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Old 07-26-2008, 12:05 PM   #241
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The criticisms section in Wikipedia talks about some of this.

Bankruptcy Abuse Prevention and Consumer Protection Act - Wikipedia, the free encyclopedia

A less balanced look at the bill

Senate Passes MBNA's Bankruptcy Bill

Likewise, the link provided by ladelfina to the Daily Kos has some good information, albeit very ideologically slanted.

Honestly, from their lending practices, it appears to me that credit card companies have completely lost their minds. These loans are unsecured. They are extending tens of thousands of dollars in credit to people of very limited means. Any type of bump in the road (illness, job loss, divorce) for these people means that the credit card company will very likely not get paid. Anyone with basic math skills should be able to understand this.

So it seems hypocritical for the credit card companies to pretend to outrage that some people might not pay. Their whole justification for charging 29% interest to these people revolves around the high level of expected defaults.

The rules were fine as written. If credit card companies were having too many losses to bankruptcy, they should have reviewed their lending practices, not run to Congress to get a special deal.

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Originally Posted by Abreutime View Post
Do you have any reason for this view? Maybe a source (outside of a blog) that I can read into? This doesnt really make sense to me.


The bankruptcy makes it harder for people who have an income to "wipe the slate clean and start over." That's what my google search turned up. It is now harder to file Chapter 7, and you need to file Chap 13 (where some of your debts are not wiped clean).
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Old 07-26-2008, 12:36 PM   #242
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One must stand in awe at the creators of financial instruments like credit cards. They were masters at understanding the darkest recesses of human nature. They knew how to accumulate vast wealth by playing on human foibles like master violinists are able to draw out the limits of sound from their instruments.

These guys sure know how to play suckers. They are the true artists of our modern society, yet they are destined to remain anonymous and unfeted(except by me).
It is amazing to me how much wealth is siphoned off of people and merchants from credit cards. Live in Delaware- there are huge credit card processing centers and piles of nice neighborhoods all the result of sucking 20% interest from people and 3% from merchants.

About 20% of S&P capitalization is (well, was...) banking - wonder what percent of that is credit card and retail banking - where again banks are just parasites offf of society.

In every city, all the big building are banks. Within a 5 mile circle of my rural home there must be 30 retail banks.

Someday, maybe:
1. Consumers will get smart and stop swallowing 20% credit,
2. Merchants will gain power and reduce 3% card fees, and
3. People will all use internet banking and electronic cash and retail banks will die like roadside motels and service stations.

We need someone like a WalMart to get into banking and wring out all the fat and excesses.

Or maybe I'm on another planet.
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Old 07-26-2008, 01:28 PM   #243
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where again banks are just parasites offf of society.
Or maybe I'm on another planet.
You are indeed on another planet. I don't know about you, but I get something of value in return when I pay interest on my mortgage or pay fees for banking services.
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Old 07-26-2008, 02:07 PM   #244
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You are indeed on another planet. I don't know about you, but I get something of value in return when I pay interest on my mortgage or pay fees for banking services.
Certainly there's capitalistic value to the banking system - just not 20% of S&P 500 cap worth.....I also cringe to imagine what percent of our working population is in banking "industry".

I suspect, don't know for sure, that the percentage of US workers in banking and law is disporportionally higher than other industrialized / productive nations (I'll probably tick of some bankers, lumping them with lawyers).

But then I don't have a mortgage, never had a car loan and never had a credit card balance - so I probably have a different view about value to society for banking industry.
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Old 07-26-2008, 02:12 PM   #245
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Likewise, the link provided by ladelfina to the Daily Kos has some good information, albeit very ideologically slanted.
What? The Daily Kos? Slanted?

Next thing you know you'll be saying Fox News is fair and balanced...
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Old 07-26-2008, 04:20 PM   #246
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look, it just came up on "the Google" and had some detail. At least over at Kos they know the difference between Obama and Osama, and that Mark Foley is a Republican. They don't show pictures of John Conyers and label him as the cash/freezer guy Wm. Jefferson.
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Old 07-27-2008, 08:41 AM   #247
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About that foreclosure suicide - it looks to be a longer running story than has been reported.

Calculated Risk: The "Foreclosure Crisis" and Exploitation of a Suicide
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Old 07-27-2008, 10:02 AM   #248
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As usual, you cant believe most of what you read and at least half of what you see...
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Old 07-27-2008, 06:56 PM   #249
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I don't know about you, but I get something of value in return when I pay interest on my mortgage or pay fees for banking services.


A warm feeling in your heart?
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Old 07-27-2008, 08:42 PM   #250
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barbarus, you can't discount that benevolent feeling you have when you know you are contributing to someone's Rolls, prostitute, golf club fees or offshore account.
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Old 07-27-2008, 09:29 PM   #251
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A warm feeling in your heart?
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Originally Posted by ladelfina View Post
barbarus, you can't discount that benevolent feeling you have when you know you are contributing to someone's Rolls, prostitute, golf club fees or offshore account.
I find it a bit amusing (though sad really), that people just don't grasp that when two parties willingly enter into a contract, that *both* parties are gaining something they want. It's a trade off, but one that is acceptable to *both* parties. The alternative is simple - don't do it.

If you take out a mortgage, you should know full well that the mortgagee is (edit going) expecting to make a profit. If you don't find that acceptable, then save up the cash to pay outright. Why complain about the price they charge (assuming they don't have a monopoly)? You have the power to just say NO.

So yes, you could say I had a 'warm feeling in my heart' when I was able to 'own' my own home, before I saved up 100% cash. It meant I had more control over my life than a renter, I benefited from sweat equity, from knowing that I wasn't at the mercy of having a lease renewed, etc. I was pretty happy with the deal.

If they want to spend the profits on a Rolls or golf fees, that is their right (I'll leave out the others as they may be illegal and I don't want to twist that morality play into this conversation).

Sorry, I just don't have much patience for people playing the victim, when they have a choice in the matter.

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Old 07-27-2008, 09:37 PM   #252
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barbarus, you can't discount that benevolent feeling you have when you know you are contributing to someone's Rolls, prostitute, golf club fees or offshore account.
I'm fairly certain that my credit union is not operated like a hedge fund, nor is it part of the Trilateral Commission.

Though they might occasionally play golf, or visit prostitutes...
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Old 07-27-2008, 09:49 PM   #253
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ERD50, who here is playing the victim? I put my money where my mouth is: I've owned two homes outright and would never, ever, pay a bank a mortgage. I would rather live in a trailer or a tent. Or just rent, which is in most cases the equivalent, and nowadays generally more advisable. I can't speak for barbarus, but that is my take on things.

There are plenty of delusions that people 'enter into' but the mere fact that they enter into them does not automatically render them salubrious.
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Old 07-27-2008, 11:03 PM   #254
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ERD50, who here is playing the victim? I put my money where my mouth is: I've owned two homes outright and would never, ever, pay a bank a mortgage.
OK, you made your choice and you seem satisfied with it; that's cool.

But it struck me that your casting of the mortgagees as people that are just taking your money to spend on toys, was also casting the mortgage holder as a 'victim' that was being played for a fool. Was I wrong about that? If so, sorry.

Quote:
There are plenty of delusions that people 'enter into' but the mere fact that they enter into them does not automatically render them salubrious.
Well, if they are 'deluding' themselves, that's another matter altogether. But, if you enter into a contract, you ought to do it with eyes open, and the expectation that you are trading one thing ( a cost) for another (a benefit). And the other party is doing the same. And if someone doesn't understand what those costs and benefits are, they should educate themselves before signing the contract.

In my view, some basic education would go much further than government regulations on this detail or that detail. Clever crooks come up with new scams and/or loop-holes faster than governments can come up with (and enforce) new laws.

-ERD50

PS, thanks for the vocabulary lesson:

Quote:
salubrious
  1. Promoting health or well-being; wholesome. Especially related to air. From the Latin "salus" - meaning health.
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Old 07-28-2008, 08:28 AM   #255
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I reject the notions that (a) credit is inherently "bad", and (b) that people are too stupid to comprehend the terms of their loans.

Everyone was trying to get on the easy money train. Crying foul after the fact is rationalization, in most cases...
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Old 07-28-2008, 08:32 AM   #256
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I reject the notions that (a) credit is inherently "bad", and (b) that people are too stupid to comprehend the terms of their loans...
Sorry - being logical in today's financial world is not allowed ...

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Old 07-28-2008, 08:50 AM   #257
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If the lenders are "clever crooks".. well just because crooks are clever doesn't mean you have to give up on having a police force. When I read that history of the "Bankruptcy Abuse" bill where an amendment that would bar interest over 30% (THIRTY.. Three-zero) was REJECTED.. well, I don't think that just a little "detail". That starts looking to me like the police have just decided to give up and hang out at the (highly salubrious) Dunkin' Donuts.

ERD50, I think the delusion is only in part what the borrower thinks is going on with the paperwork, hidden costs, tricky rates, etc. The main part of the delusion is the whole concept of what the benefit is. You and brewer assume the costs and benefits balance out, otherwise who would do it? I take issue with all of that. I don't see how consumer borrowing benefits anyone but the lender.

Home mortgages are a little different because you have a durable asset.. but still how can you look at a situation where in an unsustainably high market banks were loaning 120% of the sales price and say.. "sure, let them keep doing that". I say, "no, don't allow them to do that".. not just to save the "victim" homebuyer but to save the very banking system itself!! I am not being a bleeding heart on this at all; I have selfish motives!

"Some" debt is probably sustainable. Infinite debt is not. We are in an infinite debt situation which is being addressed via more debt. You don't like the idea of "government regulations" that might force or incentivize saving, or that might bring up capital requirements, or that might limit usurious interest rates. Do you have no problem with a government that is instead throwing all regulations out the window and allowing highly-leveraged international investment banks access to yet more debt? Debt that you will be financing? The "needs" of banks are by nature limitless and must be contained somehow.

The USA is not being run these days to promote the health and well being of its citizens; it's being run to promote the health and well being of banks. The small savers are being served up on a silver platter, with 401ks that have to be invested in the market at the same time they are limiting purchases of savings bonds. Why would a government limit purchases of its own savings bonds?

Quote:
"In the 1960s, there was a box on your tax form where you could say I'd like my refund in the form of savings bonds,"
Treasury takes new whack at savings bonds
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Old 07-28-2008, 08:56 AM   #258
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I find it a bit amusing (though sad really), that people just don't grasp that when two parties willingly enter into a contract, that *both* parties are gaining something they want. It's a trade off, but one that is acceptable to *both* parties. The alternative is simple - don't do it.

If you take out a mortgage, you should know full well that the mortgagee is (edit going) expecting to make a profit. If you don't find that acceptable, then save up the cash to pay outright. Why complain about the price they charge (assuming they don't have a monopoly)? You have the power to just say NO.

So yes, you could say I had a 'warm feeling in my heart' when I was able to 'own' my own home, before I saved up 100% cash. It meant I had more control over my life than a renter, I benefited from sweat equity, from knowing that I wasn't at the mercy of having a lease renewed, etc. I was pretty happy with the deal.

If they want to spend the profits on a Rolls or golf fees, that is their right (I'll leave out the others as they may be illegal and I don't want to twist that morality play into this conversation).

Sorry, I just don't have much patience for people playing the victim, when they have a choice in the matter.

-ERD50
Excellent post ERD50. I think your post does an excellent job showing (perhaps contrasting) the two viewpoints that seem to exist on this board. The viewpoint that I share, is that we are all adults, do not need the govt or anyone else, to hold our hands in the decisions that we make. I believe that people should be smart enough to make their own decisions, and then live with those consequences. I have mentioned in other posts that if people truly are NOT smart enough to run their own lives, (cases of mental problems and the like), then the govt should try to intervene, and I do believe there are programs to help such people.
The alternate point of view (one that I do not share), is that by and large people (in general) are not smart enought to do things for themselves, and that people who are smarter than them, should tell these folks what they need to do. It also goes on to insist that since most folks are too foolish to know a good or a bad deal when they see one, then the govt should step in (because presumably they are smarter), and make sure that no lending institution can try to make a better deal for itself in a business capacity. In that point of view this would be exploitive. The fact that people can say "NO" to a deal as ERD50 accurate explains, is irrelavent, because most folks lack the mental capacity to understand when they should probably do that.
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Old 07-28-2008, 09:28 AM   #259
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If the lenders are "clever crooks".. well just because crooks are clever doesn't mean you have to give up on having a police force. When I read that history of the "Bankruptcy Abuse" bill where an amendment that would bar interest over 30% (THIRTY.. Three-zero) was REJECTED.. well, I don't think that just a little "detail". That starts looking to me like the police have just decided to give up and hang out at the (highly salubrious) Dunkin' Donuts.

ERD50, I think the delusion is only in part what the borrower thinks is going on with the paperwork, hidden costs, tricky rates, etc. The main part of the delusion is the whole concept of what the benefit is. You and brewer assume the costs and benefits balance out, otherwise who would do it? I take issue with all of that. I don't see how consumer borrowing benefits anyone but the lender.
Sounds like price control to me, not my cup of tea. You see the consumer not getting ANY benefit from the lender? Why do they do it then? Are they tricked into it? Are they misled? If the answers are NO to both of those, then they willingly make a choice because it helps them. How much does it help them? I don't know and it doesn't matter. What matters is if they were not duped into the transaction, they did it willingly and the fact is it HELPS them. There are costs to a transaction, and benefits. That is the foundation of the entire world economy. (sidenote here for why I don't care about the trade deficit). What do banks do for societies? It allows present consumption at a cost for future consumption. That is WHAT THEY OFFER. If you don't like it, then don't take it.

About the buying house with cash, ladelfina has done it herself that is entirely respectable and her own choice. If she does not want to carry credit card debt and a home mortgage, it is entirely her choice to do so. Many others would prefer to carry debt in a form of a mortgage, a car loan, or to pass off future consumption for present consumption (a credit card). By offering this service, the banks deserve to be paid. How much? Not up to me. But, if the rates they are charging are so high, then why not just not buy something, why not just find a better rate? Answer: interest rate is damn close to a fair price for the service being offered.
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Old 07-28-2008, 09:34 AM   #260
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If the lenders are "clever crooks".. well just because crooks are clever doesn't mean you have to give up on having a police force.
We need a police force. I think enforcement should be swift and severe with cases of *fraud*, not for cases of making offers that people are free to reject.
Quote:

When I read that history of the "Bankruptcy Abuse" bill where an amendment that would bar interest over 30% (THIRTY.. Three-zero) was REJECTED.. well, I don't think that just a little "detail".
I don't think there should be a law against 30% loans, or 60% or 90% or 9000%. Should there be a law against offering a Picasso for $1M? I can put my house up for sale for 10x the going rate - I am unlikely to get any buyers, but I don't think I should be arrested. What's the difference?

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ERD50, I think the delusion is only in part what the borrower thinks is going on with the paperwork, hidden costs, tricky rates, etc.
Well, I've said it before - if someone is ready to make the largest financial decision of their life, it should not be unreasonable to expect them to do a tiny bit of basic research and educate themselves a bit on the process. I'm pretty sure there are some 'Mortgages for dummies/idiots' books out there. Funny how some of these people seem to be responsible enough to hold jobs that qualify them for the payments, they seem to be smart enough to figure out how negotiate our complex legal system to file bankruptcy claims, but these same people are not smart enough to ask what 'adjustable' means in 'adjustable rate mortgage'? Hmmm, they figured out that the adjustable rate was cheaper (to start) than the fixed rate - how'd they get so smart and so stupid at the same time?


Quote:
You and brewer assume the costs and benefits balance out, otherwise who would do it? I take issue with all of that. I don't see how consumer borrowing benefits anyone but the lender.
So just because you don't see the benefits, they should be outlawed? I don't see the benefit of disco music, or rap, but should it be outlawed.... wait, maybe you have a point there

OK, back to the Picasso, some people don't see the benefit - so what. Do you truly not believe in a free market, and individual choice? Should the govt decide what artwork I should own, and a 'fair price' for it? I don't want that, but I don't see how you can argue one w/o the other. So why should the govt decide a 'fair price' for a loan?


Quote:
"Some" debt is probably sustainable. Infinite debt is not. We are in an infinite debt situation which is being addressed via more debt. You don't like the idea of "government regulations" that might force or incentivize saving, ...
I'd like to see the govt set an example - balance the budget, and pay off the debt. I don't see any reason for an established govt like the US to be in debt when it can collect the money it needs from it's citizens. IMO, it is just sleight of hand, pay for stuff today with tomorrows promised dollars, so it doesn't look like they are spending so much.

Which brings us to a parallel with personal debt. I see a benefit to a mortgage for a family in the early stages (it's fine if you don't share that view), but as time goes on, they should be getting out of debt and building a positive net worth. Our country is out of the 'early stages' of 'life', and should be debt free, IMO. A possible exception is for public works projects that have a long term payback, but high up-front cost. No different than a personal financial decision.

-ERD50
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