| 9 Biggest Banks' Derivative Exposure - $228.72 Trillion |
Website with Story, The "buildings" stacked up next to these large bank headquarters are palettes of stacked $100s. Derivatives are very risky and come with a lot of consequences. On one hand they are great tools to hedge a larger position of non-derivatives. That was the intended purpose, but now days people use these instruments daily with larger positions to leverage up the best way possible. The FED has had to look out for these banks best interests because if they hadn't paper money would have failed along with all these bad banks bets. When/if the house of money crumbles, I would advise to not be in it for the customers will be stuck with the bill (i.e. MF Global). Credit Unions don't have shareholders and reinvest to get get low rates and more customer service. These are how banks are suppose to conduct business. Looking out for customers as opposed to looking to get rich off customers.
I've been looking to get all my money in a credit union. I hear nothing but good things.
ReplyDeleteI don't understand too much about finance. I know the basics from my "
Managerial Finance", but a lot of the terminology you used is over my head.
Are those pallets representing the actual amount? If so, wow.
I don't know much about derivatives except that they can be a pain to calculate. (Calculus can suck.)
ReplyDeleteI know that some derivatives are good. They help hedge risk. The ones that had to do with the housing market were the ones that caused a lot of problems. A lot of people don't really understand derivatives and the complex financial instruments that the banks were using up to the crash, Alan Greenspan said in an interview that he couldn't understand them. The banks were forced by the government to take on bad assets in the form of loans given to poor people that had very little hope of paying them back. The banks did what all businesses have to do which is make a profit. So they made these financial instruments to try to turn bad assets into a profit. I think most of the blame was on the government forcing the banks to take on these bad assets. Of course today a lot of the big banks are in bed with the government. Dodd Frank has really interjected the government into the banking industry in a bad way. I use to defend the banks, but when you see how involved they are with the government and the government with them it is kind of hard to defend them. Of course this is a complex issue and I am not up to speed on it like I should be.
I think credit unions are a good place to put your money, but in the end there will be no out running the government and the mess created by it and the big banks that is headed our way. Eventually your money will be worthless and taken over by the government. You have to stay up to date to know when to convert your paper money into hard assets before this happens.
This is a depressing article: http://www.cnbc.com/id/47133762
ReplyDelete"The college class of 2012 is in for a rude welcome to the world of work.
A weak labor market already has left half of young college graduates either jobless or underemployed in positions that don't fully use their skills and knowledge.
Young adults with bachelor's degrees are increasingly scraping by in lower-wage jobs — waiter or waitress, bartender, retail clerk or receptionist, for example — and that's confounding their hopes a degree would pay off despite higher tuition and mounting student loans.[...]"You can make more money on average if you go to college, but it's not true for everybody," says Harvard economist Richard Freeman, noting the growing risk of a debt bubble with total U.S. student loan debt surpassing $1 trillion.[...]Broken down by occupation, young college graduates were heavily represented in jobs that require a high school diploma or less.[...]According to government projections released last month, only three of the 30 occupations with the largest projected number of job openings by 2020 will require a bachelor's degree or higher to fill the position — teachers, college professors and accountants. Most job openings are in professions such as retail sales, fast food and truck driving, jobs which aren't easily replaced by computers.
College graduates who majored in zoology, anthropology, philosophy, art history and humanities were among the least likely to find jobs appropriate to their education level; those with nursing, teaching, accounting or computer science degrees were among the most likely.[...]In addition, U.S. workers increasingly may need to consider their position in a global economy, where they must compete with educated foreign-born residents for jobs. Longer-term government projections also may fail to consider "degree inflation," a growing ubiquity of bachelor's degrees that could make them more commonplace in lower-wage jobs but inadequate for higher-wage ones."
That sucks.
There are a lot of people going to school nowadays because jobs are hard to find, and public funding for higher education is in abundance. This means that there a lot of free loaders who are getting shitty degrees and don't belong in college in the first place. These people are the ones who will be SOL when they graduate. The people that would have gone to
ReplyDeletecollege before the recession and without the government funding will be just fine. Basically, the current socioeconomic condition of our country has brought in a bunch of shitty students. They will be the ones who work in menial jobs.
"According to government projections released last month, only three of the 30 occupations with the largest projected number of job openings by 2020 will require a bachelor's degree or higher to fill the position"
This seems like a statistic that could be applied to any generation in history. The jobs with the most openings are always shitty jobs. See the Pyramids of Egypt, the Chinese Wall, American Fast Food, etc.
There is a huge education bubble. Student loan debt is close to 1 trillion. I can tell you from personal experience that well over half of the people going to college are wasting their time and future generation's money and don't need to be there. The only reason they are is because of the free government money. Government pumping money into college is one of the main reasons for the high inflation in tution costs.
ReplyDeleteGet a degree in a challenging field and your chances of getting a good job go way up.