Tag: Occupy Wall Street

How to make money in finance

| January 3, 2012 | 0 Comments

By Laughing Squid on Flickr

J. Bradford deLong writes that there are only two real ways to make money in finance:

find people with risks that need to be carried and match them with people with unused risk-bearing capacity, or find people with such risks and match them with people who are clueless but who have money.

People who are clueless and have their own money to lose are unfortunate. People who are clueless and managing other people’s money, especially that of taxpayers, should be hit by a Russian telescope falling from outer space.

Bloomberg took a recent look at some of the German, Italian and American towns that have lost a great deal of money on interest rates swaps purchased from JP Morgan Chase and other banks and are now having to declare bankruptcy, downsize personnel and cut services. Why did they undertake these deals in the first place? Continue Reading

Lessons from Lagarde in 2012

| January 2, 2012 | 0 Comments

It’s hard to believe, but it’s been almost a year since the start of the Arab Spring. This tsunami of popular revolt removed, among others, the longest serving modern leader of one of our cornerstone civilizations. Who dares to claim that any country is wholly immune to such an uprising?And it’s still rolling on as Egyptians take to the streets to keep the military from hijacking the people’s revolution. Tunisia looks to be on a firmer footing, while the full outcome of Gaddafi’s ouster in Libya is not yet apparent. The outbursts of popular discontent in Bahrain, Jordan, Yemen, Syria, Saudi Arabia remain unresolved.

Christine Lagarde, the head of the IMF, has a tendency to voice inconvenient truths. (Her recent comments on another topic invited a not-so-subtle suggestion to sit down and shut up.) Here’s her view on the spark that lit the Arab Spring:

“[While] top-line economic numbers—on growth, for example—often looked good, too many people were being left out.”

She also concedes the extent to which the Very Serious People at the IMF, and everywhere else, were caught off-guard:

“[...] we did not fully anticipate the consequences of unequal access to opportunities. Let me be frank: we were not paying enough attention to how the fruits of economic growth were being shared.”

Will leaders of other seemingly invincible countries take this lesson to heart in 2012?

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Finance Addict will return on January 2

| December 28, 2011 | 0 Comments

Until then, have a look at the top 10 FA stories from 2011. Happy New Year to you and yours!

10. Notes on global wealth. We learned some interesting things from Credit Suisse’s Global Wealth Report.

9.   No time for tax reform. The tax code is “riddled with special preferences”, says one who should know — Tim Geithner, U.S. Treasury Secretary.

8.  Black Friday, television and debt. The holiday season is a good time to look at whether television ads caused us to take on more debt. A study from 2009 says that they did.

7.  What’s underneath the $470 billion TARP?  Be prepared to throw up a little after reading the Government Accountability Office’s annual audit on TARP.

6.  Greek CDS shenanigans. How to avoid calling a spade a spade.

5.  What the top 1% doesn’t want you to know. Up until now a lot of the dialogue has been around hurt feelings and hypotheticals. Here’s what’s really revealing.

4.  OWS? Here’s who the banks should really be scared of. We should be paying attention to another fast-spreading movement that can do a lot more direct damage to the big banks.

3.  Hard evidence: bailed-out banks take more risk. A recent study actually lets us observe moral hazard in action.

2.  AIG chairman says that you just don’t get it. Steve Miller is the chairman of AIG, which received bailouts totaling $69.8 billion in taxpayer money. Which has not been fully repaid. Here’s what Steve said recently.

And our #1 story of the past year was… Continue Reading

All I want for Christmas is….

| December 23, 2011 | 0 Comments

THIS, which comes courtesy of Occupy Central. Wouldn’t it be great if we  had a uniform for all public servants, up to and including the President, so that we can see who else they they are serving? Maybe this kind of information, served up in a difficult-to-miss manner, can help us to roll back the tide of money that is slowly strangling our democratic process. I don’t believe in Santa Claus, but I can still dream.

Happy Holidays and Happy New Year to you from the Finance Addict. I’m deeply grateful to know that you’re out there. Here’s hoping that we can help make change together in 2012. See you here again on January 1st!

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What the top 1% doesn’t want you to know

| December 22, 2011 | 1 Comment

By (cup)cake_eater on Flickr

You know that Bloomberg article by Max Abelson, “Bankers Join Billionaires to Debunk ‘Imbecile’ Attack on Top 1%”? A lot of folks have been raging –some politely, some not– about some of the outrageous points of view expressed by these so-called Masters of the Universe. I can’t say that I blame them. In fact, I almost regret the 3 minutes of life that I wasted by reading what these Marie Antoinette-types had to say. It basically came down to “haters gonna hate”.

But I’m glad that I did, because there’s some very important information hidden among all the maddening but pointless talk of “job creators” and getting high-fives from other richies at the country club over egg-white omelets.

Continue Reading