American Roulette

One of my frequent readers pointed out at a meeting (in the real world) recently that I had not updated this blog of late. I told him I was looking for an issue that spoke to me enough to work through the flu haze and inspire a blog.

I am not sure this is it or that I am merely feeling better. I am happy to see that finally there will be some legislation regulating the credit card scam. Is it too little too late? And is the credit card lobby, with the threat of financial collapse, still getting its way?

Yes, I said scam. If your local Mafia member down the block did what credit card companies do with government blessing they would be facing felony charges. I once played what I call American Roulette with credit cards. I had a fantastic credit score and every time I turned around they were raising my credit limit.

And I got endless offers for 0% on balance transfers. Following my skiing accident while going through 2 1/2 years of medical treatment I virtually lived on credit cards. And yes, you can pay your Master Card with your Visa. I was constantly playing one card offer against another, paying on line to avoid late fees (they mail the bills so late that no way can you pay by mail and not be late), and constantly going for the lowest stated interest rate (this can be a lie). Figuratively I was constantly rotating the credit cards like the chamber of a pistol, and like Russian Roulette you eventually come up with the loaded chamber.

My favorite scam of theirs was the one where they raise your interest rate because you called to see if you could get it lowered. This was something Oprah recommended as a way of getting out of debt. If you call and ask, she said, they will work with you. No they won't. Nor will any of those agencies that will give you free debt advice. They are run by the credit card companies to delay you filing bankruptcy. Oh, and by the way, the credit card companies are why we have tougher bankruptcy laws these days. Too many people will getting in trouble with credit cards and using bankruptcy as a get out of jail free card. It is not free and I am not sure Chapter 13 is not jail.

The bill before congress, thanks to President Obama pushing the issue after it has lingered for eight years, will make the small print on card statements larger and easier for a non-lawyer to understand (basically they all said: our game and you are f**ked), and require the credit card provider give you ample notification of raise in interest rates, changes in late fees or shortened billing cycle, etc. What it does not do is cap interest rates. There had been a push to set a limit of 15% but the whiners said that would make it harder for people to get credit cards. So they will still be able to raise your rate to 36% but with 30 day notification.

Yes, there is a loaded chamber in American Roulette. Maybe more than one. And all I can see this bill will do is require them to let you know there is.

Bankruptcy is the American Way

Dr. Phil on his television show about four years back said that bankruptcy should be considered the one time only "Get out of jail free" card.

At the time I was recovering from an extreme on job injury and despite what everyone tells you worker's compensation did not pay the bills. I had great credit and lots of credit cards and was sure I could catch up until I encountered the bank games of raising rates if you are late (with a head injury being on time is a challenge), etc. Hey, at the same time they are raising your credit limit they are charging more and more for the privilege. So after much soul searching (and thankful both parents were dead and would not know) I filed Chapter 13. I am still paying into that trustee account and will for another year.

G. W. Bush almost immediately toughened up the bankruptcy laws to protect his credit card issuing friends, but the truth of the matter is few people enter into bankruptcy lightly and in the majority of cases it is because of medical problems and debts.

Nobody bailed me out. Nobody is bailing out those in foreclosure or those in bankruptcy. But GW wants to bail out the investment banks that created these foreclosures and bankruptcies. We will end up paying more to rescue these banks and investment firms than they are worth. They need to go bankrupt. In a reorganization bankruptcy they can get out of the golden parachute contracts. And their bad investments can be sold for what they are really worth and not some inflated figure they are cobbling up for the bailout.

Bankruptcy does not mean these firms will cease to exist. It means they will be revalued to what they are really worth and others will probably buy them up. They are currently reluctant to take offers on the table because they see a golden parachute for the whole company in this bailout pig with the lipstick calling it a rescue plan for the economy. And they are even refusing to lend money they do have to force us into urging this bailout as opposed to bankruptcy.

Yes, there will be a readjustment period but we need that. Home prices are artificially inflated. And congress needs to work on putting regulations back in place over investment and lending institutions. And the $700 billion (the ultimate price tag will probably be a great deal higher after all the blackmailing going on) can be spent to invest in our infrastructure putting people back to work at good paying jobs here in the United States building bridges and railroads and developing green energy sources.

Write your representatives and tell them to point the way to the bankruptcy courts. Do not pass go and do not collect $700 billion of taxpayers' money.

Money Changers in the Temple

One of my favorite Bible stories has been that of Jesus and the Money Changers. It made for a wonderful scene in one of my all time favorite rock musicals - Jesus Christ Superstar.

It generally gets worked into sermons about the evils of selling the good of God. But then it seems to me in this day and age that religion is all about money and how you are not going to the promised land if you don't tithe. But I digress. This blog is about those all time bad boys in the land of money changing - the sub-prime lenders. And the wonderful government that is going to bail them out of their financial woes.

So back to that Bible story. Jesus walks into the temple square and throws a tizzy because of all the merchants selling lambs for sacrifice, etc. So he starts in overturning tables and scattering gold coin of the money changers and generally all hell breaks loose. The modern version would feature the Romans following him around and doling out compensation for the losses of the money changers. With a bit extra for pain and suffering. It rather ruins the story don't you think?

Now wouldn't the Christian thing to do be for those Romans to go around and find all the people that availed themselves of the money changers and got cheated and compensate them? I mean in answer to that ever present bumper sticker - What would Jesus Do? - wouldn't that be it?

So shouldn't the United States government make the sub-prime lenders lower their now raised interest rates to those initially agreed upon at the beginning of these loans? And then access all those people about to lose their homes to these mortgage bait and switch scams and give them relief in at least the form of say a mortgage payment holiday for three months so they can catch up? Or allow them special protection under the bankruptcy laws because they were cheated?

Speaking of bankruptcy laws; the man in the White House had all those toughened up so it costs a lot to avail yourself of this protection if you can fit the rules at all. He thought too many people were getting out of credit card debt and hurting his friends - dare I say the money changers. Course GW has done nothing to stop all the bait and switch going on with credit card companies. Nor has he taken into account that the majority of people that end up filing bankruptcy (people and not airlines) do so because of medical expenses they cannot pay. And this year that number may be joined by those that cannot buy gas to get to work or pay the rising energy bills to heat their houses.

So just where is Jesus when you need him? The temple of the United States Government is filled with vile money changers.