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Fox
Joined: 04 Mar 2009
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 Posted: Fri May 15, 2009 4:07 pm Post subject: |
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| Pluto wrote: |
| What is it with "abusive lending practices?" Last I checked, cc companies weren't kidnapping children, raiding people's homes or forcing people at gunpoint to sign the dotted line. So here a deal, I'll stop with the analogies if you stop with the hyperbole. |
If you don't believe the legal obfuscation used by the credit industry is an abusive practice that needs to stop, we have a fundamental, irreconcilable difference in opinion. My opinion is that government should protect people via regulation based on how people actually behave. Your opinion seems to be government should not protect people via regulation based on how they should behave. If you feel I have mischaracterized your views, please correct me.
| Fox wrote: |
| No, I'm very right. The fed is the big elephant in the room when discussing all things finance; it can't be ignored. |
No one is ignoring it.
| Fox wrote: |
| Fox wrote: |
| It's in the nature of corporations to maximize profits through any legal means possible. So long as abusive practices are legal, they will continue. |
This is wrong. It's in the nature of corporations to maximize shareholder value, not make profits; there is a difference. |
We both know my point was that these practices will continue unless they are prevented; if you would rather I say this:
It's in the nature of corporations to maximize share holder value through any legal means possible. So long as abusive practices are legal, they will continue.
Then there you go, I just said it. The actual point I was making -- that these practices will continue until or unless they are prevented by law -- remains the same. |
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Fox
Joined: 04 Mar 2009
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| Posted: Fri May 15, 2009 4:18 pm Post subject: |
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| Pluto wrote: |
| Well stated, but I suppose those last statements were due to Fox's confrontational attitude to those with different philosophical leanings. Questioning someone else's intelligence due to their differing worldviews is no way to properly exchange views IMHO. |
I do no such thing; although I don't agree with the level of economic conservativism professed by quite a few people on this forum, I respect the intellects of almost every person I see articulating such beliefs here. For the most part they are very well educated and well read, and enjoyable debate partners.
My reaction to Rusty was not driven by his economic arguments, which although I feel are incorrect I understand the basis of and feel he articulates well enough. Rather, his repeated mischaracterizations of things I've said combined with his tendency to talk about me rather than my argument has irritated me.
I should probably have said what I said in a private message rather than in public, though. That was rude of me, and I apologize for saying it publically. |
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Ya-ta Boy
Joined: 16 Jan 2003
Location: Established in 1994
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| Posted: Fri May 15, 2009 7:08 pm Post subject: |
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I own and operated a summer business in excess of 43 years. My business credit card was with Avanta at 7.9 percent for years. Last year my payment jumped about $400 per month - I thought there was fraud involved. Upon checking I found my interest had been raised from 7.9 to 28.8 percent. I always paid more than the minimum and always on time. When Avanta was contacted and asked why, I was told it's a floating interest. I asked to speak to a manager and was advised that's the way it was and they could do nothing to lower it. I got a line of credit loan from the credit union at 1 percent over prime, paid them off and shut down my business. After 43 years of business, it took usury to shut me down. I am seventy five years old and a vet. Go get them Bernie, it's time we had honesty in the banking system.
Walter,
Poultney, Vermont
http://www.huffingtonpost.com/rep-bernie-sanders/testimonies-on-credit-car_b_197151.html |
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Rusty Shackleford
Joined: 08 May 2008
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| Posted: Sun May 17, 2009 5:50 pm Post subject: |
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Interesting NYT article.
http://tiny.cc/MIzq9
My favorite part:
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All of these were sins of commission, not omission, by Washington, and some at least were not unrelated to the very considerable political contributions and lobbying expenditures of the financial sector. Taxpayers, therefore, should beware. It is more than a little convenient for America�s political class to blame deregulation for this financial crisis and the resulting excesses of the free market. Not only does that neatly pass the buck, but it also creates a justification for . . . more regulation. The old Latin question is highly apposite here: Quis custodiet ipsos custodes? � Who regulates the regulators? Until that question is answered, calls for more regulation are symptoms of the very disease they purport to cure. |
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Kuros
Joined: 27 Apr 2004
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| Posted: Sun May 17, 2009 7:16 pm Post subject: |
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| Rusty Shackleford wrote: |
| The old Latin question is highly apposite here: Quis custodiet ipsos custodes? � Who regulates the regulators? Until that question is answered, calls for more regulation are symptoms of the very disease they purport to cure. |
That's a cleverly put but ultimately inane question. Regulatory agencies have their own oversight officers, who report to Congress, who report to the public through the media. Its a system of checks and balances, and ultimately all are accountable in a democratic system. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Sun May 17, 2009 7:31 pm Post subject: |
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| Right, but it has completely failed, hasn't it? At least in relation to the financial services industry. Even hope and change has been stopped. |
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Kuros
Joined: 27 Apr 2004
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| Posted: Sun May 17, 2009 8:39 pm Post subject: |
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| mises wrote: |
| Right, but it has completely failed, hasn't it? At least in relation to the financial services industry. Even hope and change has been stopped. |
Yes.
But if, as Ferguson says, the fault is of bad regulation as much as deregulation (and it was certainly some mixture of the two), then we'll need some regulatory repair. The SEC is not going away, and it certainly wasn't because of too much regulation that all this happened (too much market intervention, yes, that's part of it).
I really didn't like the way he ended that article. |
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bacasper
Joined: 26 Mar 2007
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| Posted: Sun May 17, 2009 9:43 pm Post subject: |
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| mises wrote: |
| Right, but it has completely failed, hasn't it? At least in relation to the financial services industry. Even hope and change has been stopped. |
Whaddayamean? With all the trillons being dished out to the financial services industry, I continue to "hope" we get to keep some of the "change." |
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Pluto
Joined: 19 Dec 2006
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| Posted: Mon May 18, 2009 11:52 am Post subject: |
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| Fox wrote: |
| Pluto wrote: |
| What is it with "abusive lending practices?" Last I checked, cc companies weren't kidnapping children, raiding people's homes or forcing people at gunpoint to sign the dotted line. So here a deal, I'll stop with the analogies if you stop with the hyperbole. |
If you don't believe the legal obfuscation used by the credit industry is an abusive practice that needs to stop, we have a fundamental, irreconcilable difference in opinion. My opinion is that government should protect people via regulation based on how people actually behave. Your opinion seems to be government should not protect people via regulation based on how they should behave. If you feel I have mischaracterized your views, please correct me. |
We disagree on the means and not the ends. I feel that Credit Card companies should fully back all their credit lines with deposits and preferably something tangible. You think by making a law with a populist tint, everything will be okay. (As an aside, I really don't trust these populist bills. Think of the PATRIOT Act or No Child Left Behind... How'd those turn out?)
Which leads me to my next point. Christopher Dodd (Sleazebag - CT) is sponsoring this bill. What do we know about him? He was one of Fred and Fan's biggest backers in the Senate. Fred and Fan need more oversight and more regulation, but when it came time to act he used his position on the Senate Finance Committee to block any reform. He was also a great friend of Angelino.
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Senator Dodd received two loans in 2003 through Countrywide�s V.I.P. program. He borrowed $506,000 to refinance his Washington townhouse, and $275,042 to refinance a home in East Haddam, Connecticut. Countrywide waived three-eighths of a point, or about $2,000, on the first loan, and one-fourth of a point, about $700, on the second, according to internal documents. Both loans were for 30 years, with the first five years at a fixed rate.
The interest rate on the loans, originally pegged at 4.875%, was reduced to 4.25% on the Washington home and 4.5% on the Connecticut property by the time the loans were funded. The lower rates save the senator about $58,000 on his Washington residence over the life of the loan, and $17,000 on the Connecticut home. The former employee says the float-downs were free. Senator Dodd�s wife, Jackie Clegg, said in a brief interview that two other lenders they checked with offered comparable interest rates. The senator�s office said Thursday afternoon that it is preparing a response. |
Point being, it calls his credibility into question. If Messrs. Dodd and Conrad aren't getting help from Credit Card Companies (eg. Special Interests) in writing this bill, I'll eat my hat.
Anyway, I found this in the WSJ today:
Democrats and Guns
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Amid so much other news, a Senate vote last week to allow loaded guns in national parks slipped under the media radar. The vote shows how the political cause of gun control is as dead as a mounted moose.
By 67-29, the Senate passed Oklahoma Republican Tom Coburn's amendment to let law-abiding visitors carry legal firearms into national parks. This overturns a 1983 federal rule requiring that firearms be kept unloaded and in an inaccessible place such as a trunk of a car. The provision (now part of credit-card legislation) protects Second Amendment rights, and it preserves the right of states to pass firearm laws that apply consistently, even on federal lands.
As recently as the 1990s, guns in parks legislation would have provoked a Congressional uproar. But gun control has proven to be a consistent political loser, and last year the Supreme Court cast doubt on state gun bans. No fewer than 27 Democrats voted for Mr. Coburn's amendment, and the ayes included Majority Leader Harry Reid, who is up for re-election in Nevada next year.
Congressional liberals are furious, and are threatening to hold up the credit-card bill, much as they have held up Washington, D.C. voting-rights legislation to which Republicans attached gun-owner protections. Holding up both bad bills forever would be fine with us, but in any case it's clear liberals have lost the gun control debate even within their own party. |
I don't care if this stupid bill passes or not, but I'd be glad to take my 9mm fully loaded onto federal land any day. Don't worry, I'll leave the safety on, although I haven't decided whether or not to have a round in the chamber. More importantly, as the Journal alluded to, this may force state laws to actually allow individuals to protect their life, families and property which is good.
I don't get to say this about the opposition much but...
Senate Republicans +1 |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Mon May 18, 2009 12:11 pm Post subject: |
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When you expand the amount of credit in the system, individuals who would not have previously qualified for credit will now receive it. The more you expand, the less credit worthy the borrower will be.
It is like cutting players for a hockey team. You have 22 spots so you pick the best 22. The Federal Reserve of Hockey steps in and says now you have 30 spots, so 8 people who did not make it before (the next 8 best) are on the team. The overall quality of the team is diminished.
So, regulate all you want. It won't work. The rot is in the system. The only possible piece of regulation (aside from a push for a sound money system) is capping the total amount of credit an individual can take as a % of his disposable income. But the banksters would never agree. You can get rid of the credit card co's deceptive practices, which is good, but the fundamental problem of creditworthy individuals having access to hoards of credit will remain. |
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Ya-ta Boy
Joined: 16 Jan 2003
Location: Established in 1994
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| Posted: Mon May 18, 2009 2:49 pm Post subject: |
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| You can get rid of the credit card co's deceptive practices, which is good, but the fundamental problem of creditworthy individuals having access to hoards of credit will remain. |
mises is basically right.
There should be a two-step approach. First, end the trick and trap system we have. Level the playing field so people who are trying to play by the rules aren't screwed by sharp ass lawyers who write the current contracts. That is a given to any fair-minded person.
Second, this is a capitalist system where people are supposed to have some freedom of choice and the responsibility that goes along with it. So make it more difficult for banks to collect from people who make bad choices and get in over their heads. Banks should be free to hand out credit cards like candy to anyone they want, but the state should not go overboard in bailing the banks out because the bank made a bad choice. If the banks are more responsible for their bad choices, they may become more responsible in who they give credit cards to. Banks have become the Welfare Queens of the 21st Century and are too dependent on the gov't. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Mon May 18, 2009 3:13 pm Post subject: |
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| Banks should be free to hand out credit cards like candy to anyone they want, but the state should not go overboard in bailing the banks out because the bank made a bad choice. |
Yes, I totally agree. It is the state screwing up from both sides. First, they decrease the likelihood that banks will apply strict rules of credit worthiness and then bail out the banks when they take it way too far. Nobody is forced to be responsible and the result of chaos. |
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Pluto
Joined: 19 Dec 2006
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| Posted: Mon May 18, 2009 3:30 pm Post subject: |
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| Ya-ta Boy wrote: |
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| You can get rid of the credit card co's deceptive practices, which is good, but the fundamental problem of creditworthy individuals having access to hoards of credit will remain. |
mises is basically right.
There should be a two-step approach. First, end the trick and trap system we have. Level the playing field so people who are trying to play by the rules aren't screwed by sharp ass lawyers who write the current contracts. That is a given to any fair-minded person. |
This is true, but don't forget about the savvy lobbyists that the likes of BoA and G. Sachs have. Your small neighborhood bank couldn't possibly keep up with their influence.
| Ya-ta Boy wrote: |
| Second, this is a capitalist system where people are supposed to have some freedom of choice and the responsibility that goes along with it. So make it more difficult for banks to collect from people who make bad choices and get in over their heads. Banks should be free to hand out credit cards like candy to anyone they want, but the state should not go overboard in bailing the banks out because the bank made a bad choice. If the banks are more responsible for their bad choices, they may become more responsible in who they give credit cards to. Banks have become the Welfare Queens of the 21st Century and are too dependent on the gov't. |
Yes and in a capitalist system there would be privatized profits as well as privatized losses. Instead, we've got private gains and socialized losses, in effect corporatism. I believe that is what Mises said was the true issue earlier in this thread. |
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Pluto
Joined: 19 Dec 2006
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| Posted: Mon May 18, 2009 4:29 pm Post subject: |
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Well, for what it's worth...
From The Financial Times
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Bankers escape cap on salaries
By Tom Braithwaite in Washington
Published: May 18 2009 21:15 | Last updated: May 18 2009 21:15
Bankers will not have their salaries capped by the Obama administration but they will face changes to executive compensation aimed at discouraging risky short-term bets, Tim Geithner, the US Treasury secretary, said on Monday.
�I don�t think our government should set caps on compensation,� he said, but he added that the financial crisis had been �magnified by the fact that people were paid to take a huge amount of short-term risk�.
At an event in Washington, the Treasury secretary said there would be �broader reforms to compensation incentives in the financial system as a whole . . . [to] make it much less likely people get paid to take large amounts of short-term risk at the expense of their firm and the system as a whole�.
Government intervention of any kind into the way companies choose to pay their executives is a sensitive issue on Wall Street. Restrictions already placed on pay at those institutions that received government assistance from the troubled asset relief programme are one of the main reasons behind the banks� desire to repay the money.
But some bankers are receptive to some form of regulatory change, with Lloyd Blankfein, chief executive of Goldman Sachs, writing in the Financial Times earlier this year that �senior executive officers should be required to retain most of the equity they receive at least until they retire�.
Anger generated on Capitol Hill and beyond earlier this year by the $165m (�123m, �108m) bonus payments at AIG, the bailed-out insurer, has subsided but some lawmakers are still demanding action to rein in compensation.
The administration fav�ours introducing �say on pay� legislation, moving the US closer to the law in the UK, where shareholders have greater oversight of directors� remuneration.
The House financial services committee is due to consider reform of executive pay as part of hearings into broad regulatory changes, expected to start in the next month.
Amid increasing optimism that the economic decline may be reaching a bottom, Mr Geithner cautioned that an improvement in unemployment would lag behind a recovery.
�It�s not going to feel better for a long time for millions of Americans,� he said. |
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Rusty Shackleford
Joined: 08 May 2008
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| Posted: Mon May 18, 2009 6:24 pm Post subject: |
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http://www.nytimes.com/2009/05/19/business/19credit.html?partner=rss&emc=rss
The responsible folk get stiffed, while those who act irresponsibly get a bail out.
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Credit cards have long been a very good deal for people who pay their bills on time and in full. Even as card companies imposed punitive fees and penalties on those late with their payments, the best customers racked up cash-back rewards, frequent-flier miles and other perks in recent years.
Now Congress is moving to limit the penalties on riskier borrowers, who have become a prime source of billions of dollars in fee revenue for the industry. And to make up for lost income, the card companies are going after those people with sterling credit. |
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