Ft Lauderdale Auto Title Loans

EmbassyLoansEmbassy Loans of Ft Lauderdale practices responsible lending by providing loans to qualified applicants with equity in their cars and trucks that they own. This type of lending can be called a car title loan, a loan based on a percentage of the value of the car, truck or van.

Why use Embassy Loans of Ft. Lauderdale:

  • You keep the car and the cash
  • If your loan is approved – you get your cash the same day
  • Embassy Loans of Ft Lauderdale is an A-Rated company with the Better Business Bureau
  • Offering some of the Lowest auto title loan rates in Florida – as low as 1.5% monthly!
  • Borrow up to $5,000 and you set the monthly Payments – 3 to 18 months
  • Bad credit? No credit? No problem – Loans are made Regardless of Credit
  • There are 23 Florida locations to serve you
  • Ft Lauderdale Car Title Loans are made regardless of personal credit history.

Embassy Loans is a consumer finance company licensed under Statute 516 [Consumer Finance] in the State of Florida specializing in auto equity loans, loans based on equity in your vehicle and not personal credit scores. We are a state regulated financial company that adheres to the strict Florida guidelines concerning lending

Contact us TODAY at 866-277-5796 or use our online form – http://www.autotitleloansftlauderdale.com

South Florida suffers from credit ‘hangover’ with record delinquencies

By Donna Gehrke-White, Sun Sentinel
6:24 a.m. EDT, May 16, 2012

South Floridians used and abused their credit cards, and some are woefully behind in payments. In fact, South Florida has the worst credit ranking in the nation.

So says an index released early Wednesday by CredAbility, a nonprofit credit counseling agency. Of the 25 top metro areas surveyed, Broward, Palm Beach and Miami-Dade counties rate the worst at trying to dig themselves out of credit card debt.

Read more…
http://www.sun-sentinel.com/business/fl-worst-credit-rating-20120515,0,2146740.story

Altamonte Springs Loans for Auto Titles

Embassy Loans is Altamonte Spring's leader for loans on your auto titleEmbassy Loans is Altamonte Springs’s leader for loans on your auto title, specializing in loans for auto titles, auto equity loans and auto refinancing.

Embassy Loans is a consumer finance company licensed under Statute 516 [Consumer Finance] in the State of Florida. Because we specialize in equity loans, loans are based on equity, not personal credit scores – and are made regardless of personal credit history.

As a licensed consumer finance company, Embassy Loans Inc. reports to a national credit bureau to help their borrowers in establishing or re-establishing their credit history. All of their equity loans range from 12-18 months and are based on the amount of loan. The interest rates are 24% up to 30% per year and are also based on loan amount. At Embassy Loans Inc., they follow a simple procedure for approval of loans and loans can be funded the same day! Borrowers just need to fill out their online loan application and their representative will contact them shortly with a decision. They must provide proof of residence and proof of employment unless self employed.

  • You keep the car and the cash – Same day cash
  • A-Rated with the Better Business Bureau
  • Offering some of the Lowest Rates in Florida – as low as 1.5% monthly
  • Borrow up to $5,000 – Monthly Payments – 12 to 18 month financing
  • Bad credit? No credit? No problem – Regardless of Credit

Call 866-277-5796 or visit our web site to apply http://www.autotitleloansaltamontesprings.com

White House To Propose Cutting Corporate Tax Rate

Barack Obama Corporate Taxes

WASHINGTON — Laying down an election-year marker in the debate over taxes, the Obama administration is proposing to cut the corporate tax rate from 35 percent to 28 percent, and to seek an even lower effective rate for manufacturers, a senior administration official says.

In turn, corporations would have to give up dozens of loopholes and subsidies that they now enjoy. Corporations with overseas operations would also face a minimum tax on their foreign earnings.

Treasury Secretary Timothy Geithner on Wednesday was to detail aspects of President Barack Obama’s proposed overhaul of the corporate tax system, a plan Obama broadly outlined in his State of the Union speech last month.

Chances of accomplishing such change in the tax system are slim in a year dominated mostly with presidential and congressional elections. But for Obama, the proposal is part of a larger tax plan that is central to his re-election strategy.

The corporate tax plan dovetails with Obama’s call for raising taxes on millionaires and maintaining current rates on individuals making $200,000 or less.

The 35 percent nominal corporate tax rate is the highest in the world after Japan. But deductions, credits and exemptions allow many corporations to pay taxes at a much lower rate.

Under the framework proposed by the administration, the rate cuts, closed loopholes and the minimum tax on overseas earning would result in no increase to the deficit.

That means that many businesses that slip through loopholes or enjoy subsidies and pay an effective tax rate that is substantially less than the 35 percent corporate tax could end up paying more under Obama’s plan. Others, however, would pay less while some would simply benefit from a more simplified system.

The official said the Obama plan aims to help U.S. businesses, especially manufacturers who face strong international competition. Obama’s plan would lower the effective rate for manufacturers to 25 percent while emphasizing development of clean energy systems. The administration official spoke on condition of anonymity to describe what the administration will do.

The New York Times first reported details of the plan in its online edition early Wednesday.

Many members of both parties have said they favor overhauling the nation’s individual and corporate tax systems, which they complain have rates that are too high and are riddled with too many deductions.

The corporate tax debate has made its way into the presidential contest. Former Massachusetts Gov. Mitt Romney has called for a 25 percent rate, former House Speaker Newt Gingrich, R-Ga., would cut the corporate tax rate to 12.5 percent, and former Sen. Rick Santorum, R-Pa., would exempt domestic manufacturers from the corporate tax and halve the top rate for other businesses.

While Obama has been promoting various aspects of his economic agenda in personal appearances and speeches, the decision to leave the corporate tax plan to the Treasury Department to unveil signaled its lower priority.

What’s more, the administration’s framework leaves much for Congress to decide – a deliberate move by the administration to encourage negotiations but which also doesn’t subject the plan to detailed scrutiny.

Obama’s plan is not as ambitious as a House Republican proposal that would lower the corporate rate to 25 percent.

Still, Obama has said corporate tax rates are too high and has proposed eliminating tax breaks for American companies that move jobs and profits overseas. He also has proposed giving tax breaks to U.S. manufacturers, to firms that return jobs to this country and to companies that relocate to some communities that have lost big employers.

Geithner told a House committee last week that the administration wants to create more incentives for corporations to invest in the United States.

“We want to bring down the rate, and we think we can, to a level that’s closer to the average of that of our major competitors,” Geithner told the House Ways and Means Committee.

White House economic adviser Gene Sperling has advocated a minimum tax on global profits. Currently many corporations do not invest overseas profits in the United States to avoid the 35 percent tax rate.

___

Associated Press writer Alan Fram contributed to this report.

Florida to get $8.4B from national mortgage settlement

Florida Attorney General Pam BondiFlorida Attorney General Pam Bondi said that $8.4 billion of the national $25 billion settlement with mortgage servicers will apply to Florida.

The proposed mortgage settlement between 49 state attorneys general and the nation’s largest loan servicers could net $8.4 billion in relief to Florida homeowners, Florida Attorney General Pam Bondi announced on Thursday.

The joint federal-state investigation resulted in a proposed $25 billion settlement over the mortgage practices of large banks and loan servicers, including robo-signing, where lenders were alleged to have filed foreclosure lawsuits without verifying the accuracy of the documentation. This led to thousands of foreclosure lawsuits in Florida getting held up and mired in confusion.
GMAC (NYSE: ALLY) were the loan servicers involved in the settlement. It applies to their handling of loans in mortgage-backed securities (MBS).

The settlement releases civil claims, but it doesn’t release any parties from criminal claims, Bondi announced. The agreement doesn’t prevent individuals or class action groups from suing lenders. A federal judge in Washington, D.C. must approve the deal.

However, the agreement excludes mortgages owned by Fannie Mae

The $8.4 billion settlement payments in Florida breaks down this way:

  • Florida borrowers could get $7.6 billion in relief from lenders in the form of loan modifications, including principal reductions. Nationally, this part of the settlement accounted for $17 billion.
  • Lenders promised to save Florida borrowers with underwater mortgages $309 million by refinancing their loans. The national component of this program is $3 billion.
  • The lenders would pay $170 million to Florida borrowers who lost their homes to foreclosure from Jan. 1 2008 through Dec. 31, 2011 and suffered “servicing abuse.” The national portion of this would be $1.5 billion to about 750,000 borrowers.
  • The lenders will pay the state $350 million. The money is slated for consumer protection efforts.


Get the latest banking industry news here.

bizWatch

See all your followed company news on your personalized dashboard.

To access the full benefits of bizWatch and receive a weekly email with aggregated news on all the companies you are following, please provide your email address below.

You must have a bizjournals account to follow a company.
Please Log In or Register.

 


Bright Futures scholarships may get tougher to keep


By Scott Travis, Sun Sentinel
1:52 p.m. EST, January 30, 2012

Recipients of Florida’s Bright Futures scholarships may be in for a much dimmer future if their grades slip in college.

Those receiving the most valuable scholarship would eventually have to maintain a 3.5 grade point average — up from the current 3.0 — to keep the scholarship under a proposal supported by the Florida House higher education budget committee. The Senate hasn’t taken up the issue yet.

Those with the second tier Medallion scholarships would have to maintain a 3.0, up from the current 2.75.

Read more…
http://www.sun-sentinel.com/news/palm-beach/fl-bright-futures-changes-20120130-1,0,5628075.story

South Florida’s jobless rate improves — a little

The healing continues for South Florida’s job market, though a full recovery remains out of reach.

New job figures emphasized the shakiness of a rebound that began in 2010 but still hasn’t brought down unemployment to healthy levels. Employers in Broward and Miami-Dade reported about 23,000 more payroll positions in December than they had a year ago, the 18th straight month of job growth.

However, unemployment remained close to 9 percent in Broward and above 10 percent in Miami-Dade, more than double where they were during the boom days of 2005 and 2006. Statewide, unemployment inched down one-tenth of a percentage point to 9.9 percent, but it was enough to cross the psychological barrier of double digits for the first time since April 2009.

“This is further evidence Florida’s economy won’t come roaring back in the short term. But it does continue on track recovery,’’ said IHS Global Insight economist Karl Kuykendall.

Jobs at all pay levels remain in demand throughout South Florida. At the Loews Miami Beach, a recent job fair to fill 80 positions drew a crowd of 750, said Susana Fernandez, the resort’s director of human resources. Fernandez said she hired 40 people within 48 hours, a process that typically took weeks when the economy was in better shape.

“It used to be I’d run an ad and just keep running it,’’ she said.

As usual, the monthly jobs report contained mostly encouraging news for South Florida, mixed with a dash of troubling statistics.

Among the mixed bags:

Unemployment: Broward’s unemployment rate dropped from 8.9 percent to 8.6 percent as more residents listed themselves as employed. However, the decline came in part thanks to a declining labor pool — a discouraging trend that usually indicates people are giving up on their job hunt in the face of grim prospects.

In Miami-Dade, unemployment stayed level with November at 10.2 percent. But the underlying numbers looked better: both employment and the labor pool have been growing for the last two months.

The numbers are even more encouraging given that Miami-Dade is the only county in Florida to receive a seasonally adjusted unemployment rate in the state’s monthly jobs report. Broward and other smaller counties will receive their seasonally adjusted unemployment rate next week in a federal report on local hiring.

Job growth: Hiring is up across the board in Miami-Dade, with almost all industries employing more people than a year ago.

The financial industry, including insurance agencies and mortgage brokerages, is the biggest exception, accounting for 60 percent of the county’s job losses. Construction, once the top drag on hiring, has all but closed its gap with 2010’s dismal hiring levels and finished December down just 600 positions. It was the 49th straight month of job losses for the construction industry.

Tourism continues to drive Broward’s hiring rebound, which has been weaker than Miami-Dade’s. While Miami-Dade payrolls are up almost 2 percent over 2010, Broward saw less than 1 percent job growth. In Broward, six out of 10 new jobs come from the hospitality industry.

Hints of trouble: While employment is well above where it was at the end of 2010, seasonally adjusted figures show a loss of 3,700 jobs in South Florida since November. That could be a blip, or it could be the start of an extended decline.

Perhaps more troubling is a reversal in temporary hiring. Florida saw a drop of nearly 20,000 temporary workers, and Broward lost 5,000 since December 2010 — the biggest yearly drop in that category since October 2009. Miami-Dade continued to see growth in temporary hires, but the other numbers don’t bode well, said Moody’s economist Chris Lafakis.

“Businesses usually hire workers on a temporary basis before hiring full-time,’’ he said. The drop in temporary workers “means that businesses are not going to be adding significantly to full-time payrolls anytime soon.”

Economists predict a slow recovery on the jobs front this year, with hiring not picking up steam until 2013. December’s report did nothing to change those forecasts.

“I don’t think 2012 is going to be see a huge acceleration in job recovery,’’ said University of Central Florida economist Sean Snaith. “I’m not sure what kind of spike can lead to recover in the short-term.”

South Florida pump prices on upward trend

 

gas pump graphic

South Florida gas prices spiked last week by 10 to 15 cents, as oil prices rose amid positive employment numbers and threats from Iran to block a major shipping channel for oil.

South Florida gas prices spiked last week by 10 to 15 cents, as oil prices rose amid positive employment numbers and threats from Iran to block a major shipping channel for oil.

“Motorists will probably see pump prices inch up again this week, which is likely to reveal whether or not oil prices are sustainable above $100 a barrel,” said Jessica Brady, AAA 

spokeswoman for The Auto Club Group, in a statement.

Crude oil prices climbed $2.73 to close Friday at $101.56 on the New York Mercantile Exchange 

, according to the AAA Fuel Gauge Report.

South Florida fuel average details:

  • Fort Lauderdale: A gallon of regular reached $3.50, up from $3.35 the previous week and $3.17 a year ago.
  • Miami: A gallon of regular unleaded gasoline was $3.48, up from $3.36 the previous week and $3.17 a year ago.
  • West Palm Beach/Boca Raton: Regular unleaded was $3.51, up from $3.41 the previous week and $3.20 a year ago.

“Gas prices generally inch up after the first of the year on optimism the economy will continue to improve and set the stage for increased demand in the new year,” Brady said. “The recent increase in U.S. payrolls by 200,000 in December supports this notion. Then, couple it with concerns Iran will disrupt Mideast oil exports and pump prices are sure to rise. However, there is still plenty of bearish news out there, mainly Europe’s looming debt woes, with the potential to drive down oil and gas prices, especially if the Iranian threats were to cease.”

Iran has threatened to block the Strait of Hormuz, a major shipping channel for about one-fifth of the world’s oil supply.

The national average price of regular unleaded gasoline of $3.37 a gallon was up 7 cents from the previous week. Florida’s average price of $3.44 a gallon was up 13 cents.

The spike in gas prices has raised concerns that the national average could reach $4.20 by spring or summer. However, AAA warns it is still too early to know for sure.

 

bizWatch

See all your followed company news on your personalized dashboard.

To access the full benefits of bizWatch and receive a weekly email with aggregated news on all the companies you are following, please provide your email address below.

You must have a bizjournals account to follow a company.
Please Log In or Register.

Bank Mistake May Cost Foreclosure Lawyer Her Home

Christine Jackson’s three-bedroom wood-frame home in Indianapolis is in danger of foreclosure. It’s not because she can’t afford her mortgage, but because of a bank error, she said.

Jackson is one among thousands of homeowners from all walks of life who have complained that the major banks that service their mortgages have made frequent errors in calculating their loans. These errors include slapping unnecessary inspection fees onto accounts, misapplying payments in violation of Fannie Mae and Freddie Mac guidelines and “force-placing” expensive insurance onto homes that are already insured.

Jackson knows all this all too well because she is a lawyer who represents homeowners trying to stave off foreclosure. Often, those clients have claimed that their bank or mortgage servicer made a mistake in tabulating the cost of their loan, triggering a wrongful default. Jackson, 54, a former fraud investigator for the Internal Revenue Service, now understands firsthand the frustration that her clients face.

JPMorgan Chase Co., the bank that services Jackson’s mortgage, has declared her loan in default, blocked access to her online account and threatened foreclosure if she doesn’t pay late charges that she said are unwarranted. Her once sterling credit is ruined and she could lose her home if the mess isn’t resolved, Jackson said in a recent interview.

Jackson blames her situation on an extra annual insurance premium that she said Chase deducted from her account in 2009 on top of her usual payment. The overcharge triggered a series of account miscalculations, eventually leading to default, according to Jackson. “I’m disgusted with the whole thing,” she said. “My credit is trashed. I have nothing at all to finance my business. I might have to file for bankruptcy.”

Banks’ servicing arms manage all aspects of a borrower’s home loan, from collecting payments for the owners of the mortgage to pursuing a foreclosure if a loan is in default for too long. Since the housing market crashed in 2007, banks and some standalone mortgage servicers have struggled to keep up with an unprecedented wave of foreclosures, without much success.

A group of state attorneys general is trying to craft a blanket settlement with several large financial institutions following allegations that these banks filed false and “robo-signed” affidavits in foreclosure proceedings.

Also, the biggest banks and independent servicers agreed in November as part of a consent order with federal regulators to give homeowners with residences involved in a foreclosure action from Jan. 1, 2009, to Dec. 31, 2010, the option of an independent audit of their loan account to resolve cases like Jackson’s. Regulators have boasted that the move could grant more than 4 million borrowers a chance to have their loan accounts examined by qualified auditors.

But Jackson doesn’t qualify for such a review because her troubles don’t fit within the designated time frame and her home hasn’t been foreclosed on. That’s also the case for many of the estimated 3 million other U.S. homeowners whose loans are in default or some stage of foreclosure.

Jackson, who with her husband had their house built in 1997, said in February 2009 the mortgage servicing arm of JPMorgan Chase withdrew $1,422 from her escrow account to pay her annual homeowners insurance premium. The next month, Chase withdrew $838 from her escrow — again to pay her annual insurance premium; the second amount was the correct amount, Jackson claimed.

At the end of 2009, Chase recalculated the amount needed to fund the following year’s insurance premium, adding $1,422 and $838 together and incorrectly increasing Jackson’s required monthly payment, Jackson claimed. Since Jackson’s monthly payment was automatically deducted from her bank account, she did not notice until the end of 2010 that she was paying an extra $108 each month, she said.

Jackson finally noticed the mistake when she logged onto her account online, she said, noting that she called a Chase representative who promised to fix the problem.

Instead, things got worse. In January 2011 she received eight letters from Chase stating that her previous month’s payment was insufficient and that her loan was now in default. Jackson, whose clients have had similar problems, has coined a term for her situation: phantom default.

Jackson has spent dozens of hours on the phone and sending letters in an attempt to resolve the problem with Chase, to no avail, she said. She is now ready to pay home loan payments she has withheld over the past year, provided the bank repair her credit, reimburse her for damages and costs, and waive all the late and default fees, which she estimated total several thousand dollars, she said.

Thomas Kelly, a Chase spokesman, said that while he could not comment on the details of Jackson’s situation, “we work with customers individually when there is confusion or dispute about payments.”

Other homeowners have also complained of banks making errors with insurance premium.

In 2010, a Mississippi federal bankruptcy judge ordered American Home Mortgage Servicing to pay Glen Cothern’s legal expenses as a result of the “obvious mental anxiety, stress, and frustration” he suffered when the servicer charged him for insurance he didn’t need, triggering two wrongful foreclosures and a customer-care experience termed “Kafka-esque” by the judge.

New Orleans bankruptcy attorney Greta Brouphy saw her monthly mortgage payment balloon after Chase deducted two $3,200 annual insurance premiums in one year and imposed costly forced-place insurance on top of that. Brouphy spent a year trying to get the situation sorted out at her local Chase branch. “The loan officer should invite me to his kid’s birthday party because I spent so much time with him,” Brouphy said.

Finally, a federal judge intervened. “I’m about to choke somebody,” Brouphy recalled saying to New Orleans bankruptcy judge Elizabeth Magner after court one day. Magner, who has developed a national reputation for sanctioning servicers for their behavior, gave Brouphy the phone number of a Chase lawyer, who quickly cleared things up.

Jackson hasn’t been as fortunate. “Regardless of my knowledge of the law and my connections, my account has not been corrected, all my credit has been reduced, and I cannot get any operating loans for my business, which is fatal when you work on a contingent basis,” she said.

Bank of America Corp. and other lenders cancelled lines of credit for Jackson totaling more than $100,000 that she needs to finance cases. She closed her law office and moved into her home. She even canceled her $260 subscription to a legal research website.

Jackson, who worked for the IRS for 18 years, said she has paired down her client roll to just 10 and is considering moving with her husband to Mexico and abandoning law altogether. That’s bad news for any Indiana homeowner who might have wanted to tap her experience in navigating this type of bureaucratic nightmare.

The little apartment on Lake Chapala near Guadalajara that Jackson has rented several times for a few hundred dollars a month beckons, she said. “The stress has made me ill,” she said. “I don’t need this.”

South Florida home value slide slows


By Kimberly Miller
Palm Beach Post Staff Writer

Losses to South Florida home values are estimated to be $6.5 billion this year, an amount that, while daunting, is a considerable improvement from 2010.

Last year, Palm Beach, Broward and Miami-Dade counties lost a combined $28.6 billion in housing values, according to a recent report from real estate analysts at Zillow.

Nationwide, home values in 2011 dropped by $681 billion, down from the previous year’s staggering loss of $1.1 trillion.

But while the thrashing to home worth has lessened, it’s not about to turn around completely, warned Stan Humphries, chief economist for Seattle-based Zillow.

More than three years into the market meltdown, economic uncertainty and a backlog of foreclosed homes destined for resale continue to delay a recovery.

“Unfortunately, when we look ahead to next year, the unabsorbed pool of housing supply, dragging levels of consumer confidence, high unemployment and negative equity will continue to put downward pressure on the housing market,” Humphries said.

His prediction for a potential recovery: late 2012 to early 2013.

Just nine of 128 real estate markets tracked by Zillow nationwide showed gains in home values during 2011, with New Orleans topping the list with a $3.5 billion gain and Pittsburgh in second place with a $2.7 billion increase.

Of the 20 largest regions measured, Los Angeles showed the biggest loss, with home values down $75.5 billion. New York and Chicago trailed with losses of $44.8 billion and $41.7 billion, respectively.

The Zillow report says the large losses in Los Angeles, New York and Chicago are because of the high number of homes in those metro areas as well as decreases in values.

South Florida Realtors are often skeptical of Zillow’s home value estimates. The company’s website states that as of September its estimates were within 5 percent of the actual sales price of a home just 29 percent of the time. About 52 percent of the time Zillow’s estimates are within 10 percent of a home’s sales price in South Florida.

But some South Florida experts did agree on an extended market recovery time that will drift into 2013.

“I thought that we were going to be in better shape in 2011 because we’d have more foreclosures moving through the system, but then we had the robo-signing scandal and it all got stalled,” said Jack McCabe, chief executive of McCabe Research Consulting in Deerfield Beach. “Now I think the rebound will be 2013 or even later, and that’s barring natural disasters or other debacles we can’t anticipate.”

McCabe is estimating median prices for single-family homes in South Florida will drop 5 percent, with condominiums experiencing up to a 10 percent decline.

In November, the median price for an existing single-family home in Palm Beach County dipped to $183,700, down 12 percent from the same time in 2010. Palm Beach County median condominium prices fell 2 percent from 2010 to $77,700, according to a report the Florida Realtors released last week.

Also, a Tuesday report from Standard Poor’s/Case-Shiller Home Price Index showed prices in Palm Beach, Broward and Miami-Dade counties fell 4 percent in October from the same time in 2010.

Bill Richardson, president of the Realtors Association of the Palm Beaches, has a slightly more positive outlook than McCabe and Zillow. He says prices will stay mostly flat in 2012.

“I don’t see a lot more value loss,” Richardson said. “We may be a little up or down, but not too much either way until 2013, which should be better.”

Gold Coin Fetches $7.4 million

Rare 1787 gold coin fetches $7.4 million in deal brokered by New Orleans firm - December 12, 2011Rare 1787 gold coin fetches $7.4 million in deal brokered by New Orleans firm
Published: Monday, December 12, 2011, 6:26 AM

An exceedingly rare 1787 gold Brasher doubloon has been sold for $7.4 million, one of the highest prices ever paid for a gold coin. Blanchard and Co., the New Orleans-based coin and precious metals company that brokered the deal, said the doubloon was purchased by a Wall Street investment firm. Identities of the buyer and seller were not disclosed.

Read more…
http://www.nola.com/business/index.ssf/2011/12/rare_1787_gold_coin_fetches_74.html

Robert Reich: The Remarkable Political Stupidity of the Street

by Robert Reich

Wall Street is its own worst enemy. It should have welcomed new financial regulation as a means of restoring public trust. Instead, it’s busily shredding new regulations and making the public more distrustful than ever.

The Street’s biggest lobbying groups have just filed a lawsuit against the Commodities Futures Trading Commission, seeking to overturn its new rule limiting speculative trading.

For years Wall Street has speculated like mad in futures markets — food, oil, other commodities — causing prices to fluctuate wildly. The Street makes bundles from these gyrations, but they have raised costs for consumers.

In other words, a small portion of what you and I pay for food and energy has been going into the pockets of Wall Street. It’s just another hidden redistribution from the middle class and poor to the rich.

The new Dodd-Frank law authorizes the Commodity Futures Trading Commission to limit such speculative trading. The commission considered 15,000 comments, largely from the Street. It did numerous economic and policy analyses, carefully weighing the benefits to the public of the new regulation against its costs to the Street. It even agreed to delay enforcement of the new rule for at least a year.

But this wasn’t enough for the Street. The new regulation would still put a crimp in Wall Street’s profits.

So the Street is going to court. What’s its argument? The commission’s cost-benefit analysis wasn’t adequate.

At first blush it’s a clever ploy. There’s no clear legal standard for an “adequate” weighing of costs and benefits of financial regulations, since both are so difficult to measure. And putting the question into the laps of federal judges gives the Street a huge tactical advantage because the Street has almost an infinite amount of money to hire so-called “experts” (some academics are not exactly prostitutes but they have their price) who will use elaborate methodologies to show benefits have been exaggerated and costs underestimated.

It’s not the first time the Street has used this ploy. Last year, when the Securities and Exchange Commission tried to implement a Dodd-Frank policy making it easier for shareholders to nominate company directors, Wall Street sued the SEC. It alleged the commission’s cost-benefit analysis for the new rule was inadequate.

Last July, a federal appeals court — inundated by Wall Street lawyers and hired-gun “experts” — agreed with the Street. So much for shareholders nominating company directors.

Obviously, government should weigh the costs against the benefits of anything it does. But when it comes to the regulation of Wall Street, one overriding cost doesn’t make it into any individual weighing: The public’s mounting distrust of the entire economic system, generated by the Street’s repeated abuse of the public’s trust.

Wall Street’s shenanigans have convinced a large portion of America that the economic game is rigged.

Yet capitalism depends on trust. Without trust, people avoid even sensible economic risks. They also begin trading in gray markets and black markets. They think that if the big guys cheat in big ways, they might as well begin cheating in small ways. And when they think the game is rigged, they’re easy prey for political demagogues with fast tongues and vacuous solutions.

Tally up these costs and it’s a whopper.

Wall Street has blanketed America in a miasma of cynicism. Most Americans assume the reason the Street got its taxpayer-funded bailout without strings in the first place was because of its political clout. That must be why the banks didn’t have to renegotiate the mortgages of Americans — many of whom, because of the economic collapse brought on by the Street’s excesses, are still under water. Some are drowning.

That must be why taxpayers didn’t get equity stakes in the banks we bailed out — as Warren Buffet got when he bailed out Goldman Sachs. That means when the banks became profitable gain we didn’t get any of the upside gains; we just padded the Street’s downside risks.

The Street’s political clout must be why most top Wall Street executives who were bailed out by taxpayers still have their jobs, have still avoided prosecution, are still making vast fortunes — while tens of millions of average Americans continue to lose their jobs, their wages, their medical coverage, or their homes.

And why the Dodd-Frank bill was filled with loopholes big enough for Wall Street executives and traders to drive their ferrari’s through.

The cost of such cynicism has leeched deep into America, causing so much suspicion and anger that our politics has become a cauldron of rage. It’s found expression in Tea Partiers and Occupiers, and millions of others who think the people at the top have sold us out. And it causes some Americans to be attracted to demagogues offering fast talk and whacky ideas.

Every week, it seems, we learn something new about how Wall Street has screwed us. Last week we heard from Bloomberg News (that had to go to court for the information) that in 2009 the Street’s six largest banks borrowed almost half a trillion dollars from the Fed at nearly zero cost — but never disclosed it.

In early 2009, after Citigroup tapped the Fed for almost $100 billion, the bank’s CEO, Vikram Pandit, had the temerity to call Citi’s first quarter the “best since 2007.” Is there another word for fraud?

Finally, everyone knows the biggest banks are too big to fail — and yet, despite this, Congress won’t put a cap on the size of the banks. The assets of the four biggest — J.P. Morgan Chase, Bank of America, Citigroup, and Wells Fargo — now equal 62 percent of total commercial bank assets. That’s up from 54 percent five years ago. Throw in Goldman Sachs and Morgan Stanley, and these six leviathans preside over the American economy like Roman emperors.

Speaking of Rome, if Italy or Greece defaults and Europe’s major banks can’t make payments on their debts to Wall Street, another bailout will surely be required. And the politics won’t be pretty.

There you have it. A federal court will now weigh costs and benefits of a modest rule designed to limit speculative trading in food and energy.

But in coming months and years, the American public will weigh the social costs and social benefits of Wall Street itself. And it wouldn’t surprise me if they decide the costs of the Street as it is far outweigh the benefits.

The result will be caps on the size of banks. Some will be broken up. Glass-Steagall will be resurrected. Some Wall Street bigwigs may even see in the insides of jails.

If so, the Street has only itself to blame.

Robert Reich is the author of Aftershock: The Next Economy and America’s Future, now in bookstores. This post originally appeared at RobertReich.org.

 

 

<!–

Books by this author

–>

This Blogger’s Books from

Amazon

indiebound


Aftershock: The Next Economy and America's Future (Vintage)

 

 


Follow Robert Reich on Twitter:

www.twitter.com/RBReich