Despite Finding Big Problems in Mortgage Industry, Regulators’ Punishment Unclear

by Paul Kiel ProPublica, Feb. 17, 2011, 1:16 p.m.

Federal regulators say they’re going to crack down after finding “critical deficiencies [1]” with how banks and mortgage servicers have been handling struggling homeowners. But it’s an open question just what form a punishment will take, with one regulator reportedly pushing lighter penalties than the others. Read more…

A Money Story About The Life Changing Gift Of Knowing You Will Die

By Kalinda Rose Stevenson, Ph.D.

As a character in the hero journey story of Joe Versus The Volcano, Dr. Ellison is the paradoxical mentor who gives the hero an essential gift that makes the journey possible.

The Mentor’s Gift In The Hero Journey

As a mentor, Dr. Ellison is both a liar and a truth teller. His money story is that he sold his soul to Mr. Granamore and is willing to lie to Joe with a made-up diagnosis. But the story is not about Dr. Ellison, and the tradeoffs he made to be Mr. Granamore’s lackey, to be willing to trade his integrity as a physician for the benefits of being Mr. Granamore’s private—and presumably well-paid—doctor. Read more…

How Leveraging Triggered the Financial Crisis

By Kalinda Rose Stevenson, Ph.D. 

Leveraging triggered the financial crisis because it created a system of creating money that could not be sustained.

What is Leveraging? 

Leveraging is the process that allows creative financing of real estate transactions. 

Some bankers at some of the world’s largest banks took a fundamental idea—the idea that money can be created on paper—and carried it too far. Read more…

The Reason For Having the Federal Reserve

By Kalinda Rose Stevenson, Ph.D.

The reason for having the Federal Reserve is to provide a mechanism to control the amount of money available in the economic system. Too much money in the system results in inflation. Too little money results in recession. If you imagine the economic system as one side of a seesaw, the Fed functions as the counterbalance on one side.

What Is The Federal Reserve?

The Fed is a strange hybrid of private banks with federal authority, but not really under government control. It operates mostly out of sight, to keep the money flowing between the extremely rich, the financial markets, the banks, and the consumers, all the while responding to political pressures, both nationally and internationally. It holds its meetings in private, making decisions that affect the economic well-being of all of us. Read more…

How Do Banks Create Money?

Banks create money because they have banking charters that allow them to do legally what would put the rest of us in jail if we tried it.

Fractional Reserve Lending

The most potent money creating tool is fractional reserve lending. According to the rules of their charters, banks only need to keep a fraction of their deposits in reserve, in the form of cash or other liquid assets. Read more…

Can You Change Your Money Story By Becoming Soul Sick?

By Kalinda Rose Stevenson, Ph.D.

What if the best way to change your money story is to first become soul sick? Joe Versus The Volcano is a money story about soul sickness. Soul sickness is a condition brought on by selling out your authentic self for some gain. It can be money. It can be fame. It can be popularity. It can be security. Whatever it is, the price is too high.

Your Authentic Self Becomes Soul Sick

Above all, soul sickness is a state of awareness. You become soul sick when you become aware that you have compromised your true self—your authentic self—for something that is not worth the tradeoff. Read more…

A Money Story About Trading the Priceless For Orange Soda

By Kalinda Rose Stevenson, Ph.D.

Is It Priceless Or Does It Have A Price Tag? 

Have you seen the ads by the credit card company about the difference between the things you can buy with your credit card and the experiences that are priceless? The purpose of the ads is to persuade you that things with a price tag are worth buying because those things can create a priceless experience.

Joe Versus the Volcano is about the opposite effect. It is a money story about the high cost of trading the priceless for something that comes with a price tag. Read more…

Do You Sell Your Soul For Money?

By Kalinda Rose Stevenson, Ph.D.

Do you sell your soul for money? How much of your life story is a money story ruled by choices about what you will do or not do for money?

One of my favorite movies is Joe Versus the Volcano. It’s silly movie that is truly profound. As a story, it’s an extended parable about what people will do for money. The story shows people sleepwalking through their lives, half dead, for the sake of their jobs. Read more…

Accusations of Fraudulent Mortgage Documents Led Citigroup to Settle With Homeowners

by Marian Wang ProPublica, Feb. 8, 2011, 12:55 p.m.

In a handful of cases around the country, Citigroup has reached settlements with homeowners who accused the bank of filing fraudulent mortgage documents [1] to prove its legal standing to collect the debt in bankruptcy proceedings, Bloomberg reported today.

The cases put a twist on recent efforts by banks to patch over problems created because lenders and securitizers were sloppy with documentation during the housing bubble. These homeowners alleged that Citigroup’s mortgage assignments—a key document produced whenever the ownership of a mortgage changed hands—were flawed because they were dated after the bankruptcy was filed. Read more…

Two Sets Of Money Rules

By Kalinda Rose Stevenson, Ph.D.

Do you know that we live in a society with two sets of money making rules?  One set of money rules allows bankers to make money out of thin air. The other set of money rules keeps most people struggling to make more money. Read more…