But the markets are up! Ben said the recession would be over by the end this year. Happy times are here again! i mean, really, what are a few hundred thousand foreclosures and CC defaults between friends?
So are we really expected to believe that the average Chase receivable has 200-300bps less in charge offs than the rest of the industry?
I look forward to hearing Jamie Dimon's BS on that....
“So are we really expected to believe that the average Chase receivable has 200-300bps less in charge offs than the rest of the industry?
I look forward to hearing Jamie Dimon's BS on that
Especially given that JPM had not been known for industry-best credit card loss rates
I'm wondering how this news feeds back into housing?
How many people have been putting their mortgage payments on their credit cards since the HELOC/ATM window closed?
There is no property/casualty etc insurance policy that those crooks have that can't be written by a legitimate company, eg. Chubb, Liberty, ACE, Travelers, Zurich. US Govt. should take that part into run-off. This is the "hospice" stage for all dying insurance companies. The "casino" part of their business is declared illegal gambling debts. GS and JPM and a bunch of European bank high-rollers go BK, and the world is a better place.
Perhaps it's time for merchants to add 5% to card purchases . . . or discount for cash. - sportsfan
Funny you should mention that - saw a sign today:
Diesel Cash $1.91
Diesel CC $1.97
That was in Des Moines
Six cent a gallon premium... only about three percent... but still pretty significant. Biggest spread I've seen since interest rates went below 10%... YEARS ago.
All wall street bonus guarantees have conditions. I'd bet the house that ALL the AIG bonus guarantees were predicated on the employees NOT being terminated for cause.
If $160 billion in losses is NOT a proper CAUSE for termination I don't know what is.
This is a shakedown. A looting. I say put the AIG employees on Riker's Island for a night (general pop). See if that changes their attitudes.
Before the Paulsons of the world reduced the standards for granting mortgages based upon the applicant's mastery of Mirror Fogging, credit cards were provided to people who didn't even exist. CC companies are getting what they deserve, and I don't mean bailed-out.
tinderbox:
TIC data + China demands = confidence fading
Fed backing everything in sight + FDIC deposit "fund" = recipe for disaster
Treasury market on brink with another few years of forcefeeding
Fed forced to montize to take edge off = inflation spirng loaded
House prices another 20% downside at least
Printing creates upward rate pressure steepening curve - exacerbating house price pressure
pent up inflation NOT passed through to wages
idle capacity adds to deflationary expectations and unemployment in things you want
Needs already getting more expensive - see Euro M/M CPI today +0.4% (y/y comp distorted by energy)
Bottom line
Bernanke and the Fed have lost control - they have so mahny balls in the air the only question is which one goes first...
I find your statements "House prices 20% downside at least", "idle capacity adds to deflationary expectations" and "inflation spring loaded" rather contradictory. Prices going DOWN and inflation at the same time? Hmmm.
sportsfan says:
Today, 8:25:08 PM
“Perhaps it's time for merchants to add 5% to card purchases . . . or discount for cash."
Minor detail, but tossing it in anyway: card hold defaults refers to the card issuer liability. Credit card 'charge backs' are a different issue, normally very low ( for brick and mortar establishments at least).
\t
Uh, that site has a load of Truther and Illuminati crap on it as well. Too bad so many fo the guys who saw at least some of his coming are getting claimed by all the fringe conspiracy dicks. Gonna make it to easy for the MM to dismiss them and go back to doing puff pieces like the 60 minutes Frank and Benny B. "interviews".
Long,Long ago I was a senior collector at the Bank now called Providian,an early issuer of credit account recievable securities.Those securities paid 12% and the card rate was 21.9%. If our losses had hit 4% heads would have rolled,even though late charges and overlimit fees were a big part of the profit.The big banks have a LOT more overhead.Of course if you borrow at 2.5% and lend at 25-30% you can absorb quite a bit in the way of overhead and losses.....it's the margin that counts.
mmmm. sniff sniff. is that the odor of rising credit card interest rates in the air? smells like fresh inflation loaf. are there enough lawyers in the world to pursue millions of clients holding CCs that won't/can't pay their bills? wait until the percentage defaults gets to 20%. credit cards are among the most profitable things a bank does - IF the bills get paid. that can quickly reverse if the bills don't get paid.
oh wait, I hear something too. it sounds like timber falling. the credit card crash of 2009.
""So are we really expected to believe that the average Chase receivable has 200-300bps less in charge offs than the rest of the industry?"
"Yes. Different issuers, different criteria. I would be surprised if there were not a difference between charge-off rates between issuers.""
I'll go out on a limb here and say there's no way that JPM and COF are seeing lower default rates than Amex. Maybe their chargeoff assumptions are different, based on overly optimistic unemployment assumptions etc.. But Mr. Dimon and the clowns at COF will have a very hard time explaining why their businesses are immune to the distress elsewhere.
It's amazing how optimistic you can be when your very solvency is at stake.
"The Jim Rogers video from the last thread is interesting.
He suggests that it's time to take up farming and mining.
In Asia."
I listed to all of Marc Farber's videos on both bloomberg and youtube on the weekend. Farber and rogers on a similar wavelength - only Farber seems much more grounded or perhaps fatalistic. If you really want to get nervous, view Farber's videos.. I find it interesting that both these fellows are so bleak. It seems the gray-haired analysts are more definite on where this going and how it ends (in a war).
I think that the obvious solution to the problem of a burgeoning default rate is to get people borrowing again. Oh, and make sure the government buys up this paper. (AAA+++ would rate again!)
Right? Right?
On the JPM vs AMEX... I wonder how many of the JPM cards are issued to JPM checking account holders? Can JPM just help itself to funds through the electronic connection in the event of a default? Make the collection path a lot shorter, I'd guess.
I always pay off my card charges that month. Maybe $10 interest/year. So Citi starting playing a game. Denying a charge for "security reasons" for 30 bucks of gas.Denying a charge to Amazon.
Called them and the Indian gentleman told me that for security reasons they would only accept charges in NYC where I live. They would not notify me when they did. Had to say the magic words "call my Senator" about refusing more bailout.
30 minutes later get call from American supervisor, apologizing with blah blah blah. Assured me no more problems.
Citibank delenda est!
Amex. Isn't that the largest holding of Berkshire Hathaway? Wasn't somebody here recently warning about this very thing?
Anyway. The solution is easy. Level 3 for personal credit. Rather than all this silly NPV based on actual performance just slap the stuff in "Loan Gitmo" and value it based on the original assumptions.
Anyone want to help me develop a new branch of finance?
Income Swaps based on Profession and Geographic location
So a mid-level manager at a direct mail advertising business could swap, in 5% increments, their income for a 3 year period with that of a dairy farmhand. Then you could arrange that same deal, but with the 2 jobs located in different countries.
Expedites globalization, provides investment certainty and redistributes future cash flow. No need for student loans, let someone pay for a stake in a pool of the income of 500 recent law school grads.
That's what Jim Rogers was talking about, right? ...right?
The surfboard also worked as a bottle opener. Since the person who gave me it represents people at "Camp Freedom" I thought it was ironic. Waterboard = Surfboard.
OK I am tired of the Best and brightest are going to leave AIG. Here is the plan
1) Tax the bonus money paid to employees of a TARP funded institution at 110%. We get some of our money back.
2) It is a financial emergency. Give the president the ability to draft the "best and brightest" into the army if they leave AIG and send them right back. If they don't want to go there, send them to guard a mountain top in Afghanistan.
Problem solved
Hey, does the following story still show up in the news "Financial crisis was caused by subprime loans the government forced institutions to make to minorities"
I just saw that comment on another website... it's not really relevant, but I was embarrassed for the person who posted it
Rob Dawg,
I can see a post you made but that did not show up in the thread if I click your name and look at past comments, but it was not a longish one.
If you want in on my Profession swaps, phone my business line at 1-800-BUY-MOON-LAND
As for Rogers, or Faber, there isn't much value in listening to them because what they say doesn't change much. I think they can be both smart and incorrect in what they say. The good thing they do is bringing up history.
What I want to know is, why do we let the banks we've bailed out continue to charge usurious interest rates and fees to their customers/rescuers. If we're saving their bacon, we shouldn't have to let them keep frying ours.
OT, but would you part with the name of your health insurance agency? If you want to do so "discreetly", pass the info on to Rob Dawg and have him email me. [FTR, he can give you my email address.]
OK I am tired of the Best and brightest are going to leave AIG.
As I've stated previously, one condition of government money should've been a legal requirement that key employees stay put until the money's paid back (or else go to jail). Bonuses? NFW!
There is no escape from the collapsing avalanche of debt burying us all. The correlation between rising unemployment and increased default is indisputable. Every unemployed American is their own leveraged equity implosion. Link this to the leveraged money they were originally loaned and you have what was a small number get big, quickly. Cascade failure has been achieved and the ripples are washing away what was our economy.
"Anyone want to help me develop a new branch of finance?
Income Swaps based on Profession and Geographic location"
I'm in. Gonna need a name like - Disparate Occupation
XLO Diversive Region Collaterilized Default Swaps.
DOXDRCDS. Rule number 1. Confuse the hell out of everybody.Rule number 2. All memebers of the DOXDRCDS
board are entitled to retention bonuses.
I was reading about Blythe Masters, supposed inventor of cds at JPM. The first product they rolled out was called "BISTRO" which, someone remarked, is the kind of place in England where gangsters hang out.
My sense on bailouts is that people don't like them, but they are prepared to accept them. They just want to be guaranteed a piece of pie themselves before corporations get to go through the dessert cart
"So a mid-level manager at a direct mail advertising business could swap, in 5% increments, their income for a 3 year period with that of a dairy farmhand. Then you could arrange that same deal, but with the 2 jobs located in different countries."
can I swap two (count em 2) two-holed corn pickers for a "farmhand?"
Without HELOC and my CC what will I be able to buy!!!
"Retail, thy future is bleak
What can I say
American shopping freak! ...
Just came back from a small-sized meeting in Chevy Chase, Md., sponsored by the local parish, one of the more affluent parishes in the DC area. About 15 people there. They shared their experiences. It's surprising what hardship they described, in their own families and for people they come in contact with. Special pain over not being able to help their teen-age and grown children financially as much as they'd like. Those dependent on investments for income having trouble. One woman who works at a children's medical center here talked about seeing some familial stress resulting in some child abuse showing up at the emergency room.
American Express was started as an express mail business in Albany, New York, in 1850.It was founded as a joint stock corporation by the merger of the express companies owned by Henry Wells (Wells & Company), William Fargo (Livingston, Fargo & Company), and John Warren Butterfield (Wells, Butterfield & Company, the successor earlier in 1850 of Butterfield, Wasson & Company).
“Short on real details, but one of the first MSM articles I have seen hinting at public anger.
I'm still employed and have done nothing but profit from this whole mess the past two years, and yet I routinely find myself angry in ways that I've never been angry before.
I can't imagine how it must be for people who just simultaneously saw their jobs and their wealth wiped out.
THe IMF is a mechanism for the US to pick winners and losers. It was born of the post world era and the US financial construct. Of course the US wants the IMF to print money to ensure that the US printing which will create the massive inflation for dollar basics in these countries has some mitigating factor. ot ethe inflation numbers out of latvia lithuania and others today in the EU CPI numbers. If the RoW were smart they would dismiss this out of hand. Printing money whther through the SDR or Fed or UK is atantamount to devaluation. There will be no silver bullet and gladly paying a dollar today will cost you dearly or is it darling.
Shilling, courtesy of Mauldin, gives probably the best and most succinct summary I have seen of the credit binge and the unfolding bust, and reading it is not toxic. But it may not anticipate possible, fatal, financial accidents.
rogers says that most of the money has gone to the east and that countries in the west are debtor nations now. hmmm, i am not sure if i am buying this. first off, what does he consider to be money? fiat? what is money? remember, most of these asian countries did real well selling their junk to the west. so now, the west cannot buy as much of their junk. so what does this do to the asians? i mean good grief. sure there are a lot of rich people in these countries, opportunist who took advantage one way or the other by hook or crook to get ahead. but the vast majority of peoples in the eastern asian coutries are dirt poor and always have been. this answer by rogers reminds me of the crap that schiff was pushing a couple of years ago as he made the rounds on the boob toob, talking about investing in any currency except the dollar. mish shedlock brought this subject up one time and the stuff hit the fan about it ,even though what shedlock said was true at the time. to me, it is not as clear as what rogers is saying about it. maybe he is right. time will tell. chasing paper trails around will never work for me. i like the shiney stuff that is in your hand and not in the bush.....
"I mean, if you could, is there some way you can just, in English to the average American...try to think this through and more in words, in terms, that the average American starts to understand," Baucus pleaded with Geithner.
Here's what the average American needs to understand:
"You were r---d and lied to by both Wall Street and Washington. Your anger is entirely justified and appropriate. The solution to these problems lay in your hands, not the financiers, economists, and politicians that caused them."
"They" have a choice: just tell folks it's over the whole thing is going down OR make up lots of little lies to paper things over and hope by some miracle we only have a Depression -- shouldn't we be rooting for them to succeed or NOT??
Mercantilism does not work, but asians will not learn.
//rogers says that most of the money has gone to the east and that countries in the west are debtor nations now. hmmm, i am not sure if i am buying this. first off, what does he consider to be money? fiat? what is money? remember, most of these asian countries did real well selling their junk to the west.//
Tom Stone - I hope you spent a bit of that extra $500 a month wandering over to Broadway in 1982 and catching my punk rock band play at the Mabuhay. A hell of a great year in SF.
Japanese Stocks Rise for Third Day; Mitsubishi UFJ Leads Banks
Dec. 25 2007 (Bloomberg) -- Japanese stocks rose for a third day, led by financial shares, after a decline in interbank borrowing costs signaled a global credit-market slump is easing.
Japanese Stocks Rise for Third Day, Led by Toyota; DoCoMo Gains
Dec. 22 2003 (Bloomberg) -- Japanese stocks rose, led by automakers such as Toyota Motor Corp. and Nissan Motor Co. after the Nihon Keizai newspaper reported their overseas production may exceed domestic output by 2005.
Japanese stocks rose for a third straight trading day today after Tokyo's lower house of parliament approved the use of public funds to bail out the country's ailing banking industry. The benchmark 225-issue Nikkei Stock Average gained 164.94 points, or 0.97 percent, to close at 17,205.00.
Seems to think that AIG's books are cooked. The squirelly excuse that the bonuses are locked in due to contracts is not palatable. If we own %80 of this company, then the pay and bonuses should be on our terms. Someone is worried about retention of qualified personell. Sure there were proabably non-guilty personell in areas other than the credit swap division, but without our money how much pay would have been available to pay bonuses let alone keep these people employed?
There just seems to be no accountability except when the government is to pay then the government is held accountable, not those who made the wrong bet within the company.
".....Did you demand any answers?
The who and the what and the reason why?
Did you ever question the setup?
Did you stand aside and let 'em choose while you took second best?
Did you let 'em skim the cream off and give to you the rest?
Did you settle for the shoddy and did you think it right
To let 'em rob you right and left and never make a fight,
never make a fight, never make a fight?. . ."
In the first ruling of its kind, a bankruptcy judge held the city of Vallejo, Calif. has the authority to void its existing union contracts in its effort to reorganize, holding public workers do not enjoy the same protections Congress gave union workers at private companies.
All,
at 3:15pm EST today Yahoo Finance ran a headline that missed the spell check:
"Obama: AIG can't LUSTIFY 'outrage' of bonuses"
Snagit Screen shot can be seen at: Economic Disconnect: Full Court Financial Press
In a comment aired this afternoon on WMT, an Iowa radio station, Grassley (R-Iowa) said: “The first thing that would make me feel a little bit better towards them if they’d follow the Japanese model and come before the American people and take that deep bow and say I’m sorry, and then either do one of two things — resign, or go commit suicide.”
=-X =-X
"In a comment aired this afternoon on WMT, an Iowa radio station, Grassley (R-Iowa) said: “The first thing that would make me feel a little bit better towards them if they’d follow the Japanese model and come before the American people and take that deep bow and say I’m sorry, and then either do one of two things — resign, or go commit suicide.”
Wow! I was just going to suggest they get stripped of everything and run the gauntlet, tar and feathers optional.
Mercantilism does not work, but asians will not learn.
It is not the mercantilism that drives these countries but the thought of easy jobs for their citizens. 1. get the currency below their true value 2. create export zones with tax benefits 3. wink/wink on labor restrictions/environmental laws.
"The Board acknowledges there are significant challenges to estimating fair value, particularly in illiquid markets, requiring the gathering and analysis of relevant data and the exercise of sound judgment."
Well, I'm sure glad GS got one of the first and biggest of AIG's--I mean taxpayers'--handouts. Maybe Hank Paulson will let me shine his head for some tablescraps when I'm 80.
grassley has been there a long time. what has he done? what has he done really? not much. all of them are like that? they are one of the reasons we are in the shape we are in. they are not doing their jobs and are not caring about the people who elected them to office. in the senate , i cannot think of one man or woman that is worthy of their office. not one.
grassley has been there a long time. what has he done? what has he done really? not much.
BS. Grassley has done everything his contribution paying constituency demanded - maintained & expanded agricultural subsidies. What else would Iowa farmers want him to do? Subsidize New York investment banks?
Tom S, who bought Providian?
I wish I was still single living in sunset district bcse it is full of women looking for a hetero male...in other words its still good...
Can't even go get a beer without running into a beautiful lady...or maybe its the trick Jim Carrey uses in this movie..forward to 3:54....too funny....
I don't know if anyone has mentioned this, but I believe that all those penalties and fees generated by defaults are recorded as revenue (as it is an increase in the consumer's liability to the bank). I wonder how much this is adding to the recent "profits" announced by some of the big banks?
Apparently to shrink exposure, Amex is now mailing a "warning" notice to cardholders a month before the annual fee comes due. In it, they instruct you on how to cancel your card to avoid the annual fee. I've heard from credible sources that this is delivered to holders with clean credit, FICO > 800 and zero balance on any card. Does this make sense?
If you call BofA and say you got laid off. They will automatically cancel your card and put you in collection. Even if you are current and not missed a payment. That must be pushing numbers like this also.
"BS. Grassley has done everything his contribution paying constituency demanded - maintained & expanded agricultural subsidies."
USDA has just introduced country of origin labelling requirements for ground beef. I assume this is a scheme from the farm lobby to induce US consumers to buy USA. But savvy readers on this blog can game the system and seek out better quality ground beef that originates from New Zealand, because;
It contains less fat (fitter cows who have to expend effort to graze).
Grass feed so more flavour (corn feed only makes economic sense if corn subsidised).
No growth hormones (It scares the hell out the Europeans so we don't indulge).
No mad cow disease (Why feed animal remains to ruminants when you can more lucratively export animal remains to pet food producers?).
"BS. Grassley has done everything his contribution paying constituency demanded - maintained & expanded agricultural subsidies."
USDA has just introduced country of origin labelling requirements for ground beef. I assume this is a scheme from the farm lobby to induce US consumers to buy USA. But savvy readers on this blog can game the system and seek out better quality ground beef that originates from New Zealand, because;
It contains less fat (fitter cows who have to expend effort to graze).
Grass feed so more flavour
get real kiwi, the flavour in beef is down to the fat, as in more is more, google wagyu, marbled
i agree that NZ ground beef is ok, but be aware that is all the land of the free allows in from us....not gonna change in this climate
my advice: buy nz beef and lamb and eat it yourself with a good pinot noir until they wake up
How about that credit-card outreach commercial last night. C, BAC, JPM et al banded together to aid troubled card holders in a hysterically themed commercial where a gal quit working due to mom's illness and could no longer keep up with her credit card payments...
WTF! As if this were the face of troubled card holders today???? How about a story line where these companies over extended credit, held millions captive, lobbied the government for relief from legacy assets while their customers drown in legacy mortgages and legacy credit card balances of a previous time in history. This would more accurately tell the story. Mother-effers, all of 'em.
Yeah but that's only a mark-to-market basis.
"Yeah but that's only a mark-to-market basis."
Hahahaha!!!
This comment thread has been HALO-IZED by CRbot.
http://realize.org/cr/halokit.php?halourl=http://www.haloscan.com/comments/calculatedrisk/418179682519921844
onsense.. there are no defaults in our brave new mark to model world.
=-O
CCBS meltdown.
Poor Amex, pissing off the people who do pay them, and drowning in the charge offs of those that can't pay.
Well, about ten days ago Amex sent me a very nice card printed on lovely heavy stock, thanking me for being a customer. Guess I know why...
But the markets are up! Ben said the recession would be over by the end this year. Happy times are here again! i mean, really, what are a few hundred thousand foreclosures and CC defaults between friends?
o worries, the ABS are still rated AAA for TALF purposes.
So are we really expected to believe that the average Chase receivable has 200-300bps less in charge offs than the rest of the industry?
I look forward to hearing Jamie Dimon's BS on that....
“So are we really expected to believe that the average Chase receivable has 200-300bps less in charge offs than the rest of the industry?
I look forward to hearing Jamie Dimon's BS on that
Especially given that JPM had not been known for industry-best credit card loss rates
The Latest from Denninger:
What SCHEME Is AIG?
I'm wondering how this news feeds back into housing?
How many people have been putting their mortgage payments on their credit cards since the HELOC/ATM window closed?
Absolutely my conclusion and I believe retail sales increased (by 5%) because mortgages weren't paid but spent shopping instead.
I smell.. MORE BAILOUTS !!!
"I smell.. MORE BAILOUTS !!!"
I should max out my credit cards, so I can finally take advantage of one of these bailouts.
Regulator Before Banks Collapsed, They Pleaded With Feds To Let Them Fudge Their Books . Congress meeting YouTube - Regulator Before Banks Collapsed, They Pleaded With Feds To Let Them Fudge Their Books
JPMorgan is a strong and well capitalized bank that does not foresee having to raise any material amounts of capital
Citigroup's default rate soared to 9.33 percent in February, from 6.95 percent a month earlier
I wonder if before he claimed Citi would be profitable in Q1, Pandit remembered that defaults rates should enter P&L with the negative sign.
Then again, Bernanke said unambiguously that all the banks will pass the stress test, so who actually cares about signs anymore?
Isn't over 5% bad? So 8% is another way of saying "we have severe problems with our biz?"
We are sitting atop a tinder box.......and AIG is the match.
Be careful.......very careful.
"We are sitting atop a tinder box.......and AIG is the match.
Be careful.......very careful."
Please elaborate.
There is no property/casualty etc insurance policy that those crooks have that can't be written by a legitimate company, eg. Chubb, Liberty, ACE, Travelers, Zurich. US Govt. should take that part into run-off. This is the "hospice" stage for all dying insurance companies. The "casino" part of their business is declared illegal gambling debts. GS and JPM and a bunch of European bank high-rollers go BK, and the world is a better place.
Perhaps it's time for merchants to add 5% to card purchases . . . or discount for cash.
Perhaps it's time for merchants to add 5% to card purchases . . . or discount for cash. - sportsfan
Funny you should mention that - saw a sign today:
Diesel Cash $1.91
Diesel CC $1.97
That was in Des Moines
Six cent a gallon premium... only about three percent... but still pretty significant. Biggest spread I've seen since interest rates went below 10%... YEARS ago.
Anonymous;
"So are we really expected to believe that the average Chase receivable has 200-300bps less in charge offs than the rest of the industry?"
Yes. Different issuers, different criteria. I would be surprised if there were not a difference between charge-off rates between issuers.
My AIG comment from the last thread:
All wall street bonus guarantees have conditions. I'd bet the house that ALL the AIG bonus guarantees were predicated on the employees NOT being terminated for cause.
If $160 billion in losses is NOT a proper CAUSE for termination I don't know what is.
This is a shakedown. A looting. I say put the AIG employees on Riker's Island for a night (general pop). See if that changes their attitudes.
“Yeah but that's only a mark-to-market basis."
Haha... we've so moved on from that kind of First World nonsense.
Can I use mark to "mark to make believe" tax deductions?
I f you are Geithner
Before the Paulsons of the world reduced the standards for granting mortgages based upon the applicant's mastery of Mirror Fogging, credit cards were provided to people who didn't even exist. CC companies are getting what they deserve, and I don't mean bailed-out.
tinderbox:
TIC data + China demands = confidence fading
Fed backing everything in sight + FDIC deposit "fund" = recipe for disaster
Treasury market on brink with another few years of forcefeeding
Fed forced to montize to take edge off = inflation spirng loaded
House prices another 20% downside at least
Printing creates upward rate pressure steepening curve - exacerbating house price pressure
pent up inflation NOT passed through to wages
idle capacity adds to deflationary expectations and unemployment in things you want
Needs already getting more expensive - see Euro M/M CPI today +0.4% (y/y comp distorted by energy)
Bottom line
Bernanke and the Fed have lost control - they have so mahny balls in the air the only question is which one goes first...
I find your statements "House prices 20% downside at least", "idle capacity adds to deflationary expectations" and "inflation spring loaded" rather contradictory. Prices going DOWN and inflation at the same time? Hmmm.
sportsfan says:
Today, 8:25:08 PM
“Perhaps it's time for merchants to add 5% to card purchases . . . or discount for cash."
Minor detail, but tossing it in anyway: card hold defaults refers to the card issuer liability. Credit card 'charge backs' are a different issue, normally very low ( for brick and mortar establishments at least).
\t
"Before the Paulsons of the world ..." was my comment.
The Jim Rogers video from the last thread is interesting.
He suggests that it's time to take up farming and mining.
In Asia.
The Silver Bear Cafe
Uh, that site has a load of Truther and Illuminati crap on it as well. Too bad so many fo the guys who saw at least some of his coming are getting claimed by all the fringe conspiracy dicks. Gonna make it to easy for the MM to dismiss them and go back to doing puff pieces like the 60 minutes Frank and Benny B. "interviews".
Long,Long ago I was a senior collector at the Bank now called Providian,an early issuer of credit account recievable securities.Those securities paid 12% and the card rate was 21.9%. If our losses had hit 4% heads would have rolled,even though late charges and overlimit fees were a big part of the profit.The big banks have a LOT more overhead.Of course if you borrow at 2.5% and lend at 25-30% you can absorb quite a bit in the way of overhead and losses.....it's the margin that counts.
mmmm. sniff sniff. is that the odor of rising credit card interest rates in the air? smells like fresh inflation loaf. are there enough lawyers in the world to pursue millions of clients holding CCs that won't/can't pay their bills? wait until the percentage defaults gets to 20%. credit cards are among the most profitable things a bank does - IF the bills get paid. that can quickly reverse if the bills don't get paid.
oh wait, I hear something too. it sounds like timber falling. the credit card crash of 2009.
""So are we really expected to believe that the average Chase receivable has 200-300bps less in charge offs than the rest of the industry?"
"Yes. Different issuers, different criteria. I would be surprised if there were not a difference between charge-off rates between issuers.""
I'll go out on a limb here and say there's no way that JPM and COF are seeing lower default rates than Amex. Maybe their chargeoff assumptions are different, based on overly optimistic unemployment assumptions etc.. But Mr. Dimon and the clowns at COF will have a very hard time explaining why their businesses are immune to the distress elsewhere.
It's amazing how optimistic you can be when your very solvency is at stake.
Re JPM results - One might want to look at the reserve coverage ratio, account re-aging, etc. Determined minds have many tools at their disposal.
Without HELOC and my CC what will I be able to buy!!!
Retail, thy future is bleak
What can I say
American shopping freak!
They cranked my limit so tight
Just when I need it most
My credit is my American right!
I dance, sob and scream
Without credit
No more American Dream!
The Latest from Denninger:
One Good Idea On Taxes: Cap Gains
“"We are sitting atop a tinder box.......and AIG is the match.
Thats what they said about countrywide...
Tom - what does being a Senior Collector get you?
A cube with a view of the Golden Gate Bridge and $500 more a month in 1982.
Daddy, daddy...can I get a bailout!
Cutting card limits and credit scores
"The Jim Rogers video from the last thread is interesting.
He suggests that it's time to take up farming and mining.
In Asia."
I listed to all of Marc Farber's videos on both bloomberg and youtube on the weekend. Farber and rogers on a similar wavelength - only Farber seems much more grounded or perhaps fatalistic. If you really want to get nervous, view Farber's videos.. I find it interesting that both these fellows are so bleak. It seems the gray-haired analysts are more definite on where this going and how it ends (in a war).
I think that the obvious solution to the problem of a burgeoning default rate is to get people borrowing again. Oh, and make sure the government buys up this paper. (AAA+++ would rate again!)
Right? Right?
On the JPM vs AMEX... I wonder how many of the JPM cards are issued to JPM checking account holders? Can JPM just help itself to funds through the electronic connection in the event of a default? Make the collection path a lot shorter, I'd guess.
CITI's charge off rate is growing at over 400% annually.
what if thy got to 25% charge off by year end from 9.33% now?
I always pay off my card charges that month. Maybe $10 interest/year. So Citi starting playing a game. Denying a charge for "security reasons" for 30 bucks of gas.Denying a charge to Amazon.
Called them and the Indian gentleman told me that for security reasons they would only accept charges in NYC where I live. They would not notify me when they did. Had to say the magic words "call my Senator" about refusing more bailout.
30 minutes later get call from American supervisor, apologizing with blah blah blah. Assured me no more problems.
Citibank delenda est!
Amex. Isn't that the largest holding of Berkshire Hathaway? Wasn't somebody here recently warning about this very thing?
Anyway. The solution is easy. Level 3 for personal credit. Rather than all this silly NPV based on actual performance just slap the stuff in "Loan Gitmo" and value it based on the original assumptions.
Somebody gave me a Gitmo keychain surfboard today from the base. It says "Guantanamo - Where you Getmo!
Damn that was funny...I just peeeed myself! =-O
Getmo should be Gitmo and the keychain was made in Michigan.
Anyone want to help me develop a new branch of finance?
Income Swaps based on Profession and Geographic location
So a mid-level manager at a direct mail advertising business could swap, in 5% increments, their income for a 3 year period with that of a dairy farmhand. Then you could arrange that same deal, but with the 2 jobs located in different countries.
Expedites globalization, provides investment certainty and redistributes future cash flow. No need for student loans, let someone pay for a stake in a pool of the income of 500 recent law school grads.
That's what Jim Rogers was talking about, right? ...right?
The surfboard also worked as a bottle opener. Since the person who gave me it represents people at "Camp Freedom" I thought it was ironic. Waterboard = Surfboard.
OK I am tired of the Best and brightest are going to leave AIG. Here is the plan
1) Tax the bonus money paid to employees of a TARP funded institution at 110%. We get some of our money back.
2) It is a financial emergency. Give the president the ability to draft the "best and brightest" into the army if they leave AIG and send them right back. If they don't want to go there, send them to guard a mountain top in Afghanistan.
Problem solved
DHP
Send them to the embassy in Pakistan. It will be overun any day now.
Hey, does the following story still show up in the news "Financial crisis was caused by subprime loans the government forced institutions to make to minorities"
I just saw that comment on another website... it's not really relevant, but I was embarrassed for the person who posted it
I'm embarrassed that you think Fannie and Freddie hand nothing to do with it. Oh yeah. It was all Jim Cramer's fault!
Screw this. JS-Kit just ate a longish thoughtful post in reply to EHP. I'll just read for a while.
Rob Dawg,
I can see a post you made but that did not show up in the thread if I click your name and look at past comments, but it was not a longish one.
If you want in on my Profession swaps, phone my business line at 1-800-BUY-MOON-LAND
As for Rogers, or Faber, there isn't much value in listening to them because what they say doesn't change much. I think they can be both smart and incorrect in what they say. The good thing they do is bringing up history.
What I want to know is, why do we let the banks we've bailed out continue to charge usurious interest rates and fees to their customers/rescuers. If we're saving their bacon, we shouldn't have to let them keep frying ours.
I drive up to a gas station.
Swipe my plastic card thru that thing there.
My fuel gauge goes to F.
I get on down the road.
How cool is that!
Boy howdy!!!!
“The Jim Rogers video from the last thread is interesting.
He suggests that it's time to take up farming and mining.
In Asia.
That video should be required reading for all students in the US public school system.
BTW here's the link to the Jom Rogers interview again:
The Silver Bear Cafe
There are some things money can't buy.
sm_landlord,
OT, but would you part with the name of your health insurance agency? If you want to do so "discreetly", pass the info on to Rob Dawg and have him email me. [FTR, he can give you my email address.]
What does the Goldman Sachs Chief Economist say about this?
OK I am tired of the Best and brightest are going to leave AIG.
As I've stated previously, one condition of government money should've been a legal requirement that key employees stay put until the money's paid back (or else go to jail). Bonuses? NFW!
There is no escape from the collapsing avalanche of debt burying us all. The correlation between rising unemployment and increased default is indisputable. Every unemployed American is their own leveraged equity implosion. Link this to the leveraged money they were originally loaned and you have what was a small number get big, quickly. Cascade failure has been achieved and the ripples are washing away what was our economy.
Short on real details, but one of the first MSM articles I have seen hinting at public anger. Marketwatch:
http://www.marketwatch.com/news/story/Bailout-anger-creates-perilous-times/story.aspx?guid={E9A7B5F7-C084-4032-8DCA-2FE3BA26B76B}
This news by itself worth at least +150 on the DOW
The announced bonuses are just a portion of the total
$600mn remains in the bonus pool after they are paid
America Express - Leave Home Without It.
"Anyone want to help me develop a new branch of finance?
Income Swaps based on Profession and Geographic location"
I'm in. Gonna need a name like - Disparate Occupation
XLO Diversive Region Collaterilized Default Swaps.
DOXDRCDS. Rule number 1. Confuse the hell out of everybody.Rule number 2. All memebers of the DOXDRCDS
board are entitled to retention bonuses.
I was reading about Blythe Masters, supposed inventor of cds at JPM. The first product they rolled out was called "BISTRO" which, someone remarked, is the kind of place in England where gangsters hang out.
My sense on bailouts is that people don't like them, but they are prepared to accept them. They just want to be guaranteed a piece of pie themselves before corporations get to go through the dessert cart
American Express - You Don't Have a Home Anymore.
"So a mid-level manager at a direct mail advertising business could swap, in 5% increments, their income for a 3 year period with that of a dairy farmhand. Then you could arrange that same deal, but with the 2 jobs located in different countries."
can I swap two (count em 2) two-holed corn pickers for a "farmhand?"
Without HELOC and my CC what will I be able to buy!!!
"Retail, thy future is bleak
What can I say
American shopping freak! ...
Just came back from a small-sized meeting in Chevy Chase, Md., sponsored by the local parish, one of the more affluent parishes in the DC area. About 15 people there. They shared their experiences. It's surprising what hardship they described, in their own families and for people they come in contact with. Special pain over not being able to help their teen-age and grown children financially as much as they'd like. Those dependent on investments for income having trouble. One woman who works at a children's medical center here talked about seeing some familial stress resulting in some child abuse showing up at the emergency room.
A parish-wide meeting scheduled for March 30.
American Express was started as an express mail business in Albany, New York, in 1850.It was founded as a joint stock corporation by the merger of the express companies owned by Henry Wells (Wells & Company), William Fargo (Livingston, Fargo & Company), and John Warren Butterfield (Wells, Butterfield & Company, the successor earlier in 1850 of Butterfield, Wasson & Company).
“Short on real details, but one of the first MSM articles I have seen hinting at public anger.
I'm still employed and have done nothing but profit from this whole mess the past two years, and yet I routinely find myself angry in ways that I've never been angry before.
I can't imagine how it must be for people who just simultaneously saw their jobs and their wealth wiped out.
The IMF is making inflation a worldwide event. All will feel the pain.
IMF poised to print billions of dollars in 'global quantitative easing' - Telegraph
THe IMF is a mechanism for the US to pick winners and losers. It was born of the post world era and the US financial construct. Of course the US wants the IMF to print money to ensure that the US printing which will create the massive inflation for dollar basics in these countries has some mitigating factor. ot ethe inflation numbers out of latvia lithuania and others today in the EU CPI numbers. If the RoW were smart they would dismiss this out of hand. Printing money whther through the SDR or Fed or UK is atantamount to devaluation. There will be no silver bullet and gladly paying a dollar today will cost you dearly or is it darling.
Shilling, courtesy of Mauldin, gives probably the best and most succinct summary I have seen of the credit binge and the unfolding bust, and reading it is not toxic. But it may not anticipate possible, fatal, financial accidents.
rogers says that most of the money has gone to the east and that countries in the west are debtor nations now. hmmm, i am not sure if i am buying this. first off, what does he consider to be money? fiat? what is money? remember, most of these asian countries did real well selling their junk to the west. so now, the west cannot buy as much of their junk. so what does this do to the asians? i mean good grief. sure there are a lot of rich people in these countries, opportunist who took advantage one way or the other by hook or crook to get ahead. but the vast majority of peoples in the eastern asian coutries are dirt poor and always have been. this answer by rogers reminds me of the crap that schiff was pushing a couple of years ago as he made the rounds on the boob toob, talking about investing in any currency except the dollar. mish shedlock brought this subject up one time and the stuff hit the fan about it ,even though what shedlock said was true at the time. to me, it is not as clear as what rogers is saying about it. maybe he is right. time will tell. chasing paper trails around will never work for me. i like the shiney stuff that is in your hand and not in the bush.....
Ya but people are spending! A consumer economy predicated on credit..woohoo
"I mean, if you could, is there some way you can just, in English to the average American...try to think this through and more in words, in terms, that the average American starts to understand," Baucus pleaded with Geithner.
Here's what the average American needs to understand:
"You were r---d and lied to by both Wall Street and Washington. Your anger is entirely justified and appropriate. The solution to these problems lay in your hands, not the financiers, economists, and politicians that caused them."
. . . card hold defaults refers to the card issuer liability. Credit card 'charge backs' are a different issue . . . .
True, and I didn't mean to suggest otherwise. I just don't like credit cards.
I pay in cash whenever possible, but I subsidize those who use credit cards since the merchant raises his prices to pay the charge for taking cards.
I may receive a credit card in payment and later have to deal with a chargeback which is a pain in the butt and often not worth the hassle.
I could go on, but I just don't like credit cards from any perspective.
Rob Dawg says:Today, 6:13:13 PM“Screw this. JS-Kit just ate a longish thoughtful post in reply to EHP. I'll just read for a while.
happened to me a few time over the last few days...my postings are now much fewer!
"They" have a choice: just tell folks it's over the whole thing is going down OR make up lots of little lies to paper things over and hope by some miracle we only have a Depression -- shouldn't we be rooting for them to succeed or NOT??
Mercantilism does not work, but asians will not learn.
//rogers says that most of the money has gone to the east and that countries in the west are debtor nations now. hmmm, i am not sure if i am buying this. first off, what does he consider to be money? fiat? what is money? remember, most of these asian countries did real well selling their junk to the west.//
Tom Stone - I hope you spent a bit of that extra $500 a month wandering over to Broadway in 1982 and catching my punk rock band play at the Mabuhay. A hell of a great year in SF.
Good god,the Mabuhay.Yes,I caught a few bands there.A great time to be a straight man in SF.
“Shilling, courtesy of Mauldin, gives probably the best and most succinct summary I have seen...
Shilling's advice over the past couple of years has been as good as gold.
But you kind of have to laugh a bit when he says "We're not predicting a depression because we're not the kind of people that predict depressions."
Japanese Stocks Rise a 3rd Day on Bank Optimism;
March 17 2009 (Bloomberg) -- Japanese stocks climbed for a third day on optimism bank earnings may rebound and after brokerages upgraded Sumco Corp.
Japan Stocks Rise a Third Day on Policy Optimism; Sumco Surges - Bloomberg.com
Japanese Stocks Rise for Third Day; Mitsubishi UFJ Leads Banks
Dec. 25 2007 (Bloomberg) -- Japanese stocks rose for a third day, led by financial shares, after a decline in interbank borrowing costs signaled a global credit-market slump is easing.
Japanese Stocks Rise for Third Day, Led by Toyota; DoCoMo Gains
Dec. 22 2003 (Bloomberg) -- Japanese stocks rose, led by automakers such as Toyota Motor Corp. and Nissan Motor Co. after the Nihon Keizai newspaper reported their overseas production may exceed domestic output by 2005.
Japanese Stocks Rise for Third Day, Led by Toyota; DoCoMo Gains - Bloomberg.com
Japanese stocks rise for third day, dollar gains in Tokyo
AP - March 17, 1999
Japanese share prices climbed to their highest level in almost eight months today on optimism about corporate restructuring efforts.
NewsLibrary.com - newspaper archive, clipping service - newspapers and other news sources
AP - February 9, 1998
Japanese stocks rise for third day, dollar gains
Japanese stocks rose for a third straight trading day today after Tokyo's lower house of parliament approved the use of public funds to bail out the country's ailing banking industry. The benchmark 225-issue Nikkei Stock Average gained 164.94 points, or 0.97 percent, to close at 17,205.00.
NewsLibrary.com - newspaper archive, clipping service - newspapers and other news sources
Too American didn't Express
Seems to think that AIG's books are cooked. The squirelly excuse that the bonuses are locked in due to contracts is not palatable. If we own %80 of this company, then the pay and bonuses should be on our terms. Someone is worried about retention of qualified personell. Sure there were proabably non-guilty personell in areas other than the credit swap division, but without our money how much pay would have been available to pay bonuses let alone keep these people employed?
There just seems to be no accountability except when the government is to pay then the government is held accountable, not those who made the wrong bet within the company.
Wiliam Black Savages Treasury’s Conduct on AIG « naked capitalism
Always wanted to do this.
I bring you threadmusic:
YouTube - Karan casey Ballad of accounting (Ewan maccoll) celtic
".....Did you demand any answers?
The who and the what and the reason why?
Did you ever question the setup?
Did you stand aside and let 'em choose while you took second best?
Did you let 'em skim the cream off and give to you the rest?
Did you settle for the shoddy and did you think it right
To let 'em rob you right and left and never make a fight,
never make a fight, never make a fight?. . ."
Fillean meal ar an meallaire. . !
Precursor of things to come?
In a first, bankruptcy judge rules Calif. city can void union contracts
In the first ruling of its kind, a bankruptcy judge held the city of Vallejo, Calif. has the authority to void its existing union contracts in its effort to reorganize, holding public workers do not enjoy the same protections Congress gave union workers at private companies.
Trading places on the tube, very timely.
Never realized it but the butler sort of steals the show.
Who is not me, why are they wrong, and why?
YouTube - 40 Hour Week
All,
at 3:15pm EST today Yahoo Finance ran a headline that missed the spell check:
"Obama: AIG can't LUSTIFY 'outrage' of bonuses"
Snagit Screen shot can be seen at:
Economic Disconnect: Full Court Financial Press
Grassley on AIG execs: Quit or suicide
Grassley on AIG execs: Quit or suicide - Martin Kady II - POLITICO.com
In a comment aired this afternoon on WMT, an Iowa radio station, Grassley (R-Iowa) said: “The first thing that would make me feel a little bit better towards them if they’d follow the Japanese model and come before the American people and take that deep bow and say I’m sorry, and then either do one of two things — resign, or go commit suicide.”
=-X =-X
"In a comment aired this afternoon on WMT, an Iowa radio station, Grassley (R-Iowa) said: “The first thing that would make me feel a little bit better towards them if they’d follow the Japanese model and come before the American people and take that deep bow and say I’m sorry, and then either do one of two things — resign, or go commit suicide.”
Wow! I was just going to suggest they get stripped of everything and run the gauntlet, tar and feathers optional.
Comrade Bear,
Drop RD a line for the address. The answer is a bit complicated.
Drum Roll:
YouTube - Loggins and Messina- Angry Eyes
Mercantilism does not work, but asians will not learn.
It is not the mercantilism that drives these countries but the thought of easy jobs for their citizens. 1. get the currency below their true value 2. create export zones with tax benefits 3. wink/wink on labor restrictions/environmental laws.
I think that the game is coming to an end
Backing Off On Mark-To-Market
Backing Off On Mark-To-Market - Forbes.com
"The Board acknowledges there are significant challenges to estimating fair value, particularly in illiquid markets, requiring the gathering and analysis of relevant data and the exercise of sound judgment."
See: AIG and sound judgement
=-X
Well, I'm sure glad GS got one of the first and biggest of AIG's--I mean taxpayers'--handouts. Maybe Hank Paulson will let me shine his head for some tablescraps when I'm 80.
sm_landlord,
Dawg has my email address, but I don't have his. Figure that one out.
CB, I sent him a note. Hopefully he gets it.
public workers do not enjoy the same protections Congress gave union workers at private companies
HALLELUJAH!!! The Cali courthouses are going to be humming this summer. Pretty soon it will be an easier question which CA cities aren't going BK.
Rob Dawg writes:
Screw this. JS-Kit just ate a longish thoughtful post in reply to EHP. I'll just read for a while.
Rob Dawg | Mon, 16 Mar 09 20:13:13 -0500 | #
I use MSFT Word and copy and past to comment. I learned a long time ago about that happening.
Darn! I blew my chance to sell "Credit Card Default Swaps" for AIG ....
copy and past to comment
So much for that.
Thinking about going to join the Somali pirates. Gotta learn some new, useful job skills.
grassley has been there a long time. what has he done? what has he done really? not much. all of them are like that? they are one of the reasons we are in the shape we are in. they are not doing their jobs and are not caring about the people who elected them to office. in the senate , i cannot think of one man or woman that is worthy of their office. not one.
Anonymous:
In general, I have to agree with your analysis. I also take exception to Sen. Grassley's comments--way out of line.
And way too easy: those schmucks need to be sent to a secret CIA facility to be tortured.
Then harvest the bodies for organs....
grassley has been there a long time. what has he done? what has he done really? not much.
BS. Grassley has done everything his contribution paying constituency demanded - maintained & expanded agricultural subsidies. What else would Iowa farmers want him to do? Subsidize New York investment banks?
Tom S, who bought Providian?
I wish I was still single living in sunset district bcse it is full of women looking for a hetero male...in other words its still good...
Can't even go get a beer without running into a beautiful lady...or maybe its the trick Jim Carrey uses in this movie..forward to 3:54....too funny....
YouTube -
I don't know if anyone has mentioned this, but I believe that all those penalties and fees generated by defaults are recorded as revenue (as it is an increase in the consumer's liability to the bank). I wonder how much this is adding to the recent "profits" announced by some of the big banks?
Apparently to shrink exposure, Amex is now mailing a "warning" notice to cardholders a month before the annual fee comes due. In it, they instruct you on how to cancel your card to avoid the annual fee. I've heard from credible sources that this is delivered to holders with clean credit, FICO > 800 and zero balance on any card. Does this make sense?
If you call BofA and say you got laid off. They will automatically cancel your card and put you in collection. Even if you are current and not missed a payment. That must be pushing numbers like this also.
Dryfly said;
"BS. Grassley has done everything his contribution paying constituency demanded - maintained & expanded agricultural subsidies."
USDA has just introduced country of origin labelling requirements for ground beef. I assume this is a scheme from the farm lobby to induce US consumers to buy USA. But savvy readers on this blog can game the system and seek out better quality ground beef that originates from New Zealand, because;
It contains less fat (fitter cows who have to expend effort to graze).
Grass feed so more flavour (corn feed only makes economic sense if corn subsidised).
No growth hormones (It scares the hell out the Europeans so we don't indulge).
No mad cow disease (Why feed animal remains to ruminants when you can more lucratively export animal remains to pet food producers?).
When you send unsolicited credit apps and blank checks to everybody and their dog three times a week for thirty years, what could possibly go wrong?
Nothing until you run out of pension funds to sell the package of securitized loans too.
-- w
Kiwi writes:
Dryfly said;
"BS. Grassley has done everything his contribution paying constituency demanded - maintained & expanded agricultural subsidies."
USDA has just introduced country of origin labelling requirements for ground beef. I assume this is a scheme from the farm lobby to induce US consumers to buy USA. But savvy readers on this blog can game the system and seek out better quality ground beef that originates from New Zealand, because;
It contains less fat (fitter cows who have to expend effort to graze).
Grass feed so more flavour
get real kiwi, the flavour in beef is down to the fat, as in more is more, google wagyu, marbled
i agree that NZ ground beef is ok, but be aware that is all the land of the free allows in from us....not gonna change in this climate
my advice: buy nz beef and lamb and eat it yourself with a good pinot noir until they wake up
i do....
How about that credit-card outreach commercial last night. C, BAC, JPM et al banded together to aid troubled card holders in a hysterically themed commercial where a gal quit working due to mom's illness and could no longer keep up with her credit card payments...
WTF! As if this were the face of troubled card holders today???? How about a story line where these companies over extended credit, held millions captive, lobbied the government for relief from legacy assets while their customers drown in legacy mortgages and legacy credit card balances of a previous time in history. This would more accurately tell the story. Mother-effers, all of 'em.