I'm glad this got highlighted by CR. In addition to the Bloomberg article, zerohedge's guest post of an open letter to Sheila Bair on this is worth reading:
Just for color, the bonds that are planned for the 65-75 tender were trading in the mid-70's this week, and in the 90's 2 months ago. I see bids out for these from a broker at 70 across the board, so apparently they think one of two things
1) The tender offer will come in above 70, they tender early, get 2 extra points. Nice pickup, but a lot of downside risk if tender comes in at 65 and they bought at 70.
2) The residual value in the trust windown is greater than 70. Very possible. Depends on how bad you think things are going to get.
Money Sources
Top revenue sources for state and local governments in the first quarter, compared with the same period last year:
Federal grants: 15%
Income taxes: -11%
Property taxes: 2%
Sales taxes: -2%
Other taxes: 2%
Sources: U.S. Department of Commerce, Bureau of Economic Analysis
This sudden blip in Americans finally saving, is kind of like the loser in high school, that never studies and gets religion a few weeks before he's supposed to graduate, and studies like mad, to no avail.
Not sure your reading into this the implications...Yes, 3 C's is nice when you yourself have credit to extend verses having to pool those resources to cover staggering losses, so many losses in fact that you have nothing to lend, no credit to extend. Now consider that, and shiver.
I guess the one snag with my earlier suggestion would be the possibility that Advanta is so lean on capital that they simply don't have the capacity to even cover the writedowns on the existing portfolio much less can they afford to grow the portfolio.
My University (George Mason) just annnounced that as of Fall 2009 Semester, they will no longer accept Visa as payment for tuition. Mastercard, Discover, and AMEX are still okay, but the university has added a 2.5% service fee for all such transactions--and they will only take CC payment online. I guess Visa wouldn't come down to 2.5%!
Anyway, if the credit card companies (not the banks that utilize their services) are reaching for more fees to cover their volume losses, we may soon see a more common posting of cash vs. CC prices by merchants. It'll be one more nail in the coffin of consumer credit as we know it.
Another promising report from George Mason today..
According to a new study released by the Mercatus Center of George Mason University, some of the most liberal U.S. states rank lowest when it comes to personal freedom.
The study, which calls itself the “first-ever comprehensive ranking of the American states on their public policies affecting individual freedoms in the economic, social, and personal spheres,” made a host of findings:
The freest states in the country are New Hampshire, Colorado, and South Dakota, which together achieve a virtual tie for first place. All three states feature low taxes and government spending -- and middling levels of regulation and paternalism.
New York is the least overall free by a considerable margin, followed by New Jersey, Rhode Island, California, and Maryland.
Unfortunately, say the report authors, these freedom-disadvantaged states “make up a substantial portion of the total American population. Moreover, these bottom five states have considerable ground to make up even to move off this ignoble list, let alone into a creditable position in the rankings.”
When weighing personal freedom alone, Alaska is the clear winner, while Maryland brings up the rear.
Sarah Palin’s Alaska does extremely well on personal freedom, conclude study authors. Reasons for its high personal freedom alone score include: fully legalized possession of small amounts of marijuana (accomplished through a court ruling), the best (least restrictive) gun laws in the country, recognition of same-sex domestic partnerships, and possibly the best homeschooling laws in the country.
As for freedom in the different regions of the country, the Mountain and West North Central regions are the freest overall -- while the Middle Atlantic lags far behind on both economic and personal freedom.
There are real benefits to scoring high on economic and personal freedoms, conclude the study’s authors. Their analysis demonstrated that states enjoying more economic and personal freedom tend to attract substantially higher rates of internal net migration.
Another promising report from George Mason today..
According to a new study released by the Mercatus Center of George Mason University, some of the most liberal U.S. states rank lowest when it comes to personal freedom.
The study, which calls itself the “first-ever comprehensive ranking of the American states on their public policies affecting individual freedoms in the economic, social, and personal spheres,” made a host of findings:
The freest states in the country are New Hampshire, Colorado, and South Dakota, which together achieve a virtual tie for first place. All three states feature low taxes and government spending -- and middling levels of regulation and paternalism.
New York is the least overall free by a considerable margin, followed by New Jersey, Rhode Island, California, and Maryland.
Unfortunately, say the report authors, these freedom-disadvantaged states “make up a substantial portion of the total American population. Moreover, these bottom five states have considerable ground to make up even to move off this ignoble list, let alone into a creditable position in the rankings.”
When weighing personal freedom alone, Alaska is the clear winner, while Maryland brings up the rear.
Sarah Palin’s Alaska does extremely well on personal freedom, conclude study authors. Reasons for its high personal freedom alone score include: fully legalized possession of small amounts of marijuana (accomplished through a court ruling), the best (least restrictive) gun laws in the country, recognition of same-sex domestic partnerships, and possibly the best homeschooling laws in the country.
As for freedom in the different regions of the country, the Mountain and West North Central regions are the freest overall -- while the Middle Atlantic lags far behind on both economic and personal freedom.
There are real benefits to scoring high on economic and personal freedoms, conclude the study’s authors. Their analysis demonstrated that states enjoying more economic and personal freedom tend to attract substantially higher rates of internal net migration.
I pointed out the problem with stabilization a few weeks ago. Yes, things have stabilized at lower levels (from my survey of local small businesse at 20-35% off of normal) but the margin on that lost revenue in many cases means the difference between profit and paying your fixed costs. Unless things turn around REAL quick look for another downleg in the economy as businesses hanging onto the ledge with one finger tip exhaust their credit/capital.
Guys I am hearing a lot of 'rumors' this morning from people in capital circles. Has anyone else heard anything about a national sales tax on soda and upping social security retirement age to 70? I can't find any bills in congress suggesting this, so I assume it is all talk at this point, but the ss rumor comes from a friend who works for a US Rep from Texas and isn't prone to exaggeration. Also Australia introduced legislation to up their age from 65 to 67 like we did a few years ago. Add this to rumors too, military is preparing for something. Keep an eye out for June and July.
So the first toxic shock to small American Businesses was the box stores taking them out, and the 2nd toxic shock is their credit box scores taking them out...
Swimming naked is not just for home buyers. I can't tell you how many of my fellow small business owners have been "investing" in their operations for years by running up debt. Now that they can't roll their paper it is going up in smoke. This is particularly troubling as small businesses are where the jobs have been. Loss of credit in this sector is going to spike UE.
JP, I found that wording puzzling. I'm sure they have 100% charge-offs on some cards.
After cursory digging: I think it's just the bloomberg reporter looking at their quarterly-report PR. Search for "Net principal charge-offs", and you'll find that their charge-offs are 20% of avg receivables:
There are a lot of different buckets of receivables that Card ABS issuers can use other than the overall trust performance. There are no May filings yet, but the overall charge-off rate on all Advanta securitized cards for April was 17.3%. They can cut this further based on seasoning of the cards, whether they were Visa or MC, etc. etc.
Who knows what the 20% refers to until they release the May trust documents.
Lobbyist Ben Dover (profile) wrote on Tue, 5/12/2009 - 9:30 am
"upping social security retirement age to 70?"
Wait till the young ones figure out they are paying about 15% now for SS and Medicare! I bet they raise that soon.
You know they are going to.
My wife has a gift for mathematics, especially finance. She makes her own excel spreadsheets which she can estimate taxes and is usually within pennies of being correct. She has caught the government cheating her paycheck twice now. Anyway, she made me a nice little presentation a few years ago about taxes, social security, etc...which she concluded with that we are serfs to the Federal state and totally fucked. She wants to remove involuntary deductions and make everyone pay their taxes quarterly. Only way to save the Republic at this stage. The only joy we have in paying taxes is that she is a federal employee.
swamp otis (homepage, profile) wrote on Tue, 5/12/2009 - 10:39 am reply Ignore user Get pulled over in GA with a thimble full of weed and hello prison.
Not that bad, most cops i know would at most make you crumble it up on the street..... provided no paraphanelia, and go on...
I remember heading from GA to Mardi Gras in Nawlens one year and in Alabama they had a sign that said drug stop ahead exit 239 , well the next exit was 238 and folks were pulling off and at the top of the offramp there were the cops waiting.... funny as hell....
The National Association of Liars continued to be wrong over the last 12 months. As it turns out, it was NOT a great time to buy house (median price down 14% yoy).
hey i need to get that spreadsheet, wife and i are trying to figure what we can /could change our witholdings to once we "buy" since renting keeps us at 0/0 each. And we are in the 30% bracket....
you know where we can get one of those cause we are trying to calculate how much mortgage interest deduction we can claim, what our returns would be , what we could increase our monthly take home to by uping our witholdings....
Fiduciary Doodie (profile) wrote on Tue, 5/12/2009 - 7:20 am
According to a new study released by the Mercatus Center of George Mason University, some of the most liberal U.S. states rank lowest when it comes to personal freedom.
There is no freedom.Freedom is just in your imagination.You are always slave to somebody,something.Remember this.and yes,no god,no philosophy can give you freedom.You are bound
Locally on the radio they're advertising "100% government backed investments - you can't lose anything." I think these are the mortgage guys that have been around for a few years scamming the system.
Sounds like they've got a new way to loot the system.
Seems like it was yesterday: Advanta selling off its credit card business to rebuild itself as a subprime lender. And then selling off its subprime mortgage business to rebuild itself as a credit card company. Round and round we go...I wonder what, if anything, is next for these guys? Talk about your leading indicators--whatever they get into is probably the next credit bubble.
If you're not familiar with the company here's a useful history:
doodie, sounds about right. i went to auburn a couple years till i couldn't handle the homogenized frat boy rascists and parfumed big hair floral dress dingbats who went to college to husband shop.
Fiduciary Doodie (profile) wrote on Tue, 5/12/2009 - 9:46 am
Vonbek777,
hey i need to get that spreadsheet, wife and i are trying to figure what we can /could change our witholdings to once we "buy" since renting keeps us at 0/0 each. And we are in the 30% bracket....
you know where we can get one of those cause we are trying to calculate how much mortgage interest deduction we can claim, what our returns would be , what we could increase our monthly take home to by uping our witholdings....
Let me ask the wife tonight. She makes ours specifically for our situation, but I think it would just be a matter of replacing the formulas, and she might know of some generic ones on the net you could use as well.
the insider from outside (profile) wrote on Tue, 5/12/2009 - 10:46 am reply
There is no freedom.Freedom is just in your imagination.You are always slave to somebody,something.Remember this.and yes,no god,no philosophy can give you freedom.You are bound
Freedom's just another word for nothin' left to lose
Nothin', don't mean nothin' hon' if it ain't free, no no
And, feelin' good was easy, Lord, when he sang the blues
You know, feelin' good was good enough for me
Good enough for Hank and Neal Kashkari?
swamp otis,
I went to Baylor for a couple of years...exact same experience. Great grades, good scholarship, but I was completely suicidal and had to get out of there. Worst two years of my life. Growing up in the military did not prepare me for trust-fund religious bigots and a social networking scheme that would make the devil proud.
Fiduciary Doodie (profile) wrote on Tue, 5/12/2009 -
Freedom's just another word for nothin' left to lose
Nothin', don't mean nothin' hon' if it ain't free, no no
And, feelin' good was easy, Lord, when he sang the blues
You know, feelin' good was good enough for me
Good enough for Hank and Neal Kashkari?
Thats some nice lyric man.You wrote it yourself?Are you a poet?
Listening to The CNBC Troll instructors families have to have credit cards to function! No they don't, use cash or don't live beyond your means! Many Americans are not smart enough to be mad as hell!
one of my housemates was a bookie for the pikes. great guy. he sublet his room over the summer to the dealer for the pikes. the jerk made disgusting messes. i confronted him and he snapped and hit me with a hammer, still have the scar. i beat him until he was unrecognizable. he came back with a few pikes while i was gone and destroyed everything in my room.
carried an illegal automatic everywhere i went for a year after that. made sure they all saw it.
i was 17...
the store where i got the gun (with the help of an older friend) sold alcohol. guns, beer, ammo: all in one bag.
the pikes got into big trouble after that for gang raping a passed out girl and dropping her off at a competing frat house in a shopping cart with obscenities written all over her.
I'd bet a lending freeze is going to net them a default cascade. I'm just putting myself into the mind set of the strapped CC borrower who has a now useless card among lots of cards to pay off. Priorities, priorities, guess who doesn't get paid the monthly payment?
They can, but it wouldn't help. The charge-offs are so high on their cards, there is no excess spread (residual cash flows) left. This forces the trust to either amortize the deal away (they took this option) or re-enhance the deal by adding more collateral (JPM/Citi/BofA all did this on their deals). Since all of their collateral is performing so poorly, it really wasn't going to help much to re-enhance.
TALF can't save the dead, it can only help the living make a few more bucks.
And Advanta was mostly for small business. I consider this bad news, small businesses need liquidity to span the gaps between inflows and outflows. Debit cards don't solve this.
May 12 (Bloomberg) -- Paul Krugman, Princeton University’s Nobel Prize-winning economist, said global economic prospects don’t justify the two-month rally that has restored $8.9 trillion to stock markets around the world.
Speculation government spending packages and interest-rate cuts worldwide will reinvigorate the global economy has helped the MSCI World Index rally 37 percent since falling to its lowest since 1995 on March 9. The U.S. Standard & Poor’s 500 Index surged 34 percent in that time.
“It looks to me now as if the markets are now pricing in a rapid recovery, that they’re pricing in a V-shaped recession, which I consider extremely unlikely,” Krugman, 56, said at a forum in Shanghai today. “The market seems to be looking as if this is going to be an average recession, but it’s not.”
Swamp Otis,
Ouch, you had it bad. My problems seem trivial compared to that, but I was still in hell. Imagine going to a religious school, being non-religious, but probably the most moral person on campus. That is also where I learned I wasn't truly white. I knew I had native-american ancestry...no big deal, but I wasn't white enough to hang out in certain social circles at Baylor. The football team routinely hung out at the local strip joint outside of city limits, but we were a Christian school. The Senior Class Treasury was arrested with a gun in his hand trying to off himself after being discovered as the asshole who had been breaking in to girls apartments and jerking off on sleeping beauties. Drunk parties off campus and date rape were weekly events. I quit the debate team because I was assigned the task of writing case briefs for our celebrity members but didn't actually get to go to a meet myself even though my cases won. The sad thing was is that I had really good professors, just couldn't put up with the pricks and drama queens going there. Oh, did I mention that while I was at Waco, Branch Dravidian Massacre happened too......great times.
Imagine the pressure that comes from just having won the Nobel Prize in the Dismal Science, to get it just right as far as your prognostications are concerned?
If the recent stock market rally proves anything, it is that investors have to respect the awesome short term power of bogus financial earnings and propaganda.
"Earlier this evening Advanta, which through its FDIC-insured bank Advanta Banc Corp makes credit card loans, declared its intentions to allow its securitization trust to go into early amortization, while concurrently launching a coercive tender offer for the securities issued by the trust. This marks the first intentional amortization event, which if unpunished, could jeopardize the stability of securitization markets, the government’s special programs to aid the market such as TALF, the bank’s depositors, and the legal rights of Advanta’s ABS investors.
As it currently stands, Advanta is on the express-train to insolvency. Faced with crippling losses and hazy capital strength (tangible equity / net managed assets = ~4%), the company decided to throw a first-of-its-kind Hail Mary pass in the hope that the FDIC would not place the firm into receivership..."
"May 12 (Bloomberg) -- Home prices in the U.S. dropped the most on record in the first quarter from a year earlier as banks sold seized homes and foreclosures in California and Florida dominated sales.
The median price fell 14 percent to $169,000, the National Association of Realtors said today. Prices dropped in 134 of 152 metropolitan areas, with the deepest declines in Cape Coral-Ft. Myers, Florida, and the San Francisco and San Jose areas."
Where the Federal stimulus money is going in California: ...eligible workers laid off between Sept. 1, 2008 and Dec. 31, 2009 would qualify for a 65 percent subsidy of Cal-COBRA premiums for up to nine months, and people who’d rejected or stopped their Cal-COBRA coverage would have a chance to set it up again with the new subsidy.
Yup, subsidizing unemployment benefits is an economic stimulus.
Angry Saver (profile) wrote on Tue, 5/12/2009 - 8:15 am reply Ignore user If the recent stock market rally proves anything, it is that investors have to respect the awesome short term power of bogus financial earnings and propaganda.
It is just the dream economy is having.A fake dream over that.
Had a similar experience during my "education"...the thing I wonder is....it must be impossible for such weak people to hate themselves enough...so they invent a god to hate them all the way to hell...probably makes being such a prick easier.
The freest states in the country are New Hampshire, Colorado, and South Dakota, which together achieve a virtual tie for first place. All three states feature low taxes and government spending -- and middling levels of regulation and paternalism.
I can tell you from personal experience, and I have lived in a lot of places, that the "Live Free or Die" state of NH is about the best quality of life I have encountered so far.
Wow, this is kinda sad and pathetic isn't it? Why didn't they just donate these stocks to charity so they could at least get the tax write off? Or better yet, go down with the ship like a man.
SAN FRANCISCO (MarketWatch) -- A group of top General Motors Corp. executives, including Vice Chairman Bob Lutz, have sold what was left of their personal stakes, according to several filings with the Securities and Exchange Commission on Monday. "Our shareholders are obviously facing some pretty severe dilution if the bond exchange goes through or we end up in bankruptcy," GM spokesperson Julie Gibson said. "Either way, no matter the outcome, we'll essentially be issuing new stock." She acknowledged that the executives took advantage of a trading window to sell their shares while there's still some value "like most reasonable people would do." At the same time, GM is trying to rid itself of $27 billion in debt by convincing thousands of creditors to exchange their bonds for 10% in GM stock. According to the SEC filings, Lutz was joined by fellow Vice Chairman Thomas Stephens, Ralph Szygenda, Troy Clarke, Gary Cowger and Carl-Peter Forster. All together, the six sold nearly 205,000 shares between Friday and Monday, fetching between $1.45 and $1.61 a share...
Yesterday on the SF Bay news radio they talked about how business bankruptcies were up 30 percent month-to-month March to April (I think) in Silicon Valley. Lots and lots of Chapter 7s; just nothing left. You can bet that most of these outfits leave a lot of credit card debt behind on the floor. Mostly small outfits, but not all.
You take 10 cents on the dollar, or soldier on with the Sisyphusian task of pushing cars that nobody wants, year after year for what seems like eternity.
"The 22.6 percent drop in exports in April from a year earlier,
"These figures show we cannot be optimistic about the future trends for exports," the Commerce Ministry said in a statement posted on its Web site that amounted to a lament over the lack of a turnaround in demand for Chinese products.
On the positive side, Beijing reported that investment in factories and property development jumped 30.5 percent during the first four months of the year to 3.71 trillion yuan ($543.2 billion), as banks kept up a steady flow of lending for government stimulus projects."
Interesting, so the response to drop in exports (drop in demand) is to increase capacity rather than local consumption. Just wonderful, go RED ROCKETS!!!
p.s. how is overcapacity the positive side?
eventually, it will blow!
Bernanke threatening to take away the punchbowl just as the party is getting started. Might be a few angry party-goers, not to mention the party organizers, Geithner & Summers.
Agree with some of that line of thinking, but the truth is people are a result of their upbringing. Baylor was a reflection of the ideals and morals displayed in the 'business' elite of the south. I am actually the one who is screwed up, growing up in the military did not indoctrinate me in how the real world works. I should have probably followed in my dads footsteps, but the army was so screwed up in the early 90s, I didn't want to go there either. The great what-ifs of your life...I had a congressional nomination from Chet Edwards to West Point, Vice Presidential to Annapolis, and a Presidential to the Air Force academy. Settled on Annapolis, went in for my physical, found out I was color blind, and it completely changed my life in a matter of minutes. People look back on their 18-20s with fondness. I hope never to go back to those years. Pure torture.
Happy days are here again, this from a seller guide update I just got from Fannie Mae:
Fannie Mae’s Quality Control Process
For Refi Plus loans, Fannie Mae’s quality control process will not:
-hold the lender responsible for information that may be obtained as a result of Fannie Mae’s
reverification of income or assets stated by the borrower,
-impose any maximum debt-to-income ratio or other underwriting criteria,
-require the lender to represent and warrant that the borrower has an acceptable credit history
(other than the credit history and mortgage payment requirements that are specific to Refi
Plus per Announcement 09-04), or
-hold the lender accountable for undisclosed liabilities.
Which brings me to the question: is Advanta having a much worse time than the other card companies, or is this the beginning of the trend of the end of the credit card industry in America?
A lot of people are going to find themselves in a lot of deep doo doo.
It appears that between the GGP BK switcheroo and this Advanta tactic described by ZeroHedge, what's left of securitization as a financing system is being actively destroyed.
for the ZeroHedge tip.. I've seen his name in various places, as a big Fight Club fan how could I not.... (actually I did a Viet Cong Fight Club vid mash-up on YouTube based on a fist fight I filmed in Vietnam last year - they were both really drunk, not like Drunkenmaster 2... got a lot of hits but the Tube forced me to pull it cause of the soundtrack... word to budding vid mashers - don't use more than 20 seconds of a track, after that Fair Use seems not to apply)
By the way, local radio show host this morning was saying the recession is over. This was all a crisis in confidence, American fundamentals were as strong as always. Doomers and speculators at fault. Wouldn't take questions about rising gas or closing malls. Where can I get my rose-colored glasses?
So, "oats" must apply for new drug certification? Oats?!
Can somebody please just slap the federal government across the face repeatedly until it "comes to?"
I am starting to sound like my grandmother - "With all that's going on in the world, THAT"S what they worry about?"
“We’ll be shutting down accounts for future transaction activities, but many of the customers will maintain balances and pay us off over time,” Browne said yesterday in a telephone interview. “We’ll have to service and collect on that, and that will be the first order of business for the company.”
So the next hot career field is going to be debt collection?
"The freest states in the country are New Hampshire, Colorado, and South Dakota,"
Colorado Was a low tax state with controlled spending (Tabor Bill) till the Cali's moved in and bought a socialist spending governor. Party is soon to be over as they turn the screws to big taxes.
Good luck collecting all that prior debt once you shut off the cards.
Watch as all the LLCs liquidate and die, leaving nothing to collect and limited liability for the insolvent owners.
"We regret to inform you that no business with that name is located at this address. Thank you in advance for updating your records to reflect this. Future correspondence directed to that entity will be shredded unopened. Have a nice day."
Here's a great piece of anecdotal evidence about people being fed up...my local lawn guy (former enlisted Army Texan who is making a killing mowing lawns all by himself) told me to stop adding the 8.25 sales tax to my checks. Says he isn't paying taxes anymore, and isn't charging his customers either. This is more like the 'tea-parties' I was waiting for. Not just political feel good nothing gatherings. Waiting for the bootleg forever stamps to hit the market...
"It was during the first FDR Administration that withholding taxes were invented. This, more than anything else created Big Government."
Payroll taxes came up during the third Roosevelt administration, brainchild of a guy named Beardsley Ruml who was the controller of Macy's and also a director of the NY Federal Reserve. He realized that new recruits were going to take a big hit trying to cover their lump-sum tax payment on last year's income while in the military, because their income dropped so much. And he worked for Macy's, and knew all about payment plans....
And yes, it made taxes more painless, and thus easier to collect and raise. It also helped that payroll taxes came in during the war years, a time of full employment and rising wages -- and not that much to spend them on.
I like to hang out by the watering hole near the food court, where oftentimes I see cougars in the Wild Pair. Sometimes i feel like having a Clockwork Orange Julius @ the Cougarova milkbar across the way.
re: Cheerios ... the financial industry is not the only one capable of regulatory capture.
Next to financials, biggest corporate donors to campaigns are big pharma companies. They don't want you eating Cheerios when you could be paying for an expensive cholesterol lowering drug.
Oats are up big today, So is corn. What inflation? Just take a stroll through your local supermarket and look at prices. I can see the upward pressure on prices from the various inputs quite clearly.
Price inflation can still kill us in an overall collapsing deflationary environment. All it takes is a bit of currency trashing, and that seems to be what the Fed is hell bent on doing. No other way to deal with all the debt we are piling up. I believe that sooner rather than later the Fed will be the buyer of only resort for Treasuries, just like they are now for Agency paper. That won't exactly be helpful.
dum luk (profile) wrote on Tue, 5/12/2009 - 9:58 am
Somebody forgot to tell these guys that TA is dead:
"Treasury Rout to Pause, Fibonacci Indicates: Technical Analysis" Treasury Yields to Fall, Fibonacci Signals: Technical Analysis - Bloomberg.com...
<<<<<<<<<<<<<
Hmmm, and it just happens to coincide with a market that's run to ridiculous levels and is ripe for a significant correction, if not new lows. Funny how these things come together, isn't it?
Its an an excise tax on sweet beverages. If the Democrats are smart they'll ash-can that ASAP. its perfect fodder for the GOP and though our current government sucks donkey balls I am really not looking forward to more GOP rule thank you.
The Democratic take over is no more permanent than than the Republican majority.
Making SS kick in at 70 I have heard nothing about -- if done over the long term its manageable but it will greatly increase savings rates. Say hello to deflation forever and ever amen. Savings Up + No New Markets = Consumption Down (then) Wages Down= Consumption Down= Prices Down (loop)
CR: the some cards wording probably was meant to refer to their different types of cards. They used to offer a mix of cards with different account terms aimed at different sorts of uses and different sorts of companies. The latest update to the story no longer has that wording, and now indicates that 20% is their overall charge-off rate.
There are very good reasons for Advanta to have far worse problems than issuers of consumer credit cards:
They focused on small and medium sized businesses, all the way down to the one-man-show "consulting" businesses that pop up when experienced professionals find themselves out of work. Not exactly the most stable businesses in the world.
It seems that in many cases they were issuing cards to corporate entities as if they were real people: totally unsecured, without recourse to any collateral or co-signing by humans. In the bankruptcy of a small corporation that is likely to mean that they are last in line to get a discounted fraction of nothing.
From commercial paper to bank lines of credit, business operating credit has been drying up from the big end down, and Advanta's business is at the bottom, getting squeezed.
Advanta's issues are pretty special. They are almost like a commercial paper broker rather than a typical CC issuer.
first?
I'm glad this got highlighted by CR. In addition to the Bloomberg article, zerohedge's guest post of an open letter to Sheila Bair on this is worth reading:
Zero Hedge: Guest Post: Open Letter To FDIC
-K
welcome to rolloff. have a nice trip_and_fall.
what, me.... just when I was about to start a new biz
Rats. I spent all my good thoughts on this on the prior thread. Now, I guess I will take a nap.
nincompoop
congrats...clearly you were not shopping and using your creditcard at 701 am
WOW.I worked for a couple of credit card issues long ago and these are absolutely incredible numbers.OMFG.
America didn't take American Express or Visa in 1931, and in 2009 Advanta doesn't take risky Americans.
Confederacy of Tsunamis.
--bh
Just for color, the bonds that are planned for the 65-75 tender were trading in the mid-70's this week, and in the 90's 2 months ago. I see bids out for these from a broker at 70 across the board, so apparently they think one of two things
1) The tender offer will come in above 70, they tender early, get 2 extra points. Nice pickup, but a lot of downside risk if tender comes in at 65 and they bought at 70.
2) The residual value in the trust windown is greater than 70. Very possible. Depends on how bad you think things are going to get.
So is the near bankruptcy of a credit company a green shoot?
Glimmers of Trains.
Seems a little dumb to completely bar the doors.
Why not just start limiting the lines, and I don't know maybe vetting the 3 C's before giving people the plastic?
I know it's crazy, but it just might work.
Credit Default Swipe.
Money Sources
Top revenue sources for state and local governments in the first quarter, compared with the same period last year:
Federal grants: 15%
Income taxes: -11%
Property taxes: 2%
Sales taxes: -2%
Other taxes: 2%
Sources: U.S. Department of Commerce, Bureau of Economic Analysis
Senate Blocks 15 Percent Cap on Card Interest Rates (Update1) - Bloomberg.com
Dodd -Shelby agreement on new credit card bill of rights....
This sudden blip in Americans finally saving, is kind of like the loser in high school, that never studies and gets religion a few weeks before he's supposed to graduate, and studies like mad, to no avail.
book1,
Not sure your reading into this the implications...Yes, 3 C's is nice when you yourself have credit to extend verses having to pool those resources to cover staggering losses, so many losses in fact that you have nothing to lend, no credit to extend. Now consider that, and shiver.
--bh
I guess the one snag with my earlier suggestion would be the possibility that Advanta is so lean on capital that they simply don't have the capacity to even cover the writedowns on the existing portfolio much less can they afford to grow the portfolio.
Only slightly related--
My University (George Mason) just annnounced that as of Fall 2009 Semester, they will no longer accept Visa as payment for tuition. Mastercard, Discover, and AMEX are still okay, but the university has added a 2.5% service fee for all such transactions--and they will only take CC payment online. I guess Visa wouldn't come down to 2.5%!
Anyway, if the credit card companies (not the banks that utilize their services) are reaching for more fees to cover their volume losses, we may soon see a more common posting of cash vs. CC prices by merchants. It'll be one more nail in the coffin of consumer credit as we know it.
Which is a problem, I guess.
hat-tip to the bh, he beat me to it.
I use my CC to buy pretty much everything each month as a way to track expenses....then I just pay it off when the bill comes with cash.
I hadn't really considered that I may have to switch over to the debit card instead. It's a pity, because I liked having the fraud buffer.
The defaults are consumers throwing in the towel but i bet that much of it is triggered in silent protest to the banker looting.
ie:
"they stole from me so i am going to steal from them."
seems like a case of what goes around comes around.
kurty boy..
Another promising report from George Mason today..
According to a new study released by the Mercatus Center of George Mason University, some of the most liberal U.S. states rank lowest when it comes to personal freedom.
The study, which calls itself the “first-ever comprehensive ranking of the American states on their public policies affecting individual freedoms in the economic, social, and personal spheres,” made a host of findings:
The freest states in the country are New Hampshire, Colorado, and South Dakota, which together achieve a virtual tie for first place. All three states feature low taxes and government spending -- and middling levels of regulation and paternalism.
New York is the least overall free by a considerable margin, followed by New Jersey, Rhode Island, California, and Maryland.
Unfortunately, say the report authors, these freedom-disadvantaged states “make up a substantial portion of the total American population. Moreover, these bottom five states have considerable ground to make up even to move off this ignoble list, let alone into a creditable position in the rankings.”
When weighing personal freedom alone, Alaska is the clear winner, while Maryland brings up the rear.
Sarah Palin’s Alaska does extremely well on personal freedom, conclude study authors. Reasons for its high personal freedom alone score include: fully legalized possession of small amounts of marijuana (accomplished through a court ruling), the best (least restrictive) gun laws in the country, recognition of same-sex domestic partnerships, and possibly the best homeschooling laws in the country.
As for freedom in the different regions of the country, the Mountain and West North Central regions are the freest overall -- while the Middle Atlantic lags far behind on both economic and personal freedom.
There are real benefits to scoring high on economic and personal freedoms, conclude the study’s authors. Their analysis demonstrated that states enjoying more economic and personal freedom tend to attract substantially higher rates of internal net migration.
Home
| Mercatus
kurty boy..
Another promising report from George Mason today..
According to a new study released by the Mercatus Center of George Mason University, some of the most liberal U.S. states rank lowest when it comes to personal freedom.
The study, which calls itself the “first-ever comprehensive ranking of the American states on their public policies affecting individual freedoms in the economic, social, and personal spheres,” made a host of findings:
The freest states in the country are New Hampshire, Colorado, and South Dakota, which together achieve a virtual tie for first place. All three states feature low taxes and government spending -- and middling levels of regulation and paternalism.
New York is the least overall free by a considerable margin, followed by New Jersey, Rhode Island, California, and Maryland.
Unfortunately, say the report authors, these freedom-disadvantaged states “make up a substantial portion of the total American population. Moreover, these bottom five states have considerable ground to make up even to move off this ignoble list, let alone into a creditable position in the rankings.”
When weighing personal freedom alone, Alaska is the clear winner, while Maryland brings up the rear.
Sarah Palin’s Alaska does extremely well on personal freedom, conclude study authors. Reasons for its high personal freedom alone score include: fully legalized possession of small amounts of marijuana (accomplished through a court ruling), the best (least restrictive) gun laws in the country, recognition of same-sex domestic partnerships, and possibly the best homeschooling laws in the country.
As for freedom in the different regions of the country, the Mountain and West North Central regions are the freest overall -- while the Middle Atlantic lags far behind on both economic and personal freedom.
There are real benefits to scoring high on economic and personal freedoms, conclude the study’s authors. Their analysis demonstrated that states enjoying more economic and personal freedom tend to attract substantially higher rates of internal net migration.
Home
| Mercatus
So imagine a world without credit cards...
Where else could the hoi ploy get money?
Selling stuff on eBay, Craig's List or a pawnshop works for awhile until you run out. No bank is gonna loan you one thin dime, without collateral.
Advanta said ... charge-offs, or uncollectible debt, reached 20 percent on some cards as of March 31.
What does "on some cards" mean? And why wouldn't you list across all cards?
I pointed out the problem with stabilization a few weeks ago. Yes, things have stabilized at lower levels (from my survey of local small businesse at 20-35% off of normal) but the margin on that lost revenue in many cases means the difference between profit and paying your fixed costs. Unless things turn around REAL quick look for another downleg in the economy as businesses hanging onto the ledge with one finger tip exhaust their credit/capital.
I'd be worried if small business was historically the engine of job creation in our eCONomy.
JP, I found that wording puzzling. I'm sure they have 100% charge-offs on some cards.
best wishes
Guys I am hearing a lot of 'rumors' this morning from people in capital circles. Has anyone else heard anything about a national sales tax on soda and upping social security retirement age to 70? I can't find any bills in congress suggesting this, so I assume it is all talk at this point, but the ss rumor comes from a friend who works for a US Rep from Texas and isn't prone to exaggeration. Also Australia introduced legislation to up their age from 65 to 67 like we did a few years ago. Add this to rumors too, military is preparing for something. Keep an eye out for June and July.
Treasury Direct should offer debit cards
Then they wouldn't need the moronic 250k FDIC guarantee, which is a blatant admission that the banking system can't survive without government cheese.
So the first toxic shock to small American Businesses was the box stores taking them out, and the 2nd toxic shock is their credit box scores taking them out...
COF crack still available for your gambling pleasure
down only 7.2%
Capital One Financial Corp. - Google Finance
NEW! Dead Presidents Credit Card (cash) Don't leave home with out it!
Vonbek777 (profile) wrote on Tue, 5/12/2009 - 10:24 am reply Ignore user
Soda tax is a NY idea the gov is floating....
There has been talk for years of uping the SS age to 70, "because people are working / living longer"
Swimming naked is not just for home buyers. I can't tell you how many of my fellow small business owners have been "investing" in their operations for years by running up debt. Now that they can't roll their paper it is going up in smoke. This is particularly troubling as small businesses are where the jobs have been. Loss of credit in this sector is going to spike UE.
Small biz is NOT that important to the current economy..."you folks just don't understand modern finance and that we are now a global economy"-
doodie, ever been pulled over in georgia?
"upping social security retirement age to 70?"
Wait till the young ones figure out they are paying about 15% now for SS and Medicare! I bet they raise that soon.
Less competition for other credit card companies. That's a green shoot if I ever saw one!
swamp otis (homepage, profile) wrote on Tue, 5/12/2009 - 10:30 am reply Ignore user doodie, ever been pulled over in georgia?
Im from Athens so yes, many times, why?
JP, I found that wording puzzling. I'm sure they have 100% charge-offs on some cards.
After cursory digging: I think it's just the bloomberg reporter looking at their quarterly-report PR. Search for "Net principal charge-offs", and you'll find that their charge-offs are 20% of avg receivables:
Advanta PR on 10Q.
At least, that's my best guess with 5 minutes of digging. Who knows what thinking happens inside the brain of a bloomberg writer...
Ah nothing like the good ole days when $241k tabs at your local gentlemans club could be run up on your corporate card
'Scores' Lawsuit over $241,000 tab settled - Mar. 8, 2006
So the fact that the US borrows $.50 for every $1.00 spent will result in an outcome different from this how?
There are a lot of different buckets of receivables that Card ABS issuers can use other than the overall trust performance. There are no May filings yet, but the overall charge-off rate on all Advanta securitized cards for April was 17.3%. They can cut this further based on seasoning of the cards, whether they were Visa or MC, etc. etc.
Who knows what the 20% refers to until they release the May trust documents.
"Advanta" is one of those dopey names some corporate think-tank thought up.
It could just as easily be a prescription drug, or a new 2010 car from the Big 3
Get pulled over in GA with a thimble full of weed and hello prison.
poor WFC: stock is down 6.2% today. maybe Warren isn't taking calls today for additional stock support.
Lobbyist Ben Dover (profile) wrote on Tue, 5/12/2009 - 9:30 am
"upping social security retirement age to 70?"
Wait till the young ones figure out they are paying about 15% now for SS and Medicare! I bet they raise that soon.
You know they are going to.
My wife has a gift for mathematics, especially finance. She makes her own excel spreadsheets which she can estimate taxes and is usually within pennies of being correct. She has caught the government cheating her paycheck twice now. Anyway, she made me a nice little presentation a few years ago about taxes, social security, etc...which she concluded with that we are serfs to the Federal state and totally fucked. She wants to remove involuntary deductions and make everyone pay their taxes quarterly. Only way to save the Republic at this stage. The only joy we have in paying taxes is that she is a federal employee.
Without credit, we all get to be named Cash Carry.
As in kneel before graven Fed Image, Kashkari.
swamp otis (homepage, profile) wrote on Tue, 5/12/2009 - 10:39 am reply Ignore user Get pulled over in GA with a thimble full of weed and hello prison.
Not that bad, most cops i know would at most make you crumble it up on the street..... provided no paraphanelia, and go on...
I remember heading from GA to Mardi Gras in Nawlens one year and in Alabama they had a sign that said drug stop ahead exit 239 , well the next exit was 238 and folks were pulling off and at the top of the offramp there were the cops waiting.... funny as hell....
Looks like the S&P may dip under 900 this morning?
The National Association of Liars continued to be wrong over the last 12 months. As it turns out, it was NOT a great time to buy house (median price down 14% yoy).
Hoocouldanode?
Vonbek777,
hey i need to get that spreadsheet, wife and i are trying to figure what we can /could change our witholdings to once we "buy" since renting keeps us at 0/0 each. And we are in the 30% bracket....
you know where we can get one of those cause we are trying to calculate how much mortgage interest deduction we can claim, what our returns would be , what we could increase our monthly take home to by uping our witholdings....
Fiduciary Doodie (profile) wrote on Tue, 5/12/2009 - 7:20 am
According to a new study released by the Mercatus Center of George Mason University, some of the most liberal U.S. states rank lowest when it comes to personal freedom.
There is no freedom.Freedom is just in your imagination.You are always slave to somebody,something.Remember this.and yes,no god,no philosophy can give you freedom.You are bound
Oops - here's the link for the liars:
Yahoo! 404 - Page Not Found
Locally on the radio they're advertising "100% government backed investments - you can't lose anything." I think these are the mortgage guys that have been around for a few years scamming the system.
Sounds like they've got a new way to loot the system.
Seems like it was yesterday: Advanta selling off its credit card business to rebuild itself as a subprime lender. And then selling off its subprime mortgage business to rebuild itself as a credit card company. Round and round we go...I wonder what, if anything, is next for these guys? Talk about your leading indicators--whatever they get into is probably the next credit bubble.
If you're not familiar with the company here's a useful history:
Advanta Corporation -- Company History
doodie, sounds about right. i went to auburn a couple years till i couldn't handle the homogenized frat boy rascists and parfumed big hair floral dress dingbats who went to college to husband shop.
Fiduciary Doodie (profile) wrote on Tue, 5/12/2009 - 9:46 am
Vonbek777,
hey i need to get that spreadsheet, wife and i are trying to figure what we can /could change our witholdings to once we "buy" since renting keeps us at 0/0 each. And we are in the 30% bracket....
you know where we can get one of those cause we are trying to calculate how much mortgage interest deduction we can claim, what our returns would be , what we could increase our monthly take home to by uping our witholdings....
Let me ask the wife tonight. She makes ours specifically for our situation, but I think it would just be a matter of replacing the formulas, and she might know of some generic ones on the net you could use as well.
the insider from outside (profile) wrote on Tue, 5/12/2009 - 10:46 am reply
There is no freedom.Freedom is just in your imagination.You are always slave to somebody,something.Remember this.and yes,no god,no philosophy can give you freedom.You are bound
Freedom's just another word for nothin' left to lose
Nothin', don't mean nothin' hon' if it ain't free, no no
And, feelin' good was easy, Lord, when he sang the blues
You know, feelin' good was good enough for me
Good enough for Hank and Neal Kashkari?
Hey wait a second there, CR. Charge-offs = loss rates? Are you sure about that?
Sherman* burns Advanta.
swamp otis,
I went to Baylor for a couple of years...exact same experience. Great grades, good scholarship, but I was completely suicidal and had to get out of there. Worst two years of my life. Growing up in the military did not prepare me for trust-fund religious bigots and a social networking scheme that would make the devil proud.
Debt is Hell.
Holy Crap! Our company uses Advanta.....
Good luck on them getting replacement credit in this market.....
Fiduciary Doodie (profile) wrote on Tue, 5/12/2009 -
Freedom's just another word for nothin' left to lose
Nothin', don't mean nothin' hon' if it ain't free, no no
And, feelin' good was easy, Lord, when he sang the blues
You know, feelin' good was good enough for me
Good enough for Hank and Neal Kashkari?
Thats some nice lyric man.You wrote it yourself?Are you a poet?
So I guess Advanta can't sell debt to the fed through TALF then? If they could, would they not?
Listening to The CNBC Troll instructors families have to have credit cards to function! No they don't, use cash or don't live beyond your means! Many Americans are not smart enough to be mad as hell!
Somebody forgot to tell these guys that TA is dead:
"Treasury Rout to Pause, Fibonacci Indicates: Technical Analysis"
Treasury Yields to Fall, Fibonacci Signals: Technical Analysis - Bloomberg.com
swamp, that was you r first mistake, Auburn over Bama... the women are prettier in their sundresses at Bama... "Tha's what I like about the south..."
Arbitrage_Macht_Frei (profile) wrote on Tue, 5/12/2009 - 10:55 am reply Ignore user Debt is Hell.
Or as Sartre might say:
Hell is other people's Debt.
vonbeck,
one of my housemates was a bookie for the pikes. great guy. he sublet his room over the summer to the dealer for the pikes. the jerk made disgusting messes. i confronted him and he snapped and hit me with a hammer, still have the scar. i beat him until he was unrecognizable. he came back with a few pikes while i was gone and destroyed everything in my room.
carried an illegal automatic everywhere i went for a year after that. made sure they all saw it.
i was 17...
the store where i got the gun (with the help of an older friend) sold alcohol. guns, beer, ammo: all in one bag.
the pikes got into big trouble after that for gang raping a passed out girl and dropping her off at a competing frat house in a shopping cart with obscenities written all over her.
not good times
"What do you mean half of our customers got no PULSE?! Don't tell me their dogs are also in serious trouble?!"
@FD
Jessie's got sum sahweet tunes fer TEOTWAWKI today!
Jesse's Café Américain: Don't Ask Why, Just Buy
Goes nicely with the Janis
I'd bet a lending freeze is going to net them a default cascade. I'm just putting myself into the mind set of the strapped CC borrower who has a now useless card among lots of cards to pay off. Priorities, priorities, guess who doesn't get paid the monthly payment?
Advanta is closing,it will be good for other CC companies.Americans might start using debit cards
They can, but it wouldn't help. The charge-offs are so high on their cards, there is no excess spread (residual cash flows) left. This forces the trust to either amortize the deal away (they took this option) or re-enhance the deal by adding more collateral (JPM/Citi/BofA all did this on their deals). Since all of their collateral is performing so poorly, it really wasn't going to help much to re-enhance.
TALF can't save the dead, it can only help the living make a few more bucks.
Ask what you can buy for your country, not what your country can buy for you.
Johnny Lee,
Funny thats opposite what Whitney said on the floor yesterday.....
But his has a nice beat, easy to dance to, i give it a 6...
And Advanta was mostly for small business. I consider this bad news, small businesses need liquidity to span the gaps between inflows and outflows. Debit cards don't solve this.
Arbitrage_Macht_Frei (profile) wrote on Tue, 5/12/2009 - 11:05 am reply Ignore user
Ask what you can buy for your country, not what your country can buy for you
AMF,
Actually we are giving the funds, BO is buying buying buying....... so it IS what can our country buy for us mentality it would seem...
Just for you swamp otis.... stright from my pleasure center...
YouTube - Police dog bites Auburn player
Krug speaks....
May 12 (Bloomberg) -- Paul Krugman, Princeton University’s Nobel Prize-winning economist, said global economic prospects don’t justify the two-month rally that has restored $8.9 trillion to stock markets around the world.
Speculation government spending packages and interest-rate cuts worldwide will reinvigorate the global economy has helped the MSCI World Index rally 37 percent since falling to its lowest since 1995 on March 9. The U.S. Standard & Poor’s 500 Index surged 34 percent in that time.
“It looks to me now as if the markets are now pricing in a rapid recovery, that they’re pricing in a V-shaped recession, which I consider extremely unlikely,” Krugman, 56, said at a forum in Shanghai today. “The market seems to be looking as if this is going to be an average recession, but it’s not.”
Credit cards became an outright scam once the interest rates turned predatory.
Swamp Otis,
Ouch, you had it bad. My problems seem trivial compared to that, but I was still in hell. Imagine going to a religious school, being non-religious, but probably the most moral person on campus. That is also where I learned I wasn't truly white. I knew I had native-american ancestry...no big deal, but I wasn't white enough to hang out in certain social circles at Baylor. The football team routinely hung out at the local strip joint outside of city limits, but we were a Christian school. The Senior Class Treasury was arrested with a gun in his hand trying to off himself after being discovered as the asshole who had been breaking in to girls apartments and jerking off on sleeping beauties. Drunk parties off campus and date rape were weekly events. I quit the debate team because I was assigned the task of writing case briefs for our celebrity members but didn't actually get to go to a meet myself even though my cases won. The sad thing was is that I had really good professors, just couldn't put up with the pricks and drama queens going there. Oh, did I mention that while I was at Waco, Branch Dravidian Massacre happened too......great times.
krug is on BHO steroids
"Ask what you can buy for your country, not what your country can buy for you. "
But but this hand I took from Statue of Liberty must be good for at least five Benjamins, right?
Imagine the pressure that comes from just having won the Nobel Prize in the Dismal Science, to get it just right as far as your prognostications are concerned?
If the recent stock market rally proves anything, it is that investors have to respect the awesome short term power of bogus financial earnings and propaganda.
Pump and dump.
Branch Dravidian Massacre
South Indians holed up in Waco and getting wiped out by the Feds. Great times indeed....
More on Advanta here...
Zero Hedge: Guest Post: Open Letter To FDIC
"Earlier this evening Advanta, which through its FDIC-insured bank Advanta Banc Corp makes credit card loans, declared its intentions to allow its securitization trust to go into early amortization, while concurrently launching a coercive tender offer for the securities issued by the trust. This marks the first intentional amortization event, which if unpunished, could jeopardize the stability of securitization markets, the government’s special programs to aid the market such as TALF, the bank’s depositors, and the legal rights of Advanta’s ABS investors.
As it currently stands, Advanta is on the express-train to insolvency. Faced with crippling losses and hazy capital strength (tangible equity / net managed assets = ~4%), the company decided to throw a first-of-its-kind Hail Mary pass in the hope that the FDIC would not place the firm into receivership..."
well,
"May 12 (Bloomberg) -- Home prices in the U.S. dropped the most on record in the first quarter from a year earlier as banks sold seized homes and foreclosures in California and Florida dominated sales.
The median price fell 14 percent to $169,000, the National Association of Realtors said today. Prices dropped in 134 of 152 metropolitan areas, with the deepest declines in Cape Coral-Ft. Myers, Florida, and the San Francisco and San Jose areas."
will green shots become green rockets?
Where the Federal stimulus money is going in California: ...eligible workers laid off between Sept. 1, 2008 and Dec. 31, 2009 would qualify for a 65 percent subsidy of Cal-COBRA premiums for up to nine months, and people who’d rejected or stopped their Cal-COBRA coverage would have a chance to set it up again with the new subsidy.
Yup, subsidizing unemployment benefits is an economic stimulus.
doodie, "this cop right here, maybe he's a bama fan."
nice,
memories...
Angry Saver (profile) wrote on Tue, 5/12/2009 - 8:15 am reply Ignore user If the recent stock market rally proves anything, it is that investors have to respect the awesome short term power of bogus financial earnings and propaganda.
It is just the dream economy is having.A fake dream over that.
Vonbek777,
Had a similar experience during my "education"...the thing I wonder is....it must be impossible for such weak people to hate themselves enough...so they invent a god to hate them all the way to hell...probably makes being such a prick easier.
Vegas mourning line in terms of where gunplay is most likely to happen:
Southeast Even money
North of Mason-Dixon east of Flyover: 2-1
Flyover: 7-5
Left Coast: 3-1
Non penetrative accupunture the same as traditional accupunture, both better than pain meds alone:
Toothpicks Match Needles for Acupuncture - US News and World Report
FDA to General Mills: register Cheerios as a drug or stop making cholesterol lowering claims
CNNMoney.com: 404 Page Not Found
You left off the money quote from Lawrence Yun:
"We expect a measurable increase in home sales during the second half of the year, which would help stabilize prices in most areas,
The freest states in the country are New Hampshire, Colorado, and South Dakota, which together achieve a virtual tie for first place. All three states feature low taxes and government spending -- and middling levels of regulation and paternalism.
I can tell you from personal experience, and I have lived in a lot of places, that the "Live Free or Die" state of NH is about the best quality of life I have encountered so far.
The freest state of being i've experienced anywhere in America, is deep in her wilderness.
Credit Default Swamp
+1 "they invent a god to hate them all the way to hell"
i think montana is freest state,once you live in mountains
Wow, this is kinda sad and pathetic isn't it? Why didn't they just donate these stocks to charity so they could at least get the tax write off? Or better yet, go down with the ship like a man.
SAN FRANCISCO (MarketWatch) -- A group of top General Motors Corp. executives, including Vice Chairman Bob Lutz, have sold what was left of their personal stakes, according to several filings with the Securities and Exchange Commission on Monday. "Our shareholders are obviously facing some pretty severe dilution if the bond exchange goes through or we end up in bankruptcy," GM spokesperson Julie Gibson said. "Either way, no matter the outcome, we'll essentially be issuing new stock." She acknowledged that the executives took advantage of a trading window to sell their shares while there's still some value "like most reasonable people would do." At the same time, GM is trying to rid itself of $27 billion in debt by convincing thousands of creditors to exchange their bonds for 10% in GM stock. According to the SEC filings, Lutz was joined by fellow Vice Chairman Thomas Stephens, Ralph Szygenda, Troy Clarke, Gary Cowger and Carl-Peter Forster. All together, the six sold nearly 205,000 shares between Friday and Monday, fetching between $1.45 and $1.61 a share...
Yesterday on the SF Bay news radio they talked about how business bankruptcies were up 30 percent month-to-month March to April (I think) in Silicon Valley. Lots and lots of Chapter 7s; just nothing left. You can bet that most of these outfits leave a lot of credit card debt behind on the floor. Mostly small outfits, but not all.
It's a Faustian bargain over @ GM...
You take 10 cents on the dollar, or soldier on with the Sisyphusian task of pushing cars that nobody wants, year after year for what seems like eternity.
Vonbek777 (profile)
you had a exciting life.Wish i could have lived like that.Could have much more tough
"The 22.6 percent drop in exports in April from a year earlier,
"These figures show we cannot be optimistic about the future trends for exports," the Commerce Ministry said in a statement posted on its Web site that amounted to a lament over the lack of a turnaround in demand for Chinese products.
On the positive side, Beijing reported that investment in factories and property development jumped 30.5 percent during the first four months of the year to 3.71 trillion yuan ($543.2 billion), as banks kept up a steady flow of lending for government stimulus projects."
Interesting, so the response to drop in exports (drop in demand) is to increase capacity rather than local consumption. Just wonderful, go RED ROCKETS!!!
p.s. how is overcapacity the positive side?
eventually, it will blow!
Bernanke threatening to take away the punchbowl just as the party is getting started. Might be a few angry party-goers, not to mention the party organizers, Geithner & Summers.
Think he'll do it ?
LMAO!
What this thread was about?
Comrade Janošik,
Agree with some of that line of thinking, but the truth is people are a result of their upbringing. Baylor was a reflection of the ideals and morals displayed in the 'business' elite of the south. I am actually the one who is screwed up, growing up in the military did not indoctrinate me in how the real world works. I should have probably followed in my dads footsteps, but the army was so screwed up in the early 90s, I didn't want to go there either. The great what-ifs of your life...I had a congressional nomination from Chet Edwards to West Point, Vice Presidential to Annapolis, and a Presidential to the Air Force academy. Settled on Annapolis, went in for my physical, found out I was color blind, and it completely changed my life in a matter of minutes. People look back on their 18-20s with fondness. I hope never to go back to those years. Pure torture.
Happy days are here again, this from a seller guide update I just got from Fannie Mae:
Fannie Mae’s Quality Control Process
For Refi Plus loans, Fannie Mae’s quality control process will not:
-hold the lender responsible for information that may be obtained as a result of Fannie Mae’s
reverification of income or assets stated by the borrower,
-impose any maximum debt-to-income ratio or other underwriting criteria,
-require the lender to represent and warrant that the borrower has an acceptable credit history
(other than the credit history and mortgage payment requirements that are specific to Refi
Plus per Announcement 09-04), or
-hold the lender accountable for undisclosed liabilities.
https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2009/0913.pdf
In other words: "To fuel the Fed printing presses with new MBS issuance, we won't impose any lending standards".
Having problems worrying about your small business about to go under?
try Advanta*, the Red Pill
This thread was about credit cards.
Which brings me to the question: is Advanta having a much worse time than the other card companies, or is this the beginning of the trend of the end of the credit card industry in America?
A lot of people are going to find themselves in a lot of deep doo doo.
It was during the first FDR Administration that withholding taxes were invented. This, more than anything else created Big Government.
It appears that between the GGP BK switcheroo and this Advanta tactic described by ZeroHedge, what's left of securitization as a financing system is being actively destroyed.
In People's Republic of GGGP, when you're not shopping everything starts stopping
thanks SKK
for the ZeroHedge tip.. I've seen his name in various places, as a big Fight Club fan how could I not.... (actually I did a Viet Cong Fight Club vid mash-up on YouTube based on a fist fight I filmed in Vietnam last year - they were both really drunk, not like Drunkenmaster 2... got a lot of hits but the Tube forced me to pull it cause of the soundtrack... word to budding vid mashers - don't use more than 20 seconds of a track, after that Fair Use seems not to apply)
By the way, local radio show host this morning was saying the recession is over. This was all a crisis in confidence, American fundamentals were as strong as always. Doomers and speculators at fault. Wouldn't take questions about rising gas or closing malls. Where can I get my rose-colored glasses?
OT, but ok, I'll bite:
So, "oats" must apply for new drug certification? Oats?!
Can somebody please just slap the federal government across the face repeatedly until it "comes to?"
I am starting to sound like my grandmother - "With all that's going on in the world, THAT"S what they worry about?"
From the article:
“We’ll be shutting down accounts for future transaction activities, but many of the customers will maintain balances and pay us off over time,” Browne said yesterday in a telephone interview. “We’ll have to service and collect on that, and that will be the first order of business for the company.”
So the next hot career field is going to be debt collection?
"The freest states in the country are New Hampshire, Colorado, and South Dakota,"
Colorado Was a low tax state with controlled spending (Tabor Bill) till the Cali's moved in and bought a socialist spending governor. Party is soon to be over as they turn the screws to big taxes.
So few malls, so few chances to get malled by a cougar...
The Yen and the Dollar are acting up a bit today...10y yield exploding....
Could get interesting at the close, especially after yesterdays selling into the close....
Torch,
They're the FDA, it's not like they're going to be taking on the banking industry.
Government walks and chews gum at the same time, at least, when it's working right.
A lot of people were calling the bottom in exports last month. Statistical fluke. china imported a lot of coal last Winter (Jan) that is all.
Good luck collecting all that prior debt once you shut off the cards.
Watch as all the LLCs liquidate and die, leaving nothing to collect and limited liability for the insolvent owners.
"We regret to inform you that no business with that name is located at this address. Thank you in advance for updating your records to reflect this. Future correspondence directed to that entity will be shredded unopened. Have a nice day."
AMF, please don't stop.
malled by a cougar!
Monk-
Yeah, I know.
But really, OATS?!
We're subjected to 24/7 ED and "enhancement" ads, and they go after the oats?
Will no one stand up for the grains?
"First they came for the oats, and I said nothing ..."
"First they came for the oats, and I said nothing ..."
+7
Here's a great piece of anecdotal evidence about people being fed up...my local lawn guy (former enlisted Army Texan who is making a killing mowing lawns all by himself) told me to stop adding the 8.25 sales tax to my checks. Says he isn't paying taxes anymore, and isn't charging his customers either. This is more like the 'tea-parties' I was waiting for. Not just political feel good nothing gatherings. Waiting for the bootleg forever stamps to hit the market...
"It was during the first FDR Administration that withholding taxes were invented. This, more than anything else created Big Government."
Payroll taxes came up during the third Roosevelt administration, brainchild of a guy named Beardsley Ruml who was the controller of Macy's and also a director of the NY Federal Reserve. He realized that new recruits were going to take a big hit trying to cover their lump-sum tax payment on last year's income while in the military, because their income dropped so much. And he worked for Macy's, and knew all about payment plans....
And yes, it made taxes more painless, and thus easier to collect and raise. It also helped that payroll taxes came in during the war years, a time of full employment and rising wages -- and not that much to spend them on.
I like to hang out by the watering hole near the food court, where oftentimes I see cougars in the Wild Pair. Sometimes i feel like having a Clockwork Orange Julius @ the Cougarova milkbar across the way.
moved to new thred
re: Cheerios ... the financial industry is not the only one capable of regulatory capture.
Next to financials, biggest corporate donors to campaigns are big pharma companies. They don't want you eating Cheerios when you could be paying for an expensive cholesterol lowering drug.
Oats are up big today, So is corn. What inflation? Just take a stroll through your local supermarket and look at prices. I can see the upward pressure on prices from the various inputs quite clearly.
Price inflation can still kill us in an overall collapsing deflationary environment. All it takes is a bit of currency trashing, and that seems to be what the Fed is hell bent on doing. No other way to deal with all the debt we are piling up. I believe that sooner rather than later the Fed will be the buyer of only resort for Treasuries, just like they are now for Agency paper. That won't exactly be helpful.
dum luk (profile) wrote on Tue, 5/12/2009 - 9:58 am
Somebody forgot to tell these guys that TA is dead:
"Treasury Rout to Pause, Fibonacci Indicates: Technical Analysis"
Treasury Yields to Fall, Fibonacci Signals: Technical Analysis - Bloomberg.com...
<<<<<<<<<<<<<
Hmmm, and it just happens to coincide with a market that's run to ridiculous levels and is ripe for a significant correction, if not new lows. Funny how these things come together, isn't it?
Flight to safety anybody?
"The freest states in the country are New Hampshire, Colorado, and South Dakota,"
Personal freedom/Population density. Notice a trend?
Soda Tax was on yahoo.
Yahoo! 404 - Page Not Found
Its an an excise tax on sweet beverages. If the Democrats are smart they'll ash-can that ASAP. its perfect fodder for the GOP and though our current government sucks donkey balls I am really not looking forward to more GOP rule thank you.
The Democratic take over is no more permanent than than the Republican majority.
Making SS kick in at 70 I have heard nothing about -- if done over the long term its manageable but it will greatly increase savings rates. Say hello to deflation forever and ever amen. Savings Up + No New Markets = Consumption Down (then) Wages Down= Consumption Down= Prices Down (loop)
The military -- I've heard nothing there
CR: the some cards wording probably was meant to refer to their different types of cards. They used to offer a mix of cards with different account terms aimed at different sorts of uses and different sorts of companies. The latest update to the story no longer has that wording, and now indicates that 20% is their overall charge-off rate.
There are very good reasons for Advanta to have far worse problems than issuers of consumer credit cards:
Advanta's issues are pretty special. They are almost like a commercial paper broker rather than a typical CC issuer.