer defenses were breached on Thursday night.

An Indian hacker allegedly helped a Russian mafia gang steal identities of an estimated eight million people that could lead to a loss of around three billion pounds, the most audacious cyber-crime in history.

Details of how to access the information - which included home addresses, place of employment and credit card details - were sold through an underground network operated by the Russian mafia.

The attack scooped up the personal details of guests who stayed at Best Western hotels during the past year, potentially eight million people.

You may be affected if you stayed at one of Best Western's 1,312 European hotels since 2007.


2008 Pig Book Released - CAGW

Citizens Against Government Waste have compiled a list of all pork-barrel projects in the federal budget.

The 2008 Version can be found here

For my Congressman, NJ 11th District, Frelinghuysen has submitted 42 projects totaling $86.8 million dollars.

A credit card to avoid...

credit_cards.jpgThere are quite a lot of credit card offers that you get in the mail that may offer 0% APR for a limited time, or a high credit line, or even free online credit scores at no charge.

Here's one credit card offer that I got in the mail from Credit One Bank.

It promises me, after a credit check, a line of credit up to $1,000, plus free online monthly credit score, free account updates, and I get to pick my own payment date. Oh yea, I also get automatic credit line increase reviews.

These are the only positives for this offer.

The negatives...

1) APR is 23.90%!!! Not even a promotion rate.

2) There is an annual free of $69.00. But it is stretched over the year so it is $5.75 per month.

3) An enrollment fee of $69.00. Of course, one-time only fee.

4) It does not mean you will get a credit line of $1,000, but up to that amount. So the lowest credit line you can possibly receive from Credit One is $200.00. So if you do get $200, then your remaining credit would be $125.25 (b/c of the annual and enrollment fees).

Really, how can you build your credit on this card?

The card is more likely to wreck your credit score instead of improving it.

Fiscal News: National Debt Interest

With our national debt reaching almost $9.4 trillion, the federal budget's amount to pay the interest on that debt has passed $400 billion.

The interest expense paid on the National Debt is the third largest expense in the federal budget, right after Defense and Health and Human Services, HUD, and Agriculture.


Jon Stewart: Broken Arrow

I believe that for the rest of his term, Bush is not allowed to make any more speeches or statements regarding the nation's economy.

Housing Bubble

Falling Dollar hurting expats worldwide

American expats living in London, Paris, Tokyo, and other countries are getting slammed by the falling dollar. Another expected interest rate cut by the Fed won't help.

If you live in Tokyo, a year ago, one dollar could get you 116-117 yen. It even went above 120 yen back in July. Today, it is about 97-98 yen. A 16% decrease.

In Europe, it was 1.34 to every dollar. Today, it is 1.58. Dollar has lost 16%. If you compare two years ago, the dollar lost about 24%. Five years, the greenback lost almost 33%.

Even in Canada, their dollar has pretty much reached parity. Same goes for the Swiss Franc. Go to Australia, they are almost within parity. Five years ago, you could have fetch about 1.7 AU for every US dollar.

In Amsterdam, small currency outlets are refusing to sell dollars for local money because they cannot afford the buy/sell spreads. Tourists would have to go downtown, to the central station, or post office.

US Dollar Index

A possible 1-percent cut by the Fed will cause the dollar to fall again, and we may see another record low in the US Dollar Index.

In July 2001, the index hit a high of 119.61. Since then, it has lost about 40 PERCENT!

Can the Fed prevent a total collapse of the mortgage industry?

Sometimes, it is better to get a UK perspective.

Telegraph UK reported that the US Federal Reserve has accepted $200 billion of housing debt as collateral to prevent an implosion of the mortgage finance industry and head off a full-blown economic crisis.

This came after an emergency conference call by the Fed governors on Monday night. It followed the melt-down of the US chartered agencies -- Fannie Mae, Freddie Mac, and other lenders -- which together guarantee 60 PERCENT of the entire US home loan market. Fannie Mae's share price has already fallen 19 percent in panic trading on Monday after Barron's suggested it may need a rescue package.

Keeping them solvent is a must since they wrap or insure $6 TRILLION in mortgages.

But is it going to be enough?

The Bank of England had to widen their range of eligible collateral. Even the ECB and the Swiss have boosted swap agreements with the Fed.

Will Fannie Mae and Freddie Mac have to be nationalized, as part of a huge government bailout?

After a 400+ point rally in the markets on the 11th, the rally has again fizzled out.

* * * * * * * * *

Of course, a March 2nd article by the Telegraph titled "The Federal Reserve's rescue has failed" showed even worse news. According to recent estimates, we are only halfway through the tsunami of rate resets on teaser loans.

UBS estimates the cost of the credit debacle to reach $600 billion. Some say it could even reach $1 trillion.

* * * * * *

Bear Stearns had to deny news that it was facing a cash shortage. CEO Alan Schwartz stated that they still have a $17 billion cash position. Shares went down 11 percent two days ago based on speculation that the firm, which is the second-biggest underwriter of mortgage-backed bonds after Lehman Brothers Holdings Inc., was running short of funds to cover liabilities.

Dollar Falls Below 100 Yen for the first time in 12 years

The dollar dipped below 100 yen for the first time in 12 years Thursday and hit record lows against the euro amid a growing consensus that synchronized efforts by central banks will not stop a deterioration in the U.S. economy.

Meanwhile, the euro exceeded $1.56 for the first time.

The British pound hit a 3-month high, reaching $2.0374.

Of course, the yen has bounced back above the 100 mark, trading at 100.16. The U.S. currency has never fell below 100 since November 1995.

Japan is now worried because the yen has risen 10 percent against the dollar and may hurt their economic growth.


Pay-Option Loan Risk plagues Countrywide

Blame the lender or blame the borrower?

Countrywide Financial Corp., the largest home loan provider, could see further trouble ahead with another risky slate of loans -- pay-option adjustable rate mortgages.

These pay-option loans give borrowers the option to make a lower payment but can result in the unpaid portion being added to the principal balance. In most cases, the borrower would just pay the interest, leaving the principal balance untouched. The objective of these borrowers were to capitalize on the housing boom to exact a substantial profit when they sell the home after a few years.

Unfortunately, with the housing market in the dumps, these borrowers are stuck with these pay-option loans which have grown beyond their original loan amount because they cannot make the payment. Countrywide says they had nearly $29 billion in these risky loans at the end of December, of which $26 billion of the total have grown beyond their original amount.

81 percent...that's EIGHTY-ONE PERCENT of these loans were made out to borrowers who provided little or no documentation of their income.

71 percent with pay-option loans elected to make less than full interest payments.

5.71 percent of borrowers are at least 90 days late, up from 0.65 percent a year earlier.

* * * * *

Honestly, why pick a loan where you just pay off the interest? Plus you got folks not paying the full interest which basically increases the overall balance of the loan. Then of course these borrowers are claiming that their lender or broker were hiding the real facts from them. Boo hoo. Total bullsh*t. Even if the housing market was going up 15-20% per year, the profit take will be small if you let the interest pile up on the original loan. A majority of these Countrywide loans originated in California and Florida which may explain the tempting aura of high profits to these borrowers.

You can blame the bank for offering the loans, but also blame the borrower for being stupid enough to take it.

Business Week

Rick Santelli on Ron Paul's Fed Testimony

C'mon folks, listen to him.

Latest foreign exchange reserves - Jan 08


UNITED STATES - $71.6 billion

UNITED KINGDOM - $99.1 billion

FRANCE - $115.7 billion

GERMANY - $147.3 billion

HONG KONG - $159.9 billion

BRAZIL - $189.4 billion

SOUTH KOREA - $261.9 billion

TAIWAN - $272.8 billion

INDIA - $290.8 billion

RUSSIA - $481.3 billion

EUROZONE - $511.3 billion

JAPAN - $996 billion


At the end of 2007, 63.77% of the identified official foreign exchange reserves in the world were held in United States dollars and 26.4% in euros.

Just how long before those countries holding our dollars start moving their reserves into euros or yen?

US Dollar Index hits record low

See US Dollar Index Chart (courtesy of INO.com)

Federal Reserve Chairman Ben Bernanke visit to Capitol Hill yesterday did not give quite a lot of confidence about our economy.

With future interest rate cuts become more likely, the value of the dollar continues its downward spiral.

The Euro hit an all-time high of $1.5229 on Thursday. The British pound is at $1.9841. The dollar dipped to 104.07 Japanese yen. All are approaching three-year lows.

Our dollar index, a measure of the US unit's strength against a basket of foreign currencies, fell to a record low of 74.22.

Ron Paul at Bernanke Visit to Capitol Hill

Opening Statement

Paul's Question to Bernanke

History of Tax Hikes, Tax Cuts Since 1992

With people arguing whether our tax rates are hurting or helping the wealthy, let's take a look at the historical figures. To me, it seems people always think in short-term outlooks, not long-term.

1993 saw a tax hike on the wealthy (via two new brackets at the top), and then 2001 through 2003 saw a series of tax cuts that lowered the tax brackets as follows:

  1992   1993 -
  2001  2002  2003 -
15% 15% 15% 10% 10%
15% 15%
28% 28% 27.5% 27% 25%
31% 31% 30.5% 30% 28%
36% 35.5% 35% 33%
39.6% 39.1% 38.6% 35%

From 2000 to 2002 most brackets dropped by one percent, and there was a new low bracket added for the "lucky duckies" at the very bottom.

In 2003 most brackets got an additional cut of two percent with a special gift for the "other" lucky duckies, the ones at the top. But note that the rich still paid more in 2003, and everybody else paid less, than was the case in 1992.

Now if we could just balance the budget...

US Dollar has lost 35% of its value since Feb 2002


Nice chart of the US Dollar Trade-Weighted Exchange Rate Index from 1973 to today.

Already, the US Dollar has lost more than a third of its value (35%) against a basket of major currencies since Feb 2002.

Also, the decline seems to be accelerating. The USD lost 12.5% in the last year, 3.5% in the last month, and 1.5% in the last week alone.

National Debt hits $9 Trillion for the first time

The Treasury Department said Wednesday that the debt subject to limit was at $9 trillion on Tuesday. It was $8.996 trillion on Monday.

Last month, Congress passed and President Bush signed into law an increase in the government's borrowing ceiling to $9.815 trillion. It was the fifth debt limit increase since Bush took office in January 2001. Those increases have totaled $3.865 trillion.

The administration contends the rising debt reflects such factors as slow economic growth during the 2001 recession, the Sept. 11 attacks and the cost of fighting terrorism.

The total national debt is actually higher than $9 trillion because it includes borrowing by some agencies that are not covered by the congressional debt limit. That total was $9.086 trillion on Tuesday.

Did you know?

It took the country from George Washington until Ronald Reagan to reach the first $1 trillion in debt.

* * * * *

Bush has spent $3.865 trillion of our debt since he took office in 2001.

Now with our economy slowing down, the mortgage sub-prime crisis, and a potential war with Iran, a lower federal deficit sounds like a joke. Who knows if $10 trillion level is going to be just right around the corner.


Woe the US traveler going abroad

The British pound crossed $2.0725, a 26-year high. ($.48 US cents) It was about $1.80 a few years ago.

The Euro passed $1.4466, another high. ($.69 US cents) It started at around $0.85-0.90 when it first came out.

The Yen is up to 115.17. Remember when it was around 250.

The Loonie (CAD) is 1.0511 ($0.95 US cents) Remember when it used to cost about $1.35 to 1.40 in favor of Americans.

We used to get two Australian dollars for one US dollar. The rate is now 1.0837, almost towards parity.

* * * * *

If US interest rates drop again, expect the dollar the fall. We could made quite a taking if we went into currency trading a few years ago and know that strong US dollar is heading for the dumps.

Ron Paul on Sub-Prime Mortgage Meltdown


The $3 ATM Surcharge Fee

bank_of_america.jpgOn Sept 20, I went to the Bank Of America branch at the corner of Broadway and 53rd Street, and when I put in my local bank branch card, it asked me to pay a $3.00 ATM surcharge.

A few weeks ago, it was $2.00.

Thank you Bank of America.

Then I went searching on the web, it seems Bank of America was quietly rolling out the increase during the months of July and August without any noticeable announcement.

$3.00 is the highest fee ever imposed nationwide by a major bank. Unfortunately to millions of consumers, BofA has the largest ATM network in the USA.

It is only a matter of time before the other banks decide to raise their ATM fees. Currently, Citi, Chase, Wachovia, and Wells Fargo have no immediate plans to raise ATM fees.

So what is BofA's excuse for this?

Bank of America spokeswoman Betty Riess:
The higher fees help offset the "significant investment" the bank has made to upgrade and expand its cash machines. The bank decided to charge non-customers a $3 fee at 10,700 ATMs — nearly two-thirds of its network — in bank branches and supermarkets as a way to "reduce wait time for our own customers," Riess says.

At shopping malls, convenience stores and airports; the withdrawal fee at those machines remains $2.

Here's Bankrate.com Fall 2006 survey of ATM fees

Of course, your own bank charges you a separate fee for using BofA's ATM and any other bank. So your cash transaction would cost you at least $4.00 to $5.50.

USPIRG has a talking points memo dealing with the BofA increase.

Canadian Dollar Reaches Parity with US Dollar

twenty_canadian_dollar_bills.jpgI could still remember when we drove up to Niagara Falls and the exchange rate was like $1.35-1.40 in favor of the US dollar.

Today, after 31 years, the Canadian dollar reached parity with the greenback. It hit $1.0064 in favor of the Canada dollar, but later fell down to 99.56 U.S. cents.

More canadians are coming across the border to shop in the U.S. because of their stronger currency and that product prices in the U.S. are usually lower than those in Canada.


Credit Card companies revising their late fees structure

It would seem that credit card companies are bent on squeezing out the regular customer every cent they make. Even the most creditworthy customer could be shafted if a late payment is made.

According to Bill Hardekopf of lowcards.com, credit card companies are adding a third-tier for late fees. For example, Chase now charges $15 on balances up to $99.99, $29 on balances between 4100 and $249.99, and $39 on balances over $250.

Remember about the Fed reducing interest rates by 0.5 percent. That is good news for consumers, but the bad news is that the credit card companies are slow to pass the lower rate to them. They would calculate the finance charge on the rate before for the current billing month or possibly the next month, before the new lower APR kicks in.

As for the rest of the credit cards:

Discover: After October 1, the late fee will be $19 on balances up to $250, and $39 on balances over $250.

Bank of America: $15 on balances up to $100, $29 on balances over $100 up to $250, $39 on balances over $250.

AMEX: $19 on balances up to $400, $38 on balances over $400.

Capitol One: $19 on balances up to $100, $29 on balances of $100 up to $1,000, and $39 on balances of $1,000 and over.

Citibank: $15 on balances up to $100, $29 on balances of $100 up to $250, and $39 on balances of $250 and over.

A cash advance? Discover just boosted their cash advance rate from 20.99 to 22.99 percent. Chase charges 28.24 percent on its standard accounts. Household Bank MasterCard has a cash advance rate of 25.15 percent. Blue from AMEX and Sun Trust's Visa charge 23.34 percent.

Remember, there is usually a transaction fee of 3 percent or more on top of that outrageous interest rate.

Also, the worst penalty is the default rate. If you make a late payment on any bill or loan reported to the credit bureaus, you could see your interest rate skyrocket to the default rate — even if you have a perfect payment record with that card.

Fortunately, Citibank announced it was eliminating universal default. Capitol One said it did not have a universial default penalty. Chase charges 32 percent.

Of course it is important to pay on time. But still, some of late fees are outrageous and would be detrimental for consumers caught in some financial strain.

MSNBC - Why are credit card rates still out of control?