Tag Archives: business

Pension Benefit Guarantee Corp – Next up for a bailout?

I’ve been following this for a while and even started a blog post about it back in the fall. This is just the latest in a string of examples of what happens when those in government bow to the kiss the ring of the “all-knowing” power brokers on Wall Street. The stock market will fix everything, remember the mantra? Social Security – privatize it, let them invest!

Chales Millard

Well it’s no surprise that Bush appointee and former Lehman Brother’s banker would decide that the Pension Benefit Guarantee Corp should invest its funds more aggressively. He pushed to move the investment mix from a very conservative allocation to one that relied heavily upon equities, private equity, and other alternative investments… right at the peak of the market in February of 2008.

Now, the U.S. Senate is asking the Inspector General for the PBGC to investigate Mr. Millard’s contacts with executives of banks who were awarded business by the PBGC about job opportunities for him after his brief stint in public service. 

With corporate bankruptcies and poor investment returns pushing the PBGC to the brink of insolvency, guess who will be paying for Mr. Millard’s mistakes.  The same folks who have been ponying up to pay for the avarice and greed of Wall Street executives… you and me.  

Stay tuned…


Digg!

Share this article

Bookmark and Share

Subscribe via RSS

Have a topic you’d like to see covered? Leave a comment!

Advertisements

Leave a comment

Filed under business, Economics, Politics

Credit Default Swaps, AIG, and the Fed – Will $123 Billion Be Enough?

Update on the Fed’s $123 billion in emergency lending to AIG.


For those intrigued by my credit default swap post, there is a good article in yesterday’s New York Times. The article asks, “where are the funds being lent to AIG by the Fed going within the company”

The American International Group is rapidly running through $123 billion in emergency lending provided by the Federal Reserve, raising questions about how a company claiming to be solvent in September could have developed such a big hole by October. Some analysts say at least part of the shortfall must have been there all along, hidden by irregular accounting.

The article goes on to describe that accounting for its derivatives trades, largely the selling of credit default swap protection, had been severely lacking oversight. As more attention was drawn to the activities of AIG’s Financial Products group, an alarming picture began to emerge.

Continue reading

Leave a comment

Filed under Economics, election, Finance, Politics, Tax Policy, Taxes

It’s an Especially Good Year to Be a Wealthy High School Senior

How the Credit Crisis Will Make it Easier for Rich Kids to Get Into Their College of Choice


You may have heard that a male student interested in the humanities has a better chance of being accepted to a prestigious liberal arts college than a comparably qualified female candidate. How about the tale of the gifted athlete with sub-par grades who gets a full-ride to “State” on a football scholarship; everyone tells that story. Have you heard the one about the rich kid from the Upper West Side who gets in because his family is wealthy? This isn’t the kid whose family’s name is plastered all over the football stadium, dining hall, and library; he’s just your everyday, average, wealthy student who doesn’t need financial aid. The sad reality is that all but a select few of this country’s institutions of higher education take a student’s ability to pay into consideration when making an admissions decision.The economic realities of college admissions run deeper and darker than most people know.

Continue reading

1 Comment

Filed under Economics, Finance, Politics, Uncategorized

Attention Subscribers!!

Due to a change in our URL, you may need to update your RSS reader. You can subscribe using the following RSS feed:

http://speciousriches.com/feed

or, use the following links:

Bookmark and Share

Subscribe via RSS

Thank you for subscribing to SpesiousRiches! Please update your RSS reader to ensure that you don’t miss a single post!

Leave a comment

Filed under Uncategorized

What is a Credit Default Swap and Why Should I Care?

Credit Default Swaps – A Primer

A credit default swap is a type of credit derivative. Credit derivatives “derive” their value from an underlying credit instrument; generally the bonds of sovereign nations or the bonds of a corporate entity. In recent years, credit derivatives have been created that are based obligations rather than entities; one common reference obligation are asset backed securities based on home equity loans.

A credit default swap is a contract that allows one to take or reduce credit exposure. The contract is between the two parties and does not directly involve the underlying reference entity. A credit default swap is essentially an insurance policy where one entity pays a premium to a second entity to take on the risk of a loss.

Let’s look at a fictitious example.

Continue reading

2 Comments

Filed under business, Economics, election, Finance, Politics, public policy, Taxes

Nouriel Roubini’s Predictions get Freaky

Yesterday I wrote about Professor Nouriel Roubini’s predictions for continued stress in the U.S. economy. Roubini is predicting a prolonged recession lasting two years or longer. While I was writing, Roubini was in London predicting wide-spread market panic that would require a suspension of trading and temporary closure of the markets. (Video) and (Article)

Panic, check; suspension of trading, sort of; closure of markets, let’s hope not.

This morning trading in the S&P 500 futures on the Chicago Mercantile Exchange triggered “circuit-breaker” rules designed to curb the downdraft of futures trading. According to marketwatch.com:

The CME limits the S&P 500 futures to a drop of a 60 points and the Nasdaq 100 futures to a drop of 85 points during electronic action.
They can still be traded electronically, only they can’t trade below those levels. Those contracts can fall more once the pits open at 9:30 a.m. Eastern. See external link on CME rules.
Keep your fingers crossed at 9:30 a.m. And someone, please, get Nouriel Roubini a pair of rose-colored glasses before he issues his next prediction.

As an antidote to the gloom…
More puppies:

Share this article:

Bookmark and Share

Subscribe:

Subscribe via RSS

2 Comments

Filed under Economics, election, Finance, Uncategorized

Obama and McCain – Where do they Stand on Immigration Reform?

You could be forgiven if you don’t know where the candidates stand on immigration. With the financial market meltdown in full swing and a full-blown media circus surrounding $150,000 shopping sprees and fair-weather fans, the press hasn’t had much time to talk about immigration. The Brookings Institution has published this fact sheet comparing the candidate’s plans that is worth reading.

So where do McCain and Obama stand on important features of immigration reform? As it turns out, despite what the ads would have you believe, not too far apart.

Continue reading

3 Comments

Filed under election, Politics, Uncategorized