Hank Paulson Caption Contest

According to Hank Paulson, former Treasury Secretary, who helped save the big banks, there is a big difference between 2007 and now.



Select your favorite caption for this photo.

1.  What inequality gap?  It has only grown by THIS MUCH!  Ha. Ha. Ha.

2. The Federal Reserve has kept interest rates at .025 for THIS LONG and credit card companies are still charging 24%.  Hee. Hee. Hee.

3. Thanks to my HUGE circle of friends, Goldman has 4 of the 5 regional Fed presidents voting in 2017.  Yuck. Yuck. Yuck.

4. The big banks have only gotten THIS MUCH BIGGER.  Ya ha ha.

5. My dachshund has grown and is this LONG now.  Ho. Ho. Ho.

Ok.  Maybe this isn’t so funny.

Fed Warns of Two Bubbles

Hidden in recent Fed remarks by Yellen, are fears that CDM and CRE are bubbles.


CRE stands for Commercial Real Estate. In terms of CRE prices and change, the above chart from Gerdau shows investments across the country are soaring.

For example the General Motors building just sold for an amount that values it at $3.4 billion, the most expensive office building in the United States.

Also William Ackman and other investors purchased a penthouse apartment at One57 in Manhattan for over $90 million, the highest price ever paid in New York City, as an investment to flip for a profit.

The CRE bubble did not burst in 2008, but evidently is bigger now.


CDM stands for Corporate Debt Markets also known as Debt Capital Markets. In terms of CDM, the above chart by Dealogic, dated February 5th, 2015, shows a 30% increase in the spread for the year.

Specifically, the average spread to benchmark on 30-year global debt issuance peaked at 193bps in January 2015, a 30% increase on January 2014 (148bps), marking the highest monthly average benchmark spread since October 2009 (206bps).

Here is exactly what the Fed minutes said on 2/19/2015.

“However, the staff report noted valuation pressures in some asset markets. Such pressures were most notable in corporate debt markets (CDMs), despite some easing in recent months. In addition, valuation pressures appear to be building in the CRE sector.”

At least the Fed is aware of the bubbles and not totally focused on interest rates.


Elephant In The Room

This old expression for something obvious being ignored has a new take away from Mad Magazine.


“The only reason a great many American families don’t own an elephant is that they have never been offered an elephant for a dollar down and easy weekly payments.”

That says something about debt in the US.

If you are in debt, there is plenty of advice out there. I like Dave Ramsey’s advice (DaveRamsey.com) which I have included in the following:

1. immediately save $1000 for emergencies even if you have to sell something,

2. pay the smallest debt balance first,

3. create a budget using your previous expenses,

4. create envelopes of cash and pay from them,

5. eliminate duplicate insurance policies,

6. immediately pay your credit card balance if possible,

7. cut the cable or satellite cord via Chromecast or Amazon Fire,

8. build up an emergency fund to last 6 months.

You too can tackle that elephant.

Best of luck!

NOTE TO BANKS – A Prepaid Gift Card is NOT A Debit Card

Several times I have received a gift card or a prepaid card that clearly says “DEBIT CARD” on the card above the VISA or MasterCard logo.  But NOOOO…..


When I go to use it I have to say it is a Credit Card because it does not have a pin number.

Why don’t the banks put the following on the card?

PREPAID CARD (use like Credit Card)

You would think the banks making billions of dollars a year could figure this out.