Roman and Christine are a charming family full of financial contradictions. By day, Roman manages cash and balances budgets. But, when it comes to their own finances, the more they make, the more they spend. They would like to be able to help their kids to purchase their first homes, as their parents did for them – but, at the rate they spend, they will have nothing but receipts to leave as their legacy.

That’s the scenario for the first episode of the recently broadcast TV series “Burn My Mortgage“, that attempts to show homeowners how to reduce their mortgage burden by doing small sacrifices that will eventually lead to a substantial decrease in the number of payment years and to savings of tens of thousands of dollars off their mortgages.

In this first episode the family is spending $17,000 a year on sports equipment and events, plus $12,000 a year dining out, ordering in and entertaining friends, and another $17,000 a year on things like vacations, housekeeping, landscaping and dry cleaning.

By the end of the show, the family learns that by cutting spending on those unneeded luxuries by half, they can pay their mortgage off much sooner and save a big chunk of money in interest. The message is that ignorance and a little sacrifice is preventing many families from reaching a mortgage-free life. For example, in this first episode,  Roman and Christine’s mortgage details before entering the program are:

• Mortgage Amount: $450,000
• Amortization: 25
• Interest cost: $130,000
• Actual Cost of Mortgage: $580,000

and after some common sense corrections it becomes:

• Mortgage Amount: $450,000
• Amortization: 11
• Interest cost: $55,000
• Actual Cost of Mortgage:  $505,000

You can watch the full first episode of “Burn My Mortgage” online at the following link:
http://www.wnetwork.com/

In this post Gonzalo Lira fantasizes about whether Alan Greenspan, who was Chairman of the Federal Reserve Board from 1987 to 2006, should be tried for Crimes Against the Economy?

Gonzalo’s answer?: “Yes—absolutely. No question.

Below the four main charges against Greenspan:

One—Irresponsible Market Liquidity, Which Created Rampant Moral Hazard:
The Accused was instrumental in creating the pernicious policy mentality of “providing markets with necessary liquidity”—essentially, throwing money at every problem.

Two—The Fed’s Do-Not-Touch-the Financial-Services-Sector Policy:
The Accused was instrumental in creating a Do-Not-Touch attitude towards the banks, both investment and commercial—which of course led the financial sector to pursue incredibly stupid products and strategies: All in the name of “maintaining financial markets’ ability to innovate”. These “innovations” were directly to blame for the Global Financial Crisis, as they created unsustainable liabilities which sooner or later would lead to system-wide collapse.

Three—Subsidized Money, Which Radically Distorted The Economy:
This is probably the biggest crime Alan Greenspan committed as Federal Reserve Chairman: The so-called “Greenspan Put”.
For the twenty years of his tenure, the Accused—supposedly an avowed free marketeer—subsidized the cost of money. Rather than let the Fed funds rate more or less mirror what banks were lending among themselves, and tighten interest rates when the economy overheated (as his predecessors had done), Greenspan instead goosed the markets: His “targeted” Fed funds rate was forever undercutting what the financial markets were dictating, as to the true price of money.

Fourth and finally—Turning Economics Into a Religion with the “We Are Right Because Our God—Math—Is On Our Side” Fallacy, and Marginalizing the Heterodox.
The Accused—Alan Greenspan—reneged on his sworn mandate to maintain low inflation and full employment, and instead pursued a policy of maintaining—and increasing—aggregate asset values, whatsoever the cost. In other words, he actively pursued bubble-creation and inflated asset values, to the benefit of the financial services industry, and to the detriment of the U.S. and world economies as a whole.

The Conclusion:
Alan Greenspan furthermore created rampant moral hazard, and declined to carry out his sworn duty to regulate and monitor financial markets, and to curb usurious or unsafe financial products and services. Finally, he created the conditions that—quite possibly—will lead to a Treasury bond collapse and a hyperinflationary catastrophe.

The Prosecution rests.

Read the whole post here:
http://gonzalolira.blogspot.com

Read Also:
25 People to Blame for the Financial Crisis
The good intentions, bad managers and greed behind the meltdown
A list of 25 people to blame for the financial crisis by Time Magazine, that placed Greenspan at # 3.

Statistics Canada has just released the preliminary second quarter 2010 issue of the Quarterly Financial Statistics for Enterprises.

Highlights

Operating profits for Canadian corporations amounted to $61.7 billion in the second quarter, down 1.8% from the previous quarter.

This decrease followed three consecutive quarterly increases.

Overall, profits were down despite the fact that 15 of 22 industries reported higher profits.

Declines were led by corporations in the insurance industry, as well as the oil and gas industry.

In the non-financial sector, profits decreased by 1.5% to $46.4 billion, while among financial industries profits declined 2.7% to $15.3 billion.

However, on a year-over-year basis, profits in both sectors in the second quarter were roughly 28% above the levels in the second quarter of 2009.

Note:
Quarterly profit numbers referred to in the text are seasonally adjusted and are in current dollars. The quarterly financial estimates for the first quarter of 2010 have been revised.

Quarterly financial statistics for enterprises are based upon a sample survey and represent the activities of all corporations in Canada, except those that are government controlled or not-for-profit. An enterprise can be a single corporation or a family of corporations under common ownership and control, for which consolidated financial statements are produced.

Profits referred to in this analysis are operating profits earned from normal business activities. For non-financial industries, operating profits exclude interest and dividend revenue and capital gains/losses, whereas for financial industries, these are included along with interest paid on deposits.

Operating profits differ from net profits, which represent the after tax profits earned by corporations.

Non-financial sector

Operating profits for oil and gas extraction and support activities declined 13.9% to $4.3 billion between the first and second quarters of this year. The second quarter was characterized by a decline in exports and relatively stable oil prices.

Profits for retailers fell by 6.3% to $3.8 billion. Much of this decline came from clothing and department stores, where profits were down by $141 million. Similarly, operating profits in the wholesale trade industry decreased by 3.7% to $4.9 billion.

Operating profits for manufacturers remained relatively flat in the second quarter, rising 0.2% to $10.4 billion. This followed four consecutive quarters of growth.

Growth in motor vehicle and parts manufacturing, and computer and electronic product manufacturing largely offset the decline in profits in chemical, plastics and rubber products manufacturing, and primary metal manufacturing.

Profits in the mining and quarrying industry increased by $401 million to just under $2.0 billion, as certain commodity prices rose.

Financial sector

Profits of insurance carriers and related activities declined by $868 million to $1.6 billion.

Depository credit intermediation, mainly chartered banks, and non-depository credit intermediation tempered the decline with increases in profits of 5.3% and 13.1%, respectively.
For more information, please visit Statistics Canada:
http://www.statcan.gc.ca