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Originally posted by mnemeth1
reply to post by David9176
I'll take 50% of 1 billion as a bonus for losing other peoples money.
How do I apply for such a job?
[edit on 1-4-2010 by mnemeth1]
The root of the present drama is in the huge housing mania—and the financial adventurism that surrounded it—that took hold of the U.S. in the mid-1990s and accelerated after the stock market collapsed in 2000–1. (For background, see this prescient 2005 LBO article.) Several aspects of the bubble have left behind a toxic residue.
Hedge Fund Bail Out 12.20.08 -- 2:19PM By Josh Marshall The Fed has set up something called the TALF, the Term Asset-backed Securities Loan Facility, which will offer "low-cost three-year funding to any US company investing in securitized consumer loans" including hedge funds. Says the Financial Times (reg.req.), "Since the credit crisis erupted, hedge funds have complained that they cannot get the leverage they need to arbitrage away excessive spreads and meet high hurdle rates of return."
If you are having trouble telling the difference between hedge funds and investment banks these days, the latest ranking from Alpha magazine probably won’t help. In a further sign of how deeply Wall Street firms are getting into the hedge-fund business, the hedge fund arms of two bulge-bracket banks, J.P. Morgan Chase and Goldman Sachs, have the No. 1 and No. 2 positions on Alpha’s annual list of the biggest hedge funds. Top-ranked J.P. Morgan has $33 billion in hedge fund assets, putting it just above last year’s winner, Goldman, which oversees $32.5 billion.
The overdraft industry, which started only 16 years ago, has grown to nearly $40 billion. It's one of the banking industry's biggest honeypots. How? Well, many people don't realize that you can incur more than one overdraft fee in a single day, or that many banks deliberately reorder purchases to ensure that you pay the maximum number of fees. And while the Fed finally ruled that come July consumers must opt in to overdraft protection, it didn't address the central flaw: Overdraft fees are essentially a form of loan sharking. Consider that the average overdraft amount is $17 and is paid back in five days. With the typical overdraft fee now around $35, this works out to nearly $2 in fees for every $1 borrowed, an effective annual percentage rate of more than 10,000 percent. Not even the Mafia has a vig like that.
It was, for example, what allowed Big Finance to keep Congress from banning "universal default," the small-print declaration on millions of credit card applications that banks could retroactively raise interest rates on consumers at any time for any reason.