Bankrupting America

[chequita guevara]

Originally posted by VetLegion
Recession is not the end of the world.

It is for those who die because of it.

[Agathon]

I'd say that the problems are endemic. Americans have been taught to expect that they can just keep consuming and consuming and everything will work out all right in the end. The Republicans, who were supposed to be the fiscally responsible party, are following this faith based policy. It is already putting the status of the dollar as the world's reserve currency under threat, and that may well be the end of a freebie that most Americans don't realize exists.

They also have a society designed around cheap petroleum. I remember seeing a Libertarian economist on PBS going mental about suburbs and the car culture as being the most visible manifestation of American financial irresponsibility.

A lot of western countries are like this, but the heavier hand that governments take in the economy and the fact they aren't dominant economies means that the risk isn't so pronounced.

We live in problematic times. Our leaders basically have no idea of what to do, so they've adopted faith based policies and continued to indulge the same response in the voting public. As I've said before, the current political climate reminds me of the period preceding WWI, when it was painfully evident that institutions weren't up to facing reality. As usual, the last thing people are willing to give up is what is causing the problem.

[chequita guevara]

You better thank your lucky stars we're consuming, cuz if we weren't, you'd be out of a job. American consumerism is the economic engine of the planet.

[Dinner]

Originally posted by Aeson

What I do know is they created these methods to get the risk off their books, and acted like the risk was gone even though it was still there. Fraud or stupidity. Probably some of both.

Part of it was to get the risk off of their books, part of it was evade the Federal requirements that banks not exceed a certain ratio of assets on hand to loans made, and part of it just old fashioned stupidity motivated by greed.

[Dinner]

As long as we're on the topic of bankruptcy I'd like to point out that the recession has lead to a 47.7% increase in bankruptcies in the US this year compared to one year ago. The good times are a rolling.

http://www.signonsandiego.com/news/business/20080502-0732-usa-economy-bankruptcies.html

[Kidlicious]

Originally posted by Aeson


Because that's what happened.

There's a big problem with your logic. You can't answer my question, can you? That's because you don't know. You're just guessing.

[Kidlicious]

Originally posted by Aeson


You act like it's something you were after. It wasn't. I was refuting your entire implication:

"So you are saying the same thing that Spiffor is, that they didn't calculate the risks correctly. Why do you say that?"

I may or may not be saying what Spiffor is. I haven't read everything he's said, so how would I know? I agreed with one specific thing he had said, which was that there was a method banks were using to "cover" their risk by transferring it to other agencies (who themselves couldn't cover the risk).

I was never saying that they didn't calculate the risks correctly. You were incorrect to pretend that I did.

I'm just trying to find out what your claim is here. I take it now that it is that they did calculate the risks and purposefully caused this crisis. I asked you how you know that, and you said "because that's what happened." I don't see any point in continuing this further.

[Kidlicious]

Originally posted by Agathon
I remember seeing a Libertarian economist on PBS going mental about suburbs and the car culture as being the most visible manifestation of American financial irresponsibility.

Living in the suburbs is better for the individual family than living in the city. It's just not better for the world. The problem isn't financial irresponsibility, it's social irresponsibility.

As long as people have the same idea of individualism that they have had for centuries the **** will continue to hit the fan.

[snoopy369]

Originally posted by chegitz guevara


It is for those who die because of it.

Yes, all zero people who will die because of the recession. Good one.

[Kidlicious]

Regulators zero in on credit card reform

Regulators zero in on credit card reform

Key bank regulator approves proposal to eliminate industry practices like 'double-cycle billing'; Fed expected to follow.

NEW YORK (CNNMoney.com) -- Federal regulators are pushing ahead to stop abuses by credit card issuers at a time when the $2 trillion industry has come under increasing scrutiny.

On Thursday, the Office of Thrift Supervision, responsible for overseeing the nation's savings and loans, endorsed a seven-point plan to tackle "unfair" and "deceptive" practices by companies that issue credit cards.

The plan would allow consumers more time to pay their monthly bill. It would prevent companies from applying interest-rate increases retroactively to pre-existing balances. And it would ban "double cycle billing," a practice that computes finance charges based on previous billing cycles.

"Today's proposal addresses practices that have raised concern about fairness and transparency," the office said.

The National Credit Union Administration board also approved the proposed rules Thursday. The Federal Reserve is expected sign off on it no later than Friday.

Under the proposal, companies that issue credit cards would be required to outline the factors that determine which of several advertised interest rates and credit limits a customer will receive. In addition, the rules would prevent companies from charging fees to open an account and receive credit.

Regulators, most notably the Fed, have been under pressure from politicians to do a better job of overseeing the banking industry in general or risk losing some of their regulatory powers.

At the same time, lawmakers have pushed to make the credit card industry more consumer friendly at a time when Americans struggle with debt and increasingly rely on their credit cards to make ends meet.

U.S. consumers were saddled with $850 billion in credit card debt as of the end of last year, according to the Consumer Federation of America.

Sen. Christopher Dodd, D-Conn., joined by a group of fellow Democratic lawmakers, unveiled legislation on Wednesday that incorporated some of those same regulatory proposals and added some new ones such as preventing issuers from charging customers a fee to pay a credit card bill by phone.

Earlier this year, Rep. Carolyn Maloney, D-N.Y., introduced a legislative plan dubbed the Credit Cardholders' Bill of Rights, which garnered attention at a House hearing last month.

Industry says rules could choke off credit

Card industry representatives have been quick to warn that the passage of new legislation or additional regulation could hurt all credit card carriers.

Americans with shabby credit histories, for example, may no longer have similar access to credit. At the same time, consumers with good credit could soon find themselves facing higher interest rates.

In the early 1980s, before issuers relied on credit scores in vetting customers, interest rates hovered around 18% and everyone paid an annual fee.

Nowadays consumers pay an average interest rate of just over 13%, and three quarters of card issuers do not charge an annual fee, according to the American Bankers Association.

The consumer federation and the U.S. Public Interest Research Group said they were encouraged by the joint proposal, but added that regulators did not address other problems like unwarranted interest rate changes and aggressive marketing to college students.

"It's a good first step in addressing a number of abusive practices," said Travis Plunkett, legislative director at the consumer federation. "However, it will still be necessary for Congress to step in because the proposal only deals with a few of the problems that have been identified."

At the same time, legislators could have quite a fight on their hands. Previous efforts trying to reform the industry have largely failed, while recent legislative proposals have found little support among GOP lawmakers.

The reforms proposed this week will be open for public comment for 75 days. The agencies expect to finalize any new regulatory changes by the end of the year.

There still won't be a maximum rate that they can charge people. I think that's wrong. On average we pay 13% interest. That's ****ed up.

[Agathon]

Originally posted by chegitz guevara
You better thank your lucky stars we're consuming, cuz if we weren't, you'd be out of a job. American consumerism is the economic engine of the planet.

Not if you haven't got anything to give back, and those green pieces of paper look pretty worthless right about now.

[Aeson]

Originally posted by Kidicious
There's a big problem with your logic.

There's a big problem with "your logic". It's that it doesn't exist and that you are simply ignoring what has obviously happened.

You can't answer my question, can you?

I already answered your question. So yes, I can.

I'm just trying to find out what your claim is here.

Making assumptions about what I have said and asking loaded questions with your assumptions as implications is an idiotic method of doing so. So is asking a question in regards to one statement, and then pretending the answer was in another context altogether.

I take it now that it is that they did calculate the risks and purposefully caused this crisis.

No. I plainly said I do not know if they calculated the risks correctly or not. That is what I meant by, "I don't know if they calculated the risks correctly or not." I am sorry you do not possess the mental facilities necessary to understand what that means.

I asked you how you know that, and you said "because that's what happened." I don't see any point in continuing this further.

No, you asked me how I know "they created these methods to get the risk off their books, and acted like the risk was gone even though it was still there." That is what you quoted before you asked the question "And how do you know that?" Now you are trying to pretend you asked the question in regards to another statement, one which I didn't even make.

We can look back and see that they did indeed take the risk off their books through these methods and then acted like the risk was covered. It is what happened.

[Kidlicious]

Aeson,

You're making an assertion and then not answering questions that people ask to find out if there's any basis to it. You did that yesterday in another thread. So I'm done here.

[chequita guevara]

Originally posted by snoopy369


Yes, all zero people who will die because of the recession. Good one.

What happened to you. You used to be smart.

[chequita guevara]

Originally posted by Agathon


Not if you haven't got anything to give back, and those green pieces of paper look pretty worthless right about now.

We're borrowing from you in order to buy from you, which means you can hire people to make the stuff you sell us.