dryfly, yes, I remember. It's amazing that the banks just woke up to the HELOC problem. And now it sounds like they are starting to understand there is a credit card problem. This does seem like the end of the borrowing line for consumers.
WAMU just sent me a solicitation for a HELOC, despite that I don't own any real estate. (I sold in 2004 -- a little early, I admit.) I suppose that since I don't own any real estate, I'm the ideal candidate, as I'm not exposed to equity erosion due to declining home prices. The financing documents might be tricky, but given what has been accomplished in recent years, I think that my lack of homeownership should not be troubling.
I don't get all those CC offers anymore... because I opted out. Citi (my beloved card issuer) is sending me constant and repeated offers for balance transfer. Good quality paper (for fireplace starter).
We've been getting weekly "we want you back" letters from countrywide since we paid off our mortgage last spring. However the credit card offers slowed noticeably in conjunction with payoff. Maybe the cc co's assume no mortgage = no house.
Yeh, it takes me about 15 minutes every month to shred the offers and I filed B 6 years ago. In fact it took 20 minutes the other day to close a card I don't use. The questions just keep coming on why. What part of (I don't use it) don't you understand.
Jo6pac
The race to the bottom continues.
"The financing documents might be tricky, but given what has been accomplished in recent years, I think that my lack of homeownership should not be troubling."
Exactly. Your loan officer might say, "you wouldn't happen to have a second home you forgot about?"
Exactly. Your loan officer might say, "you wouldn't happen to have a second home you forgot about?"
Berylmarkham | 02.04.08 - 11:45 pm | #
Or...
"Do you play 'virtual life'?" or wtf online game that is (my kids would know). When I can get HELOCs over the asset holdings my kids have in 'virtual' then I know we're near the end.
I've heard that Citi is purging "high risk" CC holders in England. Some of those considered to be "high risk" are CC holders who pay off their balance every single month!
The CC companies refer to such customers as "deadbeats", because they never pay fees and never pay any interest but just rake in the perks.
I have a feeling that my wife and I might get purged; we've never missed a payment and we pay our balance off every month. It'll be weird if that happens; I use the damn cards to buy everything.
They can repossess the cars, the house, and all the other financed crap. But taking away the credit card? There's gonna be some pissed off people. What the hell are they going to use? Cash?
Thankfully I married and now my wife handles the "give the cc offers to the shredder" duties. I have 1 card only, with my credit union. They just upped my limit substantially despite my being one of those pesky "pay it off every month" types.
I love that Discover commercial with the floating globe talking to the chick on the treadmill. What a fabulous idea: pay the interest on some schmuck's card when they make 6 months of payments on time. I.e. give the schmucks a pat on the back when they carry a balance and generate lots of fees for Discover.
Another bad idea: knocking off $1 from the mortgage for every $100 racked up on the credit card. Who was that, BofA? It was about 1 year ago. Brillllliant!
How about pestering people with phone calls during dinner time "urging" you to sign up for their $9.95/month "credit monitoring" service.
What about that "insurance" they used to sell a while back, wherein if you lost your job and all your money or some such, they would pay off the balance on your credit card. Nice. Holding a balance on the card racking up interest in hopes that you'll get the axe at work so you can not make payments on the balance.
So many bad ideas coming from banking and credit cards. I say they deserve the goat that's being rammed up their petunias.
News flash - your ccredit card co still makes 150 bps per trans from the merchant whether u pay in full monthly or not. If u keep a balance, that's just gravy.
Don't worry about any cc company recalling ur chargeplate anytime soon.
You earn by spending, cashback, points, miles. There is some card that saves for your kids college or something like that, penny on every dollar you spend. Spend about million a year and economics starts making sense.
Odd. My mailbox has had no CC offers for about 4-6 months. Now that you mention this it is odd.
Anon posted a bit about the CC cards in the UK - Egg, I think. I do wonder what US folks would think if their credit was cut off. Would we cope? Could we cope?
Inflation? Its a trailing indicator. Deflation is taking root and will be more intractable than the inflation Volker fought and the deflation that has bedeviled the Jap's for 15+ years.
As the credit evaporates, the cash will remain... for those who haven't had their banks and the FDIC fail.
Foolish creation of unpayable credit generated inflation, its contraction is slamming the tranny in reverse.
The mood of the markets is unsettled and turning worried. How much longer until the growing fear produces the panic when everyone heads to the door at once? Too soon, I fear to suggest to the bull headed who rally at the flaccid efforts of lowered FFR, TAF or discount or open market or fiscal stim packs, the financial equivalents of mojo's, potions, spells or conjurings.
The impotence of adding liquidity at the top will eventually (sooner than later) drive a stake through the heart of trickle down believers. Awareness that this con was predicated as a misdirection for the on-going policy of syphon up for the benefit of an elite few, will dawn on many more irate bag holders and the lynching of bankers, suspended since the mid 30s) will recommence.
PLEASE note that when you cancel a card it goes on your credit report as a credit "Cancelled"...it is percieved as a negative in that you or the bank had to cancel it! Beware.
home prices spiraling down. Refi's MUCH harder to do. Heloc's being closed out and MUCH harder to get. Credit Cards following the trend. Savings rate of Americans negative! Cash Equivalent Savings vehicles yielding much less for retirees.
We'll need more than $600 per person. Do I hear $700, $750, $800. C'mon who wants my vote. Tomorrow is Super Tuesday. Let our kids figure it out.
And while Treasury yields have dropped sharply in the wake of the Federal Reserves actions, corresponding interest rates such as those for prime mortgages or jumbo mortgages have not. The federal-funds rate has declined by 2.25 percentage points in the past year, but the average 30-year mortgage rate is at 5.58%, compared with 5.96% a year ago, a 0.38-percentage point decline. Jumbo loans are higher, at 6.71%, from 6.19% a year ago. This is why we are not more bullish on the macro outlook given the dramatic rate cuts by the Fed because as the bad debts mount, lenders are pulling back the Fed can influence the cost of capital perhaps, but not its availability, writes David Rosenberg, chief North American economist at Merrill Lynch.
If the banks get any type of bailout during this mess, it should be countered by nullifying the changes in the bankruptcy laws from 2005 or whenever it was. but that will never happe
Canceled 6-7 various credit cards about 4 years ago. Those showed up on ensuing credit reports as account closed by request of cardholder. AFAI can tell, it hasn't made a difference in obtaining low interest rate auto loans nor reduced the number of weekly cc offers.
I'm paying on my upside-down mortgage out of honor -- I signed up for it and I don't want to ruin my credit.
But I'm wondering if credit is really going to matter in the near future, with walking away being hailed as the thing to do?
Plus, it seems like even now if you go BK you still get credit like anyone else. Or is that why there's a crisis now, and in the future banks won't be so willing to lend to bad credit scores?
What's the incentive for all the people who are losing their homes to continue to pay their credit cards? Their credit will be shot for the next few years anyway. They may as well rack it up to the limit (if it's not already there) and then let it go along with the mortgage. How many foreclosures expected in 2008? Is it millions or just hundreds upon hundreds of thousands.
Oh boy, it's getting ugly. Just another reason why Wall Street should rally some more.
There needs to be outside-of-the-box thinking,'' says Laura Tyson, a former economics adviser to President Bill Clinton who now teaches at the University of California, Berkeley.The problem has not been contained, and there's a continuing risk to the economy.''
another:
Bernard Connolly, global strategist at American International Group's Banque AIG unit in London, even predicts authorities will eventually have to buy up stocks to prevent a crash.
open season for bail outs:
Russo proposes offering government-backed loans to U.S. homeowners with adjustable-rate mortgages, whether prime or subprime. He also advocates a tax credit for people who buy homes this year that would triple the current benefits mortgage holders receive.
They have no clue how to close a card with a credit balance.
nah, in 2006-2007 I cycled 3 0% balance transfers from BofA and Discover through my Citi MC. They had no problems cutting me a check for $8,000+ each time.
note to self: not really worth the PITA to do those 0% transfers any more.
the incentive for keeping credit cards current (while letting the house go) is to get a last ditch cash advance cushion when the sheriff kicks you to the curb.
You might need a quick source of cash deposit for a new place to rent. some fools might have like 30K-50K in credit lines they can still tap once they lose the house.
It doesn't matter to me what my FICO score is I'm not buying anything on credit anyway.
Had an error on my phone bill last year (their problem, not mine). The phone co said they'd ruin my credit score if I didn't pay up (on their error at that), I told them they could try but as I go cash only it meant zip to me, their threat was meaningless.
After 6 months of begging they admitted they were wrong, a software billing error. So much for them.
MARKET WATCH
How risky are uninsured bank deposits? More risky than they once were. The FDIC is gearing up for the prospect of a large bank failure. So double check that all your deposits, including interest, are well within FDIC insurance limits. How risky are uninsured bank deposits? - MarketWatch
I don't know - my mailbox has been of full of credit card offers recently.
Dont' argue with stupidity, take advantage of it. I take every 0% check offer and turn it into Tbonds or forex CDs. What's not to like about earning 3-5% on somebody else's principal?
(If etrade would let me, I'd buy puts on the company's stock.)
PLEASE note that when you cancel a card it goes on your credit report as a credit "Cancelled"...it is percieved as a negative in that you or the bank had to cancel it! Beware.
Barley | 02.05.08 - 12:32 am | #
To use an old Midwest colloquialism, they can eat me. This phony "negative" is publicized only to keep people hooked. Pull out the credit IV, people. Walk free. Set the rules as you want the banks to treat you, not the other way around.
Soon, when enough people behave like this, the rationals who cancel crappy cards will become a desirable demo for them to seek out with the sweetest offers.
tj& the bear,
BofA is truly too big to fail, however, we thought the same about America until recently. If it were my money I would not deposit more than $100,000 and less if you want your interest insured. Deposits are reportedly insured up to $250,000 on certain qualified retirment accounts. Be careful here. There have not been many bank failures since the relatively new $250,000 retirement account coverage was approved. Therefore I anticipate a certain level of FDIC insurance coverage determination problems once these so called retirement bank accounts receive FDIC's strict review during coming bank failures.
DC Rogers, tell it brother. I have requested numerous credit card accounts 'closed at the customers request' for at least 20 years and my FICO is above 800 and I'm unemployed. I'm about to close my Amazon.com/Chase card because Chase will not refund a late charge.
oh... and obviously, I'm not literal in my delivery, I'm a big fan of Richard Kelly who did Donnie Darko and Southland Tales.. and I've always loved his precurser, Gegg Araki.
Lots of apocalyptic shadings to what I write.. sometimes hyperbole brings out the things that matter.
eli (from your blog)- if you're pure evil then you ought to get together with Elvis and Misean. IIRC, Elvis admitted a couple months ago he was responsible for the subprime mess and Misean claimed his rantings were taking down the housing market.
Just this morning I cancelled my Chase card of 15 years because the arrogant "supervisor" refused to waive the $39 late fee assessed because of a delayed posting of 2 days past due. I exlpained I mailed my payment in full 10 days before the due date. Chase will NEVER get ANY of my business again.
Actually, I don't see much consistency in the concept that credit card availability is being severely constrained at this point. Check out the fascinating numbers in Figure 4 of the Fed report that CR linked to.
Only 9.7% of respondents say they're tightening standards on domestic credit cards. That's as compared to 40% on eyeball average through '96 and '97. Tightening on "other consumer loans" is very high, at 32%, which probably means HELOC.
The installments number is about as low as we've ever seen, at -15%.
The shocker for me, however, was the percentage of respondents reporting increased demand for consumer loans. It's been very persistently and deeply negative since '04.
These data don't align very well. Why is that? Is it just that we don't shop for loans since they're marketed so aggressively to us?
Furthermore, what happens when they really tighten credit card standards? I don't believe it's happened yet, not anecdotally, in this survey, or in the G.19.
Chase Sucks, I made a payment on-line to my Chase account and then called them to request my first late payment refund of $39. When I agreed to the Amazon.com/Chase card I did not realize Amazon.com automatically changed my billing for One Click purchases from my Capital One card to the Chase card. I didn't realize I was charging away on the Chase card and was not getting a paper statment having opted for on-line billing only. I had inadvertently overlooked the on-line bill thinking it was spam. I was told that they would refund the $39 no problem since it was my first late payment, however I would have to call back again after my on-line payment posted. Several days later I called again only to be told by another Chase rep the $39 late charge would not be refunded unless it was Chase's fault. I brought my small balance to zero and will call them tomorrow to request the account be closed at the customer's request. I've had a Capital One card for years and they refunded a late charge for me last month based on my payment history and 800 plus FICO.
FFDIC, thanks for the link. I really hope Bernanke isn't ousted. He is, indeed, the foremost expert on what we're facing, and there's nobody whose knowledge I'd rather see at the helm, though he could work on the PR a little. I think he's doing an excellent job playing out a completely horrible hand with no chance of winning. I believe anyone else would lose faster and harder.
Even the threat of him getting the hook could create a lame duck chairman, which I think would be the worst of all worlds at a time when we need decisive leadership for that all-important confidence.
Be it MEW, HELOC, Credit Cards or Cash out Auto loans, when the liquidity dries up the music stops. Then the American economy will prosper based on the wages of its citizens less debt service.
Good luck w/Chase tomorrow. In the past, I've had no problem getting a fee waiver from them (mind you I do NOT do this regularily but after 15 years, there has been a few times I did not get my FULL payment to them by the required payment date due to long vacations/travel). I too have stellar credit and charge relatively high balances that are paid in full. Do you think there is anything to the idea they are weeding out my demographic because they can't make any money on full balance payors?
bad for me. I take advantage of every single 0% APR purchase offer and use the proceeds to invest in precious metal for a year, and pay off the credit card just before the normal purchase APR kicks in. I run up big balance, and therefore big cash bonuses too.
I am sure I belong to the money-losing segment for all the credit cards I use, I doubt if they ever make a dime from me. I'll be looking out for the cut-off letters from Chase, Citi, Discover soon.
Great line in the NYT today, "People have come to view credit as savings. That says it all; people thnik that having a HELOC is going to get them through rainy days. They're going to find out that, when it rains, it pours, and there is a correlation between rainy days and having your HELOC pulled.
FFDIC: Even though I think the Fed should be replaced, Bernanke has been doing a decent job, considering the circumstances. They have been creative in utilizing a wide variety of mechanisms to target the problem better. Greenspan probably would have rates down to 1% already. You also have to give him some credit for stepping in to take the blame for a situation he did not create. I think it was Regan's fault, right? Mr. Gorbachev, tear down this wall!
could you recommend a link about what is insured by the goverment and how it works?
I have T-bills and T-notes with a bank I gather that those are not FDIC insured but are supposedly guaranteed by the govmt, both the principal and the interest. So what happens if the bank goes bust?
Thanks!!!
I'm going to apply for a cc that gives a discount where I usually buy gas. Lately I've made an effort to pay down credit. I assume that the credit application will be go straight though but who knows.
"Vivian Snyder has strong credit and is not classified as subprime, but she is one of many consumers who can't afford the car she leased. Snyder drives a brand new convertible BMW with a MSRP listed at approximately $100,000."
"Vivian has only a few options. She can plead with the finance company to release her from the lease or have the car repossessed, losing her good credit and a $30,000 down payment which consisted of her entire retirement savings"
She bought a car with her entire retirement savings? Talk about going on a shopping spree.
Anecdotal evidence of credit tightening - I misplaced a small dept store credit card bill; missed the payment date by 5 business days. Paid my late fee to clear it up before it got to the negative stage and impacted my credit report.
What's interesting though is that their credit dept called me to let me know I was late. This after just five business days ... hmm. Also I have a fairly common first and last name and am getting debt collector cold calls for somebody else who has my same name. They must be using the yellow pages to "throw darts".
My deceased relative who's been dead several years is still getting credit card offers. Just got one for them last week. I'd say that credit still has a ways to tighten.
"Retail sales in the euro region declined 2 percent from a year earlier, the biggest drop in 13 years, the European Union's statistics office in Luxembourg said today."
"LONDON, Feb 5 (Reuters) - Fitch Ratings said it planned to change its methodology for rating corporate collateralised debt obligations (CDOs), resulting in an expected average downgrade of five notches for static synthetic transactions."
We have changed the definition of the net free borrowings on Friday and excluded the term auction credit from its calculation. Thus, it may seem as if the series lost a January observation but it's due to the fact that the December observation revised so much. There wasn't any January observation posted on the internet on or before the change took place. We expect the January numbers from H.3 release to come out this week.
Have a nice day,
Yvetta Fortova
So, there you have it. TAF has been removed from the calculations.
Reminds me of when we were getting concerned phone calls from student loan vendors telling us to refinance because interest rates were going up up up!!
The next time we called I thanked them for their advice and said their timely warnings had convinced us to simply pay it off.
Moody's have said that it may overhaul its sytem for rating structured-finance securities. There will be a numerical scale and '.sf' designation, standing for 'sheer fantasy'.
capitol one just sent my wife and I letters saying they were raising our 4.9% rates to 15%. We have perfect credit. They dont want us, because they cant make money on us. They want the bums who miss payments, rack up late fees and keep debt. Thats the bottom line.
CalculatedRisk writes:
This does seem like the end of the borrowing line for consumers.
CR, I really hope you are right, but there is still the last ugly option - loans against retirement funds. If you have a bank IRA, the bank will make you a loan secured by it, and if you have a 401k, you may be able to borrow against it as well.
That way you can burn up your retirement money now for big screen tvs and Tahitian vacations. Then you can live on Social Security when you get old...
I'm afraid a lot of us on this board are going to be supporting a huge population of improvident seniors in years to come - our tax dollars at work...
ICSC-UBS pegs same-store sales for the week of Feb. 2 at a year-on-year pace of +1.6%, ending what it describes as the softest January on record. Week-to-week sales, a comparison often distorted by calendar and seasonal factors, were up 1.7 percent. Redbook is up next.
I am afraid of losing my CC because I transferred my car loan to it. I tranferred 25000 to a Capital 1 card at 1.99% for the life of the loan. I imagine they would love to get rid of me, Oh well its down to 9000 and I could pay it off if necessary but don't want to. Anybody know the rules for balances remaining if you are cancelled?
Everything is OK! I knew they would think of something.
WASHINGTONMembers of Congress assured Americans that they have a definitive plan for reviving the slumping economy when they unveiled on Monday a bold new fiscal stimulus package that calls for the purchase of a pair of alpacas.
Senate Minority Leader Mitch McConnell (R-KY) said the proposal, which is expected to solve the sub-prime mortgage crisis, boost consumer confidence, and pump much-needed liquid capital into the market, will be put into motion as soon as the first issue of Alpaca World magazine arrives and Congress has a chance to go through the catalog and select the perfect mating pair.
Saw Wilbur Ross on CNBC this morning, he's pushing for the feds to buy a third of the defaulting loans (instead of sending out 150 billion in rebqates) and change the terms to 4% fixed for 10 years. His justification is this will spread the pain between the government and the banks. After all he says - the government ENCOURAGED ARM's!
WTF? Other than go-go Al saying arms had paid off for consumers over the past decade a while back, how many 100% financing, 2/28, 4% start rate / 12%+ cap, interest only or option ARM loans have the GSE's or FHA issued? Hmm?
The President yesterday announced a $3.1T budget which is the largest in the history of the union. This does not include the $150B stimulus package nor Defense ($515B). Where do we get the money to pay for a bailout of the monoline insurers? Where do you think this money comes from? We are already taking on $2B worth of debt per day to pay down the current budget deficit!
We are no longer a Creditor Nation (Post WWII) but among the greatest debtor nations in the world's history. After OPEC de-pegs from the dollar, forget about it!
Feb. 5 (Bloomberg) -- Collateralized debt obligations may be downgraded as many as five levels as mortgage-related losses force Fitch Ratings to review its criteria.
The biggest cuts will be to AAA rated CDOs that are based on credit-default swaps and aren't actively managed, according to ratings guidelines proposed by Fitch today. CDOs that package high-yield assets may be cut as many as three levels for the portions first in line for losses.
"So, there you have it. TAF has been removed from the calculations."
Yal | 02.05.08 - 7:55 am
Very nice job. My thanks to you.
By the way, my first ever post to this blog, sometime last August, was to ask a bunch of intimidatingly competent people if they thought Berkshire was planning to buy CFC.
You and idoc were the only ones to respond. I've always wanted to tell you both that, as an index fund investor, all I wanted then was to find out why BRK.B had risen
- more than 8%
- in less than 3 weeks.
I had no idea of the can of worms I'd opened due to your legitimate short positions at that time.
my mailbox has been full as well. am i to interpret this as a sign that i have made the vicious cut and am now the beneficiary of solicitations initially offered to those less worthy?
CDOs that package high-yield assets may be cut as many as three levels for the portions first in line for losses.
What's three levels below AAA on this idiotic scale? BBB?
So "the portions first in line for losses" on packages of "high-yield" assets ... in other words, those with an intrinsic value at or very near 0 cents on the dollar ... are now going to be rated BBB?
I've got a great headline for this article ... "Fitch: 'BBB' Is The New 'D'"
It slices! It dices! It can take those pesky CDO's and RMBS's off your hands and turn them into shiny new $100 bills! You can even cut a tin can with it!
(Seriously, just Google the phrase above and it'll give you more than you ever wanted to know.)
I made a balance transfer to capital one on the pre-condition that they change the card to a no annual fee deal. Which of course they posted the fee again, now refuse to credit it back, you guys know the drill.
Also: No offense to previous poster(s), but I find it hard to believe the credit card companies are raising BT rates without specific cause (though I realize this is an option.)
If you want to stop receiving credit card offers in the mail try this web site. There is a bit of a lag time before the offers stop coming, but I haven't received a single one for a few months now.
They aren't strictly TAF-related per se, but many of the past 2 months' worth dwell quite a bit on Fed lending in general and the TAF in particular. Well worth reading to get a better feel for why the TAF maybe isn't all it's cracked up to be.
FFDIC,
Since Bernanke was Alan Gascan's deputy, I doubt he will serve a second term. I don't give any chance for the GOP in this election, and the new President will be counseled by some to push Bernanke out immediately. The Fed refused to regulate non-depositories like Ameriquest, Option One, etc. despite their statutory authoriy. Bernanke is part of the problem.
I'm based in London and withdrew my savings from Citigroup-owned Egg yesterday.
Not that it will make any difference, but I wrote the following email to the Egg CEO and the head of retail at Citi. No replies yet!
"Dear Sirs
I have been a depositor with Egg since the bank opened.
After the way you have treated credit card customers, cutting off those who pay their monthly balance off in full under the pretext of removing borrowers with poor credit records, I have today withdrawn all my funds from your bank and will not be doing business with you again.
I doubt any of you will pay the price for this appalling treatment of customers, since people in your position usually get multi-million payoffs for their incompetence, but I thought you might like to know my views all the same.
So far standards are being tightened for other consumer loans more than credit cards. And, according to the Fed, tightening for consumer loans is minimal compared to the tightening for commercial real estate (CRE).
I suspect most of the tightening is going on in the posteriors of various financial professionals. We now have neg-Am mortgages, I suggest the neg-Am executive bonus, money is withheld from the regular paycheck to cover a negative bonus should corporate performance fall below stated objectives.
Wow. Yesterday I tried to get a $39 fee waived from Chase on a two day late posting even though I mailed my check for the full balance 10 days prior to due date. The supervisor was almost gleeful in refusing the waiver and seemed happy to honor my request to close the account after 15 years.
Today, I called Citibank to up my limit on that card to make up some of the lost line limit difference. They were estatic to up the limit by 5k and offered me zero interest on a CASH advance until August on my new max credit line of 20k with only a $75 fee. I didn't take the bait (yet anyway) but what a difference in the two banks.
It is funny how banks are treating their long time credit card holders. BoA has been changing my due dates to holidays and weekends.
Also, one of my BoA cards recently raised my interest rate to the default rate starting next month if I don't protest in writing. I called them today and talked to a supervisor. The supervisor said that the bank was concerned that the balance was not going down so they raised my interest rate. I have never laughed so hard in my life as I mentioned to her that I would pay it off this month.
I don't know - my mailbox has been of full of credit card offers recently.
Mine too but we aren't the demo their worried about - or at least not yet.
BTW CR - remember months, even years ago, I said their was no credit crunch until they cut up the cards? We're gettin' there.
CR they use to want people that needed credit, now they want people that don't need credit, but can afford it, like you.
FB'ers are shotgunning for a refi.
Why is it a surprise CC issuers are shotgunning for fresh meat?
dryfly, yes, I remember. It's amazing that the banks just woke up to the HELOC problem. And now it sounds like they are starting to understand there is a credit card problem. This does seem like the end of the borrowing line for consumers.
Best Wishes.
A really, really, really wealthy man once remarked that bankers always want to lend money to people who don't need it.
That wisdom seemed lost until recently. A return to trend perhaps.
Dryfly,
I agree these guys are no fun at all. They have been winning all this time and just as they start to lose they pack their cards up and go home on us.
WAMU just sent me a solicitation for a HELOC, despite that I don't own any real estate. (I sold in 2004 -- a little early, I admit.) I suppose that since I don't own any real estate, I'm the ideal candidate, as I'm not exposed to equity erosion due to declining home prices. The financing documents might be tricky, but given what has been accomplished in recent years, I think that my lack of homeownership should not be troubling.
All,
The bankers didn't just wake up to the mortgage or heloc or toggle bond problem, they ran out of fools to sell the junk to.
Bernanke talks about "well anchored" inflation expectations. I see inflation increasing and a "well anchored" distrust of wall street.
Also all this debt contraction sounds very deflationary.
I don't get all those CC offers anymore... because I opted out. Citi (my beloved card issuer) is sending me constant and repeated offers for balance transfer. Good quality paper (for fireplace starter).
We've been getting weekly "we want you back" letters from countrywide since we paid off our mortgage last spring. However the credit card offers slowed noticeably in conjunction with payoff. Maybe the cc co's assume no mortgage = no house.
Dryfly -
I got a HELOC offer letter today signed by a d00d in my linkedin posse. How weird is that?
Somehow I just can't imagane getting fewer credit card solicitations.
Yeh, it takes me about 15 minutes every month to shred the offers and I filed B 6 years ago. In fact it took 20 minutes the other day to close a card I don't use. The questions just keep coming on why. What part of (I don't use it) don't you understand.
Jo6pac
The race to the bottom continues.
"The financing documents might be tricky, but given what has been accomplished in recent years, I think that my lack of homeownership should not be troubling."
Exactly. Your loan officer might say, "you wouldn't happen to have a second home you forgot about?"
Exactly. Your loan officer might say, "you wouldn't happen to have a second home you forgot about?"
Berylmarkham | 02.04.08 - 11:45 pm | #
Or...
"Do you play 'virtual life'?" or wtf online game that is (my kids would know). When I can get HELOCs over the asset holdings my kids have in 'virtual' then I know we're near the end.
I've received 8 cc offers in the mail over the last two weeks. They were addressed to a business I closed 2 years ago! Talk about weird.
I've heard that Citi is purging "high risk" CC holders in England. Some of those considered to be "high risk" are CC holders who pay off their balance every single month!
The CC companies refer to such customers as "deadbeats", because they never pay fees and never pay any interest but just rake in the perks.
I have a feeling that my wife and I might get purged; we've never missed a payment and we pay our balance off every month. It'll be weird if that happens; I use the damn cards to buy everything.
They can repossess the cars, the house, and all the other financed crap. But taking away the credit card? There's gonna be some pissed off people. What the hell are they going to use? Cash?
This is going to be interesting to watch.
Thankfully I married and now my wife handles the "give the cc offers to the shredder" duties. I have 1 card only, with my credit union. They just upped my limit substantially despite my being one of those pesky "pay it off every month" types.
I love that Discover commercial with the floating globe talking to the chick on the treadmill. What a fabulous idea: pay the interest on some schmuck's card when they make 6 months of payments on time. I.e. give the schmucks a pat on the back when they carry a balance and generate lots of fees for Discover.
Another bad idea: knocking off $1 from the mortgage for every $100 racked up on the credit card. Who was that, BofA? It was about 1 year ago. Brillllliant!
How about pestering people with phone calls during dinner time "urging" you to sign up for their $9.95/month "credit monitoring" service.
What about that "insurance" they used to sell a while back, wherein if you lost your job and all your money or some such, they would pay off the balance on your credit card. Nice. Holding a balance on the card racking up interest in hopes that you'll get the axe at work so you can not make payments on the balance.
So many bad ideas coming from banking and credit cards. I say they deserve the goat that's being rammed up their petunias.
Afferent -
News flash - your ccredit card co still makes 150 bps per trans from the merchant whether u pay in full monthly or not. If u keep a balance, that's just gravy.
Don't worry about any cc company recalling ur chargeplate anytime soon.
You earn by spending, cashback, points, miles. There is some card that saves for your kids college or something like that, penny on every dollar you spend. Spend about million a year and economics starts making sense.
Odd. My mailbox has had no CC offers for about 4-6 months. Now that you mention this it is odd.
Anon posted a bit about the CC cards in the UK - Egg, I think. I do wonder what US folks would think if their credit was cut off. Would we cope? Could we cope?
Here's today's very bleak notion:
Inflation? Its a trailing indicator. Deflation is taking root and will be more intractable than the inflation Volker fought and the deflation that has bedeviled the Jap's for 15+ years.
As the credit evaporates, the cash will remain... for those who haven't had their banks and the FDIC fail.
Foolish creation of unpayable credit generated inflation, its contraction is slamming the tranny in reverse.
The mood of the markets is unsettled and turning worried. How much longer until the growing fear produces the panic when everyone heads to the door at once? Too soon, I fear to suggest to the bull headed who rally at the flaccid efforts of lowered FFR, TAF or discount or open market or fiscal stim packs, the financial equivalents of mojo's, potions, spells or conjurings.
The impotence of adding liquidity at the top will eventually (sooner than later) drive a stake through the heart of trickle down believers. Awareness that this con was predicated as a misdirection for the on-going policy of syphon up for the benefit of an elite few, will dawn on many more irate bag holders and the lynching of bankers, suspended since the mid 30s) will recommence.
Jo6pac
PLEASE note that when you cancel a card it goes on your credit report as a credit "Cancelled"...it is percieved as a negative in that you or the bank had to cancel it! Beware.
home prices spiraling down. Refi's MUCH harder to do. Heloc's being closed out and MUCH harder to get. Credit Cards following the trend. Savings rate of Americans negative! Cash Equivalent Savings vehicles yielding much less for retirees.
We'll need more than $600 per person. Do I hear $700, $750, $800. C'mon who wants my vote. Tomorrow is Super Tuesday. Let our kids figure it out.
This is ridiculiculiculas!
Shnapster-
I was aware of the transaction fees charged to merchants. Are things different in the UK?
Prudent customers risk losing credit cards - Times Online
Why would they chuck CC holders like me that pay off their balance every month? Maybe they don't get enough from transaction fees to cover the costs?
People will cope alright. Cut off the credit card and they'll stop making payments on any outstanding balance. They've got nothing to lose.
And while Treasury yields have dropped sharply in the wake of the Federal Reserves actions, corresponding interest rates such as those for prime mortgages or jumbo mortgages have not. The federal-funds rate has declined by 2.25 percentage points in the past year, but the average 30-year mortgage rate is at 5.58%, compared with 5.96% a year ago, a 0.38-percentage point decline. Jumbo loans are higher, at 6.71%, from 6.19% a year ago. This is why we are not more bullish on the macro outlook given the dramatic rate cuts by the Fed because as the bad debts mount, lenders are pulling back the Fed can influence the cost of capital perhaps, but not its availability, writes David Rosenberg, chief North American economist at Merrill Lynch.
If the banks get any type of bailout during this mess, it should be countered by nullifying the changes in the bankruptcy laws from 2005 or whenever it was. but that will never happe
How about a credit card GSE to dump all this stuff on?
mmm..I wonder if the market for CD paper on credit card balances has dried up?
Pay in full each month?
Worried about being a deadbeat and getting cut off?
Send them more than you owe, just a buck or two.
They would have to cut you a check to close your account.
They have no clue how to close a card with a credit balance.
IMO
Canceled 6-7 various credit cards about 4 years ago. Those showed up on ensuing credit reports as account closed by request of cardholder. AFAI can tell, it hasn't made a difference in obtaining low interest rate auto loans nor reduced the number of weekly cc offers.
I'm paying on my upside-down mortgage out of honor -- I signed up for it and I don't want to ruin my credit.
But I'm wondering if credit is really going to matter in the near future, with walking away being hailed as the thing to do?
Plus, it seems like even now if you go BK you still get credit like anyone else. Or is that why there's a crisis now, and in the future banks won't be so willing to lend to bad credit scores?
What's the incentive for all the people who are losing their homes to continue to pay their credit cards? Their credit will be shot for the next few years anyway. They may as well rack it up to the limit (if it's not already there) and then let it go along with the mortgage. How many foreclosures expected in 2008? Is it millions or just hundreds upon hundreds of thousands.
Oh boy, it's getting ugly. Just another reason why Wall Street should rally some more.
some great quotes from this bloomberg article:
http://tinyurl.com/26oc5q
There needs to be outside-of-the-box thinking,'' says Laura Tyson, a former economics adviser to President Bill Clinton who now teaches at the University of California, Berkeley.The problem has not been contained, and there's a continuing risk to the economy.''
another:
Bernard Connolly, global strategist at American International Group's Banque AIG unit in London, even predicts authorities will eventually have to buy up stocks to prevent a crash.
open season for bail outs:
Russo proposes offering government-backed loans to U.S. homeowners with adjustable-rate mortgages, whether prime or subprime. He also advocates a tax credit for people who buy homes this year that would triple the current benefits mortgage holders receive.
pure madness!
Well they ought to.
Then again, Egg is run by bell-ends. This lunacy might actually be 'contained'. 4 real.
They would have to cut you a check to close your account.
They have no clue how to close a card with a credit balance.
They'd have to wait for the next TAF to cut the check.
They have no clue how to close a card with a credit balance.
nah, in 2006-2007 I cycled 3 0% balance transfers from BofA and Discover through my Citi MC. They had no problems cutting me a check for $8,000+ each time.
note to self: not really worth the PITA to do those 0% transfers any more.
They'd have to wait for the next TAF to cut the check.
HAHAHAHA
the incentive for keeping credit cards current (while letting the house go) is to get a last ditch cash advance cushion when the sheriff kicks you to the curb.
You might need a quick source of cash deposit for a new place to rent. some fools might have like 30K-50K in credit lines they can still tap once they lose the house.
FDIC getting ready for a large bank failure.
BofA, Citi, JPM, Wachovia, and HSBC cited as riskiest.
How risky are uninsured bank deposits? - MarketWatch
It doesn't matter to me what my FICO score is I'm not buying anything on credit anyway.
Had an error on my phone bill last year (their problem, not mine). The phone co said they'd ruin my credit score if I didn't pay up (on their error at that), I told them they could try but as I go cash only it meant zip to me, their threat was meaningless.
After 6 months of begging they admitted they were wrong, a software billing error. So much for them.
bofa,
Great, my bank is BofA. Love to hear FFDIC's take on that.
Anyone know if CDs at Wells Fargo are covered by FDIC? Under $60k total. Thanks
MARKET WATCH
How risky are uninsured bank deposits? More risky than they once were. The FDIC is gearing up for the prospect of a large bank failure. So double check that all your deposits, including interest, are well within FDIC insurance limits.
How risky are uninsured bank deposits? - MarketWatch
Dont' argue with stupidity, take advantage of it. I take every 0% check offer and turn it into Tbonds or forex CDs. What's not to like about earning 3-5% on somebody else's principal?
(If etrade would let me, I'd buy puts on the company's stock.)
FFDIC,
I just posted the same article.
Can you add any color to it?
What are your thoughts on timing?
I'm quite frankly surprised that this is hitting a mainstream news source.
PLEASE note that when you cancel a card it goes on your credit report as a credit "Cancelled"...it is percieved as a negative in that you or the bank had to cancel it! Beware.
Barley | 02.05.08 - 12:32 am | #
To use an old Midwest colloquialism, they can eat me. This phony "negative" is publicized only to keep people hooked. Pull out the credit IV, people. Walk free. Set the rules as you want the banks to treat you, not the other way around.
Soon, when enough people behave like this, the rationals who cancel crappy cards will become a desirable demo for them to seek out with the sweetest offers.
tj& the bear,
BofA is truly too big to fail, however, we thought the same about America until recently. If it were my money I would not deposit more than $100,000 and less if you want your interest insured. Deposits are reportedly insured up to $250,000 on certain qualified retirment accounts. Be careful here. There have not been many bank failures since the relatively new $250,000 retirement account coverage was approved. Therefore I anticipate a certain level of FDIC insurance coverage determination problems once these so called retirement bank accounts receive FDIC's strict review during coming bank failures.
i've decided that the time is now... after almost two and a half years, I've decided to begin blogging again.
I'm solely doing this to push the idea of a Debtors' Union.
My hope is that this idea will bubble up from the base.. but I'm going to do my part to be part of the bubbling.
. blog
It used to be called "Potty Mouth Blog" then it was "Serious Bastard" then it was "Seriously Rich Bastard" then it became "."
Make of that what you will..
FFDIC,
I only wish I had that much to worry about!
Any "inside" chatter you hearing second-hand??
DC Rogers, tell it brother. I have requested numerous credit card accounts 'closed at the customers request' for at least 20 years and my FICO is above 800 and I'm unemployed. I'm about to close my Amazon.com/Chase card because Chase will not refund a late charge.
tj& the bear,
9/11 like chatter getting louder.
oh... and obviously, I'm not literal in my delivery, I'm a big fan of Richard Kelly who did Donnie Darko and Southland Tales.. and I've always loved his precurser, Gegg Araki.
Lots of apocalyptic shadings to what I write.. sometimes hyperbole brings out the things that matter.
Worried-
You need to read the paperwork that came with your particular CD. Seriously, nobody here can answer that question for you.
If you don't know where the paperwork is, go back to the bank and get another copy.
If it's FDIC insured, it'll say so on the paper.
eli (from your blog)- if you're pure evil then you ought to get together with Elvis and Misean. IIRC, Elvis admitted a couple months ago he was responsible for the subprime mess and Misean claimed his rantings were taking down the housing market.
FFDIC,
Thanks. BTW, I do have a few bucks, but I keep my personal & business account balances just high enough to cover bills. The rest goes elsewhere.
sdtfs,
I always appreciate this quote across the top of Russ Winter's blog:
"During times of universal deceit, telling the truth becomes a revolutionary act." - George Orwell
eli (from your blog)- if you're pure evil then you ought to get together with Elvis and Misean.
stdfs,
That was from another time and place... when I was "pure evil"...
I've since grown past that state... I've left all the old posts up.. I think it's illustrative to see a person's ideas develop throughout time.
..even if those ideas may be a little embarrassing.
London Times - The future may be bleak for Ben Bernanke, like many fellow Americans, he may shortly need a new job... by Gerard Baker:
The future may be bleak for Ben Bernanke - Times Online
FFCIC:
Just this morning I cancelled my Chase card of 15 years because the arrogant "supervisor" refused to waive the $39 late fee assessed because of a delayed posting of 2 days past due. I exlpained I mailed my payment in full 10 days before the due date. Chase will NEVER get ANY of my business again.
Actually, I don't see much consistency in the concept that credit card availability is being severely constrained at this point. Check out the fascinating numbers in Figure 4 of the Fed report that CR linked to.
Only 9.7% of respondents say they're tightening standards on domestic credit cards. That's as compared to 40% on eyeball average through '96 and '97. Tightening on "other consumer loans" is very high, at 32%, which probably means HELOC.
The installments number is about as low as we've ever seen, at -15%.
The shocker for me, however, was the percentage of respondents reporting increased demand for consumer loans. It's been very persistently and deeply negative since '04.
These data don't align very well. Why is that? Is it just that we don't shop for loans since they're marketed so aggressively to us?
Furthermore, what happens when they really tighten credit card standards? I don't believe it's happened yet, not anecdotally, in this survey, or in the G.19.
Chase Sucks, I made a payment on-line to my Chase account and then called them to request my first late payment refund of $39. When I agreed to the Amazon.com/Chase card I did not realize Amazon.com automatically changed my billing for One Click purchases from my Capital One card to the Chase card. I didn't realize I was charging away on the Chase card and was not getting a paper statment having opted for on-line billing only. I had inadvertently overlooked the on-line bill thinking it was spam. I was told that they would refund the $39 no problem since it was my first late payment, however I would have to call back again after my on-line payment posted. Several days later I called again only to be told by another Chase rep the $39 late charge would not be refunded unless it was Chase's fault. I brought my small balance to zero and will call them tomorrow to request the account be closed at the customer's request. I've had a Capital One card for years and they refunded a late charge for me last month based on my payment history and 800 plus FICO.
FFDIC, thanks for the link. I really hope Bernanke isn't ousted. He is, indeed, the foremost expert on what we're facing, and there's nobody whose knowledge I'd rather see at the helm, though he could work on the PR a little. I think he's doing an excellent job playing out a completely horrible hand with no chance of winning. I believe anyone else would lose faster and harder.
Even the threat of him getting the hook could create a lame duck chairman, which I think would be the worst of all worlds at a time when we need decisive leadership for that all-important confidence.
Let's hope this idea doesn't spread.
The music stops when the liquidity stops.
Be it MEW, HELOC, Credit Cards or Cash out Auto loans, when the liquidity dries up the music stops. Then the American economy will prosper based on the wages of its citizens less debt service.
vader,
Imagine the national psyche when people can no longer easily finance their Best Buy toys for one low monthly payment.
FFIDC:
Good luck w/Chase tomorrow. In the past, I've had no problem getting a fee waiver from them (mind you I do NOT do this regularily but after 15 years, there has been a few times I did not get my FULL payment to them by the required payment date due to long vacations/travel). I too have stellar credit and charge relatively high balances that are paid in full. Do you think there is anything to the idea they are weeding out my demographic because they can't make any money on full balance payors?
Uh oh,
bad for me. I take advantage of every single 0% APR purchase offer and use the proceeds to invest in precious metal for a year, and pay off the credit card just before the normal purchase APR kicks in. I run up big balance, and therefore big cash bonuses too.
I am sure I belong to the money-losing segment for all the credit cards I use, I doubt if they ever make a dime from me. I'll be looking out for the cut-off letters from Chase, Citi, Discover soon.
Great line in the NYT today, "People have come to view credit as savings. That says it all; people thnik that having a HELOC is going to get them through rainy days. They're going to find out that, when it rains, it pours, and there is a correlation between rainy days and having your HELOC pulled.
Here in the UK we can register not to receive junk mail.... so my letterbox has NOT been full of credit card offers - hahahah!
FFDIC: Even though I think the Fed should be replaced, Bernanke has been doing a decent job, considering the circumstances. They have been creative in utilizing a wide variety of mechanisms to target the problem better. Greenspan probably would have rates down to 1% already. You also have to give him some credit for stepping in to take the blame for a situation he did not create. I think it was Regan's fault, right? Mr. Gorbachev, tear down this wall!
FFDIC,
could you recommend a link about what is insured by the goverment and how it works?
I have T-bills and T-notes with a bank I gather that those are not FDIC insured but are supposedly guaranteed by the govmt, both the principal and the interest. So what happens if the bank goes bust?
Thanks!!!
I'm going to apply for a cc that gives a discount where I usually buy gas. Lately I've made an effort to pay down credit. I assume that the credit application will be go straight though but who knows.
This story is just unfreakin believable-
"Vivian Snyder has strong credit and is not classified as subprime, but she is one of many consumers who can't afford the car she leased. Snyder drives a brand new convertible BMW with a MSRP listed at approximately $100,000."
Auto Loan Defaults Newest Financial Meltdown - cbs5.com
Auto Loan Defaults Newest Financial Meltdown - cbs5.com
"Vivian has only a few options. She can plead with the finance company to release her from the lease or have the car repossessed, losing her good credit and a $30,000 down payment which consisted of her entire retirement savings"
She bought a car with her entire retirement savings? Talk about going on a shopping spree.
pastorn-
she didn't buy anything, she "leased" the car, that is just criminal.
risk capital
Sorry, my bad. I guess my brain is overloaded with all the recent negative news.
Anecdotal evidence of credit tightening - I misplaced a small dept store credit card bill; missed the payment date by 5 business days. Paid my late fee to clear it up before it got to the negative stage and impacted my credit report.
What's interesting though is that their credit dept called me to let me know I was late. This after just five business days ... hmm. Also I have a fairly common first and last name and am getting debt collector cold calls for somebody else who has my same name. They must be using the yellow pages to "throw darts".
CR-
wondering how those "piers" are looking?-
Detnews.com | This article is no longer available online | detnews.com | The Detroit News
What do those 160K odd UK citi card holders do about their card balance when it expires in March?
My deceased relative who's been dead several years is still getting credit card offers. Just got one for them last week. I'd say that credit still has a ways to tighten.
From a Bloomberg article this morning:
"Retail sales in the euro region declined 2 percent from a year earlier, the biggest drop in 13 years, the European Union's statistics office in Luxembourg said today."
Where for art thou, Retail?
Regarding the story about Vivian, I don't know who is more disgusting: Vivian, the auto dealer, or the news station portraying Vivian as a victim.
harsh reality-
vivian obviously has a bolt loose. The actions as portrayed in the story by the dealership are beyond comprehension.
Dollar Libor jumped across maturities today in europe
"LONDON, Feb 5 (Reuters) - Fitch Ratings said it planned to change its methodology for rating corporate collateralised debt obligations (CDOs), resulting in an expected average downgrade of five notches for static synthetic transactions."
404 Page not found
Response from the Fed:
We have changed the definition of the net free borrowings on Friday and excluded the term auction credit from its calculation. Thus, it may seem as if the series lost a January observation but it's due to the fact that the December observation revised so much. There wasn't any January observation posted on the internet on or before the change took place. We expect the January numbers from H.3 release to come out this week.
Have a nice day,
Yvetta Fortova
So, there you have it. TAF has been removed from the calculations.
Reminds me of when we were getting concerned phone calls from student loan vendors telling us to refinance because interest rates were going up up up!!
The next time we called I thanked them for their advice and said their timely warnings had convinced us to simply pay it off.
The silence on the line was priceless.
Moody's have said that it may overhaul its sytem for rating structured-finance securities. There will be a numerical scale and '.sf' designation, standing for 'sheer fantasy'.
capitol one just sent my wife and I letters saying they were raising our 4.9% rates to 15%. We have perfect credit. They dont want us, because they cant make money on us. They want the bums who miss payments, rack up late fees and keep debt. Thats the bottom line.
CalculatedRisk writes:
This does seem like the end of the borrowing line for consumers.
CR, I really hope you are right, but there is still the last ugly option - loans against retirement funds. If you have a bank IRA, the bank will make you a loan secured by it, and if you have a 401k, you may be able to borrow against it as well.
That way you can burn up your retirement money now for big screen tvs and Tahitian vacations. Then you can live on Social Security when you get old...
I'm afraid a lot of us on this board are going to be supporting a huge population of improvident seniors in years to come - our tax dollars at work...
First, they stop publishing the numbers (M3), then they bogus the numbers (borrowed reserves without TAF borrowing).
Lovely, just lovely.
Softest January on record according to ICSC-UBS:
ICSC-UBS pegs same-store sales for the week of Feb. 2 at a year-on-year pace of +1.6%, ending what it describes as the softest January on record. Week-to-week sales, a comparison often distorted by calendar and seasonal factors, were up 1.7 percent. Redbook is up next.
Apologies if this has already been posted but CR got a mention in CNN / Fortune.
Home equity loan defaults soar - Feb. 4, 2008
I am afraid of losing my CC because I transferred my car loan to it. I tranferred 25000 to a Capital 1 card at 1.99% for the life of the loan. I imagine they would love to get rid of me, Oh well its down to 9000 and I could pay it off if necessary but don't want to. Anybody know the rules for balances remaining if you are cancelled?
Nice. would be nicer if they linked it on their online version of the article.
Everything is OK! I knew they would think of something.
WASHINGTONMembers of Congress assured Americans that they have a definitive plan for reviving the slumping economy when they unveiled on Monday a bold new fiscal stimulus package that calls for the purchase of a pair of alpacas.
Senate Minority Leader Mitch McConnell (R-KY) said the proposal, which is expected to solve the sub-prime mortgage crisis, boost consumer confidence, and pump much-needed liquid capital into the market, will be put into motion as soon as the first issue of Alpaca World magazine arrives and Congress has a chance to go through the catalog and select the perfect mating pair.
Saw Wilbur Ross on CNBC this morning, he's pushing for the feds to buy a third of the defaulting loans (instead of sending out 150 billion in rebqates) and change the terms to 4% fixed for 10 years. His justification is this will spread the pain between the government and the banks. After all he says - the government ENCOURAGED ARM's!
WTF? Other than go-go Al saying arms had paid off for consumers over the past decade a while back, how many 100% financing, 2/28, 4% start rate / 12%+ cap, interest only or option ARM loans have the GSE's or FHA issued? Hmm?
Simply put:
Americans (and many in Spain, UK, Ireland, etc.) Assumed that Wealth creation could be achieved by Debt aggregation.
The music has stopped, prepare for a Paradigm shift in this country which will challenge the very core of the economy.
The Markets have been elevated for the last 7 years by pure illusory wealth. The consumer is dead, and so goes 70% of annual revenues.
Bloomberg story on GMAC taking a hit
GMAC Posts $724 Million Fourth-Quarter Loss as Home Loans Sour
The President yesterday announced a $3.1T budget which is the largest in the history of the union. This does not include the $150B stimulus package nor Defense ($515B). Where do we get the money to pay for a bailout of the monoline insurers? Where do you think this money comes from? We are already taking on $2B worth of debt per day to pay down the current budget deficit!
We are no longer a Creditor Nation (Post WWII) but among the greatest debtor nations in the world's history. After OPEC de-pegs from the dollar, forget about it!
CDO's whacked 3-5 credit ratings at a go - uffda!
CDO Ratings to Fall as Losses Trigger Fitch Overhaul (Update1)
By John Glover
Feb. 5 (Bloomberg) -- Collateralized debt obligations may be downgraded as many as five levels as mortgage-related losses force Fitch Ratings to review its criteria.
The biggest cuts will be to AAA rated CDOs that are based on credit-default swaps and aren't actively managed, according to ratings guidelines proposed by Fitch today. CDOs that package high-yield assets may be cut as many as three levels for the portions first in line for losses.
[snip]
Living within means is shocking? I just finished grad school 2 years ago.. I've been living within my means for over a decade.
I don't know what it means to be extravagant.
I used the DMA's (Direct Marketing Association's) opt out from and I haven't received more than two or three cc offers in the last 2 years.
It also stops all the junk mail.
Well worth the 5 minutes it takes to fill out.
Looks to be a very bad morning to be short the yen...very bad
"So, there you have it. TAF has been removed from the calculations."
Yal | 02.05.08 - 7:55 am
Very nice job. My thanks to you.
By the way, my first ever post to this blog, sometime last August, was to ask a bunch of intimidatingly competent people if they thought Berkshire was planning to buy CFC.
You and idoc were the only ones to respond. I've always wanted to tell you both that, as an index fund investor, all I wanted then was to find out why BRK.B had risen
- more than 8%
- in less than 3 weeks.
I had no idea of the can of worms I'd opened due to your legitimate short positions at that time.
apparently thanks to all the past ways to get credit...(credit = "my cash that i have earned the right to obtain as cash")
the addiction to easy money.....
Excuse my while i quote Miss Whitney Houston to sum it all up....
"cash is whack"
my mailbox has been full as well. am i to interpret this as a sign that i have made the vicious cut and am now the beneficiary of solicitations initially offered to those less worthy?
CDOs that package high-yield assets may be cut as many as three levels for the portions first in line for losses.
What's three levels below AAA on this idiotic scale? BBB?
So "the portions first in line for losses" on packages of "high-yield" assets ... in other words, those with an intrinsic value at or very near 0 cents on the dollar ... are now going to be rated BBB?
I've got a great headline for this article ...
"Fitch: 'BBB' Is The New 'D'"
NoVa ...LOL
Nork West...
M3, out of sight out of mind...'cept on a few pain in the ass blogs...
[long time lurker, occasional poster, standing on tippy-toes at the back of the room listening to the big kids.]
What's a TAF? I've scratched a raw spot on my forehead on this one, and acronym.com isn't helping.
Uber Danke to Tanta for yesterday's UberNerder post. Love those.
What's a TAF?
The Fed's shiny new Term Auction Facility!
It slices! It dices! It can take those pesky CDO's and RMBS's off your hands and turn them into shiny new $100 bills! You can even cut a tin can with it!
(Seriously, just Google the phrase above and it'll give you more than you ever wanted to know.)
Stupid Credit Card Issurer Tricks:
I made a balance transfer to capital one on the pre-condition that they change the card to a no annual fee deal. Which of course they posted the fee again, now refuse to credit it back, you guys know the drill.
Also: No offense to previous poster(s), but I find it hard to believe the credit card companies are raising BT rates without specific cause (though I realize this is an option.)
Thanks Mook.
I must have had a brain freeze not to remember my own perenial admonition, "google it, dummy."
If you want to stop receiving credit card offers in the mail try this web site. There is a bit of a lag time before the offers stop coming, but I haven't received a single one for a few months now.
https://www.optoutprescreen.com/?rf=t
Bill - If you're in a reading mood, I'd also recommend you check out John Hussman's market comment archives at Hussman Funds - Weekly Market Comment: Current Archive
.
They aren't strictly TAF-related per se, but many of the past 2 months' worth dwell quite a bit on Fed lending in general and the TAF in particular. Well worth reading to get a better feel for why the TAF maybe isn't all it's cracked up to be.
Dear CR
Too bad you didnt trademark the expression, Its all about the HELOCs, stupid. a couple of years ago.
Regards,
people who are getting crunched by the credit crunch read this article.
Lively Money: Finding a credit card and loan that is right for you!
FFDIC,
Since Bernanke was Alan Gascan's deputy, I doubt he will serve a second term. I don't give any chance for the GOP in this election, and the new President will be counseled by some to push Bernanke out immediately. The Fed refused to regulate non-depositories like Ameriquest, Option One, etc. despite their statutory authoriy. Bernanke is part of the problem.
I'm based in London and withdrew my savings from Citigroup-owned Egg yesterday.
Not that it will make any difference, but I wrote the following email to the Egg CEO and the head of retail at Citi. No replies yet!
"Dear Sirs
I have been a depositor with Egg since the bank opened.
After the way you have treated credit card customers, cutting off those who pay their monthly balance off in full under the pretext of removing borrowers with poor credit records, I have today withdrawn all my funds from your bank and will not be doing business with you again.
I doubt any of you will pay the price for this appalling treatment of customers, since people in your position usually get multi-million payoffs for their incompetence, but I thought you might like to know my views all the same.
Yours
Paul Amery"
So far standards are being tightened for other consumer loans more than credit cards. And, according to the Fed, tightening for consumer loans is minimal compared to the tightening for commercial real estate (CRE).
I suspect most of the tightening is going on in the posteriors of various financial professionals. We now have neg-Am mortgages, I suggest the neg-Am executive bonus, money is withheld from the regular paycheck to cover a negative bonus should corporate performance fall below stated objectives.
Wow. Yesterday I tried to get a $39 fee waived from Chase on a two day late posting even though I mailed my check for the full balance 10 days prior to due date. The supervisor was almost gleeful in refusing the waiver and seemed happy to honor my request to close the account after 15 years.
Today, I called Citibank to up my limit on that card to make up some of the lost line limit difference. They were estatic to up the limit by 5k and offered me zero interest on a CASH advance until August on my new max credit line of 20k with only a $75 fee. I didn't take the bait (yet anyway) but what a difference in the two banks.
It is funny how banks are treating their long time credit card holders. BoA has been changing my due dates to holidays and weekends.
Also, one of my BoA cards recently raised my interest rate to the default rate starting next month if I don't protest in writing. I called them today and talked to a supervisor. The supervisor said that the bank was concerned that the balance was not going down so they raised my interest rate. I have never laughed so hard in my life as I mentioned to her that I would pay it off this month.
could you recommend a link about what is insured by the goverment and how it works?
SONY PSP
rc helicopter
Led Flashlight