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Financial Industry

A political centrifuge.  “During the worst of the economic crisis, the nation's most powerful business lobby pleaded with Congress to prop up financial institutions and stimulate the economy with hundreds of billions of dollars in borrowed money.”

"Make no mistake:… Americans will not tolerate those who stood by and let the calamity happen," wrote Bruce Josten, the U.S. Chamber of Commerce's vice president in September 2008, who at the time pressed lawmakers before their vote on a $700 billion bailout for Wall Street.”

“Fast forward to the present. The chamber is now spending millions of dollars on ads trying to elect candidates whose campaigns are based on opposing the very bank rescue and stimulus law it once supported.”

“Not one of the political ads the chamber has rolled out across the country this year commends a lawmaker for voting for the stimulus bill and the bailout.”
Excerpted from: SPIN METER: Government austerity or bailouts? US Chamber of Commerce takes both sides by KEVIN FREKING, Associated Press, LA Times 10-4-10

Talk about bad timing. “Amid accusations that it defrauded investors, Goldman Sachs is set to pay more than £3.5 billion ($5.4 billion) in compensation to its staff for the first three months of the year, The Times of London reported”.

“The report comes after a civil lawsuit filed against Goldman last Friday contained damaging allegations whose reverberations are just beginning to be felt. In the lawsuit, the Securities and Exchange Commission contends that Goldman misled investors who bought a mortgage-related instrument known as Abacus 2007-AC1 by not disclosing that the security was devised to fail”.
Excerpted from: Goldman Said to Pay $5.4 Billion in Compensation, NYT 4-19-10

$weet Revenge. "From costlier checking accounts to higher credit card fees, banks are scrambling to find ways to compensate for...revenue that could be lost because of the tougher rules and requirements.

"This isn't about a money grab," said Scott Talbott, senior vice president for government affairs at the Financial Services Roundtable...And because banks will no longer be able to jack up people's credit card rates willy-nilly, he said, that will expose issuers to more risk, thus creating more costs.

That's one way of looking at it. Another is that banks are cheesed because lawmakers are showing some uncharacteristic backbone when it comes to consumer protection, and they're turning the screws because, well, they can."

Excerpted from: Banks take revenge for new consumer rules, by columnist David Lazarus, LA Times 1-6-10

Cash - don't leave home without it. "More and more consumers are getting to the cash register to find that their credit cards have been canceled without their knowledge. Consumers say that it is often embarrassing to have a card declined in front of friends and other customers, and that it is frustrating when customer service is able to confirm only that the card was canceled, but not why."
Excerpted from: Cardholders Get Rude Surprise at the Register by Mary Pilon, Wall Street Journal 8-12-09