Financial Answers “IN SIMPLE LANGUAGE”

I’ve tried not to get too political with In Simple Language because I want to keep it as a financial and information learning tool.  However, what is taking place today in the United States is so important to every American’s survival that I have to voice my opinion and inform those of you who are not aware of what is taking place.

When 911 happened nine years ago, the U.S. Government came out with the Patriot Act which, in effect, took away many of the rights that Americans enjoyed for a long time.  Maybe this was justified because of this horrific act of war.  Americans will have to live with the results of the Patriot Act in the meantime.

This latest act by the United States Government, namely the Supreme Court of the United States, gives me more cause for fear than anything previously done by our government.  Some may argue but I feel the Supreme Court is nothing more than another branch of our bloated government.

So what am I talking about?  The Supreme Court of the United States has ruled that unions and corporations-inanimate entities-can spend unlimited amounts of money on advertising in promoting for or against political candidates.  Now if you think about this, this is totally insane.  You and I have been watching as big corporations have been taking advantage of all of us over the years and it has been getting progressively worse rather than better.  Now these monster organizations will be able to control, even more than they already do, who is elected to what office. 

I think we can all agree that our political system is so broken that unless you have tens of millions of dollars to spend it is next to impossible to be elected to any political office of any consequence at the federal level.  This new Supreme Court ruling will now allow corporate America to “totally” have a say in who is going to hold what position in Washington, D.C… in effect controlling America.

Your fair and impartial representation in America has been eroded slowly but surely over the last couple of decades.  This ruling will break our backs and put us under the yoke of corporate America, not only with our financial lively hood (jobs and paychecks) as it now is, but will also now control “who” will represent us in all our matters.

The Supreme Court Says…

The Supreme Court has justified this ruling by saying it is a violation of the First Amendment free speech rights to not allow corporations the right to free speech.  Here is what the First Amendment of the U.S. Constitution says, “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press, or the right of the people peaceable to assemble, and to petition the government for a redress of grievances”.

Now it seems to me, although I am no constitutional attorney, the Supreme Court has read more into the constitution than they probably should have.  If I am not mistaken, where does it say freedom of speech is for non-living entities or non-humans or inanimate objects or corporations or anything other than” the people”?

Now in defense of the Supreme Court, this ruling was passed by a 5 to 4 vote so it seems that at least 4 of the justices have not lost their minds or don’t need their wallets lined with corporate money.

President Obama is upset and so are 24 states who are questioning the ruling because of its effect on their state laws. 

This is a serious problem to all of us if we allow corporate America to dictate to us through their “deep money pockets” who we should or shouldn’t vote for.

If you read this far there may be something about this post that you are relating to.  There may be some financial related pain In Simple Language is talking about.  Tell us your story.  We really do want to know.

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Looking for a financial speaker or financial writer?  Contact Rich today at rsowa@insimplelanguage.com or call Sowa Financial Media, LLC now at (502) 569-1714.

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This has often been cited as being a victimless crime, which we can argue back and forth forever.  But is it really?  What I am talking about is “insider trading”.  Insider trading takes place when someone has information about a company or companies that puts them in a position of advantage over everyone else, namely the general public. This information is about a company or companies selling or buying another company or companies or merging with another company. Insider trading causes the value of the stock of the company to change one way or another and gives the person with the insider information an advantage from which they can buy or sell stock and make money…usually a large amount of money. This is illegal under the SEC (Securities and Exchange Commission) regulations.

Let’s take the recent case of Raj Rajaratnam, founder, of the Galleon Group who was recently arrested on insider-trading charges.  This was a high profile case in all of the financial publications and it involved large amounts of money being made by Rajaratnam and his company because of their insider information.

Look at how pervasive insider trading has become over the last five years… the New York Stock Exchange has referred approximately 150 suspected cases to the SEC in 2008 alone.  This is 57% more than four years previously in 2004 when the latest corporate meager craze began.  The SEC brought 60+ cases to court in 2008 which was more than 30% higher than in 2007.  Do you think we have a problem here?

It’s Not Just the United States

All too often Americans only hear about what is going on in America.  It seems that this insider trading problem is in every country where stocks are traded.  If we look at Great Britain we see that the United Kingdom’s Financial Services Authority shows that 30% of the reported mergers in that country have shown unusual stock trading in the days before the deals are finally getting done.  Coincidence?  You tell me.  There are many more examples of this taking place all around the world.

As another example of insider trading in the United States look at the recent deal of Dell Inc. purchasing Perot Systems for $3.6 billion.  The SEC charged a Perot employee with insider trading.  Adobe Systems Inc.’s $1.8 billion acquisition of Omniture, a software company, resulted in Omniture’s stock rising almost 20% before the deal was even announced.  In March of 2009, the announced merger of Merck & Co. Inc. and Schering-Plough Corp., the two pharmaceutical giants, is being looked at by the SEC for insider trading.

And on and on the stories keep popping up.  Is there a problem with insider trading?  Based on my own personal experience in the financial services world for over 30+ years there is no doubt in my mind.  And as far as insider trading being a victimless crime I don’t buy it for a minute.  Insider trading is just another example of the select few who get to take advantage of you and I, the general public, by being able to buy stock at a lower price in quantity thusly driving up the price which causes us to have to pay more. Not only do we pay more but the insider’s can now make a fortune off the inflated price of the stock that you and I are forced to pay if we want the stock.  This additional cost to you and I is also reflected in the costs of the mutual funds that you and I have in our 401k, 403b, and 457 plans.

Insider trading is a crime and impacts the public’s trust and wallet adversely and should be enforced as stringently as any law.  What do you think?

If you read this far there may be something about this post that you are relating to.  There may be some financial related pain In Simple Language is talking about.  Tell us your story.  We really do want to know.

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Copyright © 2008-2010 “All Rights Reserved”

Looking for a financial speaker or financial writer?  Contact Rich today at rsowa@insimplelanguage.com or call Sowa Financial Media, LLC now at (502) 569-1714.

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We have all been touched in one way or another with situations like the Bernie Madoff multi-billion dollar Ponzi Scheme in which so many people lost most, if not all, their investments.  This type of financial advisor deception has caused tremendous hardships for a lot of people that were retiring or approaching retirement and it happens more often than you are aware of.

 In previous blog articles dated August 25, 2009 (How Well Do You Know Your Financial Advisor) and November 3, 2008 (Did You Do Your Homework?), I talked about how you need to protect yourself by knowing who you are dealing with.  Well that is easier said than done.  You can go to the FINRA (Financial Regulatory Authority Inc.) web page at www.finra.org and use their “broker check” system to find out such things as complaints against your registered financial advisor.  Or whether your financial advisor has any criminal convictions, liens or bankruptcies. 

The problem with the FINRA site is after two years FINRA doesn’t list the records of any registered representatives that have been suspended…meaning that the licensed representatives financial license i.e.: Series 7, 6 etc., was taken away from them.  

Why is this important if their licenses have been taken away from them and they can’t act as a financial representative anymore?  The problem begins with the fact that some of these representatives go to work for someone else who does not care or doesn’t check on whether they are properly licensed or not.  That means that you have no way of knowing whether this individual you are dealing with is legitimate or some dirtbag ripping you off.

 Honest, Hardworking Individuals

There are approximately 650,000 registered representatives in the United States and most are honest, hardworking individuals with the best interests of their clients first and foremost.  However, like every other profession on the face of this beautiful planet, there are those unscrupulous dirtbags that have only one thing on their minds…how to take advantage of and rip off as many people as they can.

So what can you do to protect yourself?  The first thing I would suggest is go to the FINRA website and see how it works.  Then I would contact FINRA stating that you would like to see them get rid of this “two year rule” and have the records of all present and past registered representatives become a permanent record that could be checked forever if necessary.  Or at least extend the accessibility of the registered representatives out, for say, at least ten years after their license is revoked or voluntarily surrendered because of an occupational change or retirement.

Do yourself a favor. Before you believe everything you read on the “FINRA broker check” site keep in mind that many times wrong or misinformation is posted to the wrong individual.  If there is something “adverse” about your financial representative listed see if you can talk to other people that also deal with your financial advisor and get their opinion.  If you feel that that is still not enough to make you feel comfortable than speak directly, face to face, with your financial advisor.  Listen to their explanation and watch their body language.  Then you can make a more informed decision if you want to continue doing business with this person or initially hiring this person to work as your financial advisor.  Do your homework.  Sleep at night.

This rule change would go far in helping to protect you from unscrupulous people that are trying to rip you off.  What do you think?

If you read this far there may be something about this post that you are relating to.  There may be some financial related pain In Simple Language is talking about.  Tell us your story.  We really do want to know.

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Copyright © 2008-2010 “All Rights Reserved”

 Looking for a financial speaker or financial writer?  Contact Rich today at rsowa@insimplelanguage.com or call Sowa Financial Media, LLC now at (502) 569-1714.

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With the way the financial services industry has been in turmoil the last year or so, it is a wonder that anyone knows what’s going on.  Especially, when company names are somewhat similar and confusing.

I think we can all remember the name AIG (American International Group) or what I referred to in previous posts as the Arrogant International Group.  This is the company that the United States government loaned $160+ billion to bail their conniving butts out of trouble lest the company would have gone bankrupt.  Also not to mention that the United States Congress’s many lavish benefits were being held and administered by AIG.  Coincidence?  You tell me.

Now do you remember this bunch of dirt bag insurance executives? 

ING not AIG

ING Groep NV, the Dutch financial conglomerate and global supermarket of various financial services, was ordered broken up by European financial regulators.  Now this is no small company.  As of this writing, ING’s global asset management business had $600 billion plus.  It also has a broker-dealer network of about 8,700 financial representatives and financial advisors.

This is significant to you because if you are dealing with any of ING’s broker-dealer firms such as Financial Network Investment Corp, Primevest Financial Services Inc., or Multi-Financial Securities Corp. your account and financial advisor may become part of another company.

If you are dealing with any of these three firms call your financial advisor and ask them to let you know what is going on.  Especially if your financial rep is thinking of moving their book of business, which is your business, to another broker-dealer. What that could potentially mean to you is transferring your account and possibly lots of paperwork for you. 

This is certainly not a bad thing but you should know what’s going on.  It is your money after all isn’t it?  An informed investor is a wise investor.  Be proactive in managing and investing your money. 

If you read this far there may be something about this post that you are relating to.  There may be some financial related pain In Simple Language is talking about.  Tell us your story.  We really do want to know.

•  Please ask your questions of In Simple Language and we will answer you as soon as possible in the comments section of the blog article you asked about.
•  Please give In Simple Language your comments and suggestions about this post and/or future topics of interest to you.
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Thank you for taking the time to visit In Simple Language. 

Copyright © 2008-2010 “All Rights Reserved”

Looking for a financial speaker or financial writer?  Contact Rich today at rsowa@insimplelanguage.com or call Sowa Financial Media, LLC now at (502) 569-1714.

Check out the “SERVICES” tab above the beginning of the post for all available services.

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In an article I posted May 14, 2009 titled “So What is this BAB I’m Hearing About” I mistakenly stated that these bonds are tax free.  THEY ARE NOT TAX FREE.  Nobody hates to get misinformation more than me so I apologize to all of my readers for this unintentional error and thank those of you who pointed out my mistake to me.  Keep up the good editing work.

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A “Very Happy New Year” to all In Simple Langauge readers.  In Simple Language will be posting new articles beginning the week of January 4, 2010.  We look forward to providing you with up-to-date financial “info”, written without all the confusing financial jargon, making your financial world a little easier to understand.

We also look forward to another year of your insightful comments and suggestions.

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Watch for new articles being posted beginning soon.  Thank you to all my faithful readers for being so patient with In Simple Language.

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To all my In Simple Language faithful readers:

I have had some interesting medical issues over the last several weeks so I will not be posting any articles until, probably, next week.  All is well and I am headed in the right direction on the road to recovery.  Just wanted to let everyone know that In Simple Language is alive and well.

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Most Americans are now aware that the Federal Deposit Insurance Corporation is the pseudo federal agency that insures the money you put into your savings accounts and certificates of deposit…those of you that have any money left that is.

Federal Dependent Insurance Corporation

It looks like the old FDIC has been replaced by the new FDIC called the Federal Dependent Insurance Corporation.  Why?  Not in my wildest expectations would I have believed that the very banks that got us into this unbelievable economic mess, who we bailed out, would now be called on to bailout the FDIC.

What is wrong with this picture?  Is there no one in Washington, D.C. left with any competence or sense or has everyone lost it.  Couldn’t these idiots see this coming?  What are we paying these morons for?

You have this idiot U.S. Treasury Secretary Geithner, who has never had a “real” job outside the government womb, saying that things are now getting better and we are heading in the right direction.  At the same time the FDIC is worried about going under, commercial real estate is in shambles, credit card debt and defaults are mounting, and China is trying to decide whether they want to own all of the United States or just most of it.

Have we all lost our minds or are most of the people in Washington, D.C. nuts?  The FDIC has approached the very same large banks that they had to bail out less than six months ago to ask them to now bailout the FDIC.  The idiot regulators are also considering levying additional fees on the already stressed out bankers, of all size banks, to help make up for the deficits the FDIC is experiencing from all of the bank failures thus far in 2009.

Some of the “big shots” within the FDIC are saying that they are not seriously considering borrowing from the large bailout banks that they just helped.  Rather, the FDIC would draw on a $100 billion line of credit that they have with the Treasury Department.  The very same U.S. Treasury Department that Tim Geithner runs.  How can you say things are improving when the backbone agency that protects your savings deposits is heading for insolvency unless it gets bailed out?

Does everyone in Washington, D.C. think that the American public is that stupid to believe the crap that is coming out of the mouths of these supposed servants of the people?  That is an insult to every American’s intelligence.

Washington, D.C.

I am really starting to believe that Washington, D. C. is beginning to stand for Washington, Dumb Congress. 

The FDIC has estimated that through 2013, bank failures will cost the FDIC an estimated $70 billion.  I think that is probably a very conservative figure.  Remember the tsunami wave of commercial real estate and credit card debt that is heading our way.

Also, the FDIC is mandated by congress to keep a minimum of 1.15% in their fund of total insured deposits outstanding.  That’s $1.15 in insurance money for every $100 in insured deposits in all the insured financial institutions across the country.  Currently they have $.22 for every $100 in insured deposits.  Are they in trouble or what?  So are we to believe our treasury secretary that things are getting better.  No, it’s just the arrogance of the people we elect and the idiots they appoint.  What do you think?

If you read this far there may be something about this post that you are relating to.  There may be some financial related pain In Simple Language is talking about.  Tell us your story.  We really do want to know.

•  Please ask your questions of In Simple Language and we will answer you as soon as possible in the comments section of the blog article you asked about.
•  Please give In Simple Language your comments and suggestions about this post and/or future topics of interest to you.
•  Like what you read?  Send it to a friend.  Click on “share this post” right above leave a comment below.
•  Did you remember to bookmark this blog?

 Thank you for taking the time to visit In Simple Language.    

Copyright © 2008-2009 “All Rights Reserved”

 Looking for a financial speaker or financial writer?  Contact Rich today at rsowa@insimplelanguage.com or call Sowa Financial Media, LLC now at (502) 569-1714.

 Check out the “SERVICES” tab above the beginning of the post for all available services.

Member One Southern Indiana Chamber of Commerce

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