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Posts Tagged ‘banks’

Peer-to-Peer lending: A beginner’s guide

In Advice, Financial, Fresh on December 2, 2016 at 11:18 AM

Today, when you have money left over after paying your bills, you invest in big and distant corporations. You don’t even think about it. The government incentivizes you to save for your future through RSPs and TSFAs. You invest in stocks, bonds or mutual funds. Basically, all of our money goes to the financial markets. The financial system has been designed to funnel our our collective savings in that direction. As different as you might try to be, we all own a slice of the financial markets at large. Alternatively, you could start your own business or purchase an investment property, but this is a lot of risk, costs more in legal fees and taxes, and most importantly, it may entail work that you don’t have time for. So you invest in passive financial instruments. And until now, passive financial instruments basically meant big corporations. 2016 marks the year where we, individual Canadians, can re-channel some of those investments from large and distant corporations to local small businesses. Read the rest of this entry »

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Dark Markets

In Criticism, Financial, Fresh on April 28, 2014 at 11:37 AM

Imagine that you’re buying property in Toronto. You know the exact neighborhood that you want to live in, but your real estate agent has told you there are no homes listed for sale in that area. Secretly though, every home in that neighborhood is owned by one real estate kingpin. The kingpin wants to take advantage of the high real estate prices as soon as he can, but he needs to do this discreetly. He understands that if he were to list all of his property at once publicly, then he wouldn’t get as much money for his property. He needs to make buyers like you believe there is a limited supply of homes, when in fact there is an abundant supply. To do this, he uses dark markets.

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Modern Day “Salami Slicing”

In Financial, Fresh on April 1, 2014 at 3:13 PM

My first introduction to “salami slicing” was in Superman 3. Richard Pryor, who played a quirky computer hacker that worked in the processing department of a bank, discovered that there were millions of transactions happening at the bank each day and that all of them required the bank to round amounts to the nearest penny. By accumulating these rounding increments into his own bank account, he became rich. Apparently, Wall Street has a similar scam and is doing this to all of us every day. 60 Minutes has a must-watch piece if you’re interested in how they skim money from your investments.

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Being a Bank

In Financial, Fresh on March 4, 2014 at 4:31 PM

Banking is the best business in the world. People give you money, trusting you to keep it safe. In exchange, you pay them a tiny amount of interest. You then have the right to lend a portion of that same money and charge a higher interest rate, keeping the difference as profit.

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The LIBOR Scandal

In Financial, Fresh on July 16, 2012 at 7:52 PM

“This is the banking industry’s tobacco moment,” says the chief executive of a multinational bank, referring to the lawsuits and settlements that cost America’s tobacco industry more than $200 billion in 1998. “It’s that big.” 

The Economist

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