News of the finance

A piece of propaganda from Forbes:

Cities Where The Recession Is Easing

Jobs in Washington [DC] are growing quickly, and in 2008 the city produced more in goods and services than almost anywhere in the country.

D.C. and nine other cities (among them: Boston, Los Angeles and a host of metros in Texas) are best surviving the downturn in part because they specialize in industries that are relatively insulated from economic volatility. Federal and state jobs all but guarantee the health of a local economy, and nowhere is there more government-related work than in Washington. The city has one of the lowest unemployment rates in the country, at 6.2%, and its output amounts to $362.3 billion, more than three times the average for the country’s largest cities.

Excuse me, but what goods did DC produce? They don’t manufacture any goods (cars, bicycles, computers, guns, etc), process food, or grow any food or timber.

While DC writes in great salaries, pensions and health plans for themselves and bend the rest of the nation to the will of their corporate buddy robber-barons, this little known rule will be enforced upon their “former” peons:

Defaulted Loans May Haunt Seniors

The Treasury currently withholds benefits of 3.1 million Social Security recipients to recover defaulted student–, farm– and small–business loans, unpaid income taxes, amounts veterans owe for health care, and other debts to the government.

Previously, the U.S. hasn’t been able to withhold Social Security payments to recover most debts delinquent for more than ten years.

But a provision in the 2008 Farm Bill lifted the ten–year statute of limitations on the government’s ability to withhold Social Security benefits in collecting debts other than student loans—for which the statute of limitations was lifted in 1997—and income taxes, where the limit remains 10 years.
….
A Treasury spokesman says the new legislation “allows Treasury’s Financial Management Service to collect older debts and levels the playing field so that all eligible debts, regardless of age, are subject to debt collection. Treasury expects this legislation will result in increased collections of $10 million per year in delinquent federal non–tax debt.”

[It's getting harder and harder...for spokesmen to say "level the playing field" with a straight face anymore.]
….
The shift applies to debtors of all ages, but Social Security recipients will bear much of the brunt. A Wall Street Journal analysis of Treasury Department data shows that Social Security recipients comprise a large and growing percentage of people from whom the Treasury recovers debts.
….
…a former staff attorney for the Social Security Administration, has handled more than 100 overpayment cases, “very few of which were accurate,” he says. “Most people can’t find or afford help, and give up very quickly and end up with painful offsets on a fixed budget.”
….
A Treasury spokesman says the new regulations require agencies seeking to recover debts more than a decade old to give debtors the right to review and copy their files, make payment arrangements, and apply for disability and hardship waivers.

But a recent dispute about a student loan shows that even with these rights, a person challenging an old debt can face hurdles similar to homeowners in foreclosure trying to modify a loan that has been resold.

Ah, yes, the two sets of rule thing remains in effect and becomes more disparaging by the hour. Corporations can get out of paying their debts, but the citizen-turned-consumer-becoming-debt-serf can’t. There is no debt-forgiveness –no Jubilee.

I’ll need to do a blog post about how corporations can pay off their debts to their creditors by issuing pieces of paper called stock. Can you or I issue a personal stock at some supposed monetary value we picked out of thin air to pay off our debts? No. But, the corporations can write themselves a virtual jubilee whenever they need one. More another day on that.

State Tax Changes in Response to the Recession

Ten of those states have raised taxes by more than 5 percent of the prior year’s collections: California, Delaware, Florida, Indiana, Massachusetts, Nevada, New Hampshire, New York, North Carolina, and Oregon.
….
Overall, 13 states raised new revenue from personal income taxes, 17 enacted sales tax increases, 22 increased excise taxes on tobacco, alcohol, or motor fuel, 17 increased business taxes, and 24 increased fees or other taxes.

In dollar terms, sales and excise tax changes account for 37 percent of the net increase, or $11.0 billion. Nearly one-third of the expected new revenues — $9.8 billion — came from personal income tax changes. The remaining nearly $9.0 billion — close to one third of the total — is made up of corporate taxes, miscellaneous taxes, and fees.

I wonder how those “corporate taxes” are actually used in practice? Are they equally applied across the board or do they hit the remaining mom and pop shops while loopholes were written in for the multinational corporations (and campaign contributors)? Do they only affect competitors of certain corporations who have lawmakers in their pockets in those particular states? Do reporters look into these things anymore? No.

Last, but not least today:

Israeli banks urge America clients to close Israeli accounts

Obedient to intensifying U.S. government pressure to crack down on offshore tax evaders, in January Israeli banks began ordering clients they identify as “Americans” or “U.S. tax residents” to close investment accounts they hold in Israel. It is apparently an anticipatory measure, ahead of changes in U.S. law.
….
Local finance professionals agree that the situation is likely will evolve as the Americans develop and implement new banking guidelines, but differ in their assessment of the possible consequences for U.S. citizens living in Israel.

“Theoretically, any American who has an account here could be affected by the changes,” Aaron Katsman, a Jerusalem-based financial consultant who specializes in English-speaking clients, said. “They won’t be able to hold stocks. They could have deposits here, but that’s about it.”
….
The problems Americans face in Israel are part of the fallout from a tax evasion scandal involving Switzerland’s biggest bank, UBS. In 2008 the U.S. accused the Zurich-based bank of helping wealthy Americans to evade taxes. In response, UBS announced it would stop providing cross-border private banking services to American clients. Last month the Swiss bank UBS agreed to pay $780 million to avoid being prosecuted by the American authorities. It also disclosed the names of some account holders.

Some but not all? Hmmm. I wonder how many people who thought they had money woke up one morning to find out they really weren’t big enough for the big game anymore? The games the factions play have high stakes.

As you might imagine from the title, the last few days have been up and down. One might say my days have been as erratic as the weather here, which is currently below freezing and showing rather pathetic signs of warming up. It is, however, sunny, which is a win.

Small problems, small victories.

My weekend was rather uneventful. I was a homebody on Saturday — with the exception of a glorious run to the Parc des Buttes Chaumont — and Sunday I went to the American Church in Paris with Victoria. It was a traditional service — sans actual denomination, although it leaned towards Presbyterian — and we both felt very American and very much like children in church again. Afterwards, there was much plentiful and FREE American style coffee.

We then headed off to the student brunch in the south of Paris, which was cheap and tasty — cereal, bread, pastries, yogurt, milk, orange juice, potatoes, eggs, coffee and more for less than 3 euro! — but we had to battle it out with hungry French students for food and for a place to sit. In the end, it was worth it, and we left full and happy.

Small problems, small victories.

School started up again on Monday, as it is often wont to do, and I can honestly say that I was glad to get back into my somewhat regular routine. Classes were interesting, and the sky was blue and sunny, albeit a tad bit cold.

Monday evening, my friend Matt from Carolina got in on the train from London, where he is spending the majority of his spring break, watching football (British football that is) matches and wandering around aimlessly. His visit was sort of spur of the moment, but when he got off the train, I realized how nice it was to see a familiar face from my regular life back in the real world.

We made dinner for ourselves and for some friends of a high school friend — the people who introduced me to the first batch of French people here — which was delicious (mac and cheese, only the fancy and elaborate kind). I also made butterscotch, which everyone always loves.

Tuesdays are my busy days, and yesterday was no exception. French class in the morning — where the clock is always mysteriously stuck on 4 o’clock, exactly — followed by a quick stop in the library to begin the book check-out process and then lunch and Media and Politics class, concurrently.

You see, you aren’t allowed to actually go into the stacks in the library here. You fill out a little form with the book number and title, scan it into a timestamp machine and give it to the people behind the circulation desk. They then send someone into the stacks for you to see if the book is there, and bring it back after a period of oh, say, 45 minutes. When I explain the American university library system to French people, they are stunned.

The short of all of this is that the book I wanted for my paper on the landmark Supreme Court case New York Times Co. v. United States (the Pentagon Papers case) — called “Nixonland”, a book which we used in my favorite history class last term — was checked out, even though the library’s database told me otherwise.

My difficulties continued when I went to my French bank to attempt to deal with a problem with my account. Let me just pause a minute here and explain something. I opened this account in January. I chose the BNP-Paribas student option, because they have some sort of deal with French universities in which they give you free money for being a student and opening an account with them, so I had to give them my SciencesPo student ID. Which I did. In January.

Last week — the first week of March, mind you — I got a call from the bank, explaining that my student ID card has the wrong birthdate on it, or rather, it doesn’t match my passport birthdate. You see, the French — and the rest of the world in general, methinks — write dates as “day/month/year” and not “month/day/year” like we do back in the states. So, somewhere along the line, I must have made an error in filling out the student card registration form, because my card says I was born March 9, or, 9/3/1989.

(So I just had a fake birthday yesterday. Holler.)

The ever vigilante folks at BNP wanted further proof that I really did go to SciencesPo and that my birthday was September 3rd, 1989 and not March 9th. I explained to them last week that, since SciencesPo was on holiday, I would have to wait a bit. Which was fine with them. (I mean, they had already waited more than a month to tell me there was a problem, so what was another week, right?)

In digging through my piles of official papers and things, I discovered a “Certificat de Scolarité” that the UNC Study Abroad Office gave me right before I left campus in December. It basically just says, “Hey people reading this, this kid is really a student at SciencesPo. And also, he was born September 3rd, 1989, in case you were curious. Cheers.” For some reason the dates on the paper are written in American format, unless of course the French have discovered a 25th month (the date in the top right corner is 11/25/09).

But there’s a very official looking stamp on this paper, so I thought it would suffice. I brought it in to the bank first on Monday afternoon, but they told me they needed my passport — a copy of which they already had — so I had to come back yesterday, as I do not usually carry my passport around with me for safety reasons.

Yesterday I returned, and much confusion ensued.  First, the woman at the front desk had no idea what I was talking about. Then, she disappeared with my information and passport and went to talk with one of her superiors. She came back and told me everything was cool. Which was false, and I told her as much, reminding her of the phone call I had received from someone in the office. The woman then disappeared again, for longer this time, and returned with all my stuff.

“You need to fix this date thing with SciencesPo,” she told me, pointing to the birthdate on the certificat de scolarité. “This date doesn’t mean anything to us.”

“Oh,” I said. “But you see, this paper is written in American-style date format, as evidenced by this corner date here. So I’d imagine this is correct then.”

“No,” she told me. “We don’t write dates like that here in France. This means nothing to us, I don’t care if it is inversed. You need something else.”

Okay, I’ll admit, this afternoon was just a big fail. No small wins at all. But I am at the point where I just might give up this bank account quest. So, that could be construed as a win. Maybe.

The evening was one big win for all. My French class had our first — of hopefully many — “dîner de conf”, or “class dinner” at our professor’s lovely apartment. Everyone brought food to share, and the professor provided wine, cheese and bread.

It was a truly delightful evening. I simply adore my French prof, and the class is a fantastic mix of students from many different countries and academic backgrounds. We had a delicious meal of random dishes — including my own contribution of my famous fatoush (FATOUSH!) —and had lively and interesting conversation in French. I truly hope we can do it again soon.

Matt is still asleep right now, and I need to get him up and going so we can have a picnic in the Jardin de Luxembourg before my class today. He leaves tonight on the Eurostar to London.

Life may be a series of difficulties and successes, but hopefully my life is headed more towards the “success” column and away from the “difficult” one.

…FATOUSH.

After the other week when I stupidly forgot my bank card PIN number, I requested a new PIN number from the bank.  (Who by the way, couldn’t explain why, even though my PIN had been blocked, I’d still been able to withdraw cash a day earlier). 

Anyway, I got my new PIN number and thought all was hunky dory.  I wrote my new PIN on a post-it note just incase I forgot it again.  But I managed to I withdraw cash from the machine without any mishaps, it was fine. 

A few days later I went to get some shopping and went to pay with my card.  It flashed up before I’d even tried to enter a number: ‘PIN BLOCKED’.  What the fuck?   The stupid banking bastards had sent me a new number without unblocking it?

So there I was, stood with a trolley full of shopping with no cash on me and card that didn’t work.  Again. 

Sigh.

Yet again, with red cheeks, I went outside to the cash point expecting my card to be swallowed by the money monster.  Instead, it accepted my PIN number and there was an option to unblock my PIN – even though it should’ve been unblocked by the bank – after going through a little rig-moral of entering numbers about a million times it said it was now unblocked.  With a new, more memorable, PIN number.

I went back into the store and paid for my stuff, she must’ve thought I wasn’t coming back because she was about to cart it off. 

And, well, ummm, that’s it really.

What an ending eh?  This is up there with the gimp bit in The Usual Suspects.

Now repeat that really really fast!

One of the few banks to prosper during the banking crisis, Barclays, is looking to buy a large US retail bank. FT reports that the UK banking giant seeks to “rebalance” its business away from investment banking.  Investment banking, under the leadership of Bob Diamond, has been hugely profitable for Barclays. Diamond led the bargain purchase of Lehman Brothers last year.

The move to expand in the US retail banking signals the bank’s positive outlook for that sector. It will be interesting to see their choice of target over the next few months.

If you have plans to buy something like a piece of furniture, or a car, or you have to pay the fees for your child, then the best way to meet this expense is to save in a Recurring Deposit.

Decide how much money you will need, divide it by the amount you can set aside each month and you get the number of months you need to pay this amount into your recurring deposit.

For example, if you are going to need Rs.50,000 next March then you need to pay Rs. 4000 per month into a RD.

Check when the bank will allow you to withdraw the money. Some banks, allow you to withdraw the money only 30 days after the expiry of the account.

Planning ahead saves you stress and pays you interest. I know one CA who used to borrow money every year to pay the college fees of his daughter. So he was paying out this amount every month with interest instead of receiving it .

As Radha says, ” It pinches when you save, but was a huge relief when it came to making the big payment.”

The Post Office has recurring deposit  scheme which offer the best returns but it has to be done for a period of 5 years, and there is no withdrawal before the end of the scheme.