Dodd Frank Will Affect You


The Dodd Frank Act came about in response to the Recession that happened in 2008.  The financial industry as we knew it was collapsing and bringing the entire economy down with it.  The government knew that something had to be done, and that it had to be done quick.   Therefore, they come up with the Dodd Frank Act which has two major overarching goals.  The first goal was to limit the risk of contemporary finance or in other words to revise financial reform.  The second objective is to limit the damage caused by a large financial institution.

While I do believe that financial reform was necessary, I don’t believe that this type of financial reform was quite what the economy needed.  I also don’t believe that the Dodd Frank Act was carried about in the way it was supposed to be.  The Dodd Frank Act has only been a third of the way passed and it has not made the significant impact on the economy that it promised.  It is also interesting to look at the two goals.  It is interesting that we are trying to limit financial risk with same policies that we argued against in the past.  Secondly, it is interesting that the government is funding large financial institutions in order so that they won’t cause a large damage to the economy if they fail.  If pumping millions of dollars will limit this risk I would appreciate you explaining it to me because I don’t get it.

The information on this more than 300 page act is unlimited.  I have done what I believe to be a good job of compiling this information into a 21 page report from the most reliable resources.  You choose: read my 21 page report double spaced or read a mind wrenching couple hundred page document.  Either way, I do suggest you read and educate yourself because this Act will affect all of you.


Educate yourself

This week I attended the sustainability seminar that spoke about the new curriculum.  I think sustainability is actually a very interesting topic and wish I had attended a different seminar that spoke more about sustainability rather than the curriculum.  I mean yeah, I guess it was somewhat interesting to learn about the new curriculum but to be honest I don’t really care about a curriculum that wasn’t offered to me.

Don’t get me wrong, I do think that sustainability is an extremely important topic but I’m not sure its something that can be taught in the classroom.  I really think it is something that you kind of have to go out and learn on your own.  Its similar to what we were talking about in class with taking an entrepreneurial class.  There is no reason to do this, it’s more of something you just have to go out and learn on your own.

I hate to be so distraught towards I school I love but to be honest I kind of feel like this whole sustainability notion is more of a facade than something that is actually real.  I feel like Bucknell is doing it in order to look better in the eyes of a number of different people and so that they can make the claim that Bucknell is a highly “sustainable” campus.  Like I saw in some other posts, it is important to highlight that sustainability doesn’t just mean saving the environment.  I do support the parts of engineering curriculum that are being changed but I am by no means a huge fan of what is going on in the management school.

Ever wondered how to manhandle a bear?


I wonder how many of you have heard about Bear Stearn’s in the past.  If you are not that interested in finance it would not come as much of a surprise to me that you haven’t?  Anyway, Bear Stearns was a major bank who was widely invested in selling mortgage backed securities.  In 2008, the bank was on the verge of destruction and was essentially going to fail.  JP Morgan decided to pick them up and put them under their wing but their deal was about the equivalence of what they would offer a homeless person.  Here’s what happened:

The case that I am looking into deals with the large banks of Bear Stearns and JP Morgan.  In 2008, Bear Stearns nearly looked death in the eyes as the economic crisis was about to begin its rampage on Wall Street.  This crisis occurred because of the tightening of credit markets which occurred as a result of investment banks exposure to subprime mortgages.  Unfortunately, Bear Stearns was one of the biggest underwriters of complex investments that were linked to these subprime mortgages.  By the end of July 2007, two of Bear’s hedge funds were deeply invested in subprime mortgages.  In December of 2007, Bear Stearns announced its first loss in their 80 year history as they reported a write down of $1.9 billion of holdings in mortgages and mortgaged based securities up from $1.2 billion.

Just a few months later in March 2008, the rumors began to run rampant regarding the financial condition of the corporation along with the financial industry in general.  Quickly enough on March 10th Bear Stearns faced a serious liquidity crisis.  By March 13th and 14th counterparties were refusing to lend them additional money on customary terms and simultaneously demanded the repayment of outstanding debt.  Bear Stearns was essentially left with two decisions: dissolve or merge.

The Federal Reserve would do anything in its power in order to prevent a fire sale which could further depress markets.   A decision had to be made quickly before the markets opened up in Asia on Monday March 17th and this became a worldwide phenomenon.  A deal for the proposed merger was struck late on March 16th where JP Morgan would acquire the company for $2 a share and the Federal Reserve would support up to $30 billion of funding for less liquid assets.  However, the agreement did not go over so well with a number of different people mainly those who were stakeholders of Bear Stearns and thus getting stuck with an extremely low share price for a corporation that had been valued so highly just a year ago.  Needleless to say an amended merger proposal was made which altered some of the terms of the original agreement to benefit those who were unsatisfied.  The merger ended in a series of lawsuits and with the question of whose fault was this and who was truly acting with an ethically and morally sound base in this situation?

What would Jensen’s stakeholder value versus stockholder value say about this?

Carlson, Robert and Lee, Stephen.  “Revisiting the Bear Sterns/JP Morgan Transaction: An Analysis of Deal Protections and Fiduciary Duties”.  StayCurrent. 2008 May.  Web. 9 February 2013.

Read this and you’re guaranteed to win the lottery

Just kidding.  You cant with the lottery.  It’s clearly a conspiracy theory.  I am so fed up with the lottery but I can’t stop playing.  How does it all work?  What does it all mean?  AHHHHH!!


Essentially, lotteries are operated and regulated by national, state, or provincial governments, and cities.  Lottery tickets are sold so prevalently you might as well start using them as toilet paper instead of taking the time to scratch off another losing ticket.  Lottery tickets are sold at more than 2o3,000 locations in North America.  Most commonly, they are sold at convenience because these are places that get the most foot traffic on a daily basis.  How does it work?  Retailers are paid a very small commission usually about 5% per ticket and sometimes more if they sell a winning ticket.  But, lets be honest.  They don’t sell winning tickets and if they did the government would probably hoard the money anyway like they do with every other penny that floats through our currency system.

Lottery ticket sales were almost  $262 billion last year.  At this point, I am pretty much convinced I might as well walk down to D.C. and hand my money directly to the government.  I mean its not like the government doesn’t already receive enough money from me, raising taxes faster than I can blink my eyes.  I wouldn’t be surprised if the government is working on a plan to raise taxes again right now as I write this post.

One story in specific comes to mind when I think about the lottery.  Last week, I went into the store and bought a lottery ticket.  I won but my prize was as an additional free ticket from the same strand of tickets that I had just brought.  Now, I think to myself what the hell could the chances possibly be that the next ticket in that row is actually going to be a prize when the ticket before it essentially just gave me the right to get one additional ticket.  Well, I am pretty sure the percent of me winning on the next ticket would be 0%.  So i get the next ticket, anxiously scratch it off like a kid on Christmas morning and of course I win nothing.  Being the sucker that I am I buy one more ticket.  I scratch it off and what a surprise-my prize is one additional ticket.  I get the next ticket in the row and of course I win nothing.

The government has created the lottery in order to create another widespread addiction where they can funnel more of people’s money into their system.  It’s ludicrous at this point.  What scheme will they come up with next?

Some people never learn

Image    IS  Image

Some of you might be wondering, “what the fuck has AIG been up too?”  I was curious after numerous class discussions and articles about whether or not they had gotten themselves into any more casual $182 billion bailouts.  The AIG I knew was mainly busy hedging bets on risky derivatives and being one of the major contributions to the 2008 economic crisis!  Way to be a team player AIG.

Well, apparently recently AIG has been busy trying to be a ‘good two shoes’.  In an article from this year, I read about the stir amongst colleagues, students, and community members regarding the new Center of Ethics, Law, and Society at Sonoma State University in Northern California.  However, the most central to its concern was where the funding had come from along with the further corporatization of public higher education.

You might want to take a seat for this one.  Apparently, AIG have two thirds of the first years funding towards the facility.  Who knows what AIG had up their sleeve with this one.   With AIG’s past ethics it would seem that AIG is just one more powerhouse leaping at the chance to further privatize SSU and influence the education it offers students.  One educator stated, “We are fools when we allow them access to our children and our schools.”  This educator believes that these mega corporations simply want access into resources and new markets.  The last thing they desire is for the actual benefit of these children.  Basically, corporations fund money into public education in order to try and meet their corporate goals.  This had led to corporations buying their way into universities and unfortunately most are too scared to stand up against this due to the lack of job availability now a days.

This article more or less made me laugh.  AIG has realized that ethics holds a great deal of importance to individuals in society.  Unfortunately, ethics still is not a word found in AIG’s corporate handbook.  Sure, they’ve cleaned up their act a bit and made themselves look better because they’ve had too.  Who wouldn’t after a $182 billion bailout.

Check out the article: