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The 1% more likely to volunteer, care about politics, study finds

PHILANTHROPY
A common perception of the 1% has the wealthiest Americans living isolated from the rabble, more concerned with dusting off their top hats than helping the country.

A new report from Northwestern University begs to differ.

Compared to the general public, members of the moneyed minority are much more likely to volunteer their time and money in charitable causes and participate in politics, according to the “Survey of Economically Successful Americans and the Common Good.”

Researchers and professors from the university and the NORC research group at the University of Chicago compiled a random sample of 104 individuals from Chicago-area households with a median worth of $7.5 million.

Participants were interviewed in person or over the phone for at least 45 minutes, according to the report, which was funded by the Russell Sage Foundation.

Nine in 10 of the respondents said they volunteer, especially in areas such as education, poverty and the needy, private and community foundations and youth development. A typical member of the 1% donates about 4% of his or her income to charity, the report found. Those who inherited their wealth tend to give an even higher percentage. 

The affluent crowd is also far more likely than that average Joe to be interested in politics, the study said.

Half of 1%-ers said they have reached out to a member of Congress, a White House official or a federal regulatory agency official at least once the last six months, compared to the quarter of the general public that tried to contact an elected official in the last 12 months.

Nearly all of the well-heeled group said they voted in the last presidential election and 84% say they pay attention to politics most of the time. And 64% said they’ve contributed money to a political candidate within the last four years.

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Occupy movement's next stop? Foreclosed homes.

RoseGuidel

 

After being evicted from parks and public spaces, the Occupy movement is set to move into foreclosed homes.

Organizers said Tuesday that they plan to help families across America fight foreclosure and eviction next week by "occupying" those properties. Some of the families will be moving back into their vacant properties, while others will resist eviction, said Peter Kuhns, an organizer with the Alliance of Californians for Community Empowerment, which is organizing some of the actions in Southern California.

“The original intent of Occupy Wall Street was to protest the excess of the big banks and Wall Street banks, so it seems like a pretty natural step for people to protest foreclosed properties,” Kuhns said. “Foreclosures are one of the biggest aspects of the economic crisis created by Wall Street bankers.”

Protesters also plan to disrupt foreclosure auctions across the country, where troubled homes are sold to investors and other cash buyers or repossessed by lenders. A website for the actions has been created, detailing in videos the histories of some homeowners facing foreclosure.

More than 30 foreclosed properties will be declared as "occupied" Tuesday, Kuhns said.

At least two of the homes will be in Southern California -- one in Los Angeles County and another in the Inland Empire, Kuhns said.

This is not the first incident of homeowners resisting foreclosure led by the group. Rose Gudiel, a homeowner in La Puente, refused to leave her property in September despite an eviction order, insisting she qualified for a loan modification. She ultimately won that modification.

RELATED:

Banks' foreclosure activity picks up

Many Americans say they will have to work until they're 80

Victims of improper foreclosure practices can submit claims

— Alejandro Lazo
Twitter.com/alejandrolazo

Photo: Rose Gudiel, who purchased a home in 2005 in La Puente, fought eviction with family members. Credit: Michael Robinson Chavez / Los Angeles Times

A rebel in the ranks: Mike Mayo on Wall Street

Stock analysts are not known for being a rebellious sort -– their jobs generally involve writing up dry technical reports on public companies. But Mike Mayo is not your typical stock analyst. Since joining the industry nearly 25 years ago, he has shaken up the financial world with his bold and forthright analysis of the banks he researches.

In 1999, he told investors to sell all bank stocks. In 2007, he was ahead of the pack in downgrading Bear Stearns and Citigroup. (A fuller record of those calls is here.) Perhaps predictably, this hasn't earned him a lot of love, given that he has worked at banks himself and that his employers wanted to do business with many of the banks he was analyzing. This led to often short and stormy tenures at UBS, Credit Suisse and Lehman Bros. before he landed in his current position at Credit Agricole Securities.

Now, after a financial crisis for which banks have taken much of the blame, Mayo has written a book, Mike Mayo has written "Exile on Wall Street" "Exile on Wall Street," chronicling the problems he sees with the current system in place for monitoring the financial system. He argues that regulators, accountants and credit ratings agencies do not have the right incentives to serve as good watchdogs. He slams his fellow stock analysts for providing misleadingly positive portrayals of public companies due to conflicts of interests. Money & Company connected with Mayo to talk about his views.

Money & Company: What is the basic issue you are confronting here?

Mike Mayo: Less than 5% of stock ratings on Wall Street are a negative rating. Any first-year business school student can tell you that not 95% of stocks are worth buying.

M&C: You say that there is pressure on analysts to write positive things about the companies they are covering. What is your own experience with that?

MM: I had some of the best stock calls at Lehman. But the deal-makers -- the investment bankers at the firm at the time -- didn't like what I had to say. 

I thought my goal was to serve the people putting their money into the stocks of these companies, whereas the deal-makers wanted me to be nicer to the big banks so that they might be able to raise stocks or raise debts or advise on some sort of merger.      

Eventually when I left the firm, I was literally escorted out of the office.

M&C: The idea that Wall Street analysts are afraid to say sell, how does that impact ordinary investors?

MM: The rose-colored lenses –- the positive bias to the markets –- I think contributed to some of the excess in the markets. Having Wall Street analysts and other market overseers do more of their job –- and to call a spade a spade -- can help reduce the degree of the huge swings that we've seen.

M&C: What are the problems at banks that analysts and executives are downplaying today?

MM: This year will show the slowest revenue growth for U.S. banks since 1938, and this decade will be the slowest decade of revenue growth since the Great Depression. I think the banks are downplaying just how much revenue pressure they are likely to feel, and as a result, they have been slow to better position their companies for that environment.

You saw in the case of MF Global what happens if you don't accept the slower growth. Either you accept the slower growth or you reach for revenues and risk failing.   

M&C: Banks have said that the new financial reform laws go too far, while the public seems to think they didn't go far enough. Which is it?

MM: I'm not so sure that the size of legislation is what makes difference. I think you could have less legislation as long as it is actually enforced. We haven't had it enforced. Right now, we have the worst of both worlds, and I still see that in place, even after the crisis.

M&C: Where does Occupy Wall Street come into all of this?

MM: I do research on Occupy Wall Street because I wonder if that could be extra motivation for regulation on the banks.

When I go to Occupy Wall Street, or Occupy San Francisco today, I'm the banker in the dark blue suit.

I go to the table with the anarchists. It’s a table like you'd have at a bake sale. I engage the people behind the table in a discussion. 

I disagree when you start talking anarchy -- or some real socialist form of government -– but I do believe in the idea that we should have more alternatives within our capitalism system than what we’ve had, that we should not just accept the status quo. Enough already with what hasn't worked.

M&C: How widely is that sentiment shared on Wall Street?

MM: A lot of people on Wall Street are very frustrated with parts of Wall Street. Different operators operated on steroids -- and some of those operators blew up and tainted the industry. 

RELATED:

Wall Street isn't buying Obama's reform plan

New financial reform law hasn't curtailed banks' profits

Occupy Wall Street's message hits home with some on Wall Street

-- Nathaniel Popper in New York
Twitter.com/nathanielpopper

Photo: Mike Mayo. Credit: Wiley

Bernanke to Occupy Wall Street: 'I get it'

Occupy
Federal Reserve Chairman Ben S. Bernanke says he has sympathy for the Occupy Wall Street movement’s “dissatisfaction” with the economy.

But he also said his critics were misguided if they believed that Fed policy has been motivated by a desire to protect bankers' incomes.

At a news conference Wednesday following a two-day Fed meeting, Bernanke was asked specifically about the Occupy Wall Street protests.

The question, and his answer:

Question: Chairman, you've said in the past you understand some of the anger on display with the Occupy Wall Street protesters. And a lot of the anger is directed at the Fed, with some protesters saying that the Fed is part of the problem; that the Fed preserves the financial system and promotes income inequality.

Can -- are the protesters right? Is the Fed part of the problem? And secondarily, can the Fed do anything to promote a more equitable economy?

Bernanke: Well, as I've said before, I certainly understand that many people are dissatisfied with the state of the economy. I'm dissatisfied with the state of the economy. Unemployment is far too high. Inequality, which is not a new phenomenon, it's been going on -- increases in inequality have been going on for at least 30 years. But, obviously, that -- as that has continued we now have a more unequal society than we've had in the past.

So, again, I fully sympathize with the notion that the economy is not performing the way we would like it to be, and in that respect the concerns that people express across the spectrum are -- are understandable.

I think that the concerns about the Fed are based on misconceptions. The Federal Reserve was involved, obviously, in trying to stabilize the financial system in 2008 and 2009, a very simplistic interpretation of that was that we were doing that because we wanted to preserve, you know, banker salaries. That is obviously not the case.

What we were doing was trying to protect the financial system in order to prevent a serious collapse of both the financial system and the American economy. And we needed to take those steps. If we hadn't taken them the consequences would have been dire.

As for how to fix the problem of an “unequal society,” Bernanke said the Fed had no policy options other than trying to boost employment.

“I think the best way to address inequality is to create jobs,” he said. “It gives people opportunities. It gives people a chance to earn income, gain experience and to ultimately earn more. But that's an indirect approach that's really the only way the Fed can address inequality per se.”

He also made what appeared to be a jab at anti-stimulus Republican leaders. “I think it would be helpful if we could get assistance from some other parts of the government to work with us to help create more jobs,” Bernanke said.

RELATED:

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Fed cuts growth forecast, boosts jobless-rate estimates

Fed stands pat on policy; text of post-meeting statement

-- Tom Petruno

twitter.com/tpetruno

 Photo: "Occupy" protesters in Philadelphia. Credit: Matt Rourke / Associated Press

 

Occupy Wall Street moves to 'South Park' [Video]

 

There’s a new fat cat in "South Park" tonight: Eric Cartman, with a nod to the Occupy Wall Street protests, will dub himself the newest denizen of the 1% club.

"South Park" creators Trey Parker and Matt Stone are the latest to opine on the movement with a new episode that has the roly-poly cartoon character flubbing his school’s fitness test. His failure dilutes the scores of the other elementary school students, resulting in more gym exercises for everyone.

Cue mass resentment from the 99% and first backlash and then melancholy for Cartman. Sound familiar? 

The Occupy movement has inspired a pop culture outpouring. Commentators including Michael Moore, Joan Rivers and Jon Stewart have all weighed in. Halloween costumes included top-hats and minks, and plethora of Guy Fawkes masks, even some in cephalopod outfits bearing “Octopi” signs.

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Occupy Wall Street: City officials across U.S. grow impatient

Large swath of public unsure what to think about 'Occupy' protests

Wealthy can declare support for Occupy Wall Street on new website

-- Tiffany Hsu

Video: A clip from "South Park." Credit: South Park Studios

Wealthy can declare support for Occupy Wall Street on new website

Occupy Wall Street supporter

While members of the so-called 99% take part in Occupy Wall Street protests, a new website lets some of the wealthy 1% declare their support for the movement.

The site, called "We are the 1 percent, We stand with the 99 percent," lets people post photos of themselves pronouncing their solidarity with the Occupy protesters in New York, Los Angeles and elsewhere.

"When I was 18 my father won $9 million in the California lottery," one person posted on the site, along with a photo of him holding his message written on two pieces of white paper. "With that money I now have no college debt. When my father dies I will inherit a 3rd of his money. I am committed to using it to help those less fortunate. Due to sheer luck, I am the 1%. I stand with the 99%."

The posts contain no names, but similarly show people holding up handwritten notes on pieces of paper, index cards or cardboard explaining why they back the movement. (Although there is a link to a YouTube video of singer Willie Nelson publicly backing the protests).

Organizers of the site identified two of the people with posts on the site, including Carl Schweser, who created a study program that now is part of Kaplan Schweser, a company that helps people prepare for financial exams.

"I made millions studying the math of mortgages and bonds and helping bankers pass the Chartered Financial Analyst Exam," Schweser wrote on the site. "It isn’t fair that I have retired in comfort after a career working with financial instruments while people who worked as nurses, teachers, soldiers, etc. are worried about paying for their future, their healthcare, and their children’s educations."

"They are the backbone of this country that allowed me to succeed," he continued. "I am willing to pay more taxes so that everyone can look forward to a secure future like I do. I am the 1%. I stand with the 99%. (Which equals 100% of America.) Tax me.”

Many of the posts are from children of wealthy parents or people who have inherited money.

"Being born to the right family at the right time made me a millionaire," one man writes. "Giving most of the money away made me happy."

A woman posted that, "I can afford to work my dream job at an arts non-profit because my husband works for Google. We should all be able to afford following our dreams."

The site was created by two organizations: Resource Generation, which organizes wealthy young people to work for social change, and Wealth for Common Good, a group of wealthy people and business executives that advocate for what they call fair taxation, such as higher tax rates on millionaires.

The groups said they were inspired by the “We are the 99 percent” blog, which posts similar declarations from people participating in the Occupy protests.

“Those of us with more than we need and who believe in a more just distribution of resources can stand up and tell the truth about how the deck has been stacked in our favor," said Elspeth Gilmore, co-director of Resource Generation. "We need to say that we think it’s wrong too.”

RELATED:

Occupy Wall Street braces for winter

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Occupy Wall Street shifts from protest to policy phase

-- Jim Puzzanghera

Photo: A wealthy supporter of the Occupy Wall Street protests. Credit: Westandwiththe99percent.tumblr.com

Wall Street: Stocks up on European plan

Wall Street: The European debt deal is helping to send stocks up
Gold: Trading now at $1,723 an ounce, unchanged from Wednesday. Dow Jones industrial average: Trading now at 12,095.29, up 1.9% from Wednesday.

European optimism. The European debt deal announced last night, along with some good economic data, is helping to send stocks up this morning.

Gimme shelter. As winter approaches in New York, the Occupy Wall Street protesters are said by CNBC to be looking for an inside space that will allow them to escape the cold.

Sad second act. The former head of Goldman Sachs and governor of New Jersey, Jon Corzine, made it his mission after leaving the governor's mansion to help a small brokerage firm rise -- instead the firm appears now to be close to implosion. 

Rolling Stone rant. Rolling Stone brings you the latest anti-Wall Street screed from the man who called Goldman Sachs the "vampire squid."

The SEC and the financial crisis. A ProPublica columnist says that the latest financial-crisis case -- this one against Citi -- suggests that the Securities and Exchange Commission appears to be deciding which cases to pursue based on who wrote the most imprudent emails.

-- Nathaniel Popper in New York
Twitter.com/nathanielpopper

Photo credit: Stan Honda / Getty Images

Wall Street: Stocks down, gold up

Wall Street: European leaders are beginning crucial talks aimed at finding a solution to the sovereign debt crisis
Gold: Trading now at $1,656 an ounce, up 0.2% from Monday. Dow Jones industrial average: Trading now at 11,791.24, down 1.0% from Monday.

Home prices, stocks falling. Stocks fell this morning after it was announced that U.S. home prices dropped again, and as investors await the results of the European financial summit.

Wall Street moves West. As Wall Street lays off employees, some regional banks further west are building up their investment banking operations.

Suspicious of Stevie. Regulators have been flagging suspicious activity at Steven Cohen's hedge funds for years, the Wall Street Journal found.

Divided twins. The Daily gets the story of a set of twins split by the barricades in lower Manhattan, one in the 1%, the other in the 99%.

Raj speaks. After Raj Rajaratnam spoke publicly for the first time since being arrested on insider trading charges, the U.S. attorney's office said he was lying.

-- Nathaniel Popper in New York
Twitter.com/nathanielpopper

Photo credit: Stan Honda / Getty Images

Wall Street: Gold falls, stocks waver

Wall Street: Earnings announcements from Goldman Sachs and Bank of America confirmed that Wall Street is hurting.
Gold: Trading now at $1,639 an ounce, down 2.3% from Monday. Dow Jones industrial average: Trading now at 11,414.56, up 0.2% from Monday.

Uncertainty. Stocks are wavering as investors digest earnings reports and news from Europe.

Bad for banks. This morning's earnings announcements from Goldman Sachs and Bank of America confirmed that Wall Street is indeed hurting.

A man of many contradictions. One of the men who has given to the Occupy Wall Street protests and spent time in Zuccotti Park, the epicenter of the New York demonstrations, is also a former Wall Street trader and current donor to Mitt Romney.

Blaming Madoff. Bernard Madoff's daughter-in-law breaks her silence and blames the Ponzi schemer for her husband's suicide.

Stone on the Street. Oliver Stone took on Jamie Dimon and the rest of the Wall Street crowd after a screening of his film about the industry.

Fat cats. The real fat cats of Wall Street.

-- Nathaniel Popper in New York
Twitter.com/nathanielpopper

Photo credit: Stan Honda / Getty Images

Wells Fargo profit up, but stock falls as revenue slips

BankprotestGenaroMolinoLAT
Wells Fargo & Co.'s profit jumped 21% as it sorted out bad-loan troubles and cut costs, but Wall Street slammed the San Francisco bank as its third-quarter revenue declined.

Some key measures of profitability also dropped at Wells Fargo amid the weak economy and falling interest rates. The bank's shares plunged $1.88, or 7%, to $24.70 in midday trading, although its stock-market value, at about $130 billion, remained the highest in the industry.

Wells Fargo, the fourth-largest U.S. bank as measured by assets but the largest consumer lender, said Monday it earned $4.06 billion, or 72 cents per share, compared with $3.34 billion, or 60 cents per share, in the third quarter of 2010.

Loans and deposits both rose during the quarter. But revenue fell 6%, from $20.87 billion to  $19.63 billion, as its income from interest, fees and trading declined.

Another megabank, New York's Citigroup Inc., said Monday it earned $3.77 billion, or $1.23 per share, up from $2.17 billion, or 72 cents per share, in last year's third quarter. Citi shares fell 36 cents, or 1.3%, to $28.04 at midday.

Archrival Bank of America Corp., which reports its earnings Tuesday, recently disclosed plans to start charging customers $5 a month for using debit cards, triggering waves of protest from consumers and politicians.

During the Wells Fargo earnings call, analyst Chris Kotowski of Oppenheimer & Co. suggested the $5 fee might become an industry standard. By his calculation, that would largely offset revenue big banks have lost as a result of the Federal Reserve cutting in half the amount they can charge merchants who accept debit cards for payments.

Wells Chief Executive John Stumpf was guarded in commenting on how his bank would proceed on that controversial front, referring to a pilot program, just started in a few states, of a $3 monthly fee for customers who make purchases with debit cards.

But Stumpf said Wells Fargo, while proceeding cautiously on raising fees, needs to be compensated for the cost of providing customers safe and easy access to their deposits, including online and mobile banking as well as debit cards and the biggest national network of more than 6,000 branches.

"Our customers are going to tell us ... how they'll pay for those services," Stumpf said.

Continue reading »

Occupy Wall Street: City officials across U.S. grow impatient

Occupy Wall Street set up an encampment in DenverOccupy Wall Street may continue its encampment in New York -- for now -- officials said, and protesters at Zuccotti Park cheered and breathed a sigh of relief. But across the U.S., there's evidence that authorities'  patience with the anti-corporate-greed protests is wearing thin.

Times reporter Tina Susman, on the scene in New York, documented the protesters' elation early Friday morning. But even with the reprieve, officials in New York are on standby: "Our position has been consistent throughout: The city's role is to protect public health and safety, to enforce the law, and guarantee the rights of all New Yorkers," Deputy Mayor Cas Holloway said in a statement.

Meanwhile in Denver, hundreds of protesters were told Thursday to clear out of their encampment near the state Capitol or risk being arrested. Police in riot gear moved on protesters Friday morning, arresting about two dozen and tearing down their tents. Protesters in Trenton, N.J., have been ordered to remove tents they erected near a war memorial.

In San Diego on Friday morning, police began to arrest protesters who refused to remove their tents and other property from the plaza behind City Hall.

Protests in Los Angeles, however, have been relatively peaceful, not approaching the scale of civil disobedience seen in New York. Mayor Antonio Villaraigosa went so far as to hand out rain ponchos to protesters.

In New York, the AP reported Friday, there were reports of a handful of arrests. In one case, a police scooter hit a protester, who fell to the ground and screamed before kicking the scooter over to free his foot; he was then arrested.

What's ahead for the protesters? As Times business columnist Michael Hiltzik wrote:

Moving from protest to policy is the hardest leap that grass-roots organizations face, akin to turning a promising patent into a billion-dollar business. Occupy Wall Street is just now entering that very difficult, and very interesting, phase.

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Retail sales are up

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California plans $2-billion bond sale amid rising yields

-- Amy Hubbard

Photo: Colorado Gov. John Hickenlooper said Thursday that anti-Wall Street protesters near the state Capitol must tear down their tent camp. Credit: Ed Andrieski / Associated Press

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