Posts tagged with: Business/Finance

19893712-mmmainAbout twenty years ago I made some terrible choices and found myself in a serious financial bind. The amount I needed wasn’t much — about $200 — but without it I wouldn’t have been able to pay my rent. I took out a payday loan that cost me $30 every two weeks. It took about eight weeks to get clear of the loan, resulting in a cost of $120 to borrow $200 for two months.

Was I fooling myself thinking the loan could be paid in two week? Not at all. In fact, I knew quite well that there was likely no way possible for me to pay it off in that timeframe. I knew precisely how much money I was going to be able to earn and how much my expenses would be during that two-week period. I had, roughly speaking, about $40 a week that I could apply toward the loan.

But $40 was not sufficient to cover the balloon payment of $200 that was due at the end of two weeks. So I had to roll over the loan, applying $15 a week to the new fees and saving $25 a week to be paid toward the principal. That is why it took me eight weeks to pay off the original loan: $25 a week for principal + $15 a week for fees = $40 x 8 weeks = $320 ($200 for principal + $120 for fees.

If you’re middle class and think of it in terms of interest rate, that repayment cost sounds appalling usurious. And it is. But as the poor will tell you, man does not live on APR alone. Having to pay an extra $120 was cheaper than having to find a new place to live. Yes, it was a bad deal. But it was better than all my other choices. I didn’t agree to the loan because I was bad at a math; I did it because I was desperate. And the payday lending company was more than willing to take advantage of my desperation.

How then do we solve the problem of rollover fee that take advantage of the poor when they are in dire straits? As I’ve argued before, I believe a helpful first step is to get churches and other faith-based organizations involved in providing alternatives to commercial lending agencies. The Worship Center Christian Church in Birmingham, Alabama seems to be providing a wonderful example of how Christians can help.

This past Sunday the church announced it will pay off the payday loans of 48 people — a combined total of more than $41,000 on high interest rates of 36 percent or higher.

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cellphones-povertyFrom mass shootings to terrorist attacks, political incompetence to racial unrest, there has been no shortage of bad news stories in 2015. Death, destruction, and divisiveness tend to dominate the news cycle, leading us to despair over the direction our world is headed.

But our incessant focus on the negative can lead us to overlook or downplay the positive changes that are happening across the globe. That is especially true of the most important good news story of 2015, one few people have heard and fewer have grasped the significance.

The good news: For the first time in world history, less than 10 percent of the global population will be living in extreme poverty.
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Yes, there really is a headstone cartel, at least in New Jersey. The Monument Builders Association of New Jersey are the only ones who can sell, carve, deliver and install headstones.

One might think this is all right (after all, headstones aren’t that creative] but there is at least one church cemetery that would like the right to sell their own headstones to the patrons of their cemeteries. So the Archbishop of Newark took the headstone cartel to court. Liberty & Law explains the issue:

bail bondsYou may think that if you’re a law-abiding citizen, the concept of “bail” may be irrelevant. Well, maybe you forgot to pay your car insurance. Or maybe your license lapsed. You get pulled over because your tail light is out. It’s not a violent crime – a lapse in judgement, or a lack of money, perhaps.

And suddenly you need bail. $1000, the judge tells you, or you have to go to Rikers Island, New York’s main prison complex. You and 140,000 criminals. And someone like Robert Durst, accused of murder in Texas, is able to cough up a quarter million and walk away free.

America’s for-profit bail system is a $14 million a year industry, and the U.S. is one of only two countries that allows a for-profit system. According to a 2012 Justice Policy Institute report:

For-profit bail bonding costs taxpayers through increased jail and other justice expenses. In addition, it impacts people from low income communities – generally the loved ones of the accused person – who must pay nonrefundable fees for the bond regardless of case outcome and who, through contracts with the bondsmen, bear the real monetary risk of paying the full bail amount in the event of a court no-show.

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The religious shareholders of As You Sow and Calvert Investments are heralding last month’s shareholder vote on greenhouse gas reduction targets as an out-and-out victory.

Ummmm … not so fast. Although the press release on the AYS website trumpets: “Shareholders Vote for Greenhouse Gas Reductions at Midwest Utilities,” the facts tell a much different story. Yes, some shareholders did indeed vote in favor of the AYS/CI resolution, but not nearly enough to pass it:

Citing climate change impacts and financial risks of carbon-intense coal assets, shareholders representing billions of dollars of assets voted for carbon reduction targets at FirstEnergy and Great Plains Energy, showing strong support for a pair of shareholder proposals put forth by non-profit As You Sow and investment group Calvert Investments.

All this from shareholder activists apparently unaware of a little government entity called the Environmental Protection Agency, which, for better or worse, won’t announce its final rules for existing and new, modified and reconstructed power plants until this summer. According to the EPA, the agency will release this summer a Clean Power Plan for existing power plants in states, Native American country and U.S. territories; Carbon Pollution Standards for new, modified and reconstructed power plants; and issue a federal plan for meeting Clean Power Plan goals for public review and comment. (more…)

4.1.1Now that the U.S. has re-established diplomatic relations with Pearl of the Antilles, interest in Cuba is rising. While there are no crystal balls about Cuba’s future, here are a few things we do know about the island-nation’s economy, thanks to Pew Research.

1. Cuba was doing business with the U.S. even before the embargo was lifted. A partial repeal of the embargo allowed for this, and Cuba really needed food, medical supplies and medicine.

2. Cuba’s economic growth has slowed dramatically in the past few years.

The CIA estimates that Cuba’s GDP grew just 1.3% last year in real (inflation-adjusted) terms – 177th out of 222 countries ranked. One big reason: With global oil prices still well below their pre-recession highs, the heavily discounted oil that Venezuela sends Cuba – some of which Cuba re-exports – is less valuable.

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Blog author: ehilton
Wednesday, May 27, 2015
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student debtIs it time to write off the college experience? John Stossel thinks so.

Half today’s recent grads work in jobs that don’t require degrees. Eighty thousand of America’s bartenders have bachelor’s degrees.

Politicians such as Hillary Clinton promote college by claiming that over a lifetime, college graduates “earn $1 million more.” That statistic is true but utterly misleading. People who go to college are different. They’re more likely to have been raised by two parents. They did better in high school. They’d make more money even if they never went go to college.

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