Financial Answers "IN SIMPLE LANGUAGE"

This follow up piece from my blog article of January 27, 2010, titled “The End of American Life As You’ve Known It” is still questioning why the Supreme Court of the United States is exposing you to more corporate control.

If you read my previous blog article-if you didn’t, please read it first-you will remember that the Supreme Court has given a blank check to corporate America and unions to use as much money as they want to influence our elections.  This, in effect, will give corporations control over the electoral process not you.

This has caused an enormous uproar among the American populace.  Surveys are showing that approximately 80% of Americans are against this Supreme Court ruling.  This breaks down to about 85% Democrats, 76% Republicans, and 81% Independents that are against this ruling.  This survey shows that almost all Americans are against this ruling.

With that said ask yourself this question, “Who does the Supreme Court of the United States of American represent in legal matters”?  Does the court represent the voices of the people of the United States as stated in the first amendment and I quote, “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 peaceably to assemble, and to petition the government for a redress of grievances”.  Or does the Supreme Court include a non- living entity, a corporation, as having the same “freedom of speech” as we the people as the first amendment “ONLY” mentions?

Reverse Your Decision

Of all of the people who were polled about how they felt about the Supreme Court decision, 72% said they supported a reversal, by congress, of the Supreme Court’s decision.  Such congressional leaders as Senator Chuck Schumer have jumped on the bandwagon to get congress to reverse the court’s decision.

Even Senator John McCain predicted that the American public would not accept this ruling… Senator McCain was one of the original sponsors of campaign finance law.  And he was right about the American public.

Campaign Finance Laws

As far back as the 1890’s, legislatures were aware of the enormous influence that deep money pocketed corporations could have on the influence of elections and politics.  That’s why the Tillman Act of 1907 was passed to ban direct corporate contributions to federal political candidates.  Think about this for a minute.  Corporations usually have huge treasuries…deep pockets if you will.  You are a shareholder of this corporation and yet its leaders are spending, in fact, some of your own money to promote a candidate that you are deeply opposed to. 

You can’t or won’t be able to do anything about that because the Supreme Court has now given “free speech” and a blank check to corporations to do what they want to do whether it hurts or helps you.  The Supreme Court, at least five of the justices, doesn’t seem to care about you.

After numerous attempts by corporations to get around the Tillman Act of 1907, congress added additional protection to prevent corporations from taking advantage using their huge treasuries by adding additional prohibitions in its Taft-Hartley legislation in 1947.  These prohibitions barred corporations and unions from using their general treasuries from making independent expenditures during elections to fund candidates they wanted to promote.

What congress did do, unfortunately, is allow the creation of separate accounts to fund political action committees commonly called “PACs”.  These PACs could only be funded by employees and shareholders who put in their own money, not money from the corporation’s general treasury.

With the passing of this Supreme Court ruling, all of these former laws and rules will go by the wayside as corporations will now have the ability to directly influence political candidates.  And what about foreign corporations?  What role do you think they will play in our future elections?  The First Amendment is in the Constitution of the United States of America not a foreign country.  Yet this foreign countries will be able to, more than they currently do, affect the outcome of who sits in the White House and congress. Why is the Supreme Court, at least five justices, interpreting the law in favor of a non-person rather than what the first amendment has definitively expressed…we the people.

Is this what you want?  Call your congressional representative and let them know how you feel.

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Here’s the moment we have all be waiting for. Drum roll please…H.R. 627.  The new credit card law, called the “Credit Card Accountability Responsibility and Disclosure Act of 2009” or the “Credit Card Act of 2009”, is taking affect on February 22, 2010.

Anyone with a credit card, which is probably most people, are hoping for the new law to help improve their lives by giving you more flexibility in interest rates, payments, and the way you are treated by credit card companies.

There is a lot of information on the internet about the new law.  The problem is like every new law; it is interpreted differently by different people.  Since I did not want to add to the confusion, I went to the source, the government site listing the credit card law, and printed it out and read it.

After getting a headache and eye strain from trying to decipher what the lawyers had written, I felt it was better if I didn’t try to interpret the new Credit Card Act of 2009 but rather give you a brief idea of what was in it.  So here goes!

This is a partial list of the titles and sections that comprise the new Credit Card Act of 2009.  It starts off with TITLE I – CONSUMER PROTECTION and lists Section 101 as “Protection of credit cardholders”.  This, I feel is a good start because credit cardholders have not had much protection from the likes of the predatory lending practices of some of the credit card issuers.  Let’s hope that this will help to prevent or minimize those practices.

TITLE II – ENHANCED CONSUMER DISCLOSURES begins with Section 201 which is “Payoff timing disclosures”.  Hopefully this will help to clarify the mystery that most credit card companies had in their “fine” print information disclosures that only a Harvard lawyer could understand.  And even then I am not so sure.  Maybe this new section will help you and me to better understand what the credit card companies are talking about regarding paying off credit card balances.  Time will tell.

Where Can I get More Information?

If you would really like to find out more information on the new “Credit Card Act of 2009” and how it may affect your situation than here are three links that will be a good start for you.  Remember there is a ton of information out there so you will need to do your homework.  Here are the links:

• www.creditcardactof2009.org – an overview of the act.
•  http://files.ots.treas.gov/25308.pdf – a short government summary.
•  http://en.wikipedia.org/wiki/credit_card_act_2009 – general information on the act.

These three sites should give you a good overview of what the new Credit Card Act of 2009 is all about and how it can help you to better understand what choices you now have.  Good luck with your credit card situation.

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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It never ceases to amaze me how certain industries continually try to take advantage of baby boomers.  These baby boomers-I am one of them- are constantly being preyed upon by unscrupulous companies in various advertising schemes that really bugs the hell out of me.  Just watch your television and take note to all of the advertising that is directed at boomers and you’ll see what I mean.

Now you may be thinking that as a baby boomer you should be aware of what is available to you so you can keep abreast of the various products and services that are available to make your life easier and more comfortable.  I don’t have any issues with that at all.  It is the dirtbag companies out there that target you and me and try to take advantage of us with their misleading and deceptive advertising.

Since this is a financial blog, I will give you an example of a financial product that is being deceptively marketed to us…life insurance.  Now I don’t hate all life insurance companies.  I think that life insurance can be a very important part of someone’s life planning. Life insurance has prevented many families from suffering hardships when the major breadwinner of the family dies unexpectedly… life insurance companies have their place.

With that said, let’s talk about the dirtbag life insurance companies that specifically target baby boomers with their expensive products.  Let me give you a specific example of one life insurance company that is constantly advertising on television with ads that make it sound as though they were doing you a favor.  They act as though they are actually providing you with something that was low cost and beneficial to you and that you “must” have in order to protect, at least, part of your financial well being in the event that your spouse died.

Here’s What I’m Talking About

So what am I talking about?  Remember seeing the television commercial with a husband and wife and the wife is asking the husband when he is going to fix various things around the house?  And the husband says he will get around to the chores but first he has to buy life insurance.  The wife looks surprised and says “life Insurance”?  The husband then explains to the wife how easy it is to get this life insurance and how inexpensive it is.  This is the part that bugs me.

Again, I don’t have any issues with life insurance but I do have an issue with any product that is sold without making the facts clear and understandable.  This example is such an issue.  The husband tells the wife that the insurance can be purchased without a medical exam.  Okay, that’s good.  Then he explains that the insurance is only $.35 per day per unit and how cheap that is to protect them from high funeral costs.  Sounds good on the surface, but let’s look at the numbers.

First of all, a unit is $1,000 of life insurance coverage.  $.35 per day times an average of 30 days per month equals $10.50 per month per $1,000 of life insurance coverage.  Now I don’t know about you but $1,000 doesn’t buy much today so you would need a lot more insurance.  Let’s say you need $10,000 of coverage since the average funeral is between $6,000 and $8,000.  So it costs $10.50 per month per unit times 10 units equaling $105.00 per month times 12 months in a year or $1,260 per year for a $10,000 life insurance policy.  Does that sound inexpensive to you?  If you pay on this policy for just 8 years you would have paid $10,080.00 for $10,000 of coverage.  Does that make any sense?  Who’s taking advantage of whom?

Of course the insurance company will say but you don’t have to take a medical exam so we are totally at risk and what if you should die after the first year or two?  Then who is the winner?  You will have to decide the answers to these questions for yourself.

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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We have been hearing more and more about how the economy is turning around and things are getting better.  Now I don’t want to be the purveyor of bad news but there are things that you need to be aware of.

Maybe the economy is turning around in some areas but in others it is as bad as or worse than we thought.  Case in point is that many banks are still having a difficult time staying in business.  Last year, 2009, an estimated 140 banks had to be closed.  So far this year, 2010, 15 banks have failed.  That just doesn’t sound like things are turning around.

Some of these banks are of significant size.  The Los Angeles based First Regional Bank failed with almost $2 billion in deposits and approximately $2.2 billion of assets.  Not exactly a small country bank.  This will potentially cost the Federal Deposit Insurance Corporation (FDIC) around $825 million in insurance to protect the depositors.

Besides California, several banks have failed in Georgia, Florida, Washington, and one bank in Minnesota.  What’s troubling about the two bank failures in Georgia is the fact that last year, 2009, Georgia had 25 bank failures the highest in the nation.  I haven’t found any evidence to explain why Georgia is having so many bank problems.

This is important for you and me to know because the FDIC continues to raise the cost of the premium our banks pay to cover the cost of the insurance that protects our deposits.  This FDIC insurance cost, like everything else in business, is passed along to us in the form of new banking fees and/or higher banking fees.  That is the capitalistic way of doing business.

Since we are all aware that unemployment is still hovering a little over 10% based on Washington, D.C. estimates…although anyone with any sense knows that it is probably double that when you factor in the people who don’t collect unemployment benefits anymore and have given up looking for a job.

In 2008, we only had 25 bank failures and in 2007 we only had three.  Unfortunately the number of bank failures is predicted to continue to go up in 2010.  I am still wondering why the government keeps telling us that things “are” better and getting better. Do you know of “anyone” who feels like things are getting better?   I believe that they will get better but not for at least another year or two.

Another Big Hit is coming Our Way

What I am more concerned about is the lack of information and discussion about the pending tsunami that is currently heading our way.  I have not heard much talk about the $500 billion of commercial real estate loans that are coming due in the next several years.  I think we all see the empty stores, shopping malls, and office buildings all around us. 

Those commercial properties still have mortgages on them and must meet their payments on their loans just like everyone else.  That is extremely hard to do for any extended period of time when the commercial property is vacant with no rental income coming in.

Also the credit card crunch may be right around the corner when millions of Americans can’t continue to make even the minimum payment on their credit card debt.  Sorry folks but we are not out of the woods yet.

So again not to sound like a doomsayer but rather a realist, you need to “really’ know what is going on so you can prepare and protect yourself.  I just wish the United States government would stop treating its citizens like naïve children and let us know what is truly going on.  I don’t know about you but I am a big boy and can handle the truth.

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.
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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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