Category Finance

How Wall Street is Making its Billions

From Philip Greenspun:

Wall Street banks have had profitable quarters. JPMorgan Chase reported $3.6 billion in profit (more than $1 billion per month). Goldman Sachs was only slightly behind, at $3.2 billion. These profits supposedly came from “trading.” I asked a friend who has worked in the money business how this was possible. “For someone to make money trading, there has to be someone on the other side of every trade who is losing money. Where does each bank find someone who can lose $1 billion every month?”

He explained that “carry trade” would be a more accurate description of what they’re doing. Because of the Collapse of 2008 financial reforms, the big investment banks are able to borrow money from the U.S. government at 0 percent interest. Then they can turn around and buy short-term bonds that pay 2 or 3 percent annual interest. Now they’re making 2 percent on whatever they borrowed. They can use leverage to increase this number, by pledging some of the bonds that they’ve already bought as collateral on additional bonds.

(via Boing Boing)

A Visual History of the Credit Card

From The Big Money.

The 10 Largest U.S. Bankruptcies

From Fortune.

Recession Watch

Soros: Financial crisis as bad as the Great Depression:

Buffett says recession may be worse than feared.


Economy in U.S. Probably Expanded at Slowest Pace in Five Years


Opec says oil could hit $200

Timber!!!!!!!!

Avoid walking under any high buildings in the financial districts today.

United States Poverty Map

From Visualizing Economics (which has the high rez version of the map)

Another income map, this time plotting the % of people living in poverty based on the 2000 Census.

US States Renamed For Countries With Similar GDPs

From Strange Maps.

The creator of this map has had the interesting idea to break down that gigantic US GDP into the GDPs of individual states, and compare those to other countries’ GDP. What follows, is this slightly misleading map – misleading, because the economies both of the US states and of the countries they are compared with are not weighted for their respective populations.

Pakistan, for example, has a GDP that’s slightly higher than Israel’s – but Pakistan has a population of about 170 million, while Israel is only 7 million people strong. The US states those economies are compared with (Arkansas and Oregon, respectively) are much closer to each other in population: 2,7 million and 3,4 million.

(via Information Aesthetics)

The World’s Worst Currency



From ForeignPolicy.com:

Most countries seem to have finally whipped inflation—at least for now. But not everyone is celebrating the world’s impressive economic stability. In today’s List, FP takes a hard look at the soft currencies of some of the most unstable economies on the planet.

(via Reddit)

Should I Invest in “Forever” Stamps?


Absolutely Not!
:

Since 1971, postal rates have increased more slowly than the actual inflation rate, as measured by the U.S. Consumer Price Index. So, despite the numerous rate hikes over the last 36 years, stamps have actually been getting cheaper. The 20-cent stamp from 1981, for instance, would be equivalent to 45 cents in today’s dollars—which makes today’s rate 10 percent cheaper than it was 26 years ago. Should this historical pattern hold, you’d be paying more for today’s forever stamps than you would for any stamp in the future, no matter how high the rate goes.

(via Kottke)

The Best Place To Hide Money: Conversation With A Burglar

From Personal Finance Advisor:

I had quite the interesting conversation this weekend with a person who happened to be a former burglar. It was great timing because I was wondering if something like the skid mark underwear for hiding money would really work. I also figured that if you wanted to know the best place to hide your money from a burglar, a former burglar was the person to ask.

I started off simply and was not surprised by the answer to the question “where is the best place to hide your money?”

“At the bank,” he said with a sly grin

When I rephrased and asked where the best place to hide money and valuables in the house would be if you had such items there, I was taken a bit by surprise by his answer:

(via GeekPress)


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