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#22 Eat the Bankers - What is a Fair Price? – Is a 5,000% Markup Reasonable? |
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Sunday, 09 May 2010 16:06 |
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(Part of a series of articles entitled "Eat the Bankers". Links to previous articles.) Manufacturers calculate cost of goods, overhead, sales expense and evaluate the market to determine a fair price. Retailers of non-perishable goods generally mark up wholesale prices 100% for resale. The most successful retailers have been those that discounted this formula. Perishable goods like fruits, vegetables and meat is generally marked up 3 times the cost to cover spoilage and still cover overhead and marketing expense. Usury laws, prior to 1978, outlawed “loan shark” rates and helped establish fair pricing. We have the same type laws to protect consumers from profiteering at times of natural disasters. It is unconscionable to go to an area that was devastated by tornado, hurricane or earthquake and sell a bottle of water for $20. California sets its usury law at 10% or 5% above the Federal Reserve Bank rate, whichever is greater. This takes into account “cost of goods” and enough to cover expenses and a fair profit. Banks (as of the time of this writing) can borrow money from the Federal Reserve at 0.5%. They then loan the money on credit cards at 25% plus - that equates to a 5000% mark-up. A 10% mortgage loan is a 2000% mark-up over the cost of goods. That makes the $20 bottle of water look cheap. |
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Last Updated on Monday, 17 May 2010 15:04 |
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Saturday, 08 May 2010 01:19 |
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May 7, 2010 The over/unders were 5. This week’s economic news proves that we are all just Neanderthals. Wall Street stopped breathing for a few minutes on Thursday. So far, we’ve heard some far-fetched excuses for the nearly 1,000 point drop on the Dow Jones Industrials: a typo, fat finger syndrome (accordign to Mario Bartirrromo), computer trading gone awry, cyber attacks, Greece, all gone awry. There is always the high probability tin foil idea that Goldman Sachs is playing games with flash trading and this was just a test to see if they could really make us all quiver at once. Here’s another explanation: nothing went awry, it just went down and then came back (about two-thirds); get used to it. There is a very strong probability the market will take your breath away again in the future (July to September). So the S&P 500 is back where it was in 1998. |
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Last Updated on Saturday, 08 May 2010 01:21 |
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#21 Eat the Bankers - The Housing Bubble – After Stealing Everything Else the Bankers Target Your Home |
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Tuesday, 04 May 2010 17:23 |
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(Part of a series of articles entitled "Eat the Bankers". Links to previous articles.) The next bubble came from housing, and although there are limits on the number of houses a family might realistically consider buying, usually one per family, many families were not at that limit. One answer was to bring more buyers into the market, and another more powerful approach was to create feverish speculation in housing, also known as churning or flipping. |
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Last Updated on Sunday, 09 May 2010 16:12 |
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Bank Earnings Reveal Problems |
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Tuesday, 04 May 2010 17:18 |
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May 4, 2010 JPMorgan, Bank of America, Citigroup, and Wells Fargo have posted quarterly earnings reports. The results were intriguing. Here’s the wrap-up: |
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Last Updated on Tuesday, 04 May 2010 17:21 |
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#20 Eat the Bankers - Payday Loans, Other Sharks, the Unbanked – The Modern Day Loan Sharks |
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Sunday, 02 May 2010 21:58 |
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(Part of a series of articles entitled "Eat the Bankers". Links to previous articles.) If your credit score drops too far, the banks will have nothing to do with you. It is possible to fall off the credit score radar and that means no more credit cards, no more bank loans, and no more emergency net. More than 20 million Americans cash more than $60 billion in checks each year at check-cashing businesses. The Community Financial Services Association is the lobbying group for the payday lending industry and they describe their clients as “the heart of America’s middle class”. The check cashing/payday loan store first appeared in the 1990s and it grew faster than a cancer. There are now more than 22,000 payday loan stores, more US locations that McDonalds and Burger King combined. |
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Last Updated on Tuesday, 04 May 2010 17:29 |
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