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07/30/2009

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Scott Bowen

Earlier this year, a certain bank -- let's call it "Bank of Some Country Beginning with the Letter A" -- started charging a monthly fee on one of my accounts. No announcement, no letter -- just the sudden appearance of a fee. I didn't notice until the second monthly statement, and when I went to the bank's website for an explanation, I found a very slick video in which actors portrayed "real Americans" who received their bank statement and said, "Mmm, I wonder what that fee is?" Then a perfect Stepford-Wives type character came into the picture with this deathless line: "Like many Americans, banks are now going through many changes, and have had to change the way they, too, do their banking."

Yeah, like shoving an unannounced monthly fee up our keisters.

I dropped the account and moved the money, but I still bank with this monolith because I don't yet trust the solvency of smaller banks in my region. Deposit-slip Catch 22!

But I think the scariest thing was the mindless "here's what America looks and acts like" imagery of the bank's video. In the MBA's imaginary world, we're a bunch of calm, compliant, J.Crew-wearing stiffs.

Oh, wait. . .

Laurie Essig

And what those banks really rely on is people like me, who never look at the statement and have only the vaguest sense we're being screwed with fees but are too afraid to look carefully at any of it (kinda like knowing your spouse is a cheat, but not really having the courage to gather the evidence).

The truth is, I'm afraid of my bank statement and my credit card statement and my guess is a large number of Americans are similarly cowed by all those fancy shmancy numbers and acronyms. They should make a video about us- "Here at Bank of X, we know that you don't have the time or the knowledge to read a bank statement. That's why we've added dozens of incomprehensible charges and fees that you'll never notice. If you do notice, please do not panic. Instead, call our 1 800 number and listen to soothing music until you feel calm feelings of complacency radiating through your limbs. Then you're ready to hang up and continue to pay no attention to what's going on behind the curtain of smoke and mirrors"

Mathew Hennessy

Get out of these banks and into credit unions...

firsteconomics

CONTRIBUTED 8/8/2009

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SO LONG AS MARTIN FELDSTEIN CAN PROPOSE (WALL STREET JOURNAL, 8/8/2009)"HOW TO SAVE AN 'UNDERWATER' MORTGAGE," I SAY STOP USING SOCIALIST SLURS AGAINST OBAMA

Mr. Feldstein, Harvard economist, former Chairman of the Council of Economic Advisors under President Reagan (Reagan doubled the U.S. deficit, a repeat of his California governorship, a foreshadowing of George W. Bush's record,) acknowledges as to the foreclosure avoidance issue, affordability approaches fail at least half the time and negative equity is too often the instigator of mortgagors mailing in the keys owing to the non-recourse clause preventing banks from going after non-subject property borrower assets.

He thus proposes that in return for deleting the non-recourse clause the banks swallow the bank and Uncle Sam would share the cost equally of reducing the mortgage balance due to 120% of the loan vs. a seemingly unreachable percentage.

The problem? Those who sold property at the top of the market are being asked by Mr. Feldstein to return by way of Uncle Sam a major portion of their equity gain.

What's the point in investing then? Do apartment and potential condo conversion complex investors place a subtractable variable called Factor Feldstein into their IRR equations?

Mr. Obama understands the health care coverage shell game, the car culture's concomitant excessive reliance on trade debt plus its aggravating of the demand for credit due to oil imports, and his predecessor's huge borrowing from offshore to benefit the ultra wealthy with tax cuts cause his Administration to be stuck between a weak consumer and tenuous credit and dollar markets.

He further understands that addressing our health care and transportation issues, the latter in a manner that simultaneously puts people to work, addresses structural repair of damage caused by generations of special interest politics.

Jerry Brown wanted to do this in 1992.

(He also simultaneously as California Governor balanced the budget, cut taxes, increased spending on education K-college, and lowered tuition throughout the Calif. college systems (U-C, State U's, CSU's.)

As said by Ramsey Su, "Why Be a Nation of Mortgage Slaves?," JANUARY 31, 2009
http://online.wsj.com/article/SB123336541474235541.html

Foreclosures provide the foundation of recovery, both for Main Street and Wall Street. As properties are foreclosed, they can move from weak hands to strong hands. Households that have been foreclosed upon today are the buyers of tomorrow, when given a chance to recover.

Finally, loan modification is not only ineffective, it is evil. Coercing borrowers to continue paying a mortgage on a home that is hopelessly overvalued and not informing them of alternatives is predatory lending.

The intent of modification programs to date is to create a generation of mortgage slaves. Fortunately, mortgage slaves can free themselves via foreclosure, and the masses are choosing to do so.

Ravi Batra predicted excessive concentration of wealth (think Bush) would lead the wealthy to excessively rely on higher-risk borrowers, as happened in the 1920's. Is holding their noses to the poop in return for a slightly lower pile of it, at taxpayer expense, a simple fix for concentration of wealth, a better economic system, a system encouraging investment and / or the freeing of capital for maximum efficient return?

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