The Index: Numbers behind the big bank settlement

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Tuesday February 21, 2012 · 5:29 AM PST

2012/02/21 · 05:29

In early February, 5 of the nation’s largest commercial banks agreed to a settlement with the federal government in which they will:
1. provide relief to homeowners who are struggling to make payments on underwater mortgages;
2. compensate others who have already been evicted without due process.
The total value of the settlement may reach as much as $39 billion, depending on how the banks respond to certain incentives built into the agreement. But the base amount is $26 billion.
With a nod to the Harpers Index, here are the numbers that create context around the settlement...

BigBadbiz

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Wednesday January 25, 2012 · 5:17 AM PST

2012/01/25 · 05:17

A pair of economists from Ohio State University issued a report that says the likely number of jobs that a burgeoning shale gas industry could create in Ohio has been grossly overstated – by a factor of 10 – by industry proponents and politicians who are trying to fast-track its development.
The statement is important because it debunks economic development estimates not only for this industry in this state, but potentially for any politicized energy project (think TransCanada’s Keystone XL pipeline to bring energy from Alberta’s oil sands to the U.S.) being promoted on the promise of job growth.

BigBadbiz

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Tuesday January 24, 2012 · 6:25 AM PST

2012/01/24 · 06:25

When did the credit score become the most important number in our lives?
It seems to have begun in 2003, when the federal Fair Credit Reporting Act was amended to allow everyone to receive 1 free copy of their credit report every year from each of the three national credit reporting bureaus – Equifax, TransUnion and Experian.
But it actually began earlier than that.
Read past the break for the detail.

BigBadbiz

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Monday January 23, 2012 · 9:13 AM PST

2012/01/23 · 09:13

Carnival Corp. has fantastic news for those passengers who didn’t die on the Costa Concordia last week when it drove hard aground and capsized off the cost of Italy: You can get 30% off future cruises if you continue to spend your recreation money with Carnival.
Sound a little insensitive? That's only the beginning. Since the shipwreck, the company and its Costa Cruises subsidiary have shown insensitivity, poor judgment, incompetence and possibly negligence. That's a lot to pack into a week.
Read on for more detail from BigBadBiz...

BigBadbiz

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Saturday January 21, 2012 · 3:41 PM PST

2012/01/21 · 15:41

The Cult of Capitalism is a slavish belief that the profit motive can cure all ills. Plans by the U.S. Postal Service to cut costs by slowing down first-class mail delivery drew out this textbook example late last year from Boston Globe columnist Jeff Jacoby.

Yet with all its privileges, the Postal Service is struggling, while UPS and FedEx flourish. Why? Because they have something invaluable that the post office lacks: Competitors.
… What is killing the post office is the lack of genuine, head-to-head competition that forces vendors to compete for customers by pushing quality up and holding prices down. Only in a government-sheltered monopoly like the Postal Service would labor costs remain as bloated as they have, year in and year out.

Jacoby may be right in that it’s time to allow unfettered competition between the Post Office and its private-sector peers. But typical of the Cult of Capitalism, gross oversimplification of the issue brings him to the conclusion from the opposite direction. Read More

Who's making payday lenders look good? Your bank

BigBadbiz

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Friday January 20, 2012 · 6:45 AM PST

2012/01/20 · 06:45

Overdraft fees at U.S. banks rose nearly 10% in a 5-month period last year. The Chicago Tribune has reported that the median price of an overdraft rose $2.50, from $27.50 in June 2011 to $30 in November.
The information comes from a study performed by economic research firm Moebs Services Inc., which says it’s never seen such a large increase in such a short period of time.
Banks blame the increase on the overdraft regulations contained in the Dodd-Frank Wall Street Reform and Consumer Protection Act. The law, they say, is killing overdraft revenue, which dropped a startling 10.9% in 2011 to a mere $29.5 billion.
What banks aren’t highlighting is the fact that, until now, revenue from overdraft fees climbed steadily from 2000 to 2009 – at an average of more than 10% a year. They were raking it in, even as they were also making oodles on servicing and sale of all those ill-advised mortgages.
The comedown must be difficult.
But there is one group that doesn’t seem to mind the rising overdraft fees.
Those sleazy payday lenders now provide more transparency on the fees they charge than the banks themselves. And they’re making a straight-faced case that, when the bills are due, a payday loan is cheaper than than overdrawing your bank account – even with overdraft protection.

The true cost of cheap crap from China

BigBadbiz

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Thursday January 19, 2012 · 5:54 AM PST

2012/01/19 · 05:54

At the Foxconn manufacturing facility in Wuhan China, where Apple products are made, a spate of suicides and a threatened mass suicide over working conditions have attracted a lot of embarrassing media attention.
Now, shortly after working conditions at the Foxconn plant were featured in an sobering episode of the popular public radio show This American Life, Apple has released its 2012 Apple Supplier Responsibility Report. The report indicates that 69% of audited suppliers were in compliance with Apple policies on wage and benefit practices; while only 38% were in compliance with policies on work-hour practices.

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The Index: Numbers behind the big bank settlement

Why energy projects like Keystone XL overstate job creation

Are you watching your credit rating? It's all part of the plan

Carnival: Sink a ship and torpedo the goodwill

The Cult of Capitalism goes postal

Who's making payday lenders look good? Your bank

The true cost of cheap crap from China