RSAAKS

Credit Card Crunch: Creating a New Generation of Subprime

when banks are allowed to charge 25% interest against their cost of funds at less than 3-4%, greed overtakes and reckless lending begins. That is what we had in last few years, every month there were on average 30-40 card offers in my bail box. Many in my shoes probably had those cards issued and will never be able to pay using 20+% interest rate. Greed could only go so far. Perhaps banks will learn to loan money to those who have HIGH probability of paying heir loans, and charge a reasonable rate for it. Those who can pay will not accept 25% rate, those who cannot pay, it is not worth charging any rate-meaning no loans.

Tangible Common Equity: How Much Is Enough?

If these numbers are really correct, WOW!!! and we still think banks will not need to be taken over by the Govt., especially if economy gets any worse (which it just might), we don't have a prayer.