Thursday, November 20, 2014

Big Companies are Making Big Deals Again

Recent financial woes reshaped the U.S. economy, but big companies are making big deals again, especially in health care, technology and the media industry.  Monday was a tipping point following the acquisition between two big pharmaceutical companies and then with another multi-billion dollar takeover between two oil field service companies. It's the biggest year on the books since 2000. The conditions are ideal, with borrowing costs low and share prices rising, and because deals don't happen unless people are feeling good, it seems that corporate leaders are optimistic with the times, with foresight on growth. [more...]

November's "Down Under" Theft of Your Bank Account

On November 16, the world of banking and money was officially flipped upside down because of actions taken by the G-20 nations meeting "down under" in Brisbane, Australia. People deposit their money in banks for safety. But on November 16, this gathering of 35 national leaders turned your bank into one of the most unsafe places to put your money. Without warning, these G-20 leaders agreed that the money in your bank account can be seized to pay bank debts. And some of these leaders - especially President Barack Obama - have already begun imposing billions of dollars in regulatory penalties on banks to squeeze money out of them to grow their governments. [more...]

Wednesday, November 12, 2014

Big Bank Bail-Ins vs. Bail-outs: Bad News in Disguise

In the November 10 London Telegraph, James Titcomb reports that the chairman of the international Financial Stability Board Mark Carney, Governor of the Bank of England, reveals how future bank problems will be handled. His plan is that future problems in banks that are "too big to fail" will never again end in government bailouts using taxpayer money. Instead, as Craig Smith and I explained in our latest book, Don't Bank On It! The Unsafe World of 21st Century Banking, governments will employ "bail ins" forcing what he calls "creditors" of various kinds to bear banks' losses.

This seemingly good news, however, conveniently neglects to reveal who all these "creditors" are. It turns out that they include mere bank employees, whose income and pensions may get a "haircut" to cover bank shortfalls. Those stuck paying for bank shortcomings may also include customers - depositors who do not understand that when they opened a bank account, they were in effect lending their money to a bank and getting in return only an IOU. [more...]