Happy New Year Wealth

Happy New Year!

Last year was a good one even through all the turmoil. There are a lot of opportunities for wealth this year whether they be taken in stocks, real estate, or any other investment idea.

I have helped start a call selling account which saw a few trades occur with varying results. You can see a blog on that account at www.wikicallselling.blogspot.com. This year will be focused on developing this account.

I am still seeing many real estate investment opportunities. If wealth develops in other investment areas, real estate will be on the table.

Keep saving and saving some more. The compound interest will be enjoyed.

Don't forget to give and donate time and fortune. Only then will you find true wealth.

back to normal

Now that Citigroup has successfully persuaded the government to give its TARP funds back to the government, there must be a sense that all danger in the large banking industry has been eliminated to the largest extent possible. Yeah, right. Citigroup is still losing money! We are right back to 2008.

The main reason for this rush to payment is the executive pay issue. Citigroup wants to get away from the government pay umbrella.

They didn't expand lending. They didn't expand staff to handle the glut of foreclosures.

They did find money for bonuses though.

There will be a lot of pats on the back on this one. But it will mostly be from bankers and politicians that collectively have let us down.

Step on up Citi

So now Citi is trying to pay back the government its remaining 20 billion dollars of US Government TARP aid. They plan to do this by issuing out more stock.

Now, since the government owns one third of the bank's common shares, wouldn't a new issue of shares hurt that investment? The government needs to play hardball on this and not let that sale happen.

This is simply a reactionary plan.Citi is simply jealous that Bank of America was allowed to pay back their debt. But I'm sure the government will roll over. Seems like they are good at that when it comes to the banks.

Bank of America

I am troubled by the news today that Bank of America will be allowed to pay back the full amount of TARP bailout money it owes to the government. The reason why I am troubled by this is that the bank is doing this solely because it cannot seem to find a CEO that is willing to accept the government's pay restrictions. The fact that the government is allowing this shows that the banks are still in solid control and that the government still does not have principles for this policy.

Does this put the bank back in failure risk? I will have to check the balance sheet and the effect this move will have on it. I believe that this will have a terrible effect on the ability for consumers to get a loan. The bank will be tighter than ever with loans because they will have to be. In the meantime they will pay ridiculous amounts to their executives.

This allowance by the government clearly shows that the banks are still in control. They knew that Bank of America was having trouble finding a new CEO. Allowing this will shrink loans given out to consumers. Once again the government is putting us at risk. Now maybe Bank of America can pay this back and continue giving out loans. That most certainly can be the truth. But this situation is showing more clearly how the government is mismanaging the program.

overcharges

There has been some movement on the overdraft legislation front. Bowing from pressure from consumer groups and Congress, the federal reserve announced yesterday that a new rule will go into effect July 1 2010 that limits banks from charging overdraft fees to those customers who approve them to do so. A story (below) in the Huffington Post follows up with more detail.

http://www.huffingtonpost.com/2009/11/12/overdraft-fees-require-cu_n_355442.html

Call your Congressman and tell them how you support this upcoming rule!It might make them further understand what is really going on!

New Yorker article

Hey

I read an article from The New Yorker that covered the financial situation. I enjoyed the detail and specifics covered. I think the article gives the reader a better understanding into what was going on. The article was written by James Stewart. I follow his article in StreetMoney.

Now since a subscription is required, I cannot post the site here. But here is the abstract that they provide. I strongly suggest that you read this article. If you do not like the New Yorker past this article or cannot afford the subscription, there is always the library.

Enjoy.

Vanity Fair article on Paulson

Hey

I recently read a very informative article about Henry Paulson in this month's Vanity Fair. The author, Todd Purnum, was able to get sort of a play by play during his term as Secretary of The Treasury. The article was also able to shine a light Paulson's take on the job, why he took the job, and what he was going through during the crisis. The article has enough detail to engage the reader but not too much to bore the non financial individual. Congratulations to Todd Purdum on writing this. I hope you enjoy!