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Natives keep money not creditors
B.C. creditors hoping to collect from Ottawa monies owed by first nations beneficiaries of the billion-dollar residential school settlement deal are out of luck, the B.C. Court of Appeal says. B.C. creditors hoping to collect from Ottawa monies owed by first nations beneficiaries of the billion-dollar residential school settl... more
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The death of the credit card economy
The most revolutionary notion in commerce today is one of the oldest. If you want to buy something, you may actually have to pay for it. We are reverting from a "borrow and buy" economy to the "cash and carry" model of our grandparents.
The Olesons may have extended store credit to Ma and Pa Ingalls in Little House on the Prairie, but widespread consumer credit is a very recent phenomenon. It began in the 1920s, when expensive consumer durables—cars, refrigerators—were first produced in mass quantities. It wasn't until Bank of America began carpet-bombing California with credit-card applications in the 1960s that the debt wave started in earnest.
In the decades since, consumer credit became so pervasive that paying cash became passé. Want a new $32,530 Dodge Ram Crew pickup? Take a lease. Sick of your old house? Get a 100 percent mortgage and trade up. Face lift? Round-the-world cruise? New PC? Three-hundred dollar sushi dinner at Nobu? Whip out that plastic. It was this behavior—the endless willingness of lenders to lend and borrowers to borrow—that kept the consumer economy humming uninterrupted from the early 1990s, straight through the brief recession of 2001, until the credit meltdown of 2007.
But many of the lenders who extended credit recklessly are now acting like a single twentysomething who, after having a few bad dates, takes a vow of celibacy. Students returning to college are finding that student loans have vanished. Retailers who freely extended credit to any customer with a pulse are deploying bean counters armed with sophisticated software to sniff out potential deadbeats. And when higher rates and fees don't deter their borrowers, credit-card companies resort to slashing credit lines. "We predicted there would be some degree of spillover from the mortgage meltdown," said Curtis Arnold, founder of CardRatings.com. "But the credit line reductions by big credit card companies in the last six months have been fairly unprecedented." The most revolutionary notion in commerce today is one of the oldest. If you want to buy something, you may actually have to pay for i... more -
Zoom Airlines shuts down
The low-cost transatlantic carrier left hundreds of passengers stranded in Canada and Europe.
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Getting a massage can hurt your credit score.
The allegations, in part, focus on CompuCredit's Aspire Visa, a subprime credit card for risky borrowers. The FTC claims that CompuCredit didn't properly disclose that it monitored spending and cut credit lines if consumers used their cards at certain places. Among them: tire and retreading shops, massage parlors, bars, billiard halls and marriage counseling offices.
"The company touted that cardholders could use their credit cards anywhere," says J. Reilly Dolan, assistant director for financial practices at the FTC. "What they didn't say was that you could be punished for specific kinds of purchases."
The Federal Deposit Insurance Corp. is also seeking $200 million in penalties from CompuCredit in the matter.
It's not the first time CompuCredit has come under scrutiny from authorities. In 2006, the credit card issuer and another financial firm agreed to fork over $11 million to consumers and reform their marketing and billing procedures as part of a settlement with then-New York Attorney General Eliot Spitzer, who had launched a probe in 2005 after receiving various consumer complaints. The allegations, in part, focus on CompuCredit's Aspire Visa, a subprime credit card for risky borrowers. The FTC claims that Com... more -
The 2008 student loan blues
Back to school, kids, if you can scrape up the tuition. By some estimates as many as 200,000 college students may not find anyone willing to lend them money for school this year.
The 2008 Student Loan Blues Higher Education
Nicholas von Hoffman: Some 200,000 college students won't qualify for loans in September, and millions more will pay higher interest rates. Can they count on Obama to help them out?
Millions of others are going to have to jump through more hoops, pay higher interest rates and/or get their parents to co-sign their loans. This last expedient depends on the parents having a credit rating good enough to satisfy the money-lenders.
When students get loans this year, they will pay more for them. In at least some cases students are looking at rates of 23 percent. With those numbers a young person might be better off borrowing from the mafia.
Students shopping around trying to get themselves lower interest rates had best be careful. They can inadvertently get stung with higher rates as a result of trying to get lower ones.
In few other areas of consumer life are you at risk of being penalized for seeking out the best deal.... To quote a rate, lenders check an applicants credit history. And every time a shopper asks a lender for a rate quote, it can show up as another inquiry on a credit report. Lots of inquiries send the wrong signals to the formulas that create the popular FICO credit score. The lower the FICO score the higher the interest rate a student will have to pay for tuition money.
Cashing in on the kids is no small business. Last year it amounted to more than $17 billion. The interest on that is a lot of cabbage for private, government-subsidized loan companies, which explains why some college loan officers have taken bribes to steer students to favored lenders.
They have been lining up to screw unworldly 18-year-old freshmen and their parents who may not understand that there is a government student loan program at 6.8 percent interest--which is no bargain for someone about to start out in life, but better than getting the money from a guy with a baseball bat down on the docks. Since there is a cap on how much a student is allowed to borrow at the government rate, millions are also forced to sign up with the sharks.
No one can say how many students who take on these loans appreciate what a bad deal they have signed up for. Regardless of what bad luck may hit them in later life--unemployment, sickness, being run over by a beer truck--they must discharge that loan. There is no forgiveness. Unlike other debts, the law says not even bankruptcy will wipe out a student loan obligation.
It's a neat system. The colleges and universities run up tuition without stint or limit in a society in which you either go to college or live on the verge of poverty. You must go to school and incur the costs.
No tuition restraints were included in the just-enacted higher education law. But there are more costs than tuition. Higher education is better than the airlines at tacking on fees and special charges. And the publishers of textbooks costing more than $100 are exempt from prosecution under the Racketeer Influenced and Corrupt Organizations Act.
Young people have no representation powerful enough and well enough bankrolled to go up against the higher ed lobby. Barack Obama is their best hope.
He and the Democrats are counting on the youth vote to put them over the top this November. Lets hope that, if the young people win it for Obama, the new President will ignore the rich, academic liberal types who swarm about him and repay his youthful followers by getting them something approaching an even break. Back to school, kids, if you can scrape up the tuition. By some estimates as many as 200,000 college students may not find anyone will... more -
HOPE FOR THE BEST
"A people living under the perpetual menace of war and invasion is very easy to govern. It demands no social reforms. It does not haggle over expenditures for armaments and military equipment. It pays without discussion, it ruins itself, and that is an excellent thing for the syndicates of financiers and manufacturers for whom patriotic terrors are an abundant source of gain" - Anatole France
PROUD OF WHAT ONE IGNORES ?
http://www.nowpublic.com/world/proud-what-one-ignores
PRIVATIZE THE PROFITS & SOCIALIZE THE LOSS * Even now, after all of their dishonesty and failure, Fannie and Freddie could emerge from this taxpayer rescue more powerful than ever. Mussolini said that fascism is quite simply the corporate state. This story ends all speculation that we are living in a fascist empire where it is impossible to determine where corporations end and government begins and vice-versa. Disaster Capitalism triumphant !
"A society whose citizens refuse to see and investigate the facts, who refuse to believe that their government and their media will routinely lie to them and fabricate a reality contrary to verifiable facts, is a society that chooses and deserves the Police State Dictatorship it's going to get." - Ian Williams Goddard
NATION OF WHINERS GOES ON SUICIDE BINGE !
http://www.nowpublic.com/world/nation-whiners-goes-suic...
Washington has become Versailles. We are ruled, entertained and informed by courtiers. The popular media are courtiers. The Democrats, like the Republicans, are courtiers. Our pundits and experts are courtiers. We are captivated by the hollow stagecraft of political theater as we are ruthlessly stripped of power. It is smoke and mirrors, tricks and con games. We are being had. - Chris Hedges
A democratic civilization will save itself only if it makes the language of the image into a stimulus for critical reflection — not an invitation for hypnosis." - Umberto Eco "A people living under the perpetual menace of war and invasion is very easy to govern. It demands no social reforms. It does not... more -
The next bubble: credit cards
While many eyes are focusing on the housing meltdown and its hugely negative effect on an economy clearly moving into recession, few are paying attention to the next bubble expected to burst: credit cards.
Combined with the subprime losses, such a credit card nightmare has the potential, experts say, of bringing down the entire financial system and global economy. It has brought us to a brink not seen since just before the Great Depression.
While campaigning in Edinburg, Texas, in February, Barack Obama met with students at the University of Texas-Pan American. “Just be careful about those credit cards, all right? Don’t eat out as much,” he said. After the foreclosure crisis, he warned, “the credit cards are next in line.”
Fewer people are paying their credit card bills on time. And, to flip the old paradigm, more are using high-interest credit card cash to pay at least part of their mortgages instead of the other way around.
Happily, this issue is finally being addressed by Congress and the Federal Reserve Bank. When asked for comments, the public overloaded the Fed’s website as the New York Times commented:
When the Federal Reserve asked for comments on its proposed rules on abusive credit card practices, an astonishing 56,000 poured in. Most were from outraged consumers. They told of interest rates skyrocketing when they paid an unrelated bill late. They complained of unwarranted late fees and pushed-up due dates. One Pennsylvania customer fumed: “I’m fed up with credit card company tricks that drive us deeper in debt.”
This anguished deluge should send a clear message to leaders in Washington. The Federal Reserve should swiftly adopt its proposed rules against unfair or deceptive credit card practices. But the real burden to curb these abuses falls on Congress.
This discontent is being organized to press Congress to act by groups like the Consumer Federation of America and the Center for Responsible Lending. And Congress is listening:
WASHINGTON (Reuters) - Legislation aimed at curbing credit card billing practices that surprise borrowers with unexpected interest rate increases and fees was approved on Thursday by a U.S. House of Representatives committee.
The bill approved by Financial Services Committee mirrors Federal Reserve proposals that would effectively end double-cycle billing — in which card companies reach back to prior billing cycles to help calculate the interest charged in the current cycle.
These reforms are a start but much more needs to be done because it’s not just billing practices that is at issue — it’s high interest changes, deceptive marketing, and arbitrary rules. On top of that, there are other loans that need scrutiny including payday lenders and student loans. And of course our own addiction to shop until we drop.
Also, let us not forget that our credit card companies have been colonizing markets throughout the world. As the New York Times explained in a series on debt, “As the American blessing of credit cards became widespread, so did the American curse of debt.”
Bear in mind the experience of another addicting industry — tobacco. As they came under restraints in the US, they escalated their poison pushing worldwide.
Debt is a global issue and has to be treated as such.
Just as groups like NACA provide help to homeowners in distress, we need a major effort to help the victims of credit cards — with practical assistance and political demands for regulation and relief.
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excerpted from, "The Next Bubble Is on the Way: Credit Card Debt" by Danny Schechter While many eyes are focusing on the housing meltdown and its hugely negative effect on an economy clearly moving into recession, few a... more -
After 7 Years, Talks on Trade Collapse
Us Economy too weak to negotiate trade agreements.
GENEVA — World trade talks collapsed here on Tuesday after seven years of on-again, off-again negotiations, in the latest sign of India’s and China’s growing might on the world stage and the decreasing ability of the United States to impose its will globally.
Pascal Lamy, director general of the World Trade Organization, could not bridge differences between a group of newly confident developing nations and established Western economic powers. In the end, too few of the real power brokers proved committed enough to make compromises necessary to deliver a deal.
The failure appeared to end, for the near term at least, any hopes of a global deal to further open markets, cut farm subsidies and strengthen the international trading system.
“It is a massive blow to confidence in the global economy,” said Peter Power, spokesman for the European Commission. “The confidence shot in the arm that we needed badly will not now happen.”
After nine consecutive days of high-level talks, discussions reached an impasse when the United States, India and China refused to compromise over measures to protect farmers in developing countries from greater liberalization of trade.
Supporters of the so-called Doha round of talks, which began in 2001, say a deal would have been a bulwark against protectionist sentiments that are likely to spread as economic growth falters in much of the world.
The failure also delivers a blow to the credibility of the World Trade Organization, which sets and enforces the rules of international commerce. It could set back efforts to work out other multilateral agreements, including those intended to reduce the threat of global warming.
The collapse of the talks will not bring an end to world trade, of course, which will continue under current agreements, many of which are between two or more countries rather than under the W.T.O.
But it is a big setback, particularly to the hopes of smaller and poorer developing countries, which were counting on gaining greater access to consumers in the United States, Europe and Japan.
Economists and trade experts predicted that negotiators, having come this close, might not find the conditions for a broad deal among the 153 members of the trade organization for years, if ever again.
Deep skepticism about the advantages of free trade was on vivid display during the Democratic primaries and it is growing in Europe, particularly as France, Italy and other countries have fallen into an American-style economic malaise. Us Economy too weak to negotiate trade agreements. ... more -
Last hurrah for the banking system
FDIC has only $53 billion in reserves to guarantee $4 trillion in total bank deposits.
As the bank-runs increase, the FDIC will be forced to admit the truth, that they don't have the resources to deal with a problem this big. Currently, the FDIC has only $53 billion in reserves to guarantee $4 trillion in total bank deposits. The entire system has a mere $267 billion cash in the vaults. What a shabby way to run a banking system. Where's the money going to come from when depositors start withdrawing their savings? How will the FDIC deal with the ongoing deleveraging in the market which is forcing more and more investors move into cash?
On Friday, after the market had closed, the FDIC shut down two more banks, First Heritage Bank and First National Bank. Two weeks earlier, regulators seized Indymac Bancorp following a run by depositors. The FDIC now operates like a stealth paramilitary unit, deploying its shock troops on the weekends to do their dirty work out of the public eye and at times when it will least effect the stock market. The reasons for this are obvious; there's only one thing the government hates more than seeing flag-draped coffins on the evening news, and that's seeing long lines of frantic soccer moms and blue-collar working guys waiting impatiently to get what's left of their savings out of their now-deceased bank. After all, flag-draped coffins merely indicate that we're losing a war, but lines at the bank prove that the system is broken. And the system is broken, that's why people are depressed and confidence is waning.
Last Sunday, sought Treasury Secretary Henry Paulson tried to reassure the public that the banking system is sound, while bracing people for more trouble ahead:
* "I think it's going to be months that we're working our way through this period — clearly months. But again, it's a safe banking system, a sound banking system. Our regulators are on top of it. This is a very manageable situation."
Paulson is like a broken record. Everything is always hunky-dory. He is the consummate Wall Street investment sharpie; a bright guy who could charm a hungry dog off a meat-wagon. But when it comes to telling the truth; forget about it. You'd be better off listening to Bush, which isn't saying much. The banking system is not sound nor is it well capitalized. It is a corpse that's been propped up in the office hallway next to the water-cooler so that everyone who passes bye gets a stifling whiff of the decaying flesh. Still, the charade goes on. Still the lies persist.
If the rate of bank closures continues at the present pace, by the middle of 2009 their will be restrictions on withdrawals. Even now, if you go to your bank and try to withdraw $9,000 or $10,000, it sends waves of panic through the entire building like a 5-alarm fire that quickly engulfs the main exits. It's crazy. Tellers go scampering around helter-skelter, and bank managers suddenly appear at the window grimacing in pain and wringing the sweat from their brows.
Most people are unaware of the fact that the new Fannie Mae and Freddie Mac bailout package that was passed into law on Saturday, provides Paulson with $300 billion of taxpayer dollars to shore up the faltering mortgage behemoths. In order to accomplish this, the congress increased the national debt by a whopping $800 billion sending it over the $10 trillion mark for the first time in history. FDIC has only $53 billion in reserves to guarantee $4 trillion in total bank deposits. ... more -
Housing bailout bill - another $800 billion gift from the taxpayer to Wall Street
This bill will probably pass in Senate tomorrow. You, your children and generations to come will pay for this. All taxes will be spent servicing this debt.
Cost of 5 years of Iraq war: $560 billion
Cost of this bill: $800 billion
It will be spent bailing out the same fraudsters who got us into this mess. Call your senator now and demand they vote against this! If you don't, it will probably pass. If you care for your country and your children's future, vote this video up.
The clock is ticking... This bill will probably pass in Senate tomorrow. You, your children and generations to come will pay for this. All taxes will be spent... more -
Are You Dumb or Just Plain Arrogant?
NEW YORK - Graduate students seem to be pulling out their credit cards more often to pay for school expenses - a trend that worries financial experts.
A study released Wednesday by Nellie Mae, a company based in Braintree, Mass., that provides education financing for college students, found that more than nine in 10 graduate students had at least one credit card in the 2006-07 academic year. Their average outstanding balance was $8,612, up 10 percent from the $7,831 average balance when the study last was done in 2003.
While most say they try to make at least the minimum payment every month, just 20 percent pay off their cards in full, so student's balances continue to grow.
One reason graduate students carry a lot of debt is that they've been building on the $3,500 in card debt they carried when they completed their undergraduate studies, said Marie O'Malley, a spokeswoman for Nellie Mae, which is a division of the SLM Corp., also known as Sallie Mae. And graduate students typically are eligible for fewer grants and scholarships than undergraduates, making them more dependent on their own financing.
More than 94 percent of the students used their credit cards for school-related expenses, especially the purchase of textbooks, school supplies and transportation. Nearly one-third used their cards for tuition costs, and more than one-third used them to cover college fees.
"We know there are more cost-effective ways to pay for college," O'Malley said, noting that most student loans carry lower rates and better repayment terms than credit cards. She added that it was unclear if graduate students were unaware of alternatives or didn't take the time to hunt them down.
Business students carried the highest average debt at nearly $14,000 followed by law students, and medical or dental students. NEW YORK - Graduate students seem to be pulling out their credit cards more often to pay for school expenses - a trend that worries fi... more -
What your credit score is and how to raise it
Your credit history includes your use of credit such as credit cards and bank loans. Ilyce explains the different parts of a credit history and how they impact credit scores. Having access to credit over a long period of time helps you to have a high credit score. Your credit history includes your use of credit such as credit cards and bank loans. Ilyce explains the different parts of a credit hi... more
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Paying cash? That'll cost extra
** Do they think we will outsource our *In God We Trust' dollars to credit card companies? **
Paying cash? That'll cost extra - The Red Tape Chronicles - MSNBC.com
by Bob Sullivan
Rhonda Payne went to an AT&T Wireless store in Calhoun, Ga., recently to pay her phone bill in cash. She'd been hit by ID theft and was forced to close her checking account, so she was worried she wouldn’t be able to mail a check on time. But when she arrived at the store, she was in for a surprise.
Paying in person, she was told, costs extra -- $2 extra.
Payne objected to the "administrative charge" that was added to her bill but got no sympathy. Instead, she said, she was told she should consider herself lucky because the fee was about to go up to $5.
"I was told that it was a courtesy to take cash,” she said. “I said, ‘Are you kidding me?'”
It’s no joke. Beginning earlier this year, AT&T Wireless began to charge customers who pay their bills in their stores.
"It is a way of saving money ... it helps us keep our costs lower," said AT&T spokesman Mark Siegel. "We want our associates to spend their time helping customers as they are thinking about their wireless plans or looking at phones."
There are multiple ways for consumers to pay their bills for free, he added -- in the mail, by electronic payment and on the Web. There are even kiosks in stores where bill payments can be dropped off for free. But having a sales clerk take the payment costs extra.
Hurts the poor most
Consumer advocate Ed Mierzwinski, director of the U.S. Public Interest Research Group, said he's concerned about AT&T's new fee for another reason: It hits poor people hardest because they are most likely to pay in stores.
"It's targeted at people who don't have bank accounts,” he said. “...It's punitive and largely indefensible.
"It's just unfair to me and I'm shocked by it. People that have less money have to pay more to pay their bills. … It hurts people that really don't have a choice."
Studies show that 10 million to 12 million Americans don't have bank accounts and have to pay their bills in cash, he said. Some are undocumented workers; others are consumers who have bounced too many checks in the past and are ineligible for checking accounts. Sometimes called the "unbanked," consumers who live in this cash economy are finding it harder and harder to maintain basic services, Mierzwinski said.
"I think (AT&T’s fee) is going to lead to more companies charging more to people who want to pay with cash," he said. ** Do they think we will outsource our *In God We Trust' dollars to credit card companies? ** ... more -
From 0 To Debt Hell In Six Seconds
I've never subscribed to the philosophy of debt, which seems to be one of the leading sources of misery in the Western world. I've always valued the peace of mind that zero debt gives me far above the stuff that going into debt allows me to buy.
I'm not naive, I know for some it's hard to escape debt since a minimum wage hardly covers even the necessaries of life (which is obscene, and a whole other story). But most of us do have a choice: A new car and new debt vs. keeping your old car, and your peace of mind. A new flat screen TV and new debt vs. keeping your old tube TV, and your peace of mind. It's a question of values, and what you value more.
Americans are tempted and brainwashed into debt from a very early age, with credit and debit cards marketed to kids, and obligatory student loans ensuring that we embark on our adult lives chained and enslaved by our society of debt.
We all know to stay away from loan sharks, but few question the wisdom of "respectable" institutionalized debt, such as car loans, which are likely to be our biggest monthly expense after rent or mortgage payments.
We're conditioned to believe we can have the car we "deserve" now, rather than merely the one we can afford. Worse still, we are told if we don't drive the "right" car it'll harm our personal and job prospects, the “right” car for our social group inevitably being one that’s more expensive than we can really afford.
This form of corporate-driven peer pressure is truly insidious. Few realize that by subscribing to this philosophy, and something as seemingly innocuous as a modest monthly car payment, they may well be trading in their future financial security.
Do the math. If you saved up and bought a more modest used car cash down, and put the $400 a month the average American spends on their car payments in a high yield mutual fund that earns 12% annually, after 30 years you'd have a nest egg of well over $1 million.
So what does that BMW say about you now? Is the luxury car company really selling you "sheer driving pleasure" or "sheer debt forever?" I've never subscribed to the philosophy of debt, which seems to be one of the leading sources of misery in the Western world. I&#... more -
World's rich shrug off credit crunch
The ranks of the world’s rich swelled to 8m during 2007 as the wealthy proved immune to the strains across global economies in the latter half of the year... The ranks of the world’s rich swelled to 8m during 2007 as the wealthy proved immune to the strains across global economies in the lat... more
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Individual bankruptcy filings up 27%
The American Bankruptcy Institute said that consumer bankruptcy filings increased 27% nationwide in the first three months of the year, compared with the same period last year.
In March alone, 86,165 individuals filed for consumer bankruptcy - a 13% increase over the 76,120 cases filed in February.
... is this where this debt culture is leading all of us?
Seems debt is the slavery of the New Medieval Era.
How much should we blame debt inducing advertising?
How much should we blame debt inducing politics?
... and how much should we blame ourselves for falling into the trap? The American Bankruptcy Institute said that consumer bankruptcy filings increased 27% nationwide in the first three months of the year... more -
Spend like there's no tomorrow?
As the British economy looks increasingly doomed, should we call time on our big-spending culture?
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Your credit and you?
I’m reading a lot these days about the looming credit crisis. I don’t know anybody who doesn’t have a credit card, and most people I know seem to carry at least some debt. All the talk about our “uncertain economic times” has got me thinking a lot about spending. It's easy for economists to talk about what we should or shouldn't do, but what do real people think? I know it’s one of those touchy subjects that people are hesitant talk about, but that’s exactly what I’m growing to love about this site. The honest (sometimes painfully honest) conversation that these posts can inspire.
So…here’s what I’m interested in. Why do we spend the way we do? Are there cultural pressures that come into play? If so, what are they? Is there still a “keeping up with the Joneses” phenomenon? Who are the Joneses? How do you feel about your debt? Do you feel like you have it under control? I can’t say I always do. Do you feel angry about your debt and if so where do you place the blame? How much responsibility do you accept? Do you think something needs to be done about it? And if so, what can be done?
Are these even the right questions to be asking?
What do you think? I’m reading a lot these days about the looming credit crisis. I don’t know anybody who doesn’t have a credit card, and most people I k... more -
GOP gags Citizens from Testifying about Credit Card Company Thugry
They came to the nation's capital this week from as far away as Denver, Chicago and Niagara Falls--five people who'd had tough experiences with their credit cards and were asked to share those tales with a House panel. Instead, they ran headfirst into the buzz-saw of Washington politics when the panel's Republicans insisted the visitors allow their lenders to discuss their financial histories publicly--in any forum, at any time.
For four of the five, it was a deal-breaker. Instead of signing the waivers allowing them to testify Thursday, they all sat silently in the audience.
"I didn't want all my ... information out there for just anybody," said Denver's Susan Wones, who saw the interest rate of her JP Morgan Chase card jump from 0 percent to 23 percent in one month last summer, without notification or explanation. "I'm extremely upset I can't talk about this." They came to the nation's capital this week from as far away as Denver, Chicago and Niagara Falls--five people who'd had tou... more -
Is the worst over for stock markets?
It's really only just begun.
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