Moody's: Credit Card Charge-Offs, Delinquency Rates Rise
Submitted by
CalculatedRisk on Mon, 04/14/2008 - 11:02am (115 comments)
in
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crickets chirping.
This will probably go up to 7-8% before it is over.
Very bullish for financials:
...just gotta hide those charge offs for a few more quarters...
Credit card arrears are most highly correlated to unemployment. It's no wonder that as initial jobless claims rise above 400 (which they will despite last month's fluke number) and continuing claims above 3,500, that credit card loan losses will increase.
Very bullish for financials:
Sure, just before:
3. Massive write-offs not covered by 1 and 2.
I'm sure that whole "miss a payment and see your rate increase to 30%" will also work in their favor, as well as those changes to the BK law that will encourage people who lose their jobs to file right away so they can Chapt 7 instead of 13.
"Credit card arrears are most highly correlated to unemployment. It's no wonder that as initial jobless claims rise above 400 (which they will despite last month's fluke number) and continuing claims above 3,500, that credit card loan losses will increase."
Stiglitz, in the video posted here a few days ago, called unemployment insurance extensions the most cost effective form of economic stimulus. Maybe some of the credit card companies will climb on board with him.
The percentage of credit card balances being paid fell to 17.3% in February from 17.7% a year earlier.
How to interpret this number?
Percentage of balances paid in full?
Payment as percent of total balance?
(If so does it include 100% payments?)
Jim
Think thats the paid off in full number
Well, if the credit card companies can book profit on interest not yet paid (like an option arm), then look for a boost to earnings for credit cards short term as fewer and fewer are able to pay off in full....many will rack up debt if they plan to walk away eventually, but the cc companies will no doubt see the late fees and interest rate bumps and a boost to earning they'll never eventually collect.
Dear CR
I have the same question as NC Jim...is that paid in full?
Thanks
NC Jim, I read that as the percentage of balances paid in full each month. If I'm reading that correctly, it's amazing how few people actually pay off their credit cards each month.
Best Wishes.
Please don't walk away from your unsecured obligations. If you try we will go after the secured assets and then go after you personally. Just like we did with Casey Serin. That poor boy is ... well truth be told... off Scott free.
I don't see consumer stress. I see people looking for angles because there are no consequences.
So first people stopped paying their mortgage and kept paying their CC. Now people have stopped paying their CC too.... I'm sure taxes will be next....
Now people have stopped paying their CC too ... I'm sure taxes will be next.
Already doing that, via "stopped shopping" so the sales taxes are dropping fast. Bad news for the city and state coffers.
"I don't see consumer stress. I see people looking for angles because there are no consequences."
I see consumer stress when they don't have the income to pay their debts.
Rob Dawg | Homepage | 04.14.08 - 3:53 pm | #
I work with a couple...
BTW...Is that you posting on Anthony Watts' site??
Chris
Rob Dawg writes:
"I don't see consumer stress. I see people looking for angles because there are no consequences."
There is a lot of truth in that. Why else would there be profit in advertising
"Haven't saved for retirement? No problem. An investment opportunity we call the 801(k) plan may be the perfect solution." (Banner ad at top of CR).
My feeling is that a lot of people are looking for angles because THEY THINK there are no consequences.
For many, there will be consequences. Waiting until you are 62 1/2 to start saving for retirement and hoping that some benevolent capitalists will let you in on the "801(k)" plan to save the day is clearly self-delusional, but it is the way many people think.
Didn't the BK laws that took effect a few years ago make it harder to declare with credit card debit but easier with mortgage?
ipodus writes:
"3. Massive write-offs not covered by 1 and 2.
I'm sure that whole "miss a payment and see your rate increase to 30%" will also work in their favor, as well as those changes to the BK law that will encourage people who lose their jobs to file right away so they can Chapt 7 instead of 13"
end quote
LOL....Ur Dead on.....
Well, I do know that I'm beginning to see the return of the "free money" offers.
Saturday, I got some checks from Chase that will allow me to carry a zero percent APR until October.
Assuming I buy a 3.0% CD, that's like $300 in free money. Well, less the $50 finance charge, and less taxes of course.
Still, that would count as me increasing my balance by $20,000 between now and October. Skew those numbers, baby!!
(I can't decide if I really want to do it.... I used to chase (heh) offers like this all the time, but the last time, I screwed up a minimum payment by one day, and my $200 profit went down to about $17 after fees and interest).
Michelle,
No changes to mortgages but yes, credit card debt is clearly stacked against those filing for BK
From Reuters:
"David Rosenberg, North American economist at Merrill Lynch, said on Monday the 64-quarter-old consumer spending boom came to an end in the first quarter of this year."
64 quarters . . . which map very nicely on top of the credit/income expansion.
doom
Maybe it is not just us lower class folks that are having problems:
This from the WSJ:
"Sotheby's Receivables
Are Up as Buyers Delay;
The Price of 'Wall Power'"
"Wealthy clients of Sotheby's appear to be falling behind on their bills --
Sotheby's accounts receivable -- the money owed by buyers who purchased art at auction -- more than doubled to $835 million in 2007, according to Sotheby's annual report. That is the largest total in Sotheby's history, and points to possible stress in an art world where Warhol and Rothko have become the ultimate luxury brands and the newly rich have been paying record prices for "wall power."
64 quarters . . . which map very nicely on top of the credit/income expansion.
Wow.
That's sixteen dollars.
"Calculated Risk writes:
NC Jim, I read that as the percentage of balances paid in full each month. If I'm reading that correctly, it's amazing how few people actually pay off their credit cards each month.
Best Wishes.
Calculated Risk | Homepage | 04.14.08 - 3:52 pm "
I'm not sure sure that I find it so amazing. I typically carry a balance as a result of the 0% financing deals that have flooded my mail box over the past few years. I have tended to take full advantage of those deals and when the teaser rate expires I pay the balance in full - usually I can roll it to another card with a 0% offering.
Do I have enough in the bank to pay em all off - yep but why should I - though the interest earned nowadays isn't what it was a year ago...
""David Rosenberg, North American economist at Merrill Lynch, said on Monday the 64-quarter-old consumer spending boom came to an end in the first quarter of this year."
So basically the world as everybody under 30 understands it (because they weren't paying attention for the first 15 years) has changed.
An end to eating in restaurants twice a day; to $4 coffee drinks on a whim; to disposable clothing, or living like a fashion victim on a busboy budget; to buying the latest gadget just because "you have to have it;" to recreational shopping for the middle classes; to frozen macaroni and cheese; to charge-cards for kiddies; to new cars every three or four years; and to half the retail and restaurant space in this country.
There are two interwoven problems with credit cards. One is the fact that credit cards became avaialble to just about everybody over the past 10 years.
The second is the fact that credit card issuers don't have a lot of visibility into the lifestyles of their customers.
I've heard of several people who are just maxing up their credit cards as they head toward poverty, foreclosure, addiction, rehab, welfare, depression, divorce, deportation or terminal illness.
Bankruptcy is for normal people with normal lives. I'm talking about people who won't even have the means to make it to bankruptcy in one piece.
Also, I think a lot of the CC delinquents are young single people under the age of 30 who think they can just skip. If they don't have any other assets, of course, they pretty much can.
I'm talking about the CC version of a homeowner who HELOCed to the max knowing the home would soon be gone. I don't think the CC companies have any way to identify and stop sharp escalations in balances over a short time. It's their own faults.
"where Warhol and Rothko have become the ultimate luxury brands"
Most toddlers can make you a decent reproduction of a Rothko with the Crayola Big Box.
The contrast here is that banks and credit card companies are still actively pushing credit while the banks have slammed the brakes on HELOCs.
rich touches on this in a post above. If CC companies cannot screen out risks, what will they get as a result?
Is this a form of debt dilution?
So far, the term "debt dilution" has been attributed to distressed sovereign governments and corporations. But it seems that it's happening here too.
I found an economics paper that describes it like this:
"Our paper considers another moral hazard problem besides the sovereigns willingness-to-pay: the problem of debt dilution. This problem arises whenever a sovereign approaching financial distress raises new debt mainly in an effort to delay the onset of a debt crisis. This new debt dilutes existing debt by reducing the amount that can be recovered by existing debt holders in a debt renegotiation."
It seems that raking up credit card debt and then defaulting seems optimal even for folks who are only close to being upside down on their loan, if they are having financial difficulty.
If we are doing it here, will this crash the USD? I dont know if this applies, but I remember when their government was about to default on debt, Argentineans were buying properties in Miami like hotcakes. They were pulling money out of the country in droves. That was a crash! They even imposed restrictions on bank withdrawals.
They seem to be doing all right now. Maybe we should study them and learn what happened there and how they recovered.
Yes, but because they can't screen out risks all that well they get to charge 15-30% interest rates, late fees, and take a cut of purchases.
All in, it makes for a very profitable business, so I dare say they'll muddle through somehow.
To the person who pointed out that article by Andrew Dickson White - thanks. The parallels to what's been going on are interesting.
For the rest of you, it's available here:
Fiat Money Inflation in France by Andrew Dickson White - Project Gutenberg
The part about developing a dominant speculative class seems to strike at the heart of the current problem.
Saturday, I got some checks from Chase that will allow me to carry a zero percent APR until October.
One day late on a payment and that 0% jumps to 19%. I had a payment conveniently "lost" and had to fight to restore the 0% from Chase.
Also interesting was the conversation about why the price of necessities went up, as scarcity ensued, meanwhile the cost of labor went down.
you don't use snail mail for cc payments?
Crocs just got taken out and SHOT! The consumer is DEAD!
The 2 year graph of oil today is pretty striking.
Notice no uptrend in prices until the second Bernanke opens the discount window in August.
Somebody tell me that's just a coincidence.
graph
Once again this is the same thing that happened when Fed cut rates to pump the economy up in 1927, and again in 1998, and again in 2001.
CROX is now halted - they give the "pro's" time to get out first...
CROX is now halted...they let the pro's get out first...
CROX is now halted...they let the pro's get out first...
they should be halted...period. Any man who wears those must have to ask "honey, can I have my balls before I go out?". Very fashionable with the NPR crowd too.
Talk about investing in a fad...yeesh.
"honey, can I have my balls before I go out?"
BAHAHHAHAHA.
The clowns on CNBC have been pumping this stock all the way DOWN! They should be sued...
I read the 17.3% of credit balances being paid as the percentage of the total amount of outstanding balances repaid in the month. Some pay 100% some pay less than 5% but of total outstanding balances payments equalled 17.3% in the month.
Most toddlers can make you a decent reproduction of a Rothko with the Crayola Big Box.
Most teenagers can make you a decent reproduction of Warhol with photoshop and ten minutes.
Cheers,
prat
Unrelated, interesting article.
http://www2.standardandpoors.com/portal/site/sp/en/us/page.article/2,1,1,0,1204835059249.html
\tGSEs Pose Greater Risks Than Brokers To 'AAA' Rating On U.S. Government
The company (CROX) said it now predicts a first-quarter loss of up to 5 cents to zero earnings per share, down from an earlier forecast of earnings of 46 cents per share.
Zowie!!!
"I see people looking for angles because there are no consequences."
Spoke with someone yesterday whose friend has decided it will be in her best interest to screw the bank and save herself.
She bought a place with a 20% downpayment a year ago just as the market was topping out here. Now her neighbors who "bought" with no downpayment are walking away.
She's going to get a cash-out for partial repayment of her DP (can't re-coup the whole thing or she surely would) and then walk.
The banks up here are really stupid and still offering cash-outs and HELOCs, even though the foreclosures and short sales are mounting on a weekly basis.
It's the "we're not as bad as CA. and FLA." syndrome as far as the banks are concerned.
If the banks were using their heads, they'd realize that, just one short year ago, even CA. and FLA. were not "as bad as CA. and FLA." and that the whole ship is going down.
They're too stupid for words. I guess if lending money is your schtick, you just can't stop yourself no matter what. Outside forces must stop you.
they should be halted...period. Any man who wears those must have to ask "honey, can I have my balls before I go out?". Very fashionable with the NPR crowd too.
My 4-year old loves his. Wears them everywhere. But grown men who wear these things are an embarrassment to our species.
Are we going back to old days when a big nasty gut go and break fingers of delinquent borrowers?
Ironically, under the new bk law it is easier for a homeowner to qualify for a Chapter 7 than it is for a renter with the same income and housing payment.
The feds want to treat walk-aways as renters, not homeowners, for purposes of the new law. I've had some sucess fighting them on this, but the law is in flux...
TCA-Unless your wearing them while riding a Waverunner in Lake Havasu, AZ...
They work pretty good for that.. I wonder if Croc will package shoes with a 6 pack of Pacifico..Then I would be tempted...
mrichard writes:
Saturday, I got some checks from Chase that will allow me to carry a zero percent APR until October.
One day late on a payment and that 0% jumps to 19%. I had a payment conveniently "lost" and had to fight to restore the 0% from Chase.
mrichard | 04.14.08 - 4:55 pm | #
Pay online, that way they can't "lose" the check.
Also, that 0% until October comes with a 3% processing fee, so it's not exactly free, especially if you're transferring a large balance.
Meanwhile, your existing balance remains at 24% and is paid off AFTER you pay off the amount owing on the new 0% portion. A nice predatory tactic.
All in all, I can't stomach using my Chase card any longer. $30 billion of my taxpayer dollars is enough. I'm paying it off and then closing it.
The growing cc and mortgage deliquencies are just a symptom of the complete failure of supply side economics aka Reaganomics as embraced by the criminal crony capitalist conservatives.
The conservative "revolution" is over, thank God.
TCA-Unless your wearing them while riding a Waverunner in Lake Havasu, AZ...
cd, I live in Phoenix. Those things are everywhere. I'm sure they're great for excursions to the lake, pool, whatever. It's the 40-year old nitwits running around in them like they're the new wingtips that I'm talking about.
The conservative "revolution" is over, thank God.
Did you profit from the years of Reaganomics? If so do not throw stones if residing in a glass house.
I do not believe we truthfully had a conservative revolution. GW Bush is not a conservative he is a globilist.
One world bank, one world order, and we as the debt slaves of a military complex whose job it is to enforce this bank dominated society.
Conservatisim = CROX!
The Dennys recession indicator just went green...Recession is heating up..
Denny's Reports 1Q Same-Store Sales Down 0.4%
waitinginPNW - if she takes a cash-out and then walks, the creditor is very likely to come after her. It's a red flag.
justintime.... does the only thing that matters to you is your own selfish interests? That sickness is a classic trademark of those who believe in the supply side failure.
Did you profit from the years of Reaganomics? If so do not throw stones if residing in a glass house.
No one profited from Reaganomics except the uber-elite. All this "prosperity" has been financed on the backs of our children and children's children. All that "wealth" is now disappearing. Smoke and mirrors are failing. Our debt is about to smother us all.
"if she takes a cash-out and then walks, the creditor is very likely to come after her. It's a red flag."
They only think there are no consequences...
kckid,
Supply side is Voodoo Economics...Bush 43 was against it before he was for it.
Surely they don't teach supply side in economic classes, do they? Trickle down has been thoroughly discredited by now. Don't read the WSJ Op/ed page though...they are drowning in the Kool Aid.
Blaming conservatives and Republicans for the failure of supply-side away from where it really belongs: with us, the American people, for tolerating their massive spending and budget deficits while at the same time cutting taxes.
Americans wanted it both ways, and the so-called "conservatives" (in name only) gave it to them/us in order to stay in office for a few extra years.
The bill for this 'free lunch' will come due, now or later. And it won't be pretty.
Latest Headlines:
Food Costs Rising Fastest in 17 Years
Monday April 14, 4:10 pm ET
By Ellen Simon, AP Business Writer
This is bullish right? Good for at least 300 points on the Dow tomorrow?
Saturday, I got some checks from Chase that will allow me to carry a zero percent APR until October.
Assuming I buy a 3.0% CD, that's like $300 in free money. Well, less the $50 finance charge, and less taxes of course.
I'm doing this right now, except with seven credit cards at a time. I'm floating about $90k in credit card debt in a 4% liquid account and several higher-rate CDs I got before rates dropped. It's like $360/mo pretax in free income for most of the rest of the year (a 4-5% raise... thanks CC companies!).
I like to think of it as doing CC companies a favor by putting high-credit performing loans on their books.
I have easy methods to track payments and 0% expiration dates, so there is little risk of a foul-up there as well. I say go for it.
Blaming conservatives and Republicans for the failure of supply-side away from where it really belongs: with us, the American people, for tolerating their massive spending and budget deficits while at the same time cutting taxes.
gia,
The average American probably can't balance a checkbook. I don't know how you can reasonably expect them to understand the implications of destructive macroeconomic policies. Especially when the media has been complicit in foisting these bankrupt ideas on the public for the past quarter-century.
I may be stupid if a shyster swindles me out of my life savings, but he's still the thief.
That should read: for the failure of supply side shifts blame away from where it belongs
I currently detest the republican party. However, much of my family generally votes republican and they adhere to the "classic" conservative values. They are not dumb people, but they are busy and didn't notice as the party shifted from conservative economics to voo-doo economics and to a neoconservative foreign policy.
In their defense, the rhetoric was the same but there never really was a lucid description of ideology. Actually, I think neoconservatism explicitly endorses duplicity involving "the masses."
Anyway, they are now waking up to the horror.
Saturday, I got some checks from Chase that will allow me to carry a zero percent APR until October.
Assuming I buy a 3.0% CD, that's like $300 in free money. Well, less the $50 finance charge, and less taxes of course.
The CC companies that have sent me the "0% financing offers" lately are wiser than they were last year. They'll transfer funds directly to your bank account now....for a one time 3% charge.
Last year at this time they would forgo the charge or wave it. No such luck now, even though my FICO is awesome.
Thus ends my personal CC carry-trade.
I agree, there was no conservative revolution, just an ignorant delusion.
People mistake cause and effect all to often. Reminds me of the apologists who claim fractional reserve and fiat banking causes increased economic growth.
Most of the prosperity over the last 50 years has come in spite of our government and monetary policies, not because of them.
In a comment I made here a few months ago I mused that the next growth industry would be debt collection.
Another wiser commenter responded that all of those positions would be taken by those returning from Iraq and Afganistan; well-conditioned for the task at hand.
Looks like the tale has more truth than fiction.
The CC companies that have sent me the "0% financing offers" lately are wiser than they were last year. They'll transfer funds directly to your bank account now....for a one time 3% charge.
Yeah, that 3% charge sucks. Most of my cards have capped transfer fees ($50-$75) which allows the carry trade to be profitable with only a few thousand dollar credit limit.
But those offers are drying up in favor of the 3% fee, which more or less breaks credit-card arbitrage.
Anyway, they are now waking up to the horror.
Red Pill
They thought they were buying prime rib and lobster. They got spam and dog food. I know the feeling.
Speaking as one of the deluded masses who comes here for economic comments - why don't you take the political rant off to another internet?
The truth that we are all sub prime and near BK is sinking in very quickly now. More panicked looks at the gas pump and super market. I think we are sixty days from a total disaster. Hang on for the ride we have been talking about for the last year since I joined this economic equivalent of AA. My name is vwa and I have been shown the future!
CR, What, no charts to the the trends? We are growing accustommed to nice images to hammer home the point. The walls are closing in with all indicators now converging.
Containment is no longer even a term used in passing. Now it's "across the valley" or "wall st discounted already..." blah blah blah.
Except we get fresh new discounts every single day...
Speaking as one of the deluded masses who comes here for economic comments - why don't you take the political rant off to another internet?
Yeah, you're right. IX-nay on the olitics-pay for me. Sorry.
I want all the Wall St discounts TOMORROW. They are being far too stingy, and dribbling out the discounts. I am growing weary.
x-jp writes:
Speaking as one of the deluded masses who comes here for economic comments - why don't you take the political rant off to another internet?
You cannot discuss the current economic landscape without referencing the political policies that fomented the situation in which we now find ourselves. If that's uncomfortable for you, perhaps you should ignore those posts.
x-jp
You are trying to pry apart a single object. Political decisions of course influence the financial well being of the economy and vice-versa. Do you not believe if POTUS announced he was pulling out of Iraq that would not greatly influence the market?
Shouldn't savvy investors learn what political decisions had what economic sequella.
And isn't a vote a way of trying to determine your economic situation going forward?
"He says in 29 years of doing consumer research, he's never seen a downturn this severe."
http://www.marketwatch.com/tvradio/player.asp?guid={BAB23BA2-2491-4E3D-B646-BC68AE4790C0}
Wonder if Seb takes into account that shopping list effect?
Avoiding politics entirely in an election year with the govt so actively intervening in the markets/economy is probably just willful blindness. Granted, we'll all be running about screaming and banging our heads into our desks on the strength of the ensuing discussions but we'd probably be doing exactly that anyway in the circs for other reasons. SO, as my great aunt always said: "Fight Fair." In present company, that probably means with facts and steel-toed bunny slippers when levity is needed.
TCA - as a long time lurker here, Ive seen many conversations on this blog w/o off topic political rant.
It's a waste of time to have to scan posts to evaluate content.
I could ignore all your posts, but I like to read first to see if you have something worthwhile to say on topic.
Not intending to flame here, just came to read about economics of the day, re: cc delinqs.
thx, gia for understanding.
plschwartz writes:
x-jp
Do you not believe if POTUS announced he was pulling out of Iraq that would not greatly influence the market?
If that occured I'ds expect a thread on that subject. If I had to contribute, I would do it there...
thx
Remember David Stockman?
David Stockman - Wikipedia, the free encyclopedia
Stockman was quoted as referring to the Reagan Revolution's legacy tax act as: "I mean, Kemp-Roth [Reagan's 1981 tax cut] was always a Trojan horse to bring down the top rate.... It's kind of hard to sell 'trickle down.' So the supply-side formula was the only way to get a tax policy that was really 'trickle down.' Supply-side is 'trickle-down' theory." Of the budget process in his first year on the job, Mr. Stockman is quoted as saying: "None of us really understands what's going on with all these numbers," which was used as the subtitle of the article.
Ooooo... I like where this article is headed:
Legislatures are as powerless to abrogate moral and economic laws as
they are to abrogate physical laws. They cannot convert wrong into
right nor divorce effect from cause, either by parliamentary
majorities, or by unity of supporting public opinion. The penalties
of such legislative folly will always be exacted by inexorable time.
Economics is much closer to politics than a science. I have strong feelings regarding economic policy but I can construct no experiment to verify them to anyone. I can just point to historical analogies and probably dated statistics. Others point to different historical analogies.
The iraq war is both a political and economic topic. We have to finance it with consequences for our economy. It makes me angry. I can't help that it makes me angry and that will inevitably creep into comments. I would say that most human beings without brain damage have an emotional attachment to their economic views. Very emotional attachment actually, as it has to do with surviving and social status.
As things continue to deteriorate it is increasingly delusional to think that politics and economics can be separated. There will be much heated rhetoric. We can only hope their will also be some information content as well.
TED spread up to 1.62 today..up from 1.52 Friday.
Bloomberg.com:
Personal Finance
Somebody should go paste this up on the doors of the Federal Reserve:
Statesmanlike measures, careful watching and wise management would,
doubtless, have ere long led to a return of confidence, a reappearance
of money and a resumption of business; but these involved patience and
self-denial, and, thus far in human history, these are the rarest
products of political wisdom. Few nations have ever been able to
exercise these virtues; and France was not then one of these few.
There was a general search for some short road to prosperity: ere long
the idea was set afloat that the great want of the country was more of
the circulating medium; and this was speedily followed by calls for an
issue of paper money.
SCAV; plsw -
many posters write with great precision and clarity here and their inclusion of history and politics is very insightful.
It's the partisan shit that gets tiresome.
OT: Political Rant
Ever wonder who bought the HAL Jan' 07 Leaps back in 2003? Wonder if someone will try to cross reference those foresightful people with the ones who will be giving soon to be ex types "speaking engagements?"
hehehehehe... its all a scam. For those of you who think politics / money are not connected - you're living on another planet.
It's hard to believe CROX ever traded at $75.
Think of it as a year end bonus for performance, or a golden parachute for risk taking-- see how that works? No red flag.
"It's the partisan shit that gets tiresome."
Unfortunately, "partisan" is one of those fuzzy words. And it is not pejorative in itself; you can be partisan, and right.
FIne, fine, I'll pay my damned Amex bill already...
Sheesh.
Brother, can you spare a Croc?
"the highest rate since December 2005"
Wake me up when it's the highest rate since 1991. Until then, basically a big nothingburger.
To me, this stat is less evidence of consumer "stress" than it is evidence we are much closer to the beginning of the recession & credit crunch than the end of it.
OT - rant
Bob Dobbs writes:
"you can be partisan, and right."
Valid - and I'm writing as a 99% lurker to this blog.
Too much OT rant dilutes the blog and detracts from the core thoughts.
An excess of rehashed diatribe from either side will send readers away.
Nobe and Red Bill also have valid points; and I respect them.
Some other posters are becoming repeititive - their positions are clear to us now.
ipodius said:
"they should be halted...period. Any man who wears those must have to ask "honey, can I have my balls before I go out?". Very fashionable with the NPR crowd too."
Watch it mister - I am definitely part of the NPR crowd and I wouldn't be caught dead in CROX nor do I think better of someone who I see wearing them.
Billy Shears:
Supply side economics was largely discredited even back in the late 70s, when I was doing my undergrad in econ. It was taught, but not as a serious tool of analysis.
The 'backward bending supply curve' almost doesn't exist until tax rates approach 90 percent or so (it varies). At this point, higher rates of taxation actually cause revenue to go backwards, towards zero, hence the 'back bending curve'. So cutting taxes to gain revenue works, if you're on the back bending part of the curve.
It depends on the individual, the industry, whatever... but mostly, it's fantasy. 'Conservative' support of supply side is based mostly on anecdotal information, not peer-reviewed anything.
Eg: tax revenues rose under tax cutter R. Reagan, therefore cutting taxes works.
It's not that simple, of course. And no, I don't want to beat that dead horse again. There's a reason it's dead.
Advertisement on the main page:
801k plans have been shown to pay up to 1,000% - 2,000% more than 401ks or IRAs.
Gee - how'd they know I haven't saved for my retirement? Can I haz 1,000% - 2000% more, if I act now?
(what is 1,000% more of zero?)
I got behind on a business credit card and they kicked up my rate. So I moved the balance to another credit card, at a very low rate. Alas, I did the same thing; same results; move the balance back to the first credit card, 0% interest rate again. God, I won't be so stupid again. (By the way, we are talking very little money.) But the first CC company just took the same balance back that it was charging me an arm and a leg for, and at no percent for 18 months. They are far stupider than I.
I just learned what crocs are, and here now they're going under already.
I guess I don't keep up on the latest fads.
"Crocs just got taken out and SHOT!"
I'm an occasional NPR listener whose wife wears those godawful things, and this just proves that every recession has its upside!
OT.
Today is a Titanic anniversary.
But I prefer to remember fifty years ago today when a twenty-three year old Texan walked away with the top honors from the first Tchaikovsky Piano Competition at Moscow.
For a brief moment a spectacularly gifted youth opened a door in the Iron Curtain. Muscovites threw roses. And all America was surprised, delighted and proud.
Van Cliburn.
YouTube - (Cliburn)Tchaikovsky Piano Concerto No.1 Mvt III
It's obvious why CROX had to go down. How many pairs of those things do you need? They will outlast all civilization. A product that puts itself out of business.
I'm floating about $90k in credit card debt in a 4% liquid account
Why float it? Get with the times. Spend it, then default. Heh heh.
ItsJustMe, I'm sorry! You don't own a pair of CROX, do you??
:)
And, btw, you have to look no further than a sign that there's too much dumb money and liquidity around when that company sold at $75. Sort of like people with Goggle now. Ummm, exactly why is their PE ratio so high, and what in the name of dog justifies it? Watch as their ad revenue tanks about a quarter from now as the recession really kicks in.
ipodius,
Google is negotiating with FCC over protocols for the use of soon-to-be abandoned television frequencies at the same time they are building a consortium to roll out WiMax.
I don't say they will be successful, but the business model is aggressive and the market potential very interesting. So far it's vaporware, but it's attracting interest.
Cable and telephone companies are fighting this, as you may imagine, while making their own plans to introduce the medium.
Looking for a citation, I see there's interest in accommodating cable in joint venture - a change since I looked last:
Google, Intel and cable companies ponder nationwide WiMAX JV
burnside, one lesson i learned from being in the middle of the dot com phase was this, and you may frame it:
You'll never build value and a functional business where the basic strategy is technology looking for a solution.
This is another case of Goggle saying "wow, this technology is neat" and then saying "let's build a business on it!" instead of saying "what need is there out in the market that is either underserved, or that we're not fulfilling?" See the difference? Google has this "let's toss sh*t at the wall and see what sticks" mentality, and sooner or later you have to pay for those engineers.
Their only revenue stream right now is pay for ads on the internet. What are the click-through rates now? What will they be in a recession? What will they be when everyone figures out that they don't work?
Thanks MOM, I'll tell my friend to let her know there might be a problem with the cash -out then walk model.
Thanks also to the other poster who pointed out that this is just a variation on the "Why not just run this Company into the ground then leave with 100 million $$$?".
What with all the fraud and scheming and misery, it is more than a little disheartening that so many politicians are still throwing around the catchphrase "American Dream" to refer to this nightmare housing market .
Credit card delinquencies up? I thought that 2005 bankruptcy bill was gonna solve that problem.
So, what happens when middle America simply throws up it's hands?
The tougher credit card regulation passed in 2005,might just backfire on the industry.
"Also, that 0% until October comes with a 3% processing fee, so it's not exactly free, especially if you're transferring a large balance."
Partially true.
3%. But $50 cap.
I have a $23,000 limit on that card.
So it's only 25 basis points.
I think the internet is the cause - but isn't it the cause of all evil? jk
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