milkchaser

Credit Card Cancer

Unable or unwilling?

On Mar 16 12:08 AM William Cowie wrote:
> Great article. Interesting how politicians of every stripe have become
> unable to grasp simple concepts!

Credit Card Cancer

There are those who regret this. I am not wise enough to know, but there is something to the argument that commodity based money preserves its value.


On Mar 16 03:02 PM timwalsh300 wrote:
> You all need to wake up and realize that we don't have a commodity
> system of money anymore.

Credit Card Cancer

One could argue that this printed money essentially devalues existing currency. Hence, it is not cost-free.


On Mar 16 03:09 PM timwalsh300 wrote:

> And yes, Peter, credit DOES come from thin air. Banks don't need
> deposits to make loans. They simply need to borrow reserves (which
> are printed "from thin air") from the Federal Reserve through the
> discount window. That's where all money is born. That's where people
> get reserves in the first place that they later deposit at the bank.
>
>
> It's frightening that you are a financial professional and have such
> a poor understanding of the money creation process.

Credit Card Cancer

Although I cannot disagree with the thrust of the argument, Mr. Schiff slightly overstates. Not all credit is bad. It is unwise to spend cash when credit is available and cheap. The float on my credit card is free (to me anyway) and that allows me to earn interest until the payment due date. Why forgo that float?

The credit card companies do not do this to lose money. They make money on the fees they charge the vendors. The vendors do not pay these fees to lose money. They prefer a sale to a non-sale and know that a credit card payment presents a low-risk loan.

Of course, not all credit card holders are creditworthy, and banks would do well to winnow the wheat from the chaff. That need not undermine the usefulness of responsible credit.

Home equity loans and other collateral-based loans are also not worrisome, assuming the collateral is sufficient and the borrower is worthy.

However, the massive borrowing by the US gov't is atrocious and frightening. It is foolish for the US gov't to forgo moderate borrowing when the rates are low and the capital is available. But there is nothing moderate about the Obama deficits.

TARP Has Lost 40% Since Inception

The key here is that the loss is unrealized and may, in fact, turn around. Were taxpayers forced to pay their share as computed above, yes this would counteract the stimulus "tax cut".

But if the Obama "tax cut" tells us anything it is that the average taxpayer is not going to be asked to pay his/her fair share. They have not for a long time. Bush's tax rate cuts shifted more of the Federal tax burden to high earners. Obama promises more of the same (with the exception of his carbon cap/tax which is a "fair", across-the-board tax on all).

As for alleged misspending of TARP, the three examples shown are loans to foreign entities. Is this wrong? Should these banks stop lending to foreigners? I say let them lend where the prospect of profit is highest, which may very well be overseas.

Credit Market Overview: Not Impressed with Government Verbiage

If JPM is keeping 80 trillion off the books, they are hiding much more than the entire net worth of the USA -- off their books.. This is not possible, much less believable.

Think before you post.

Moreover, if JPM were keeping such sums off their books, people would be going to jail (a la Madoff). I used to work for JPM. They would not do this.


On Feb 25 02:14 PM monday1929 wrote:

> By the measure of 80 trillion hidden off JPM's books. By the measure
> og hundreds of Billions overtly and covertly siphoned /leeched off
> the taxpayer to JPM. By the measure of what common sense tells you.
>
> But, I did just buy lot's of Citi-Corpse. The reason? The Fattest
> fixer of the century, Robert Rubenron has Obama's ear. Always trade
> reality.

Credit Market Overview: Not Impressed with Government Verbiage

BAC is worthless? JP is worthless? By what measure?

U.S. Market: So Much Stupidity in Such Little Time

User 27733 is wrong to suggest that Reagan left office with a recession. This is not the case. Republicans do not distinguish themselves from Democrats by taking money from big business. That is a bipartisan activity. Dems are no better than Republicans.

In fact, it was Dems who, far and away, have taken the most money from Fannie Mae and Freddie Mac. None of the credit problems would have happened had those two companies not created a market for questionable securities. Mostly Dems protected those companies (few exceptions like Senator Bennett from Utah) -- Dems such as Dodd and Frank.

In contrast, the Bush administration attempted 17 times to strengthen regulation of Fannie Mae and Freddie Mac. This regulation was sponsored by Republicans and shut down in the Senate by the Democratic minority (prior to 2006, after which regulation had no chance).

True, the crisis occurred during the Bush administration, but point to specific causes (as just have) to explain how Bush screwed up. Bragging about home ownership is not a very likely cause of the crisis.

Bush tried to prevent this, but failed because of Democratic opposition, yet Bush gets the blame. I suspect that Democrats knew that Bush would take the blame and that their obstruction would not redound to harm their political prospects. Politics is like that. It ain't beanbag.

Will Republicans jump to help Obama whose over the top vilification of Bush and Republicans he now dismisses as so much "campaign rhetoric"? As if to say, "I only said that to get elected. Nobody really believes it, do they?" Yeah, the Republicans are going to forgive and forget.

And why bash big business. Big businesses create jobs and profits. When they do, politicians take the credit, "I created X million jobs". No they didn't. Even when politicians create gov't jobs, they pay for them with taxes that they take from corporations and people who otherwise would also create jobs.

I expect that Obama and the Dems will tank the economy, which is not yet as bad as the 1982-83 recession. If it gets worse, blame Obama and his Democratic majority.