What if I told you the safest (and by far the biggest) market in the world isn’t safe anymore?
The U.S. Treasury market – government bills, notes and bonds – is more than $12 trillion. That’s twice as big as the next two biggest nations’ debt securities combined – and is believed without question to be the safest market in the world.
Whenever there’s a panic and the markets freak out, investors dump stocks and buy Treasuries. That’s the so-called “flight to quality.”
However, before the recent new market highs, back on Oct. 15, when the last full-on flight to quality exploded, the U.S. Treasury market failed to do what it had always done.
It’s yet another prime example of “The strong get more while the weak ones slave.” Private equity shops and institutional players are buying and packaging (securitizing) nonperforming mortgages and selling those mortgages to mutual funds and themselves.
On the surface, the U.S. Department of Housing and Urban Development (HUD) wants to minimize the cost to taxpayers. After all, we have to cover the insurance guarantees the Federal Housing Administration (FHA) made on loans it backed but are now nonperforming or in foreclosure.
That’s really nice of HUD and the FHA, thinking about us taxpayers. Maybe they should have thought about us when they agreed to guarantee payment on loans to less-than-prime borrowers who only have to put down 3% to get their loans. But, whatever, they’re from the government…
Here’s a question for you: Has higher education become another great American scam?
I’m not talking about the rich getting scammed. They get what they pay for. They can afford to be scammed – they know what’s up.
A lot of rich people send their kids to expensive private colleges hoping they’ll get a good education that will lead them into their chosen careers. If they haven’t chose a career, rich parents are more than happy to give their kids the “experience” of college, with all its social aspects, country club accommodations and alumni status.
But then there are kids who want a higher education because they believe a college education is their ticket to gainful employment and well-compensated careers. They pay for it themselves, or their hardworking parents cosign on loans or take out personal loans on behalf of their kids’ college dreams
For them, higher education is increasingly looking like a scam.
Some critics complain that this is students’ own fault, that they’re pursuing the wrong majors. Or, they say that colleges themselves are lacking, that they’re not teaching what kids need to know in our ever-changing economy.
It’s Independence Day tomorrow, so here’s a story about your freedom to think about and act on.
News came to light this week that a Facebook data scientist named Adam Kramerconducted an experiment on 689,003 users of the social-network site over a seven-day stretch in January 2012.
It’s news for a few reasons.
Some people are ticked off that they may have been used in an experiment without their knowledge. Some of the subjects of the experiment may have been teenagers.
And some people, namely folks at the United Kingdom’s Information Commissioner’s Office and the Data Protection Commissioner of Ireland, are looking into whether European Union privacy laws were broken.
Facebook wants us to believe it’s all a big kerfuffle over nothing.
But it’s not. It’s a demonstration of corporation and the government are taking away more and more of our rights to privacy and freedom.
Here are three not-so-little things hitting my radar this morning.
On Thursday, you were all shocked (not) to have to consider the possibility that peeps in Congress would ever break a law, let alone a law they made to stop themselves from breaking laws.
Alas, it may have happened. I say “may,” because we may never know if the perps – um, I mean, peeps in Congress are still making money by dishing out dirt on legislation they’re brewing up, this time to traders who profited from leaky pipes in the Senate or House.
While I like to beat on the executive branch for their various foibles, this time I admire their moxie for trying to make a case here.
I’m going to tell you what the feds and the courts are trying to do here. I expect a full-on separation-of-powers battle royale.
You’ve no doubt seen their commercials. They used to be all over the tube hawking their high-yielding certificates of deposit. Now they’re all over the tube with their “no hidden fees” campaign.
I like the one where the woman is afraid to try new things because she’s had bad experiences before. Her mechanical dog sparks a fire when he drinks water and her trainer hooks her up to electrodes that zap her. I like these commercials; they’re funny.
But Ally isn’t funny.
It recently announced that it’s launching an initial public offering (IPO) of its stock at a price per share of $25 and $28. The shares will be offered by the U.S. Treasury as part of its planned exit of its investment in Ally during the subprime crisis in 2008.
I’ve heard some analyst say this could be a good deal for investors.