Digital producer and cohost, wajahat ali is here, bringing in all of your feedback. You hear from the banks and the Financial Institutions and things look so good. And we talk to folks on the streets and its not quite sorossy. Some say the economy is recovering. However, for our Online Community, they are very skeptical so there sentimentthat the system might be rigged. It was the most vicious hit to the u. S. Economy ever since the great depression. The crisis resulted in 8. 7 million jobs disappearing, an estimated 14 trillion in lost output, not to mention the millions of homes that fell into foreclosure, and from Bank Bailouts to out right buyouts, the feds and institutions have put forth various remedies. Experts say we are recovering. But with atm, bank and the Overdraft Fees also at an alltime high, some say consumers may be getting the short end of the stick. So have we really addressed the systemic problems of the u. S. Financial system that lead to the crisis in the first place . Here with us on set is Vice President for federal affairs, out of rich monday virginia, a former Bloomberg Business week writer, and host of the podcast. And from washington, d. C. , senior fellow at the Competitive Enterprise Institute a free market think tank. Thank you all for joining us. Kenneth six years the banks nearly brought down the u. S. Financial system. And now it seems like they have recovered pretty quickly. Banks will tell you things are pretty good. How are consumers faring . Consumers are trying to recover. We have had large Financial Institutions, big banks engage in a lot of predator lending, toxicity flooded the system, and consumers are trying to rebound. You have maybe about more than 50 of the population in the United States living paycheck to paycheck. So robin the banks seem to be in better shape, but are they functioning in a way that would avoid another crash. I think no two crashes are the same. If you try to glean lessons from the savings and loan crash that lead to a massive recession. It was really apples and oranges. There are things to be learned from drunken lending, and what is typically called promiscuous lending. It happens every five or ten years when there is a new asset class and you throw in cheap money and easy debt and everybody wants in. Everyone in the United States thinks they can be a part of something, and you have to partake in the riches while the riches are good. Okay. Ut it sounds like you are citing specific in 08. But do you not think there was a systemic problem that brought us down in 08 . Yes, overborrowing, and extension of credit. You as a shady or opportunistic Mortgage Broker could buy into the animal spirits of people who shouldnt have bought a home in the first place, and then you could pass that down and securitize that on wall street and sell it to investors, so it was no ones problem, and yet it was everyones problem, because ultimately the taxpayer was on the hook and u. S. Government, and congress, and Federal Reserve had to backstop the banks, because the banks had the entire Global Economy hostage. Lending. About 6 million americans are still under water, and jorge says and he gave us a video comment to tell us more. Consumer confidence is being held back because all of the recent job growth as been in lowwage jobs. John, you heard his story. There seems to be consumer confidence. People say the economy is recovering, but has it come at the expense of main street and the average american. We have got the jobs, but it seems they are lowincome jobs. I want to challenge that with as far as talking about the banks. It depends on which banks you are actually talking about. The big banks have just gotten bigger. They hold a record 45 of Financial Assets in this country, but what we have seen since the passage of doddfrank, signed by president obama, since that passed, 650 Smaller Banks have failed, closed or merged are larger banks. So were seeing less small banks, and doddfrank is not going after the big banks or fannie or freddie, but some of the Smaller Banks and Credit Unions that by smothering them with red tape. So thats why you are seeing the disconnect. If you were too big to fail in 2008, now too big to fail is a winning strategy. You inoculate yourself. You leave the government no choice but to backstop you. In jpmorgan in 2006, it was jpmorgan chase. Now its jpmorgan bear stearns washington mutual, providian chase. And all of the things under it. If you look at all of the thousands of mergers over the years that are being rolled up into five or six big players in the United States, its crazy to be wishful for that era of looking you in the eye. The system is more under host ra age by a handful of players. I would like to challenge something. Community banks do a lot of the salt of though earthing lending. They quite frankly did not participate in the type of tread predator lending that lead to the housing collapse and the economy reeling the way it has. Essentially right now what we see are large banks that fought for carveouts, that are now trying to gut the financial consumers. Speaking of that what effect could elections have on the reform . Thats an interesting question, and we dont actually sit in the position of trying to speculate on how politic will effect what will happen. What well hopeful for is the hard fought for laws that we have in doddfrank will maintain. We have regulations that have just been rolled out, and more that will soon be rolled out, and to make sure those stay intact is important for consumers right now. There is a lot of speculation that if republicans take over the senate, some of these reforms will be rolled back. When we come back, were going to get into that, and ask if its time to try out an alternative system for size. Plus well reveal which cities have the highest and lowest out of network, atm fees. And why record world debt could mean another financial Global Crisis not too far from now. America votes 2014 midterms its all come down to this. You are going to determine whether im going to be the next senator from iowa the candidates last chance to convince voters theyre the one. They will stop at nothing to get your vote david young, how are you . Run for congress its important to be out here talking to voters director aj schnacks unprecedented series concludes its certainly something that doesnt exist in politics on Television America votes 2014 midterms only on Al Jazeera America hi, my name is mandy woodruff, im a personal finance minister for new york city, and im in the stream. Were discussing the state of the u. S. Economy six years after the great recession. One change consumers feel daily is increases in various banking fees. The cities with the highest atm fees are milwaukee, houston, san diego, denver, and phoenix tops the list. The cities with the lowest, los angeles, pittsburgh, and cincinnati is the very lowest. Kenneth these atm fees are high. They are pushing 5, and you add that to the 31. 9 billion that banks collected last year in Overdraft Fees, and that is going to leave consumers to say what is going on . This right. And what is going on, lisa is you are exactly right. Overdraft fees are a multibillion dollars a year profit source of revenue for large banks, and consumers, as i mentioned most americans now are now living paycheck to paycheck, that makes them much more susceptible to these Overdraft Fees. This is a large source of revenue for large banks. A typical fee of 35 tends to be almost twice as much. The cost of a particular overdraft, a cup of coffee, or maybe 10 or Something Like that. The banks tend to reorder the transactions from high to low, thereby increasing the likelihood that people will overdraft. The good news is the Consumer Protection bureau is looking into Overdraft Fees. So in the subsequent months the expectation is that they will be proposing a ruling that gets to the abusiveness that is related to these fees. Obama recently claimed that the feds were cracking down on wall street and things were getting tightened. But a lot of people still believe the relationship between the regulators and wall street is still too close and toothless. Yeah, i think that is valid. There were damming recordings that came out with goldman sachs, and there was still this flavor that it was an inside job. You had the former ceo who was the secretary of treasury in charge of this epic bailout that would have helped this company. Was he in any position to say that this should be punitive, that he should demand several pounds of flesh from wall street, that we should give these guys some upside . I think im surprised the extent to which wall street was able to throw off the yolk of tarp and bailout money and go back and pay fat dividends again. Especially when you compare it to the plight of unemployed and underemployed americans it was such a divergence. Robin you are talking about the plight of america. Lets take it back to the consumer. Our Online Community exploded when we said the average was 32 per transaction john, im in an interesting position where i have to defend the banks. They are saying all of these fees are because of the extra regulation and reform, and we have to send that cost on to the consumers. Do you buy that . Do the banks have a defendable position where they have to do these fees because of this extra regulations . Yes, and i think as a personal responsibility as a disfenceable position, as for the Overdraft Fees theres sample way to avoid it. Know how much you have, and dont withdraw more than you have. The fdic found that even 60 of lowend consumers have never had an overdraft fee. It used to be standard that parents in school would teach kids you balance your checkbook. You are responsible. If you let people, you know, do the equivalent of bouncing a check that means more that the rest of us have to pay. And 75 of checking accounts were free, and now its 38 , because of an inintended price control where some of the big retailers banks arent the only fat cats, like walmart and home depot lobbied for that where banks had to cut their charges. Consumer. That. Sure. The consumers that assess these Overdraft Fees. They represent the absolute lowrisk. Why . They are consumers to the bank. But there is confusion surrounding the overdraft fee, because some consumers are unaware that they have opted in. Again, theres a complete disproportionality between the fee assessed to a consumer and the actual overdraft that takes it to may i come in with an optimistic upshot at the nexus of predator and Market Forces whether you believe it was a crime or a math lapse of personal responsibility. The Banking Industry is fat, complacent and ripe for disruption. We were talking about when apple introduced apple pay, that this is the Largest Company in the world i know this sounds like it is coming in on tangent, but it is in an environment where if you look at it in very simple terms, banks are paying savers nothing for their savings now, and they can turn around and make these loans on luserious terms. You have to make that better. And you are seeing that now in a surge of peer to peer lending. There is a huge distaste for the Banking Industry. They get the perception that it is rigged. And they are intensely amenable of using nontraditional sources. And that leaves a lot of room for tech players and people to them. John made the point that 45 of americas wealth is in i think ten banks in the United States. Should consumers be concerned about that . That so much concentrated wealth is in so few hands . Yeah, there should be. And there are many runs on banks, kind of virtually in 2008 you saw people worried about hitting up against their fdic credit limits. And there is still a lot of confusion about that. And there were people actually fund managers, sophisticated inside wall street people who were telling their wives to take out 10 or 20,000 from the atm and literally hide it under the bed. Thats how on the hook the entire system was. So people should be leery about con venn concentrating their money in one institution. This is ondeck. Com, lisa, they are pairing up lenders with businesses. You can go there and they are trying to find these loans for these Small Businesses that otherwise dont qualify. Yeah, a lot of small options. John, ken, many thanks for being here. Robin you are going to stick around. Still ahead, are we headed towards another Global Financial crisis. A troubling study casting a not start with one issue education. Gun control. The gap between rich and poor. Job creation. Climate change. Tax policy. The economy. Iran. Healthcare. Ad guests on all sides of the debate. This is a right we should all have. Its just the way it is. Theres something seriously wrong. Theres been acrimony. The conservative ideal. Its an urgent need. And a host willing to ask the tough questions how do you explain it to yourself . And youll get. The inside story ray suarez hosts inside story weekdays at 5 eastern only on Al Jazeera America its a chilling and draconian sentence. It simply cannot stand. This trial was a sham. They are truth seekers. All they really wanna do is find out whats happening, so they can tell people. Governments around the world all united to condemn this. As you can see, its still a very much volatile situation. The government is prepared to carry out mass array. If you want free press in the new democracy, let the journalists live. A brutal drug war this here were the remains of 31 people that were found. Thousands disappearing the cost of kidnapping and killing a human being is almost zero fault lines, Al Jazeera Americas hard hitting. Today they will be arrested. Ground breaking. Theyre firing canisters of gas at us. Emmy Award Winning investigative series. New episode the disappeared only on Al Jazeera America welcome back. A new report by geneva economists found that global debts have skyrocketed despite countries attempts to reduce borrowing. Joining me is max wolf chief economists, thanks for being here. The geneva report called this rising global debt a, quote unquote, poisonous combination. How could it trigger another financial crisis . Clearly we have seen historically that debt is an accelerator, and also an exaggerator of the normal business cycle. In good sometimes more money is loaned, and that leads to higher highs. But when we start to get into trouble, that same debt creates an additional vulnerability. But since thats the repeated pattern of 150 years, as were deep in a financial recession cycle, were now at the height of the kind of circumstance with the kind of success debt load that has generally pressaged a relatively tough period where us. Robin that same report says the decrease in Household Debt are offset in a credit binge in asia. Why such a rise in credit in asia, and how are markets accelerating the debt growth. I think everybodys reaction in the wake of 2008, you have theaters of war. You have the United States and Federal Reserve, and congress, administrations first 100 days with the fins of 2008. You had europe having to fight the failure of greece and spain, roughly 2010, and then china is looking at its own economic slowdown, and japan, both Central Banks are throwing trillions of dollars at their slowdown and flooding the plain with money so people can keep the economy alive. A lot of this money turns into hot money. Which goes into investments. There are chinese buyers coming in willing to pay 100 cash, and driving up prices of everything, because they are hard assets that they cant buy at home. There will be a time when they have to start taking back that stimulus, when these guys have to take up rates. You are talking about the unintented consequences and liz says max, speaking about what tony just said, should the United States play an aggressive role in helping the european economy right now especially the industrial jump in germany and the u. K. There is always going to be a place for the United States. However, they have to be careful here, in part because we have had a very ambivalent relationship of righting our own ship, which has its own problems. We have been taxing as opposed to going straight towards the recovery of the economy as well. And political constituencies in each country as well across countries arent quite so sure they want to help people within their own country, let alone help people across international boundaries. It has been a problem for the u. S. , parts of germany, and europe, and i think just out for yourself type of policy logic is part of the reason were still having debates about recovery, four and five years in. What do you think the next Global Financial crisis is going to look like . Gosh, you know, that kind of keeps me up at night when i think about it. In 2006, i remember we were sitting at magazine meetings looking around the world, saying which country is going to blow up, and which country is going to come out of left field . When the entire time it was us. And i worry in that economies across the globe, large and small have answered this epic credit bubble by swelling an even bigger credit event, by throwing even more money at it, and there hasnt been a true kind of sobriety where people can look back and say these are the lessons learned. So one way or another, theres going to be a reckoning and a big bill to pay. All right. Thanks to max wolf, and robin, and all of our guests today. And until next time, waj and i will see you online. A court in bangladesh sentences a second Islamic Party leader to death. Hello, im at al jazeeras headquarters in doha. Also ahead the battle for northern iraq. We are on the front line between you ared kish peshawar kurdish peshawar troops and i. S. I. L. Yemen government and Houthi Rebels form a deal Burkina Fasos new leader
comparemela.com © 2020. All Rights Reserved.