Tag: Investments

Closing Thought–03Aug22

There is a financial trend that seems to be gathering more and more popularity……cryptocurrency.

My daughter has ventured into this and her investment is not paying off as well as she had hoped…..and with any financial thing there is always the chance of fraud……and crypto is no different…..

Cryptocurrency firm Forsage used technology undreamt of when Charles Ponzi was ripping off investors in the 1920s but regulators say the basic idea was the same: A scam in which investors promised big returns were paid off with money from later investors. The Securities and Exchange Commission has charged 11 people in connection with the scheme, which the regulator says raised more than $300 million from investors in the US and elsewhere, CBS reports. The SEC says Forsage was a pyramid scheme as well as a Ponzi scheme, with investors making profits by recruiting others. Investors were promised a “powerful long-term source of passive income.”

When it was launched in early 2020, Forsage claimed to be a decentralized smart contract platform operating on the Ethereum, Tron and Binance blockchains, but regulators say its real function was scamming investors, reports CNBC. “As the complaint alleges, Forsage is a fraudulent pyramid scheme launched on a massive scale and aggressively marketed to investors,” Carolyn Welshhans, acting chief of the SEC’s Crypto Assets and Cyber Unit, said in a statement. “Fraudsters cannot circumvent the federal securities laws by focusing their schemes on smart contracts and blockchains.”

The SEC says it charged Forsage’s four founders—Vladimir Okhotnikov, Jane Doe aka Lola Ferrari, Mikhail Sergeev, and Sergey Maslakov—who are believed to be living in Russia, the Republic of Georgia, and Indonesia. The SEC charged another seven people with violating federal securities laws, including members of the “Crypto Crusaders,” a group that promoted the scheme in the US, TechCrunch reports. The regulator says two of the defendants have agreed to settle the charges.

Settle on charges?

They were defrauding investors…..no settling should be involved….doing time and make them  pay through the nose and ban them from ever working in financial markets again.

If you are considering this investment remember one thing…..Buyer Beware…..If it sounds too good to be true then it probably is…..

I Read, I Write, You Know

“lego ergo scribo”

Why saving money won’t help the American economy

To continue boring the crap out of my visitors…..I will remain on the economics thing…..sorry must feel it must be said……

Whenever some economists get together they put out a call for more Americans to save so that there will be an increase of investing and that way the economy will get into high gear and we all will benefit……

Not so fast…..that is just a pipe dream sold to those uninformed…….it is at best propaganda ……at worst Bullsh*t!

 

Why saving money won’t help the American economy.

Where Is The Confidence?

Some money-market funds that invest mostly in Treasurys are closing their doors to new investors as low yields on government securities drag down their yields.

As the credit crisis and market volatility send investors flocking to the safety of Treasurys, yields on the government debt have fallen drastically and several Treasury funds have barred new investors. Some funds also have cut their fees to keep their yields in reasonable territory.

If the Federal Reserve moves to further cut interest rates, the possibility of “negative yields” exists, some experts said. More funds may be forced to turn back investments or waive expenses, and the difficult conditions could cause some smaller fund complexes to reconsider whether they want to remain in the money-market-fund business.

Treasury’s three-year note yielded 1.245% Wednesday after a $28 billion three-year note auction. In a sign of how much investors currently value safety, the Treasury Department sold more than $30 billion in four-week bills Tuesday at a yield of zero for the first time.

As of Dec. 1, Evergreen Institutional 100% Treasury Money Market Fund closed to new investors until further notice. In light of the current low yields in the Treasury market, the money manager determined that it was appropriate to close the fund to protect shareholders’ interests, said Laura Fay, a spokeswoman for Evergreen Investments, the investment management arm of Wachovia Corp.

A negative yield on your money is a real possibility, so you will be paying the government for the use of your money.  That will not last long and if everyone pulls their money from the treasuries, the economy will get even worse than it is now.

Morgan Stanley Responds To The Bailout

The Wall Street that shaped the financial world for two decades ended last night, when Goldman Sachs Group Inc. and Morgan Stanley concluded there is no future in remaining investment banks now that investors have determined the model is broken.

The Federal Reserve’s approval of their bid to become banks ends the ascendancy of the securities firms, 75 years after Congress separated them from deposit-taking lenders, and caps weeks of chaos that sent Lehman Brothers Holdings Inc. into bankruptcy and led to the rushed sale of Merrill Lynch & Co. to Bank of America Corp.

The announcement paves the way for the two New York-based firms, both of which will now be regulated by the Fed, to build their deposit base, potentially through acquisitions. That will allow them to rely more heavily on deposits from retail customers instead of using money borrowed in the bond market — the leverage that led to the undoing of Bear Stearns and Lehman.

Morgan Stanley has taken $15.7 billion of writedowns and losses on mortgage-related securities and other types of loans since the credit crunch started last year. Goldman’s tally stands at about $4.9 billion. While both companies have remained profitable and avoided money-losing quarters suffered by Lehman and Merrill Lynch, their revenue from sales and trading and investment banking has been declining this year.

As bank holding companies, Goldman and Morgan Stanley will no longer be required to mark all of their assets to the current market values. Assets held in the bank divisions of the firms don’t have to be valued at market rates, potentially allowing the companies to allow further writedowns on the value of their holdings.

Obama’s Tax Plan

With John McCain attacking him as a tax raiser, Sen. Barack Obama tied off the loose ends of his tax policies today, saying he would set the tax rates paid on most dividends and capital gains at 20 percent, substantially below where they stood during most of President Clinton’s presidency and lower than most Republicans expected.

He also clarified that that a proposal to impose Social Security taxes on incomes over $250,000 would not start until at least a decade from now.

The new details of the Obama tax plan are not new policies but are clarifications on vague statements from the senator from Illinois in the past. Obama has said for some time that he would raise dividends and capital gains tax rates from the 15-percent level reached in President Bush’s 2003 tax cuts, but he put the range somewhere between 20 percent and 28 percent. In an opinion piece in the Wall Street Journal today, Obama aides and advisers picked the lowest point in that range — a decision made as McCain pummels Obama as a tax hiker with a barrage of ads running during the Olympics.

By choosing a 20 percent tax, Obama is bringing tax rates on investments up to a mid-way point for families earning more than $250,000. Families below that level would continue paying the existing 15 percent rate. Obama economic aides Jason Furman and Austan Goolsbee noted that a 20 percent capital gains rate is well below the level set by Ronald Reagan in 1986. And Bush didn’t even think to lower the rate on dividends in his first round of tax cuts.