Boomers, Markets & Money

A Down-to-Earth Discussion of Financial and Lifestyle Information for Baby Boomers


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Book Review: “What if…Workbook: Give the Gift of Preparedness to Your Loved Ones

Now that fall is here, many of us are dusting off our neglected to-do lists. For those interested in organizing their financial information, Gwen Morgan has put together a handy fill-in-the-blank guide to “putting your affairs in order.”

A ceramic mother mallard duck followed by two ducklings

PUT YOUR DUCKS IN A ROW! (Click to Enlarge)

The workbook guides an individual or family as they assemble their important information in one place. This helps us by:

  • Making it easier to find information when we need it
  • Helps someone forced to take over in an emergency

After losing her mother to Alzheimer’s, Morgan realized she didn’t really know how her mother wanted her to handle many decisions, including planning her funeral service. She thought a guide would help loved ones carry out a person’s last wishes.

I like the workbook and think it has value even if a person isn’t ready to record all of his or her “last wishes.” Even people who are more organized than usual will appreciate the prompts for information.

A Ceramic Mallard Duckling Sitting on Grass

Take Care of the Little Ones (Click to Enlarge)

Space is provided for:

  •  A page to rip out to send to two people to tell them where your workbook is.
  • Personal Information
  • Contact information for loved ones
  • Contact information for household matters such as utilities, attorneys, medical and friends. There’s even a section for important information on dependent children.
  • There are pages for financial accounts such as banking, brokerage, mortgages and other loans, insurance, document storage.
  • Family medical history. This is helpful to an individual in an emergency. But it also can be helpful for the rest of the extended family to have a record of medical conditions that run in the family.
  • Personal Last Wishes.  A lot of space and suggestions are given for detailed instructions.
  • Gifts for loved ones. This can save a lot of family arguments!
A Ceramic Mother Mallard Duck with a Duckling on Each Side

Gathering Together Important Information Helps the Whole Family (Click to Enlarge)

You can find information on the guide at http://www.whatifworkbook.com

Book Review — “The Bankers’ New Clothes: What’s Wrong with Banking and What to Do about It”

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Two experts wrote a book about the recent financial meltdown and our broken banking system.

What’s different about this book is that it is written so simply and clearly that anyone can understand it. Academics Anat Admati and Martin Hellwig, who have spent their careers studying the financial system, picked apart the causes of the 2007-2009 crises. They have come up with simple, cost-effective changes that can make the banking system safer for everyone.

Now, I’m not going to lie to you. It’s not going to be as much fun as reading a favorite murder mystery or, dare I say, Fifty Shades of Grey.

But I highly recommend you read this book because:

  • Nothing has changed. “As of this writing, in October 2012, this system does not appear to be better equipped than it was in 2000-2006 to limit the buildup of risks or than it was in 2007-2009.”
  • The average, responsible person has paid as steep price for the reckless behavior of others. “…in discussing the costs of the intervention politicians and regulators, like bankers frequently ignore the enormous costs of the crises to the broader economy—the loss of output in the recession, job losses, and hardships associated with foreclosures.”
  • You will be able to understand arguments that are used to scare and confuse people.

Admati and Hellwig’s recommendations for bank reform

  • Figure out which banks are insolvent and unwind them in an orderly way.
  • Higher equity levels should be required by law. Banks’ functions do not require so much debt. However, bankers’ compensation often gives them an incentive to borrow too much.

If you read this book you will be better able to understand arguments made by bankers, lobbyists, politicians, and regulators. We all need to stand up for safer banking practices. We need and deserve a safer, more stable economy.   ####

My post “Book Review- Exile on Wall Street: One Analyst’s Fight to Save the Big Banks From Themselves” discusses the banking industry from a bank analyst’s point of view.

I added some photographs of architectural details of a beautiful Providence, Rhode Island landmark. Old Stone Bank, founded as a mutual savings bank, is defunct. Click on any of the images to see a short slide show.

This gallery contains 6 photos

Book Review–Exile on Wall Street: One Analyst’s Fight to Save the Big Banks From Themselves

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Although I am pretty cynical about what happens on Wall Street I still found myself shaking my head as I read Mike Mayo’s book.  As he recounts his two decades as a bank analyst, he gives readers insight into the banking system in an easy-to-read and entertaining tome. It’s a compelling overview of the intersection of powerful bank executives, politicians, regulators, investment bankers, and analysts.  Shareholders are treated like second-class citizens.

During his career the siScreen Shot 2012-12-09 at 9.11.04 PMze of banks has increased twenty-fold and executive compensation has soared.  He attended many presentations of merger announcements and had one eye-opening experience when he worked at Credit Suisse. He was introduced to the compensation expert who was described as “The person who made the deal happen.” Mayo wrote, “I had a clear glimpse of the role compensation played in that wave of consolidation.”  He felt at times CEOs were selling companies to enrich themselves.

Two chapters are devoted to the checkered history of Citgroup. As he said, “Citi has been involved in virtually every major financial screw-up from Enron and WorldCom, to the analyst scandals of the tech bubble, to the mortgage fiasco.” Unfortunately, Citigroup was in the news again this week, with the announcement of plans to layoff 11,000 employees. The Wall Street Journal reported the bank’s recently ousted CEO Vikrim Pandit received $221.5 million in compensation in his five years there. In my opinion, rank and file bank employees end up as collateral damage as these banks go through their predictable periods of upheaval due to these practices.

Mike Mayo ends with his ideas on how to transform “crony capitalism” to a better version of capitalism. He calls them his ABCs.  Accounting– should reflects the substance of a transaction rather than accounting tricks.  Bankruptcy—let the banks fail. Clout—reduce it for the insiders.

I’d like to close this post by saying that I see little evidence that “crony capitalism” has been cleaned up.  If you think it’s time for reform, I’ve included convenient contact information for all U.S. Senators and Representatives.

Links to helpful resources:

  •  Contact information for U.S. Senators and Representatives. There is a link to an easy-to-use email form for each one.

             U.S. Senate Contact Information

             Directory of United States House of Representatives