Thursday, February 14, 2013

Big Bottom Backyard Money: The Assets

On to the asset side of our money life.
Our 401K is with Fidelity Investments.  I must confess ignorance when it comes to researching a company like this.  I could find no government handouts and only what appears to me to be ordinary suits, fines, accusations that arise from simply being a big company with hands in lots of cookie jars. Our mix of funds we’re invested in seem to be doing as well as most other mutual funds and Fidelity doesn’t seem to be too wrapped up in the poor investment practices that wrecked the economy.  I could well have failed to find the best resources to research this well.
Assessment: Moving this money is not a high priority in and of itself, but this money could be used to backyard our liabilities.
Our house is first of all darling and we love it.  We are above water by a nice bit, partly because the real estate market has not crashed in our area; we’ve had more of a fender bender here.  Current interest rates are about 2 points below our mortgage rate.  In fiddling around with the refinance calculators online, it seems that refinancing would give us a positive return about 10 years out.
Assessment: Our investment in our house is sound, but since my goal is not just to improve our family finances, but to withdraw support from corrupt institutions, I’ll explore refinancing with a bank more inline with my ethical standards.

Big Bottom Backyard Money: The Liabilities

I begin with money.
For several reason.
  • One, it may be the single most powerful backyard weapon from the Big Bottoms. (More in a post to follow.)
  • Two, I’ve a poor history with money.  As I begin this to explore how to backyard my money, my family has credit card debt and a mortgage.  We have a 401K and a home that is floating nicely above water.  I would benefit from backyard money training.
  • Three, a cursory net search found decent resources for research and backyarding ideas.
I begin with researching the companies that hold my money and investments.
My credit card debt is with Bank of America, which took $45 billion in TARP bailouts.  It repaid the loan and deposited $4.6 billion in interest back in government coffers.  It also received $25 billion through the Capital Purchase Program.  It repaid in full.
So Bank of America was worse with money than me but managed to repay the taxpayers.
More research reveals that Bank of America is on the smarmy side.  They’ve recently spent a share with four other banks of $26 billion to settlement for foreclosing on folks illegally.  They’re also paying another $2.43 billion in a settlement after being accused of swindling investors about the health of Merrill Lynch.  I think they bought Lynch and lied about how good the deal was.  They’re also paying $1.6 billion in legal fees over the deal.
At least Bank of America is an equal opportunity smarm, cheating regular homeowners and shareholder investors alike.  Also, I have a friend who worked in one of their custom call centers.  He said he felt smarmy just going into work with the way the bank treated customers.
Analysis: I’m not comfortable doing business with a bank that proven itself more inept with money than me.  I’m irked that it appears not value truth or the law.
My mortgage is with Wells Fargo.  It received $518 million under the Incentive Payments for Home Loan Modification program, which looks like a subsidy, rather than a loan.
The government is suing Wells Fargo.  U.S. Attorney Preet Bharara characterized Wells Fargo’s practices in FHA home mortgages as a “reckless trifecta of deficient training, deficient underwriting and deficient disclosure, all while relying on the convenient backstop of government insurance.”
Analysis: Wells Fargo didn’t take nearly as much taxpayer money, but its not going to pay it back either and is being sued for playing fast and loose with people looking for home loans.
That completes my debt research.
Next up, I’ll research those banks and companies holding my money on the plus side of the ledger.

Big Bottom Backyard Money: Why?

I should say that I’m not one of the bankers-are-devil-spawn folks.  I’m not into Bilderberg and Rothschild conspiracy stuff, although given how far down the rabbit hole I’ve fallen since discovering Ron Paul only a year and a half ago, who knows where I’ll end up.
But the banking conspiracy stuff is in no way a motivation for my attempts to backyard my money.  Rather, I do not wish to give my money to folks who haven’t managed it well, whose sense of “good business practice” is shortsighted and reckless.
I’ve also come around to believing that our credit based monetary policy, planted and watered by the Federal Reserve, is stupider than most of the poor money decisions I’ve made — which is scary.
From just a bit of research, I’ve discovered that their are layers of backyarding money — from using conventional institutions but only dealing with ethical, sound companies to complete economic succession by dealing in barter and alternative money.
For my purposes and for now, I will start with the first layer.  I’ll endeavor to withdraw as much of my financial life as possible from scoundrel beggar banks.  Along the way, I’ll look for opportunities to withdraw support from institutions that engender the Federal Reserve System.
I start with the premise that the power of big beggar banks rests on the mountains of money they can pile on political campaigns, lobbying, evasion, and the like, and that the combined little bits of money from the Big Bottom could strip that power and transfer it to more comely, ethical alternatives.  It seems like an ideal Big Bottom Backyard operation.
A poster girl of the Big Bottom approach here is  Kristen Christian, a L.A. gallery owner, who got a little big mad at Bank of America and posted a facebook event encouraging her friends to pull their money from big banks and move it to local credit unions.  Bank Transfer Day grew from there and continues.
Watch an interview with Christian about BTD.
Join in on the BTD Facebook page.

L.A. Times article on the movement.