Jon Corzine gets scolded by Congress, while Bank of America apologizes to its customers with cash. LED bulbs begin to light up stores, but in Montana nothing outshines gold. In Europe: another recession and angry workers on strike.
Corzine Criticized by Congress
Jon Corzine, former New Jersey senator and governor, was criticized in a recent congressional report for making risky financial bets that helped lead to the collapse of MF Global, the Wall Street brokerage firm he headed between 2010 and 2011.
The report, issued by the House Financial Services Committee, cited Corzine for “a dereliction of his duty” and leaving his investors’ accounts open to invasion by the firm’s employees. However, it did not find any evidence that he acted in bad faith or with criminal intent.
Corzine resigned as head of MF Global in November 2011, after the company lost $1.6 billion of customer money and declared bankruptcy.
Bank of America Aids Borrowers
Bank of America, the country’s second largest bank, said Wednesday that, through September, it had provided approximately $15.8 billion in mortgage relief to 164,000 customers nationwide.
A legal settlement signed in February among five large banks and state and federal officials required the institutions to spend a total of $25 billion over three years to help struggling consumers pay their mortgages and stay in their homes.
So far, B of A has approved or completed $4.75 billion in principal reductions, $2.5 billion in home equity loan relief, $7.4 billion in short sales or deeds-in-lieu of foreclosure, and $847 million in relief through other programs.
LED Light Bulbs Land in Stores
Since January, the manufacturing of standard, 100 watt, incandescent light bulbs has been banned in America, forcing the lighting industry to develop new technologies that convert more electricity into light and less into heat.
Until recently, consumers’ only choice for replacement bulbs were compact fluorescents. But drawbacks included diminished light quality and the potential of hazardous mercury being released upon breakage.
Now, several manufacturers are shipping the first lots of 100 watt LED (light-emitting diode) bulbs to home improvement stores. These bulbs do not contain dangerous substances and are expected to last more than 20 times longer than the old incandescents, while using 80 percent less electricity.
The main drawback is the price: $50-55 per bulb.
Lawmaker Asks for Gold
State Rep. Jerry O’Neil from Columbia Falls, Mont., is a strict constitutional constructionist — at least in some areas.
Fearing that the country’s high national debt threatens the strength of the U.S. dollar, the Republican legislator cites a provision in the U.S. Constitution specifying that no state shall “make anything but gold and silver coin a tender in payment of debt.”
So O’Neil, a former supporter of presidential candidate Ron Paul, who favors a return to the gold standard, has formally requested that he be paid his annual $7,000 salary in gold. The state’s Legislative Services office has yet to respond to the lawmaker’s appeal.
Gold is currently trading at $1,985 per ounce, which means a little over 3.5 ounces should take care of O’Neil’s compensation for the year.
Europe in Recession; Workers Strike
The eurozone’s $12 trillion economy has lapsed into recession for the second time since 2009. A 0.1 percent drop in economic output in the third quarter of the year, which ended in September, followed a 0.2 percent drop in the second quarter.
Only France and Germany managed to show a modest 0.2 percent growth rate, while activity in other nations of the 17-member zone has contracted. Italy, Spain, Holland and Greece, which is in a depression, led the decline.
Economists are expecting a net negative growth rate of 0.4 percent for 2012, followed by a 0.1 percent positive rate in 2013.
Millions of European workers went on strike on Wednesday to protest enforced austerity policies that they say are driving the region into greater economic difficulties.
Bill “No Pay” Fay has lived a meager financial existence his entire life. He started writing/bragging about it in 2012, helping birth Debt.org into existence as the site’s original “Frugal Man.” Prior to that, he spent more than 30 years covering the high finance world of college and professional sports for major publications, including the Associated Press, New York Times and Sports Illustrated. His interest in sports has waned some, but he is as passionate as ever about not reaching for his wallet. Bill can be reached at [email protected].