Robert Oak's blog

What's Up in Bankster Land?

bankstersIt might just be election time. We have Bank of America being sued for Countrywide's hustle, a program which pawned off bad mortgages onto Fannie Mae and Freddie Mac from 2007 to 2009. The U.S. District Attorney, Office’s Civil Frauds Unit in New York filed a civil complaint against BoA, who acquired Countrywide, for $1 billion.

The Complaint seeks civil penalties under FIRREA, as well as treble damages and penalties under the False Claims Act, for over $1 billion in losses suffered by Fannie Mae and Freddie Mac for defaulted loans fraudulently sold by COUNTRYWIDE and BANK OF AMERICA.

Manhattan U.S. Attorney Preet Bharara said: “For the sixth time in less than 18 months, this Office has been compelled to sue a major U.S. bank for reckless mortgage practices in the lead-up to the financial crisis. The fraudulent conduct alleged in today’s complaint was spectacularly brazen in scope. As alleged, through a program aptly named ‘the Hustle,’ Countrywide and Bank of America made disastrously bad loans and stuck taxpayers with the bill. As described, Countrywide and Bank of America systematically removed every check in favor of its own balance – they cast aside underwriters, eliminated quality controls, incentivized unqualified personnel to cut corners, and concealed the resulting defects. These toxic products were then sold to the government sponsored enterprises as good loans. This lawsuit should send another clear message that reckless lending practices will not be tolerated.”

The Third Party Debate

political grave yard
Disgusted by both parties? Upset that both Obama and Romney will do nothing about globalization, bad trade, importing foreign guest workers, offshore outsourcing, financial reform, stopping too big to fail, protecting the environment, soaring education costs, underwater mortgages, jobs, jobs, jobs, for profit health care costs or pick your pet peeve issue? If you're in a State where the election isn't close, lest you forget Florida 2000, you might want to check out third party candidates. There are four choices although they are not all on every ballot in every state.

Libertarian Party candidate Gary Johnson, Green Party candidate Jill Stein, Constitution Party candidate Virgil Goode, and Justice Party candidate Rocky Anderson. The hour and half event was moderated by former CNN anchor Larry King and Christina Tobin, founder and chair of the Free and Equal Elections Foundation and is available on C-Span and also the entire debate is viewable below for your political pleasure.

Binders, Stapling Things, Offshore Outsourcing and Women's Work

binderAh, the never ending word gotcha games of Election 2012.   The Internets went abuzz with binders as a symbol of female oppression after the second Presidential debate.   We even have Amazon office binder reviews being carpet bombed with political statements.   While funny as hell, economic oppression of women is not so funny.   Nor is it a word game.

As Our Economy is Outsourced to China the Obama Administration Once Again Does Nothing

Once again the U.S. Treasury and President Obama have refused to label China a currency manipulator, this time by delaying their report on exchange rates until after the election. The excuses abound, with the claim the Treasury Department must assess progress via a G-20 meeting, scheduled conveniently in November, to oh gee, the administration doesn't want to start a trade war.

Tax Facts Show Lower Personal Income Taxes Will Not Create Jobs

taxformsWe've noticed a hell of a lot of political B.S. baffle going on, in particular on business taxes. What happens is politicians conflate small business taxes with the individual income tax and that is due in part to the actual tax code.

The GOP typical claim is a lower top personal income tax rate will allow businesses to hire more people. That is really a lie. Business profits can enable more hiring, tax refunds for hiring and retaining employees can incentivize new jobs, but the personal income tax rates for those who own businesses has negligible effect.

One thing that gets lost in the rancor are business tax deductions. An employee's salary and most benefits are a business deduction. The business owner would not pay taxes on the costs of hiring a new employee beyond the payroll taxes associated with hiring, about 6.2% of salary. The most important element to hiring is demand for goods and services provided by the business, not taxes.

There are four most common business entities in the United States. Corporations, partnerships, S-corporations and sole proprietorships. Partnerships are primarily two types, a limited liability partnership (LLP) or a limited liability company (LLC). There are also other types of businesses, such as RICs, which are glorified investment vehicles with capital gains tax pass through. S-corporations also allow pass through taxes, although not as lenient as partnerships. Below is a graph of number of these firms by type, who had at least one paid employee during part of 2009.

 

type of business 2009

 

Sunday Morning Comics - The Debate Edition

Brought to you by the Comedians - Thank God this election doesn't address the real issues, otherwise we'd be out of business
Cup O' Joe

 

Good Morning! Rise and Shine! Get that Cup O' Joe...
break out the O.J....hang out with the pooch...time to check out the debate funnies. Both candidates have two minutes to be parodied.

 

The Rumble 2012 - Jon Stewart vs. Bill O'Reilly

 

Never Ending Stupid Bank Tricks

moneyhatBanks are at it again, as usual, and these latest adventures in fictional finance are off the public radar. Maybe the public has lost their outrage and why the latest news is out of earshot. Maybe people are just exhausted, watching absurdity after outrage coming from these financial institutions and the ones who are supposed to watch them. After all, nothing ever changes. We hear the same song, just a little bit louder and a little bit worse.

Low Income Households Have Expenses More Than Twice Their Income

A shocking claim was made by various press sources that those at the bottom of the American economic pile have living expenses which are double their income.

The bottom fifth of the U.S. income distribution -- 24.4 million households -- on average earned $10,074 in after-tax annual income and spent $22,001 last year,

America is Great, Just Not for Most People Who Work for a Living

despairThe never ending stream of bad news for the U.S. work force cascades upon us like a tidal wave of despair. A host of studies have come out which put into numbers what most of us know, the American worker is being taken to the brink of financial ruin and even death.

Suicide has replaced motor vehicle accidents as the leading cause of death by injury and has increased 15% since 2000. While most people who commit suicide has psychiatric disorders, the fact is higher incidents of suicide do happen during bad economic times. Even more amusing is the government response, as if the best cure for feelings of despair, low self worth is not a damn job along with a healthy dose of respect for working people.

Homeless rates have actually not changed between 2009-2011, but that's only due to a large grant by the Federal government to keep more people sheltered. Now that funds have run dry and under attack by deficit hawks, expect homeless numbers to rise.

Despite the fact that the number of homeless people was essentially unchanged between 2009 and 2011, there is much reason for concern. As this report points out, economic and demographic indicators linked to homelessness continue to be troubling. Homelessness is a lagging indicator, and the effects of the poor economy on the problem are escalating and are expected to continue to do so over the next few years.

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