Well, frumps, today I’m going to break my “promise to self” to never discuss “Money for Money’s sake.” My relationship with Money has always been rocky. I blame that on my youth; I came of age during the Age of Aquarius when it was totally cool to eschew Money in its various forms. I was a member of the generation that not only made their own wine but grew the grapes that went into it (rarely resulting in a potable product).
We were rebellious little hellions and experimented freely with standards of living and habitat. Many of us found our vehicles ideal “mobile homes” while others explored the benefits of casual communalism. We were the rearguard of the Humanities, proud to be penniless philosophers and Eng. Lit. majors. We were committed to contributing as little as possible to what we dubbed the military-industrial complex that was seriously cramping our pursuit of happiness. We were, indeed an “elite corps of impudent snobs” but we learned some valuable lessons while living (theoretically) without Money.
This Is Your 5 AM Grown Up Call
Alas, all good things must come to an end. I don’t remember exactly when I took my first “cold shower” that broke the spell of all of that “California Dreamin.” I only know that eventually many of us woke up with “love children” in tow and huge gaps of unaccounted-for time on our Liberal arts resumes. Life happens . . .
My sole piece of advice for future generations on “dropping out” from Society: Society isn’t overly hospitable when you want to drop back in. Like many of my colorful fellow travelers, making Money didn’t come naturally – we had made careers of “not fitting in.” We were ill-prepared, dreamy, rebellious, confrontational, unpredictable, emotionally self-indulgent and had really awful fashion sense.
Somehow most of us managed to atone for our waywardness, mend our ways and were eventually accepted into the ranks of the gainfully employed despite our precarious credentials.
That’s how my herky-jerky relationship with Money started and it hasn’t gotten less herky-jerky as time wore on. I’ve had some great financial times and some frightening ones. It all averages out to pretty darn good by world standards, pretty middling by US standards.
Three Cheers for Genetics
Thank God, it looks like this recessive financial gene skips a generation because my beloved son earnestly and soberly slugged his way through university, then an MBA and is now a Chartered Financial Analyst which I understand is a pretty big deal in financial circles . . . but I’m afraid I can’t tell you much at all about the CFA job description. Money – the subject – still causes me to shudder and go a little blank.
Nevertheless, I’m extremely proud of my boy and you can be sure that I never advised him to drop out for a few years to tramp around this country (or the Himalayas) searching for the meaning of life.
Despite his ignorance of mind-altering drugs and transcendental meditation, despite the fact that he buys his wine ready-made and never read the Whole Earth Catalog or the Tao T’Ching, he appears to have quite a nice life complete with a wise and wonderful wife, a beautiful child and two slavishly devoted canines. And he makes an awful lot of Money . . . working for one of those “financially troubled entities” that came unglued last year and is just fine, thank you, now. How ironic is that?
That’s my very long-winded intro to a flurry of recent stories about Money. Because, you see, you just can’t ever tell about Money. Whether you “take it or leave it,” Money’s still very likely to bite you in the butt when you least expect it. My lad, like many another mothers’ sons of my generation, has built a career around Money but, for all of the 21st century science and analytic tools, none of them expected that Money would turn on them so quickly or prove that life can be a precarious business no matter how safe you play it.
* * *
The following news items are about Money and, as such, it’s not all that surprising that they have me truly baffled. And I don’t mean merely confused, or expectant that there’s some obvious explanation I’ve missed. I mean flat out baffled by having met with something that passes as reality but that is so inexplicable and incomprehensible that it shakes one’s faith in Everything.
What We Have Here Is a Failure to Prevaricate
The following stories are about Money and, as such, it’s not all that surprising that they have me truly baffled. And I don’t mean merely confused, or expectant that there’s some obvious explanation I’ve missed. I mean flat out baffled by having met with something that passes as reality but that is so inexplicable and incomprehensible that it shakes one’s faith in Everything.
The first story is pretty straightforward; it’s the story of a bank stating that it may have to report disappointing results for one of its divisions in 2010. Unfortunate but certainly not shocking given the economic crisis we’re in. However . . . a careful reading left me, at least, gobsmacked. These guys are so arrogant they don’t even bother to lie. Who can touch ‘em?
Here goes:
JPMorgan Chase Says New Credit Card Law To Cost Firm At Least Half A Billion Dollars A Year
“The nation’s second-largest bank said a new law that limits unfair rate hikes and hidden fees will cost it as much as $750 million a year. JPMorgan Chase revealed the estimate Monday in a regulatory filing:
“In addition, as a result of the recently-enacted credit card legislation, management estimates, which are preliminary and subject to change, are that Card Services’ annual net income may be adversely affected by approximately $500 million to $750 million. As a result of all these factors, management currently expects Card Services to have a net loss for the full year 2010.”
The “recently-enacted credit card legislation” mentioned in the filing refers to the recently enacted Credit Card Accountability, Responsibility, and Disclosure Act of 2009 which bans or limits deceptive and unfair practices, including retroactive rate increases, late fee traps like weekend deadlines and “universal default,” or raising rates because of a borrower’s delinquency with another lender.
Now, unless I’m suffering from some sort of precocious dementia, what is being said here is that now that a law has been enacted to protect consumers from predatory lending practices, JP Morgan Chase stands to lose a half a billion dollars per year. Am I jumping to conclusions to assume that, reading between the lines, JP Morgan Chase’s operation of a consumer credit card business depended on ripping off its customers in order to turn a profit? Are we consumers supposed to get all sniffly over JP Morgan Chase’s tough luck?
Thanks for the Bailout, Guys!
Here’s another one:
Wall Street Bonuses Rise as Big 3 May Pay $30 Billion
“Nov. 9 (Bloomberg) — Goldman Sachs Group Inc., Morgan Stanley and JPMorgan Chase & Co.’s investment bank, survivors of the worst financial crisis since the Great Depression, are set to pay record bonuses this year.”
“The firms — the three biggest banks to exit the Troubled Asset Relief Program — will hand out $29.7 billion in bonuses, according to analysts’ estimates. That’s up 60 percent from last year and more than the previous high of $26.8 billion in 2007. The money, split among 119,000 employees, equals $250,400 each, almost five times the $50,303 median household income in the U.S. last year, data compiled by Bloomberg show.”
Hey, wait a minute. Isn’t that the same JP Morgan Chase that was in a pout over their poor Consumer Credit division losing half a billion because they’re not able to rip off their customers anymore? I wonder how much of a bonus the financial wunderkind who dreamed up those predatory lending practices will be getting this year?
Paul Hodgson, a senior research associate on compensation at the Portland, Maine-based Corporate Library, had my favorite response to this news:
“Wall Street is beginning to resemble Clark Gable as Rhett Butler in the film Gone With the Wind: ‘Quite frankly, my dear, I don’t give a damn.’ It doesn’t seem as if even political threat, disastrous PR, envy, rising unemployment rates and home repossessions is enough to get any of these people to refuse the bonuses they have ‘earned.”
Lending No Longer Lucrative
This next story illustrates just how little these banking monoliths care about the American public’s recovery from the economic meltdown that they engineered. They know what’s needed but are dishing up the opposite:
Credit Card Rates: Banks Plan To RAISE Rates, Annual Fees
“WASHINGTON — Banks expect to tighten terms on credit cards in response to a new law that aims to protect consumers from sudden rate hikes, the Federal Reserve said Monday.”
“A quarterly survey by the Fed found that many banks expect to increase rates, reduce credit limits and raise annual fees for both prime borrowers – those with sound credit histories _as well as more risky “non-prime” borrowers, who have tarnished credit. Banks also expected to raise minimum credit scores for non-prime borrowers, the Fed said.”
“Banks already have been pushing through rate increases in anticipation of the new rules. Because of that, the House recently approved legislation to speed up the law’s effective date and have the provisions take effect immediately, although prospects are dim for Senate passage.
Most of the new credit card provisions are slated to take effect on Feb. 22.”“Many people and businesses are still having trouble obtaining loans, a force that is likely to restrain the economic recovery.”
Best for Last
My final Money story is a real lollapalooza that takes us out to the very ragged edges of Reason. Be sure you’re seated for this one. The media have not been particularly kind to Goldman Sachs over the past year or so.
For example, Rolling Stone’s Matt Taibbi dubbed Goldman the “great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.”
Now Matt’s comments don’t strike me as overly hyperbolic, in the circumstances, but evidently Goldman’s CEO Lloyd Blankfein has had his feelings hurt by all of this negative press and has decided to go public in a fairly evangelistic way to explain how the bad rap is all just part of a big misunderstanding of Goldman’s better self.
Blankfein is on a mission to disabuse the masses of their image of Goldman Sachs as “the Great Satan” at the heart of our financial darkness. Blankfein explains that, in reality, Goldman Sachs serves a “valuable social purpose” and is “doing God’s work.” No lie, Blankfein actually said that to John Arlidge in an interview for the Times of London, which, by the way is a great big rollicking article that you should definitely read when you have a few minutes. Maybe he’s worried about the Incredible Shrinking GOP and has decided to personally court the Christian Coalition?
Something tells me that Blankfein will live to regret his stupendously absurd statements – here’s a choice bit of the immediate reaction:
Technorati Tags: Goldman Sachs, JP Morgan Chase, Morgan Stanley, Credit Card Accountability Responsibility and Disclosure Act of 2009, Lloyd Blankfein, Paul Hodgson, Matt Taibbi, John Arlidge, Times of London
