Hashemian Blog Web Tools, Financial Markets, Technology Sunday, May 04, 2008 Yahoo's Fate After Microsoft  While many are preparing for a dark day for Yahoo's share when the market opens on Monday, I don't think the shares will get battered too roughly, although there will be volatility. Microsoft's withdrawing of its offer isn't good news to many, but speculation on what Yahoo may have up its sleeve might keep the stock from slipping too far. It's possible that Yahoo overplayed its hand, but it's also possible that Yahoo may have had other plans, yet to be revealed. The plans could involve Google, or private equity, or even something far-fetched like Oracle. And in the end, nothing says they can't get back to negotiating with Microsoft. Only this time, they would probably keep it quiet, until a final deal is stuck. Yahoo,microsoft,google,oracle,finance Labels: business-finance, google, Microsoft, yahoo <Yahoo's Fate After Microsoft> // posted by rh 0 comments | Thursday, April 03, 2008 Tax Spam Season  You know the income tax filing deadline (April 15th) is nearing when tax-prep companies rev up their spam engines. This one from H&R Block is offering half-off their regular prices. Obviously trying to push through a few more sales before the filing season is over and they are back in the lull period. I'm sure I'll get a few more of these unbeatable deals right up to April 15th. Thanks, but no thanks guys. This year I used TaxAct and it had a great price right from the start, free. *Note: My endorsement of TaxAct is completely unsolicited. I just liked the product and the fact that it cost nothing. income tax,taxes,taxcut,taxact,irs Labels: business-finance, tax <Tax Spam Season> // posted by rh 0 comments | Tuesday, April 01, 2008 Citibank Online Banking?  If it was an April fool's joke, surely many people didn't find it amusing. While the stock market was rocketing up today, Citibank's online banking site was down and out, stranding thousands of their customers. We're not talking about a short outage, this was an all day near blackout. What astounds me is that there was no admission and no warnings on the site indicating the problem. It was as if everything was running smoothly. Could it be that the people in charge didn't even know about the problem for hours, or perhaps they were too arrogant or too cowardly to admit the issue and warn their customers? Meanwhile many people who have come to rely on Citibank's online banking, no less at the encouragement of the bank itself, were shut out without any means of conducting their businesses. I can understand that computers and Web sites go on the fritz sometimes. That's what redundancy and failover is for. Short of poor planning, Citibank could have at least had the decency to notify its customers of the outage and suggest alternatives. Instead it decided to bury its head in the sand and not even promptly respond to customer inquiries. Online banking should no longer be considered a luxury, it's a necessity to many people. This is not a site about the latest escapades of Paris Hilton or Britney Spears. It's an integral part of many people's daily lives. With all the problems that's facing financial institutions these days, this is a sure way for a bank to send its customers rushing for the exit doors. citibank,online banking Labels: business-finance, web <Citibank Online Banking?> // posted by rh 0 comments | Monday, March 31, 2008 Prospectus Paper Waste  Like many people I have a 401(k) account through my employer, invested in a few mutual funds. I can appreciate that by law mutual fund companies have to send their clients their prospectuses (prospecti?) whenever there is a change in their investment strategies, but I was getting tired of receiving these booklets in the mail. I would just give them a cursory look and then toss them in the trash. I assume many people do the same. I doubt even a small number of people would actually read these from cover to cover and then promptly file them with their important documents. So when the retirement management company gave us the option to receive these documents via email, I jumped at the chance. Alas, I'm still getting these tree-killers, like a large one arriving today via mail weighing in at 70 pages. Makes me wonder why I even bothered signing up for the electronic format. Now I know these companies are erring on the side of caution. With so much fraud and mismanagement swirling around the financial institutions, they reckon it's better to be safe than sorry. So they just keep mailing the stuff, hoping to avoid a small chance of someone accusing them of hiding material facts. That's all fine and good, but in this day and age of green living and electronic transactions, shouldn't they at least try to respect the wishes of those of us who opted in for email and adapt their systems? If they're incapable or unwilling to join the digital revolution, they can hire a bunch of Nigerian spammers to handle the task. The Nigerian scammers figured out years ago how to conduct their businesses via email and apparently they are very successful at it. Even the U.S. government, the paragon of technical backwardness, has been going digital with programs such as e-Filing income taxes. It's about time mutual fund companies learned how to save those documents in PDF and attach them to email. mutual funds,email,pdf,taxes,spam,nigerian scams Labels: business-finance, email, tax <Prospectus Paper Waste> // posted by rh 0 comments | Wednesday, March 12, 2008 The Credit Crunch  The other day I received an email from ING DIRECT regarding their financial status. It would seem that with the credit crunch and the global financial troubles, banks have to reassure their customers that they are solvent and in a good financial shape. ING DIRECT is a subsidiary of ING Group, a giant Dutch financial institution, that offers online banking services to the US customers. They offer various types of accounts such as savings, checking, and CD's, as well as mortgages and investment services at competitive rates. The portion of the email that drew my attention stated that: The fact that ING DIRECT was not adversely affected is a testament to our operating philosophy that, as Americans, we should only buy houses we can afford. That way we can keep them for years to come. We believe a mortgage is a contract that both parties should execute in good faith and expect to see through to its conclusion. How true that statement is. But alas, the advice is a bit late for many who sank exorbitant amounts of money into real estate or some creative derivative of it, only to face the tragedy of bankruptcy and financial ruins when things turned sour. One way or another the turmoil will pass and we will all vow not to make the same mistake again. The trouble is that long before we're out of this mess, another bubble will form and will eventually snare the a bunch of giddy investors who have long forgotten the lessons learned from the current fiasco. We will never learn. credit crunch,mortgage,savings accounts,checking accounts,ing direct,ing group,cdo,cds Labels: business-finance, mortgage <The Credit Crunch> // posted by rh 0 comments | Sunday, February 03, 2008 Microsoft + Yahoo > Google?  For those of us who might have thought that Microsoft's acquisition of Yahoo was an ace in the hole, this blog post from a Google bigwig might give a pause. Could Google be joining the likes of IBM, SUN, RealNetworks, Borland, Novell and Netscape who've lodged anti-trust complaints in various regulatory bodies around the world against Microsoft? Alright, no tears for Microsoft here. We all know this company is predatory and brutal when it wants to subjugate competitors. But can Google with a 75% share in their market (online search) really have a valid complaint here? Apparently so, and I'm actually surprised that Google has even addressed this acquisition rather than giving its characteristic aloof response. With Google's market value markedly below its 52-week high and facing slowdown or saturation in some of its markets, I can understand why the giant is suddenly feeling worried about its prospects. Can this acquisition finally give Microsoft the needed ammunition to meaningfully challenge Google? Only time will tell, but the fact that Google is feeling uneasy about it promises some interesting jousting and parrying ahead. Whatever the case, I hope Google doesn't lose its grip and mire itself in a long battle with Microsoft. Instead it should just stick to its guns, do no evil, and continue to innovate around Microsoft. In the end Google may still get run over by the behemoth, but I really hope Microsoft doesn't win this match, with or without yahoo. It will be a dark day on the Internet if Microsoft strips Google of its status just by its monopolistic tactics. google,microsoft,yahoo,search engines,anti-trust,acquisition,hostile takeover Labels: business-finance, google, Microsoft, web, yahoo <Microsoft + Yahoo > Google?> // posted by rh 0 comments | Monday, July 02, 2007 Discover Card  My memory is hazy on this, but I think Discover Card was the first credit card I ever had. What I'm sure of is that Discover Card was the only credit card I carried in my wallet for years. I signed up for mine back in college years when credit card companies were just beginning to realize the untapped potential of revenue in college students. The Discover Card was a new arrival but it had an innovative approach. No annual fees and a cashback program and a slick slogan, "It pays to Discover." It instantly won me over and I started using it exclusively. Their plan was certainly paying off with me. As I graduated from college and entered the workforce and ramped up my expenses, Discover Card came along for the ride. But it wasn't meant to last. After some 15 years, I finally parted ways with Discover Card over a small dispute with a vendor. This happened a few years ago and the details of the dispute escape me, but what remained was the bitter taste of a credit card company taking the side of the merchant, rather than its long-time customer in good standing. I can understand Discover Card's reasons to go against me. I'm sure the vendor's business was substantially larger than my paltry charge-ups. But from my point of view I was wronged and by then the credit card landscape had caught up with Discover Card's benefits, so there was no reason for me not to jump. And jump I did, to a no-fee, cashback MasterCard and never looked back. As Discover Financial Services got its own stock symbol (DFS) today and begun trading on NYSE, I couldn't help reminisce of our long relationship and how it was derailed over a small charge. I wish Discover Card well, but I still don't miss it. discover card,mastercard,credit cards,merchant accounts Labels: business-finance, credit cards, customer service <Discover Card> // posted by rh 3 comments | Sunday, April 22, 2007 Exxon Profits: $40 Billion in 2006  The other day I was reading about the companies at the top of earnings list in the US and not surprisingly Exxon Mobil was firmly at the summit, racking up nearly $40 billion in 2006. This is an income figure, not sales. I'm sure the shareholders are happy with the performance. They have seen the value of their holdings double since 2004 and with the price of oil at all time highs, there in no end in sight. Exxon has also been at the top of another list in terms of market capitalization for quite some time (currently at $455 billion). I remember when GE or Microsoft had that distinction years ago. With the price of oil at all time highs and uncertainty fueling the price ever higher, it is understandable why some people are wary of these outsized profits. I suppose the math is a simple one. Given a steady profit margin, the higher the price of oil climbs, the profits continue to march upwards in lockstep. A capitalistic view would consider the outrageous profits reaped by oil companies as quite natural and deserved. After all the windfalls are based on bets made by these companies and natural market conditions have done the rest. But should it be acceptable for these companies to have so much power and monopoly over the energy markets? Conspiracy theorists have always viewed the oil companies with distrust. I am not sure if all the negative views are valid, but one has to wonder if these companies wouldn't do anything in their power to squelch any attempt at competition from others such as those promoting alternative sources of energy. If I were Exxon (or Shell or Chevron, for that matter), I would use my clout to stifle anything that seemed deleterious to my operations and my profits. I would guard my turf with a militant zeal, I would infiltrate governments, sway opinions, and engage in espionage to make sure all potential threats are neutralized before they can reach a meaningful level. Of course I would fill my legal departments to capacity to make certain that all my efforts are perceived to be within a legal framework, at least on the surface. I would do all that and more to make sure that my position is never jeopardized while keeping an image of legitimacy. $40 billion in one year alone can be of immense help in achieving my goals. exxon,oil,oil companies,alternative energy,shell,chevron Labels: business-finance <Exxon Profits: $40 Billion in 2006> // posted by rh 0 comments | Sunday, March 11, 2007 Energy Policy? Daylight-Saving Time (DST)  Here we go again. As if this whole idea of daylight-saving time (DST) wasn't bad enough, this year the US has decided to tweak the time-shift and spring forward 3 weeks in advance. I received an email from one of our vendors a few days ago regarding the change and this was a part of it: On August 8, 2005, President George W. Bush signed the Energy Policy Act of 2005. This Act changed the time change dates for Daylight Saving Time in the U.S. Beginning in 2007, DST will begin on the second Sunday in March and end the first Sunday in November. The Secretary of Energy will report the impact of this change to Congress. Congress retains the right to resume the 2005 Daylight Saving Time schedule once the Department of Energy study is complete. What kind of moronic "Energy Policy" is that? Someone's ought to tell these people in charge that wasting time with a stupid idea is not a good use of our tax dollars. Those dollars can be used for better ideas than just fiddling with a bad idea. I wrote about this 2 years ago and I grumble about it every year. Some may say, why waist time complaining, or just do as you're told like the rest of the people, herd mentality. Here we are, in a democracy, and we're expected to follow a lame idea like sheep in a herd. Only those with narrow intellectual capacities would buy the energy conservation claims. There has been no credible evidence linking energy conservation with DST. Even if there are miniscule savings, they can never outweigh the negative effects, namely the so called mini Y2K issue that many people have been busy averting. The mini Y2K refers to the problem of computers losing and gaining one hour during these time changes. A lot of time and resources have gone into making sure that critical systems are not adversely affected because of this latest change. What a waste. In my view, the real answer behind the DST is the same answer behind just about any other question, money. I've always known that the DST had little to do with saving energy and more to do with profits. Maybe kicking people out of bed earlier and having them outside for longer hours translates into more opportunity for spending. It could also mean more hours of work for employees, many of whom will see little compensation for the additional work. Always follow the money, it'll lead to the truth. So while you're yawning in your car driving to work on Monday with bloodshot eyes, consider that fact that you (and I) are nothing but sheep in a big herd driven by the big business and their insatiable quench for more money. And the guard dogs? Politicians, of course. dst,daylight saving time,politicians,business,money,mini y2k Labels: business, business-finance, money, politics <Energy Policy? Daylight-Saving Time (DST)> // posted by rh 1 comments | Sunday, March 04, 2007 Houses, Roofs, and Snow  There's an old Persian adage that states: "The bigger one's roof, the more one's snow". Living on America's east coast the adage doesn't really apply. The roofs are generally pitched and snow simply thaws and slides off. Back in Iran where most roofs are flat and building structures are of questionable soundness, people are forced to shovel the snow off the tops or else face a collapse or at least water damage, so the phrase fits well. But what the metaphorical phrase tries to convey is that bigger assets bring bigger hassles. Ironically this wisdom also fits the recent trend in the US housing market. America is a culture of consumers, the bigger and the more luxurious, the better. Some may argue that it is the consumer that drives the mammoth economy here, but considering the troubles brewing in the subprime mortgage markets, there is also a dark side to out-of-bounds consumerism. For the past few years the housing market has been one of seemingly endless growth. That lulled many to jump into the market without much consideration for a possible downside. Bigger homes (known as McMansions) sprang up everywhere and builders couldn’t keep up. People kept snapping up ever bigger and more expensive homes. The general belief was to hold on to the house for a short period, then sell for a handsome profit, rinse and repeat. Now that the housing market has gone limp, it has dragged many into hard times and many may owe more than the current value of their homes, the so called upside-down position. Owning a bigger home is not necessarily an American invention. People do it all over the world, but many fail to consider the real cost of having a bigger home if they are forced into a long-term ownership. The general financial approach is a foolishly simple one. You look at the price, then figure out the monthly payments and if it seems to fit one's monthly income, then it's a go. But there is quite a bit more there than meets the eye. Let's take a quick inventory: Initial fees: For that bigger house you will be paying higher fees to the real estate broker, the mortgage banker, the inspector, and the lawyer, just to name a few. Mortgage payments: Unless you're locked in a long-term fixed mortgage (like a 30-year variety), the assumption should be that the variable rate will eventually kick in and in most instances that means higher monthly payments. In some cases the monthly payments could outpace one's income quickly. Taxes: A bigger home means higher taxes. Even if you know what your tax liability is at the time of purchase, there is no chance it'll stay the same for long. There are two forces working against you there. The higher the assessed price of your home goes, the more your town will charge you in property taxes. Also tax rates (known as mill rates around here) never stay in one spot. As the town cost rises, so does the mill rate. It's inevitable. Energy: the bigger the house, the more the cost of heating and cooling it. Unless, of course, you cordon off parts of the house, in which case what's the point of living in a bigger house to begin with? Water and sewer: Many water companies charge homes for water and sewer services based on square footage, not actual usage. In any case, if you are in a bigger home, you will use more water and produce more waste. Just think of watering a larger front lawn as one instance. Repairs: A bigger home simply contains more stuff and therefore more chances for breaks and malfunctions. It's the law of probability. More toilets, more electrical wiring, more piping, more doors and windows, etc. And each one adds an additional risk of needing repair at some point. Maintenance: A bigger property requires more maintenance (think of the snow metaphor.) More gutters to clean, more windows to wipe, more rooms to dust, more lawn to mow, and more driveway to plow. You might need to hire a helping hand or two to cover the maintenance, thus having to part with more money. Furnishings: A roomier house means more volume to fill. That leads to trips to furniture stores to buy more couches, a bigger TV, and more decorative items to hang on the bare walls or fill the corners, or more rugs to throw on the bare floors. Even more closet space means more shopping for clothes and shoes and accessories, and of course more organizers to sort them by color or size. Don't laugh, this is just human nature. I know, I know, enough already. I'm sure this list is not even close to being complete. But there is no escaping the consequences of owning a bigger home. And if more snow won't faze you, the bigger pile of dead leaves in autumn will. homes,mortgage,subprime mortgage,tax,money,housing market Labels: business-finance, money, mortgage, tax <Houses, Roofs, and Snow> // posted by rh 1 comments | Tuesday, February 20, 2007 Tax Break Myth  Republicans like to pride themselves in supporting lower taxes. That is indeed a great ideal. The problem is that today such a view is plain false. I'm a middle class citizen, and I can speak with authority that the tax breaks have meant very little in terms of helping me achieve fiscal success. In fact, adjusted for my age, I am poorer today than when Clinton was in the White House. Don’t believe me? Let's take an inventory: - It is true that lower federal taxes put a bit more money in my pocket, but at what cost? When the government takes in less tax money, it can do one of two things to adjust: cut programs or borrow more. The US government has done both and the result has been fewer services and more debt. Is that worth the few dollars I get to pocket every year? Not. When services are cut, I have to pay (out of pocket) for those no longer available (roads, schools, police, etc.) And those Treasury holders will need to get paid at some point too. The bond Ponzi scheme can only go so far, and guess who'll be making the payments. - Have you looked at your energy bills lately? Bet you're paying a lot more than you used to. More for electricity, for gasoline, for heating oil or gas. That's money leaving your pocket while the oil companies get richer. - Sure, your home might be worth more, but who can be happy with the higher property taxes. And to add more pain, those lofty prices encouraged so many to tap their home equity. It was fun while it lasted, but now that home prices are falling and interest rates are rising, little chance those property taxes will get rolled back, and it's payback time for those HELOC and interest-only deals. - Every year people pay more for medical insurance and get shrinking benefits. And that's for the lucky ones who actually have medical insurance. Some 50 million Americans don’t even have medical insurance and that number keeps growing. - If you haven't heard of AMT (Alternative Minimum Tax), you will soon. It's basically the government's way of making sure they get a certain amount of tax money from each person, no matter what. AMT is snaring more people every year and it's one of the greatest government money scams going. Sure, we give you tax breaks, but oops, sorry, you don’t qualify. The above list is far from comprehensive, but by itself is enough for an average person to realize that the measly tax breaks are the proverbial smoke and mirror and have done nothing for the middle class except to squeeze them more year over year. The tax relief agenda is nothing more than a platform for political posturing and maneuvering to swindle the citizens for their votes. So let me implore the government to raise my taxes, but give me services and better medical coverage, lower my property taxes and energy costs, and abolish AMT. But that means helping the middle class. Never mind then. middle class,republicans,tax,amt,property tax,insurance,gas prices Labels: business-finance, tax <Tax Break Myth> // posted by rh 0 comments | Sunday, January 14, 2007 Penny Options  It wasn't long ago when stock shares in the US markets were quoted in increments of 1/16 of a dollar or 6.25 cents. I always wondered why the system was designed that way. It seemed unfair that there was always a 6.25-cent margin between the ask and bid prices, while any other product bought and sold in this country was priced in penny increments. While average traders had to contend with such a big margin, you knew there was always some middle guy skimming from this system, pocketing nice profits. There was some concern about changing the system to penny increments. Perhaps people worried that the systems wouldn’t be able to handle the stress and the penny system would have been unwelcome news to those playing the margins. The change came to pass and the sky didn’t fall. Today the average trader can specify his stock buy or sell in penny increments and we're all better for it. Options pricing have had a similar drawback. They are still quoted in nickel increments and the average trader is shackled by this unfair system. Why should an options contract have an ask price of $.05 and a bid price of $0, when perhaps in reality its ask/bid should be $.04/$.03? Today a buyer for that particular option has two bad choices. Either pay the expensive $.05 to buy the contracts or forego the trade. The seller, would have to rely on luck to unload the contracts at $.05 or hold onto to them until they expire worthless. Options are priced similar to insurance premiums. Prices are based on their expiration times and factors associated with their underlying instruments such as volume, inherent risk, volatility and others. That generally shouldn't lead to nickel increments. That's about to change on January 26th when CBOE (the giant options market in Chicago) will kick off a pilot program to make 13 classes of options available with penny increments. They are: IWM - Ishares Russell 2000 INTC - Intel QQQQ - QQQQ CAT - Caterpillar SMH - SemiConductor Holders WFMI - Whole Foods GE - General Electric TXN - Texas Instruments AMD - Advanced Micro Devices FLEX - Flextronics International MSFT - Microsoft SUNW - Sun Micro A - Agilent Tech I hope the pilot proves successful and it eventually expands to include all options. We'll all be better for it. stocks,options,cboe,bid,ask,financial markets,trading Labels: business-finance, trading <Penny Options> // posted by rh 0 comments | Monday, January 01, 2007 The Dollar in 2007  Happy new year! Somewhere among the new-year vows of weight loss, self-improvement, and advancing one's education, there are inevitable thoughts about money; how to make more, how to save more, and how to better invest the hard-earned dollars. Unfortunately the outlook for the dollar remains poor for 2007 and there is fear that it will continue its slide. Some evidence of that can be seen through the stances taken by a few central banks. Iran has indicated that it is moving away from its dollar reserves, gradually replacing those with euro-based instruments. UAE is also boosting its euro reserves considerably while paring its dollar holdings. Before you dismiss these moves as political and confined to a few countries, you should keep in mind that no country would sabotage its own economy deliberately even if it is at odds with the United States. And UAE has been an ally of the US for a long time. The point is that these countries have seen that holding dollar reserves is not in their best interest. As the values of their stash keeps shrinking they have become increasingly concerned and are now taking steps to correct their lop-sided positions in the dollar. True, these countries by themselves may not have a considerable impact on the dollar. What is disconcerting, however, is that many other central banks are mulling over the same issue and might soon begin to dump their dollar reserves. If a selling frenzy ensues, even a mild one, it could have devastating effects on the dollar. So what does that mean for the average American citizen? Quite a bit actually. First off, if a dollar crash begins to look imminent, the federal reserve would have no choice but to lift the interest rates (perhaps considerably) to defend the currency. Why defend the currency? For one thing to protect the consumers. Those cheap Chinese imports would no longer be so cheap if the dollar keeps on falling. A falling dollar means more expensive products here in the US. But what about American-made products? The US is no longer the manufacturing powerhouse it once was, but even for the domestically made products other regions of the world will look far more lucrative than the US market. The US is a capitalist market. That means that whoever pays the highest price, gets to buy the products. With the weakened dollar, the local consumer will have to pony up a lot more money to compete with the ones abroad. This is already happening. There was a news item a few days ago regarding milk and dairies price hikes for the new year. One reason given was the elevated levels in foreign purchases of dairy products, no doubt due to the cheaper dollar. Recently New York City has been running advertising campaigns in foreign countries highlighting the cheap dollar as a means to visit the city more cheaply. I can imagine that hotels, restaurants, bars and taxi cabs might raise their prices as tourists flush with dollars bought cheaply in their own countries, would be less resistant to higher prices. The higher interest rates set by the Fed to defend the dollar might stanch the bleeding a bit, but not before its repercussions are felt throughout the banking industry in the form of higher borrowing costs. Yes, that means higher mortgage rates, higher credit card interest rates, and higher business loan interest rates, which will ultimately contribute to higher prices in a continuous cycle. If you are worried, as I am, rather than buying euros and stuffing them under the mattress, it might make sense to invest in some reputable international funds for 2007. This will provide a bit of international exposure with good returns if the dollar malaise continues to worsen. dollar,euro,currency,inflation,exchange rate Labels: business-finance <The Dollar in 2007> // posted by rh 1 comments | Tuesday, December 19, 2006 The Middle Class Holiday Bonus Shaft  If you read any financial papers or visit any sites with a financial slant around this time, you’re bound to run into an article or two about holiday bonuses. Generally the newsworthy ones are about bonuses granted to money managers and deal makers in big investment outfits. The usual suspects are fund managers, top brokers, investment bankers, and the likes who rake in hundreds of thousands or millions of dollars in bonuses at year-end. Things were not rosy a few years back so bonuses weren't as generous then. Poor babies had to deal with abject destitute. Now that the good times are back and the financial companies are making money hand over fist, bonuses will no doubt follow the trend. If you're looking to get invited to a posh party this new year, I would definitely suggest getting in on the invite list of a fund manager. One might rightfully ask me, "If you're so bitter about this, why don't you kick it with these boys?" fair question. Maybe I don’t have the instincts, or the guts, or the interest. Money isn't everything, and it's nothing if I hate my job. At the opposite end of the spectrum there are those with lower-paying jobs. You know, the trash collectors, cleaning staff, bus drivers, etc. No question that sometimes their jobs are more meaningful and crucial than those of the top guys. But even some collect substantial amounts during Christmas time in the forms of gifts and tips. Certainly nothing to compare to what Wall-streeters rake in, but considerable relative to their regular wages. What's left is the middle class. A few so called lucky ones get paltry bonuses and the rest, nothing. They are not high enough on the ladder to get the out-sized loots, and not low enough to deserve anything meaningful. And isn't it just splendid that tax season would be just around the corner, when the middle-class is expected to pick up the bulk of the tab? I can't wait to give that huge tip to the Fed. bonuses,wall street,investment bankers,middle class Labels: business-finance <The Middle Class Holiday Bonus Shaft> // posted by rh 1 comments | Saturday, November 25, 2006 Dollar's Doomsday  When I wrote this blog entry about the dollar over three years ago, the dollar and the euro were at parity levels, give or take a few cents, and the euro was climbing robustly. Soros had taken a strong position against the dollar and was beating the drum on how grim the outlook for the dollar was. The dollar did lose ground but it finally stabilized and everyone thought the bad news was over. Not so fast. Here we are again. The euro is near $1.31 and the British pound is nearing $2. What gives? It's the irresponsible spending. It's the careless borrowing. It's the head-in-the-sand mentality that the world loves the dollar and it won't let it sink. At some point we have to wake up to the reality that this is business, not charity. People will not punish the dollar because they disagree with the US policies, but they will bail when their interests are in jeopardy. And jeopardy is what we have now. We are funding an endless and hopeless war without a timetable to disengage, while the rest of country goes about its business as usual. The stock market is up but now it seems that it might be on a shaky ground. And the one possible bright spot in the economy, the housing market, has run its course and it's on a descent path. Personal debt levels are at all time highs, and yet we continue to believe that all is well. Ever get a feeling that our economy today is built on a house of cards? It is. Without the foreigners, like the Chinese, that have vast reserves of dollar denominated securities, the underpinnings of our economy will come apart in a hurry and the economy will collapse. We have no one to blame but ourselves. For years, we have been the junkies and the foreigners happily supplied the drugs. They always knew what they were getting in return for their products had dubious value, but didn’t have the courage, or the will, to put a stop to it. They were just as addicted to our IOUs as we were to their products. By some accounts we are already in the middle of a long crash. The dollar is not even at a third of the value it had 30 years ago. But at some point the slow fall might turn into a fast plummet and that won't be pretty. All will suffer from a dollar crash but none more so than the US. The wealthy Americans will be fine. Their Asian accounts, European real estate holdings, and Gold and global funds will be their tickets out. As usual, it's the middle class that will take the brunt, and it'll be a painful one. dollar,euro,economy,british pound,exchange rate,china,Europe Labels: business-finance <Dollar's Doomsday> // posted by rh 0 comments |

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