Many Canadians don’t have an emergency fund according to a RBC survey. The RBC Index also showed a sharp drop in consumer confidence down to 70 against its baseline of 100 established in November 2009. That is a drop of 24 points in the last quarter. Clearly there is no umbrella for the possibly rainy days ahead.
This is a guest post by Chris Johnson.
Thanks to the rising costs of almost anything and the bad state of the economy in general, more and more people are finding it tough to pay their bills. That’s to say nothing of being able to save money for a “rainy day”. Seniors are especially susceptible to those issues because most senior citizens are on a fixed income. Let’s face some facts. Costs are going up. However, the fixed income that seniors are receiving is not. So, whether you are a senior citizen yourself or you are just caring for one, you need to take action. Luckily, there are plenty of things that you can do to cut down your energy bills.
Some posts just cry out to be written in and for me, this was one. The title, Elizabeth Rocks, came quickly to mind when I considered what I should write.
I realize that there are a number of Elizabeth’s I know that really are most impressive. As a Brit, Queen Elizabeth II is one of these fine ladies. She provides a unifying element in her various realms, and not least in Canada. She is almost universally liked, no small feat given her position.
Another impressive Elizabeth is Elizabeth Able, a co-moderator at Cre8asite Forums. She has a number of intriguing online properties and QuoteSnack is perhaps the best-known of these.
The urge to write this post however did not come from an Elizabeth I know already. However a CNN article entitled, What’s so scary about Elizabeth Warren? was the trigger that encouraged me to be to put pen to paper, as you might say.
Elizabeth Warren doesn’t look or sound scary. She’s a 61-year-old Harvard Law School professor from Oklahoma who has written personal finance books, some with her daughter.
But conservatives and some bankers are trying to kill any chance that Warren – a consistent critic of the financial sector before it was cool to be one – will run the consumer financial protection agency that’s part of the Wall Street reform measure just signed into law by President Obama.
Here is what the article suggests she will be bringing to her new position:
Her ideas for a regulator for financial products became the template for the new agency, which is tasked with regulating mortgages and credit cards, as well as making new rules for much of the financial industry and enforcing them at the largest banks.
Before the financial crisis, she was already the authority on mounting credit card debt. And her books about the financial decline of the middle class have been must-reads in the consumer advocacy community for years.
Warren’s nomination would send a strong signal that the White House is willing to stand behind an aggressive regulator who will emphasize consumer needs over bank needs. White House spokesman Robert Gibbs called her “very confirmable” on Monday.
Like many I share the popular opinion that bankers in general can be somewhat arrogant and are certainly not very customer centric. They are already circling the wagons but hopefully Elizabeth Warren will be given the power to ensure US society gets a more customer-responsive banking system.
Ford Motor Co. said it would ramp up automobile production by 150,000 U.S. cars this year. Sales have surged due to the U.S. “Cash for Clunkers” program. This is the popular name for the Cars Allowance Rebate System (CARS) program.
The rebate allows car buyers to receive up to $4,500 from the government toward the purchase of a qualifying new vehicle when trading in an older model that gets 18 miles per gallon or less.
Who’s Cashing in on All Those Clunkers? According to the Compete blog, the cash for clunkers program boosted online attention from new vehicle prospects, both in terms of unique visitors to the cars.gov site and to OEM sites. That attention, combined with attractive incentives to junk an old gas guzzler and replace it with a newer, more fuel efficient model contributed to a July sales surge of more than 15% month-over-month.
Not everyone was happy. According to watchdog groups, some ‘clunkers’ dealers were requiring payback agreements. The government website is very clear that Consumers Are Not Required To Sign Contingency Agreements To Pay Back The Dealer Should The Cars Credit Be Rejected. Some dealers were also asking consumers to keep their “clunker” until the deal was approved by NHTSA.
Another unfortunate consequence of all this is that ‘Cash for clunkers’ is hurting charities. Some charities rely on car donations to raise funds. Instead people who would normally donate their car are now turning them in to dealerships. While those who donate vehicles to charity receive a tax deduction for the price the car sells for at auction — typically $500 to $900 — the CARS program offers a $3,500 or $4,500 rebate for trading in a used vehicle. That’s a very tough choice if you would really prefer to support your charity.
![Reblog this post [with Zemanta]](http://img.zemanta.com/reblog_e.png?x-id=922f1953-f619-49f1-b46a-f4965cb6f360)
Downturn is nothing like Great Depression as the Vancouver Sun reminds us. Canadians are ‘light years’ away from the misery of the 1930s according to many observers.
H. Blair Neatby, Professor Emeritus in the History Department at Carleton University, knows what hardship is. He grew up during the Great Depression in Saskatchewan. He acknowledges the current recession is hurting many Canadians. But he also says today’s economic troubles are nothing compared to the severe insecurity and adversity faced by Canadians during the Great Depression.
That is an opinion shared by McGill University economist William Watson, writing in the February issue of Policy Options magazine. He says likening our current woes to the Dirty Thirties trivializes the hardships of our parents and grandparents who lived through both it and the war. “Nothing awaiting us in 2009 is likely to rival either the 1930s when the unemployment rate rose to I in 3 or [the] blitzkrieg,” he said. (Link to PDF version of article)
Even though the current recession may deliver knocks of somewhat lesser impact than the Great Depression, it can still be a school for useful lessons. Blair Neatby hopes that the recession may teach younger Canadians growing up in an age of debt and leverage, a simple lesson about the value of saving.
As he said, “People like me came home from the war and became a generation of savers. And we looked with some concern at our children and grandchildren who didn’t seem to be as concerned with the importance of saving. They hadn’t lived, as we had, through a time of great insecurity.”
Saving so as to have reserves and choices during hard times is timeless advice that is always right. Hopefully these lessons on saving from the past will not be lost on all as they now struggle during these difficult times.
![Reblog this post [with Zemanta]](http://img.zemanta.com/reblog_e.png?x-id=d1a5d131-7ab1-4f04-9fef-1a9dbf8c5da7)
Bank Bonanza? Forbes Says Don’t Bet On It
Earnings season won’t be an apocalypse. But boom times? Hardly. Don’t let a little accounting change fool you; banks will still struggle to eke out profits this year. Rising loan defaults and the gloomy economic conditions are largely to blame, despite factors seeming to work in banks’ favor.
It may be that Forbes is missing the big picture. After all we have just had the G20 summit. The world’s press has given a largely positive reaction to the G20 summit’s efforts to tackle the global financial crisis. But some newspapers express fears that the G20′s measures do not go far enough.
The London-based Financial Times described the detail on future fiscal stimulus and cleaning up the banks as “disappointingly thin”.
The weakest part of the package is the financial element. Banks are still gravely wounded. The financial crisis lit the fuse for this recession. It may also prolong the fire; the crisis will last much longer if major countries refuse to clean up their banks. Given the range of countries at the G20, a one-size-fits-all bank rescue policy was never feasible. But the absence of detail about a common approach to cleansing the banks of their toxic assets is extremely disconcerting. Stating vague commitments only serves to create fears that little substance lies behind the words.
Here is a brief rundown of the measures announced at the G20 meeting in London on April 2:
Items 3 and 4 in that list may well have real teeth. There is public outrage at the details that have been revealed about bonuses and the circumstances under which they are often awarded and paid out. One might have hoped that corporate governance and individual morality might have made such bonuses the exception rather than apparently the rule.
In that light it is most satisfying to see what Henry Mintzberg is writing on Executive Compensation: It’s time to call the bluff of those highrolling CEOs. He is the Cleghorn Professor of management studies at McGill University. He suspects that when it comes to executive compensation, corporate boards are finally ready to take a stand. He offers the following win-win advice:
Dismiss out of hand, without one second’s hesitation, any candidate for a CEO position who seeks a compensation package that would single him or her way out from everyone else in the company. In fact, terminate discussions immediately at the mere mention of the word “bonus.”
These prove the candidate has no business running a business of co-operating human beings. (Should this person not comprehend, cite his or her mention a few moments earlier of the importance of “teamwork,” and how “people are a company’s greatest asset.”)
This proposal will save tons of money and send a positive signal to everyone else in the company for a change, and the firm might just end up with a CEO who is a real leader. Imagine that.
Great advice. It is a sad commentary on business when such wise words will be seen to be somewhat provocative.
Nevertheless the outrageous behavior of some members of the financial communities in both the USA and the UK and the global publicity about them mean that the world can never be the same. Banking bonanzas there may be in the future but it is essential that all stakeholders benefit rather than just a privileged and unworthy few.
![Reblog this post [with Zemanta]](http://img.zemanta.com/reblog_e.png?x-id=68b92cb8-5a89-4b3b-918e-22a4b84eb64d)
Bonus Bonanza is the most used cliché in the past week and the word bonus is clearly a word to be avoided if a value above $1 million is attached to it. It will undoubtedly bring with it the eyes of the world assuming inappropriate behavior.
I rarely follow the fire trucks to watch conflagrations but I could not forbear to write this post. Given the previous post, which showed the amount of stimulus funds going to US senior citizens was less than the amount of bonuses going to AIG executives, I found my data was erroneous. This was a common error since now apparently AIG documents show a higher total for bonuses. It seems that bonuses ‘showered like confetti’ according to the Connecticut Attorney General.
Richard Blumenthal, attorney general of Connecticut says he is asking insurance giant American International Group Inc. why documents appear to show the company paid $53 million US more in bonuses to its financial products division than reported earlier. These documents obtained by a subpoena show AIG paid $218 million US in bonuses to employees in a division blamed for much of the company’s troubles, not $165 million as previously disclosed.
The House of Representatives has now passed legislation to try to recoup the payouts. The measure would slap a 90 per cent tax on any bonuses received in 2009 by top executives at rescued companies.
Seniors’ meals versus AIG bonuses. It brings to mind the ill-fated Marie-Antoinette at the hands of the citizenry after her suggestion, Let Them Eat Cake.
![Reblog this post [with Zemanta]](http://img.zemanta.com/reblog_e.png?x-id=93f9cdc3-faf6-4b90-b6cd-7614835a091c)
The US Federal Stimulus Program is intended to bring the economy out of recession. That part of it going to seniors provides basic necessities such as meals as well since this sector of the population is hard hit in these belt-tightening times.
In New Jersey, $2.8 million is going for senior nutrition programs.
The money is part of $100 million being made available for senior nutrition services nationwide by the U.S. Administration on Aging. New Jersey’s Senior Nutrition Program currently delivers 6 million meals to 63,000 seniors each year. Of the 2.8 million in federal funds, two-thirds will go toward nutrition programs. The other third will be spent on home delivered meals for frail elderly persons.
The same is happening in other US states as well. On Wednesday, word was that Pennsylvania was to get $4 million in federal funding for seniors while $1.5 million for nutrition programs would be released to aid Minnesota seniors. The money from the Department of Health and Human Services will cover nutrition services at senior centers and community centers, home delivered meals to seniors and Native American nutrition programs.
Vice President Joe Biden said in a statement. “The Recovery Act will help ensure older Americans are not forced to choose between paying bills and buying food.”
The Meals on Wheels program is important to seniors hard hit by the recession. Shrinking budgets and rising transportation costs are making it hard for seniors to get the nutritious meals they need. Such funds will help to prevent drastic cuts to these essential programs.
This is all part of the total $ 1.2 trillion recovery program that the US government has put in place. It is interesting and somewhat ironic to compare this $100 million for seniors with the dollar values in the other major news item this week:
AIG Bonuses
The $165 million was payable to executives and was part of a larger total payout reportedly valued at $450 million. The company has benefited from more than $170 billion in a federal rescue. AIG reported that it had lost $61.7 billion for the fourth quarter of last year, which is the largest corporate loss in history.
It’s certainly time for change.
![Reblog this post [with Zemanta]](http://img.zemanta.com/reblog_e.png?x-id=3beba356-2dd3-4055-96b7-dde3b4a35fef)
Is Florida a giant Ponzi scheme as Neil Macdonald of the CBC suggested? Or is it perhaps that The United States is The Largest Ponzi Scheme in the World as Bill Bonner described.
Now Nouriel Roubini of Forbes confirms that view: it is The United States Of Ponzi.
Behold the Madoff in the mirror
Americans lived in a “Made-off” and Ponzi bubble economy for a decade or even longer. Madoff is the mirror of the American economy and of its over-leveraged agents: a house of cards of leverage over leverage by households, financial firms and corporations that has now collapsed in a heap. When you put zero down on your home, and you thus have no equity in your home, your leverage is literally infinite and you are playing a Ponzi game.
If you are not sure exactly what constitutes a Ponzi scheme, here is how the Security and Exchange Commission (SEC) describes it
Ponzi schemes are a type of illegal pyramid scheme named for Charles Ponzi, who duped thousands of New England residents into investing in a postage stamp speculation scheme back in the 1920s. Ponzi thought he could take advantage of differences between U.S. and foreign currencies used to buy and sell international mail coupons. Ponzi told investors that he could provide a 40% return in just 90 days compared with 5% for bank savings accounts.
Decades later, the Ponzi scheme continues to work on the “rob-Peter-to-pay-Paul” principle, as money from new investors is used to pay off earlier investors until the whole scheme collapses.
As the SEC points out it is a type of Pyramid Scheme.
In the classic “pyramid” scheme, participants attempt to make money solely by recruiting new participants into the program. The hallmark of these schemes is the promise of sky-high returns in a short period of time for doing nothing other than handing over your money and getting others to do the same.
The fraudsters behind a pyramid scheme may go to great lengths to make the program look like a legitimate multi-level marketing program. But despite their claims to have legitimate products or services to sell, these fraudsters simply use money coming in from new recruits to pay off early stage investors.
The SEC chart below shows how pyramid schemes can become impossible to sustain.
You may ask how does all this relate to what has been happening in the United States of America. In what sense is that a Ponzi Scheme? Perhaps the image below can typify what is involved.
The top part of the pyramid is what a company or individual has created in the past in assets. Often starting with zero, a worthwhile pile has been created. Everyone assumes that things will continue to grow in the future in the way they have in the past. People borrow to create the even bigger future that is the base of the pyramid. The lenders believe the promises and provide the funds to support the growth.
However just like the Ponzi pyramid there is a limit to growth. The Past was solid, the Future is unknown. They are all dreaming in Technicolor. Eventually it turns out their pyramid is build on a base of sand. The whole edifice collapses. Welcome to the world of Ponzi.
![Reblog this post [with Zemanta]](http://img.zemanta.com/reblog_e.png?x-id=450d7740-fbe6-46a4-8c12-5e0cd00179be)
AIG bonuses are ‘an outrage’ says President Obama, and he speaks for us all. How can the senior executives in AIG be so out of touch with reality that they rely on legal niceties to do what is so morally wrong? Perhaps that lack of judgment and apparent unawareness of how the real world functions explains their appalling track record. Well they seem to have shot themselves in both feet this time:
Barack Obama is vowing to pursue “every legal avenue” to stop a clutch of top executives at American International Group Inc. from pocketing multimillion-dollar bonuses, including some to employees who designed the risky credit instruments that helped topple the insurance giant.
The U.S. President joined congressional leaders and state regulators on Monday in demanding that the failed insurance giant, which has so far received more than $170-billion (U.S.) in government bailout cash, roll back $165-million in bonuses paid to employees over the weekend. Outrage was the word of the day as news spread of the payouts, some reportedly as high as $6.5-million.
Not surprisingly, the Bonuses overshadow foreign bank payments, which could have drawn equally violent reactions.
When it emerged on Sunday that foreign banks had received more than $50bn of US federal funds as part of the AIG bail-out, big beneficiaries such as Deutsche Bank and Société Générale must have braced themselves for an outcry in Washington.
Any senior executive of any financial institution should have a keen awareness of what is going on around the world and consider carefully the most appropriate reactions. In the UK, the Financial Services Authority (FSA) will set out a banking clampdown.
Britain’s financial regulator, the FSA, plans to clamp down on risky mortgage lending and City bonuses in a shake-up of banking rules due this week according to the British Sunday newspapers.
The FSA is planning a crackdown on management bonuses that reward short-term risk taking and will propose new rules on how banks should be run, including forcing them to hold more capital against risky trading, according to the Financial Sunday Express. The regulator will also table new vetting procedures to ensure bank bosses are qualified to run financial institutions.
This follows up on assertion by the UK Prime Minister, Gordon Brown, that We won’t pay for bankers’ one-way bets. He laid out a four-point plan to end the excesses of the bonus culture
Everywhere I go in Britain, I sense and share the anger and dismay of millions of hard-working people who have watched in disbelief during a year in which irresponsible practices in global banks have brought the world’s financial system close to collapse. Only bold action to protect those endangered through no fault of their own will do.
Responsible senior bank executives should not need to have the politicians clamp down on them in this way. It goes beyond the issue of legality, it is a simple question of morality. President Obama has a massive popular movement supporting him as he tries to do whatever it takes to re-establish this in the financial world.
![Reblog this post [with Zemanta]](http://img.zemanta.com/reblog_e.png?x-id=6f0fed53-0744-4c71-95ed-1e5724d1a9ac)
This is one of the SMM blogs. Contact us for Local SEO and Social Media Marketing (Google+, Facebook, Twitter) for SMBs and NPOs in Langley, Metro Vancouver and the Fraser Valley.
Can You Have More Sales, Too?Helping over 102,000+ businesses like yours raise profits and build customer relationships using AWeber's opt-in email marketing software for over 10 years.
Take a Free Test Drive today!
