Yet another stupid debtor and retirement account raider!

[Jay_Gatsby]

Many are quick to blame this woman's personal habits. If you read the story, she had appendicitis.

No one wants to take their frustration out on these people:

Why No Outrage? - WSJ.com

Banksters can owe 33x their assets and that's normal.
But let a regular person owe 2x their assets and out come the flails.
And no one seems interested that the profit of one must needs come at the expense of the other.
Why is one group deemed "smart" and the other "stupid"?
I just don't get it!

All these smart companies run by smart people and Nobel-Prize winners are in the hole for much more than the lady here.. who is the classic example of the "capra espiatoria".. the hapless goat that assumes and expiates the sins of its masters, in this case the true believers of the current financial religion.

I read a good comment about conservatism somewhere (in relation to such "traitors" to conservatism as Bush and McCain) to wit: "Conservatism cannot fail, it can only BE failed". And so we see here that the US financial system grounded on debt cannot fail, but can only BE failed, by its very victims! This is the "common wisdom".

True, but such entities are the system. While it's a nice thought to hold them to the same standards as the woman in the article, the simple truth is that they're not. Whether they ever will be in the future is up to the politicians in Washington, D.C., the SEC, the Federal Reserve, etc.... They are allegedly accountable to the voters.

 

[Bestwifeever]

For all we know, this lady was a 1-pack a day smoker but started smoking a lot more recently. Or, was just nervous about having her picture taken for a big news article so she went for the cigarette. Or, she could be a 5-pack chimney who smoked away any hope she had of ever getting ahead of her bills. I'm not saying she's not responsible for her own actions, but it's interesting how we all read our biases into what we see.

I added the bold to Marquette's text. We see a woman with a lit cigarette regardless of our biases--it's right there between her fingers.

I think we should add the NYTimes to the list of people who are at fault for this woman's financial condition and our take on it. They could have run a photo of her standing in front of her house without smoking materials. They could have run a head shot. They chose the one of her smoking....

 

[cute fuzzy bunny]

Or maybe nobody managed to get off a shot of her without a cigarette.

In any case, my opinion is that her problems are 70% bad judgment, 20% pressure from sales and societal issues, 9% bad luck and 1% smoking.

 

[Marquette]

I added the bold to Marquette's text. We see a woman with a lit cigarette regardless of our biases--it's right there between her fingers.

I think we should add the NYTimes to the list of people who are at fault for this woman's financial condition and our take on it. They could have run a photo of her standing in front of her house without smoking materials. They could have run a head shot. They chose the one of her smoking....

No, my point is, and has been, she's at fault for her own mess. There are plenty of people that are deciding how she got into that mess (armchair quarterbacking). An editor can choose material to reinforce biases. That's likely not the "best" picture of the set and it's certainly not the only picture.

Frankly, I don't think I'd care if she ended up in some miserable condition like being forced to rent or live in a shelter as a result of her actions... there's certainly nothing newsworthy in the article (headline news "Some people make bad decisions"). but, I wouldn't have it any other way if I was in the same boat.

 

[Jay_Gatsby]

No, my point is, and has been, she's at fault for her own mess. There are plenty of people that are deciding how she got into that mess (armchair quarterbacking). An editor can choose material to reinforce biases. That's likely not the "best" picture of the set and it's certainly not the only picture.

Frankly, I don't think I'd care if she ended up in some miserable condition like being forced to rent or live in a shelter as a result of her actions... there's certainly nothing newsworthy in the article (headline news "Some people make bad decisions"). but, I wouldn't have it any other way if I was in the same boat.

She is responsible for her own condition. Some people might say that she didn't know any better. Even little children know you can't spend money you don't have. Consequently, I place the blame at her feet.

Now, does pointing the finger get her out of her mess? No, it doesn't. What it should do is create such a feeling of shame on her part that she never wants to feel it again. This, in turn, will hopefully get her to swallow her pride and ask someone to teach her how to get out of the mess she made. Unfortunately, there doesn't seem to be much shame (but rather substantial pride according to many of these stories) in being a debtor.

 

[A854321]

During all that time she was recouperating, with QVC and her credit card in front of her, she never seemed to take the time review her finances or talk to her credit card agencies who were charging her 28%? She could couch-surf shopping programs, but she could not call up a credit counselor or even a debt consolidator ( shudder). She couldn't even buy one of Suzie Orman's (shudder) books, which would have at least been on her level.

She had plenty of choices.

 

[brewer12345]

During all that time she was recouperating, with QVC and her credit card in front of her, she never seemed to take the time review her finances or talk to her credit card agencies who were charging her 28%? She could couch-surf shopping programs, but she could not call up a credit counselor or even a debt consolidator ( shudder). She couldn't even buy one of Suzie Orman's (shudder) books, which would have at least been on her level.

She had plenty of choices.

Now that you are all done crapping on her, can we have a good, old-fashioned hanging?

 

[Jay_Gatsby]

Now that you are all done crapping on her, can we have a good, old-fashioned hanging?

Nope. I wonder whether people like the woman in the article ought to be cut off from credit cards until she proves that she can be responsible. What this woman needs is someone who can say no to her, since she apparently can't say it to herself.

 

[CitricAcid]

And no one seems interested that the profit of one must needs come at the expense of the other.
Why is one group deemed "smart" and the other "stupid"?
I just don't get it!

All these smart companies run by smart people and Nobel-Prize winners are in the hole for much more than the lady here.. who is the classic example of the "capra espiatoria".. the hapless goat that assumes and expiates the sins of its masters, in this case the true believers of the current financial religion.

How is the profit of one made on the "expense" of the other? True, she is directly paying for the interest given by the money, but if it didn't HELP her, she could walk away. In other words, she is providing a service for the CC companies by paying interest and the CC companies are providing a service for her: credit. THIS is the backbone of free trade and our society. If her paying money for their profit is a problem for anyone, then I see there no difference between that and car companies EXPLOITING those who need to ride an SUV but can't afford it (or the gas prices). The pricing in this situation is done for the service provided, it is NOT a one way street.

Also, I am not willing to pass the blame off onto the person alone. Notice I am not claiming that the CC companies were being conned into letting a woman who needs money from them into defaulting on their money. I am not portraying them as victims, they are also perpetrators in the crime. The BIG DIFFERENCE is that when it comes down to being accountable for one's actions, the CC companies (not actually CC companies, but the banks who issue the CCs) can falter, lose millions/billions of dollars, cost billions more of losses in stock prices, lay off tens of thousands of workers and noone sheds a tear at that (Bernanke does seem to like to bail out his banker buddies though). In other words, they do eventually become accountable for their actions. Now, all I ask is that the other partner in the deal does as well.

 

[ladelfina]

CA, it's a matter of degree. Responsible borrowers yield little income for banks and CC companies. Less-responsible borrowers yield more income. The biggest profits are to be made by getting people to sign to the $23k-at-3%-becomes-$48k-at-16%-type loans.

Credit is not "the backbone of free trade."
If credit is "the backbone of our society", well it's time for a visit to the chiropractor.
Companies don't really want to cut off credit to people like this woman. For every one that defaults, there are two more that try to keep up exorbitant payments. If it hasn't been working out for lenders in the aggregate, this woman would not STILL BE RECEIVING CC OFFERS, as is mentioned in the article.

Some people here keep talking as if this woman were blaming someone else.. but she isn't! She fully states that it is all her fault. Maybe someone else somewhere is whining, but they are not the subject of this article, so cut her at least that slack. That is "all I ask".

 

[james22]

Many are quick to blame this woman's personal habits.

Ms. McLeod, who is 47, readily admits her money problems are largely of her own making.

I wouldn't argue with her.

 

[CitricAcid]

I am not stating that credit is the backbone of free trade (although it could be argued that it is in the post-industrial American economy). What I am saying is that the backbone of free trade is offering one service in exchange for another (or in the absence of a service, money). The credit card company IS doing her a favor, and they ARE doing them a favor. If she doesn't need the help from the credit given by the credit card company, she can either a.) find a different CC company, b.) cut back her spending c.) declare bankruptcy. In other words, the big bad CC companies are, in essence, keeping her alive through her spending ways.

And, to the point about her still receiving CC offers, yet again she can deny them. Maybe the alternatives are not very good if she doesn't use them (starvation, bankrupty, foreclosure), but these banks are willing to take on the risk, perhaps with poor foresight. But, if things fall through, they bear the costs of their decision. All I am asking is that she does the same. Yet again, it is not as if I do not understand how she got into this situation or that it is absolutely sacrilege for anyone to carry CC debt. It is just that when looking at this situation, in free trade, BOTH the CC companies and the consumer are benefitted by their transaction (otherwise they wouldn't do it). And, if the deal falls through, BOTH eventually feel the effects of the decision. In this sense, they are NOT adversarial in nature.

 

[Marquette]

I don't know if the industry needs more regulation or not... it could be self-correcting, at least to some degree.

I did ponder this, though... and not directly related to the story, but it does play a role. Let's say that there is always someone that needs money and there is always someone willing to loan money (at a price!). Would we rather that person get their money from a sanctioned, regulated industry with oversight. Or, would we rather that person get money from the loan shark thug down the street?

 

[CitricAcid]

I don't know if the industry needs more regulation or not... it could be self-correcting, at least to some degree.

I did ponder this, though... and not directly related to the story, but it does play a role. Let's say that there is always someone that needs money and there is always someone willing to loan money (at a price!). Would we rather that person get their money from a sanctioned, regulated industry with oversight. Or, would we rather that person get money from the loan shark thug down the street?

Or the less-regulated industry which offers far better rates and safety than the loan shark.

 

[brewer12345]

I am not stating that credit is the backbone of free trade (although it could be argued that it is in the post-industrial American economy). What I am saying is that the backbone of free trade is offering one service in exchange for another (or in the absence of a service, money). The credit card company IS doing her a favor, and they ARE doing them a favor. If she doesn't need the help from the credit given by the credit card company, she can either a.) find a different CC company, b.) cut back her spending c.) declare bankruptcy. In other words, the big bad CC companies are, in essence, keeping her alive through her spending ways.

I'll go one further. The availability of credit allows the borrower to have more freedom to make choices. They might be good choices, bad ones, or a mix of both, but they are still choices that could not otherwise be made without the availability of credit. Last I checked, most Merkins (and other people around the globe) generally like having freedom and more choices. So you take away some of our freedom when you regulate away the availability of credit.

 

[FinanceDude]

Early retirement is hard to achieve. I just hope, here, we don't judge or look down on people who are in difficult circumstances. I didn't envision that kinda attitude when I joined this board shortly sometime ago. Little more respect on other people's circumstances should be expected

Agree 100%. I have seen folks that make 10X what this lady does or more fall into the same predicament with just more zeroes involved.............

 

[CitricAcid]

I'll go one further. The availability of credit allows the borrower to have more freedom to make choices. They might be good choices, bad ones, or a mix of both, but they are still choices that could not otherwise be made without the availability of credit. Last I checked, most Merkins (and other people around the globe) generally like having freedom and more choices. So you take away some of our freedom when you regulate away the availability of credit.

And, regulating in restrictions of credit ignores the fact that credit is never forced upon somebody. It may be marketed differently, or have high rates, but that is part of the product being sold. Taking all the risks involved with the product being offered in this case ultimtely falls on everyone, except, I hope, the taxpayers.

 

[brewer12345]

And, regulating in restrictions of credit ignores the fact that credit is never forced upon somebody. It may be marketed differently, or have high rates, but that is part of the product being sold. Taking all the risks involved with the product being offered in this case ultimtely falls on everyone, except, I hope, the taxpayers.

Hmmm, I'll agree it is never forced, but there are situations where credit is abusively marketed. That's what I would like to see regulated.

 

[CitricAcid]

Hmmm, I'll agree it is never forced, but there are situations where credit is abusively marketed. That's what I would like to see regulated.

This is possible, however I don't really have an opinion on it. I could definitely see it being regulated somehow and not have too big a problem of it, but would not want to pass the onus of the situation from the crux of the point, both the creditor and the debtor making poor decisions, as opposed to passing it off as just tricky marketing.

 

[Westernskies]

A person's life is defined by the choices you make- whether these choices are proactive or reactive isn't always your choice. A lot of people make choices based on short-term gain instead of long-term goals. I suspect most of us on this board have made a few bad financial choices, especially when we were younger- I know I have.

I don't think she can blame the financial institutions for her predicament- so what if she is still receiving credit card offers?- that is what shredders are for- (If she can't afford a shredder, she can always burn them in her ashtray. )

Her financial meltdown was based on a lack of financial self discipline, and not having a cushion for emergencies. The former caused the latter.

I feel bad for her, but I don't feel responsible. And I am pissed off that millions of others just like her are dumping their financial problems on the rest of us in the form of higher consumer interest rates, tighter mortgage credit, diminished RE values, and a volatile Dow that is tanking my 401K account- which I worked hard to accumulate by doing without a Wii, I-phone, jet-skis, QVC, HSN, or new cars every year, unlike a lot of these folks who are just walking away from their self-directed financial crashes.

Stupid? She might be a very smart woman who just makes stupid choices- but we all know that the meat does slide out in the shape of the can...
Unlucky? Who knows? Her financial problems run a lot deeper than an unforeseen appendectomy and hysterectomy- although those expenses probably pushed her over the edge. This is the only element of her plight that elicits any sympathy from me- "there but for the grace of god, go I"
Irresponsible? Absolutely.

I am really glad I am not in her shoes, but she made a lot of the choices that got her where she is today- and you and I are going to help bail her out whether we like it or not.

 

[barbarus]

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).

I would like to see one dragged out into the noonday sun though, so I could have a good look. Their prey like "Dumpy" here in the article are all too apparent, surrounding us in everyday life, but they themselves remain hidden away in might buildings in great cities, unseen.

 

[ziggy29]

I don't know if the industry needs more regulation or not... it could be self-correcting, at least to some degree

It won't ever self correct if everyone else has to keep paying to bail out all the ones who get their bad decisions "self-corrected" into crisis.

As long as we keep privatizing gains and socializing losses, what incentive is there to not make reckless decisions about your money?

 

[HFWR]

Though there's some "bailing out" going on, both large and small, when someone is paying north of 20% interest on borrowed money, it's hard to have sympathy for the creditor's "losses". The interest rate should have more than covered the risk of loss.

 

[armor99]

And no one seems interested that the profit of one must needs come at the expense of the other.
Why is one group deemed "smart" and the other "stupid"?
I just don't get it!

Let me try to explain this from my point of view. Any business dealing in America requires two willing parties. In this case the bank, and the home owner. If the bank holds a homeowner at gun-point to take a loan, it is called extortion. If the homeowner holds the banker at gun point for money, it is called robbery. In none of these cases were either of those things true.
You seem to be implying, that these people (homeowners) were not intelligent enough to know they were getting a bad deal, and because of that lack of intelligence, it is not their fault that they willingly agreed to such a contract. So now you want to introduce legislation so that no one can enter a bad deal ever again? How would such a system work? What group of people could possibly decide what is a "fair deal" for everyone? What is a good deal for me, may not be a good deal for my neighbor. That is why in the US we have the right to choose for ourselves, and suffer the consequences, good or bad, of our own decisions.
You seem to want very badly to create a utopian-like place where no one is even allowed the possibility of making a bad deal. The only way to do that, is to limit choice. Do you really believe that the US would be a better place if people are no longer allowed to make their own decisions, because they are just not smart enough? Who gets to make the call as to what is too risky for some, but not others? Do you see the point of where I am going with this? Part of the learning process is making bad decisions, and hopefully you learn from them, and do not make the same ones again. For most that I know, including myself, this is how we learn and become smarter. Some people will have to touch the metaphoric "stove" and get hurt to understand that it is hot and can burn them. It might sound creul, but in the long run, I think it is actually far more mercifull then allowing folks to continue on in ignorance.

 

[Westernskies]

T The interest rate should have more than covered the risk of loss.

1. Bear Sterns
2. Indymac
3~ etc.

Never underestimate the power of stupid people in large groups.