On The Mark -- Good Bank, Bad Bank

There's been a lot of talk about the government establishing a "bad bank" where the banks can dump all of their troubled loans and other ugly money to clean up their balance sheets. I think the proponents of this strategy have it all wrong.

Instead of funneling all those billions of dollars into banks that have proven they can't manage money properly, the government should put its billions into a good bank and use that to produce mortgage loans and refinancing, and credit lines for small businesses.

The banks should be left to figure out how they're going to get out of the mess they've greedily gotten themselves into. They've clearly shown that they have no regard for the so-called Mainstreet, and will only use the money to clean up their balance sheets, protect their pay and bonuses. Very little of that money will make its way to Main Street. It's like oil and water; there's no connection between the banks and Mainstreet anymore.

Why should the banks be bailed out when Mainstreet, weighted down with their debts until they die, is not getting bailed out, instead thrown out onto the streets to live in cardboard boxes?

And why did the banks push so hard to restructure the bankruptcy laws last year -- because they saw this disaster coming before anyone else did and they were doing some preventive crisis management.

After a few years, the Good Bank could be sold to the private sector after the Bad Banks have climbed out of their holes on their own, at a tidy profit for us taxpayers.

Incredible ad for HSBC

Who cares what HSBC does? This ad is awesome, touching, powerful, and quirky.

(Thank you again, BoingBoing.)

Credit Card Crooks

…you want to learn how to rob a bank, or how to set one up, which is much the same thing…
*A line from “The Shadow of the Wind” by Carlos Ruiz Zafón

The above line finally got me out of my reading chair to once again point how insidious and predatory the banks and credit cards remind.

From a New York Times editorial:
…the credit card industry has stealthily adopted methods designed to maximize burdensome penalties and fees, while ratcheting up interest rates as high as 30 percent. Companies bombard unwary consumers with teaser packages that promise very low interest rates to start, while reserving for themselves the right to raise rates whenever they choose. The details are buried in deliberately arcane contracts that run 30 pages long and that even lawyers have trouble understanding.

Still more
… Under a provision known as “universal default,” a cardholder who pays a credit card company faithfully can still be hit with a high penalty interest rate for missing payments with another creditor. In another despicable tactic known as “double cycle billing,” a cardholder who pays $450 of a $500 balance is charged interest on the entire amount as opposed to the unpaid balance.

State usury laws would once have precluded many of these practices, but those have been preempted by federal regulations that are increasingly designed to make banks and credit card companies happy — rather than protect consumers.

Our elected representatives are about to go on a month’s summer vacation at our expanse, so nothing will be done until September, and still while the Republicans have enough power to block anything to protect the consumer, nothing will be done, so be wary and limit your credit card use (this has been a public service announcement).

*the book I'm currently reading