TDS: How Credit Card Companies Have Screwed Us

We've written about it. Now here it is as presented by Jon Stewart and The Daily Show.

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From Those Socialist Liberal Tree Huggers at the Department of Labor

Here's a pesky little fact they're not going to show at the Tea Party.

 

The Consumer Credit Screwjob, Illustrated

Here's what we've been talking about: The credit card companies putting the screws to American consumers before the reforms go into effect in February.

Today, we received one of those "Changes to Your Account" notices - this time for a credit company which specializes in medical and dental care, which makes it even more insidious. First, the purchase requirements:

 

So the new changes apply to "Transactions made on or after the Effective Date."

Coincidentally, they also apply to "Transactions made before Effective Date."

Gee, that's fair. Everything I purchased under the old agreement now falls into the new agreement's new APR. And what would that be? The 11.99% we WERE paying? Yeah, right.

 

There it is. Loan shark rates. 29.99%. Not quite 30%, I know, but close enough.

The fucking audacity. Close to $20k in necessary dental work we both needed (and that's AFTER insurance), and they pull the rug out from under us by almost tripling the APR.

Oh, but we do have an opt-out option. We can refuse these new rates...BUT...

 

Some "right to reject," huh? We can reject it, but that would close the account. And as we've said time and time again, closing credit accounts knocks your credit score down substantially.

Folks, we're working our asses off to be fiscally responsible, but sometimes unexpected costs happen. And these animals...these bottom-feeders...these greedy bastards are making one last goal-line stand to screw us for every dollar they can.

If I don't opt out and close the account, this will never get paid off - so I have to take the credit score hit.

This is what we're up against - right there in black and white. We're screwed. The so-called credit card reform bill has been rendered totally and completely useless. They foolishly trusted these monsters to do the right thing - and all they want to do is kick us viciously in the collective balls.

I wish there was something this White House can do...but with Joe Biden in there, proud former senator of Delaware, the credit card capitol of the nation, I'm not going to hold my breath.

And before our conservative readers rejoice at my saying that, let me make it clear that this is the result of your beloved free market deregulated marketplace that has no government (or any) oversight. Pure unmitigated chaos - THAT is the "libertarian" cornerstone you so dearly embrace, and it's been in place long before this administration took office. We're seeing the fruits of your free market myth, your "libertarianism," and they're all rotten to the core.

The good news out of all this is eventually we'll get our financial house in order. We'll pay all this bullshit off one way or another. And once we do, we'll remember all those who fucked us over when we needed them most.

Their shortsightedness will come back to kill them. My only regret is that it won't come soon enough.

We welcome your suggestions. We've run out of ideas.

Burn Your Credit Cards (Just Don't Close 'Em)

We've been writing for some time about the screwing of the American consumer by the credit card companies, despite the so-called overhaul of the credit card industry. Even though it was passed, it doesn't go into effect until February. That's given them several months to bend you over and slam it to you.

Here's an important thing we want to pass along. READ THOSE MAILINGS THEY SEND YOU. Discover and banks that distribute Visas and MasterCards are jacking APRs to an astonishing 29.99%. They do warn you, but you have to read the letters they flood you with. They generously offer you to opt out of the rate hike, but you must close the account and stop using the card. Then they'll magnanimously let you pay it off under the old agreement's APR.

Problem. Closing credit card accounts negatively impact your credit score since you need credit to get credit. So you can save money - but it comes with a price.

We've also stated many times that credit companies (not just AMEX, but the rest are joining in) are now eliminating high credit limits, slamming them down to current balances. This eliminates your debt-to-available-credit ratio which is also devastating to your credit score.

If you have time to wage battles and make a living chasing down the credit bureaus, you can probably knock your score up several points. You can also fruitlessly seek out new credit. Chances are, however, you'll be declined and that (say it with me) will ALSO give your credit score the smackdown.

It's a lose-lose-lose situation for Americans, and February won't fix what they're putting in place now.

Budget yourselves. Stop using credit if it's at all possible. We know it's tough to do these days. But sell the Wii. Drop the video subscriptions for now. Eat at home. Stop impulse buying because something looks like a great deal (I love ya, Woot, but these are lousy times). Start selling stuff on eBay and donate the rest - it's the end of the year and you should beef up those charity donations for tax time anyway.

And read this new article: "10 Ways Credit Card Companies Are Still Screwing You." There was a time when if they did just any ONE of these things, it would send shockwaves through the industry. In the last year, we have seen every single one of these implemented, and it's horrifying.

It's a game we're all losing to unregulated greed. Sorry, "libertarians," but this is free market at its worst. This needed government intervention years ago, but we had a government that didn't want to interfere (even though we're still paying them to HELP US).

We're right there with you on this, and we'll pass along any good news if God forbid we actually get any. Try to have a good holiday season. And if the in-laws just get a card instead of a big shiny new thing, they should understand.

Oh, THAT'S Why Citi Jacked Their Credit Card APR to 29.99%

They need to pay all the lobbyists they're hiring to fight regulation that would prevent them from raising credit card APRs to obscene heights...like 29.99%.

Oct. 23 (Bloomberg) -- Citigroup Inc., which has yet to repay $45 billion in federal assistance, has more lobbyists than any other company who registered to try to shape legislation regulating the financial industry, U.S. Senate records show.

The New York-based bank, 34 percent-owned by the U.S. government, is listed as a client by 46 of the 1,537 lobbyists who filed with Congress to work on President Barack Obama’s push for rules to limit financial risks and impose stricter consumer protections.

They join 44 advocates for the American Bankers Association, 41 for Prudential Financial Inc., and 29 for Goldman Sachs Group Inc. Altogether, lobbyists for companies, business organizations and financial industry groups outnumber, by 25 to 1, the 58 who registered to represent consumer groups, unions and other proponents of tougher regulations.

“We’re like Luke Skywalker and they’re like the empire,” said consumer lobbyist Ed Mierzwinski, referring to the “Star Wars” hero. Mierzwinski works for the Boston-based U.S. Public Interest Research Group.

Eric Cantor: The Stimulus Which is Helping My State is a Failure

Sometimes, you just get so stuck in your talking points that you don't know when you're sounding like a fool. Minority Whip Rep. Eric Cantor of Virginia slammed the stimulus yesterday on CNBC and suggested it should be canceled, despite this little fact:

Last month, Cantor hosted a job fair in Midlothian, VA, where the economic recovery package created dozens of jobs. Additionally, Chesterfield County, where the fair was being held, will receive more than $38 million in stimulus funding over the next two years. Were that money to be paid towards the national debt instead, tens of millions of dollars would have to be taken away from promised funding for higher education, special education, food stamps, and other essential public goods.

Sen. Jon Kyl (R-AZ) made the same suggestion last July, despite the fact that his state has received billions of dollars in stimulus funding that has provided much-needed relief to Arizona’s health and education systems.

While conservative members of Congress continue to slam the stimulus — even while hypocritically touting its effects in their own districts — the Wall Street Journal reports today that the stimulus appears to be “helping the US climb out of the worst recession in decades.”

#Krugman - It's Time to Give Reaganism Its Long Overdue Last Rites

Let the GOP keep fawning, swooning and squirting all over this dark era of the American economy. I always remember my first home purchase in 1986 with 13.875% interest. The Reagan years were a nightmare for the non-wealthy and should be laid to rest once and for all.

Washington, it seems, is still ruled by Reaganism — by an ideology that says government intervention is always bad, and leaving the private sector to its own devices is always good.

Call me naïve, but I actually hoped that the failure of Reaganism in practice would kill it. It turns out, however, to be a zombie doctrine: even though it should be dead, it keeps on coming.

Let’s talk for a moment about why the age of Reagan should be over.

First of all, even before the current crisis Reaganomics had failed to deliver what it promised. Remember how lower taxes on high incomes and deregulation that unleashed the “magic of the marketplace” were supposed to lead to dramatically better outcomes for everyone? Well, it didn’t happen.

To be sure, the wealthy benefited enormously: the real incomes of the top .01 percent of Americans rose sevenfold between 1980 and 2007. But the real income of the median family rose only 22 percent, less than a third its growth over the previous 27 years.

Moreover, most of whatever gains ordinary Americans achieved came during the Clinton years. President George W. Bush, who had the distinction of being the first Reaganite president to also have a fully Republican Congress, also had the distinction of presiding over the first administration since Herbert Hoover in which the typical family failed to see any significant income gains.

And then there’s the small matter of the worst recession since the 1930s.

There’s a lot to be said about the financial disaster of the last two years, but the short version is simple: politicians in the thrall of Reaganite ideology dismantled the New Deal regulations that had prevented banking crises for half a century, believing that financial markets could take care of themselves. The effect was to make the financial system vulnerable to a 1930s-style crisis — and the crisis came.

“We have always known that heedless self-interest was bad morals,” said Franklin Delano Roosevelt in 1937. “We know now that it is bad economics.” And last year we learned that lesson all over again.

Or did we? The astonishing thing about the current political scene is the extent to which nothing has changed.

As Krugman points out, the Reagan mindset of letting the marketplace take care of everything continues in the health care "discussion." Our brilliant lawmakers still seem to believe the outcome will be different.

Just stop it. Reaganism died while Reagan was president. Let it go.

Better Than Despair: Builders Sense Recovery

Yeah, Obama sucks. Damn him.

Tuesday's report showing that single-family housing starts grew nearly 2% nationwide in July from the previous month is welcome news in Wisconsin's North Woods, where many loggers have been trying to outlast the worst downturn they've ever seen.

The U.S. Commerce Department said Tuesday that construction of new single-family homes rose for the fifth-straight month in July. Building permits for future construction climbed nearly 6%.

The confidence level in the industry this month is the highest in more than a year, the National Association of Home Builders said Monday.

While the numbers continue to skew positive, no one - from loggers to builders - is willing to say that a full-blown recovery has taken place.

"We're definitely ahead of where we were last year," said Paul Bielinski, chief operating officer at Waukesha-based Bielinski Homes, the state's largest homebuilder.

He added that "cautiously optimistic" is the best way to describe his outlook going forward.

Knocking on 10's Door

Unemployment is at 9.5%.

The American economy shed 467,000 jobs last month, and the unemployment rate rose to 9.5 percent from 9.4 percent, the Labor Department reported on Thursday. Job losses were widespread among the construction, manufacturing, and business and professional services sectors.

The losses were sharply higher than economists’ expectations of 365,000 lost jobs.

Economists said a decline of 322,000 jobs in May had raised expectations that the market was bottoming out as the economy struggled to right itself, but the numbers on Friday dashed some of those hopes.

Obama Wants to Bring Back Bank Regulation; GOP Cries Like Babies

The grownups are in charge, the babies go nuts.

President Obama says the Wall Street melt-down was caused by a dangerous combination: wild risk-taking by financial institutions and a lack of government oversight.

Tuesday he said he wants to make sure it never happens again, reports CBS News chief White House correspondent Chip Reid.

"We have to make sure that we've got an updated regulatory system that hasn't been significantly changed since the 1930s," Mr. Obama said.

The president will officially roll out his long-awaited plan Wednesday. One major component: he wants to create a brand new Consumer Financial Protection Agency with "broad authority" to crack down on banks and credit card companies that engage in "unfair and deceptive practices."

The plan would also strengthen government oversight of all large financial institutions, toughen regulation of derivatives and other complicated financial instruments at the heart of the Wall Street crisis, and allow the government to take control of massive companies like AIG if their failure threatens the entire economy. But many Republicans in Congress say the plan will lead to too much government intervention and continued reliance on bailouts.

When it comes to the criminals who have been running the banking business, there's no such thing as "too much" intervention. Sorry, babies. Step aside.

SOCIALISM RUNNING WILD

Yeah...Obama has really taken over American business.

Obama Breaks Bread with Krugman

At least he's listening.

To judge from "War of Necessity, War of Choice," Richard N. Haass's new book on presidential decision-making with regard to Iraq, George W. Bush lived in a bubble, partly of his own making, that walled off creative dissent or even, in some cases, common sense.

Mindful of his predecessor, Barack Obama seems to be trying harder to make sure he hears all sides. On the night of April 27, for instance, the president invited to the White House some of his administration's sharpest critics on the economy, including New York Times columnist Paul Krugman and Columbia University economist Joseph Stiglitz. Over a roast-beef dinner, Obama listened and questioned while Krugman and Stiglitz, both Nobel Prize winners, pushed for more aggressive government intervention in the banking system.

That sort of outreach is admirable—but it would be a mistake to make too much of it. A couple of hours of conversation is no substitute for methodical inquiry and debate. At present, Obama's economic advice is closely controlled by his chief economic adviser, Larry Summers, who acts as a kind of gatekeeper, determining what Obama sees and hears—and what he does not.

I doubt Obama's bubble - and his head - are anywhere as thick as Bush's was.

Offshore Business Addresses No Longer Tax Free

...at least if Obama gets his way. 'Bout time.

President Obama will present a set of proposals on Monday aimed at changing international tax policy, calling for the elimination of benefits for companies and wealthy individuals that harbor their cash in offshore accounts. The president and Treasury Secretary Timothy F. Geithner will announce their plans during a late-morning appearance at the White House. The proposed overhaul in the tax code, which will be fully unveiled in the administration’s budget later this week, could help raise $210 billion in revenues over the next 10 years.

Good Luck With That

The White House wants to talk some sense into the credit card companies.

Because of the recession, credit card companies have been clamping down on credit limits. They've also been jacking up interest rates. Sometimes without informing their customers. They argue it  protects them against defaults.

"Because the credit card companies have arbitrarily stepped in and cutting down on credit lines, it has impacted credit scores. It costs us as consumers," says MCC Professor Cheryl McKeiver.

But help is coming from Washington.  President Obama's economic team will meet with bank and credit card executives this week to prevent random changes. The house is also expected to vote on Wednesday on a bill requiring companies to give you 45 days notice before any interest rate or fee changes.

"If this is signed off, in 90 days, we could see it enacted," says McKeiver.

These changes cant some soon enough. Recently, chase added a $125 fee on some of its no fee cards. American Express raised its late fees on some cards, from $29 to $39. Bank of America and Chase have doubled interest rates on some customers, to up to 30 percent.

This is ringing true as we're preparing to leave town for a while in the wake of the AmEx debacle. I could pay down one of the cards which got the credit limit clipped to clear space for the trip, but what's to stop them from slamming the limit down again once I'm there?

The seeming randomness and contemptuous nature of it all makes it all one big stress-filled crapshoot just to go on a vacation. When our ability to spend is crippled this way, it hurts everyone.

What Jim Baker Told Me on CNN This Morning

On Farid Zakaria's show, Baker says the Obama administration needs to stop focusing on everything else, and make their top three priorities the economy, the economy and the economy.

Advice from the people who just a few short months ago used to think national security was far and away our number one priority and everything else be damned. Talk about unfocused.

Some Republicans Didn't Buy the GOP's Budget Pamphlet

The budget passed the house and senate, despite zero votes from obstructionist Republicans.

It must really suck to be wrong all the time, and to now actually be proven wrong in public.

About twice as many Republicans (38 or 20 percent of their conference) voted against the GOP alternative budget -- than Democrats (20 or 8 percent) who nixed their party's spending plan.

The trends were not surprising: Most of the Dem nays came from the South and southern midwest; Most of the GOP defectors were north of the Mason-Dixon line.

The exception: seven Florida Rs voted against the tax-cutting, lower-spending GOP alternative.

Ryan Says Boehner Got It Wrong

HA! Paul Ryan needed an entire week to explain what that "budget" was the GOP presented to the press last week. Despite Boehner flapping it in front of the cameras and saying, "HERE IT IS!" Ryan gives the quote of the month, highlighted below.

Can't blame this one on the media, asshat.

(BTW, thanks, reader Lynne. I didn't even catch The Hill's mislabeling of their party affiliations when I posted this before I had coffee. They have since fixed that, but I'll leave the original form here for laughs.)

Remember that Republican budget outline last week that was supposed to be the GOP's alternative to the president's? Remember how House Minority Leader John Boehner (D-Ohio) said: "Two nights ago, the president said we haven't seen a budget yet out of the Republicans…Well, it's not true, because here it is, Mr. President"?

Not so much, Rep. Paul Ryan (D-Wis.) said Wednesday morning. Appearing on MSNBC, Ryan said, "The thing you saw last week was not the alternative budget, this is our alternative budget," referring to the budget the GOP plans to introduce on Wednesday.

More, that budget last week, which was widely panned for lacking specifics, was a "marketing document," Ryan said.

'Somewhere along the line there was a misimpression given that that was our budget," he said.

Here's where that "misinterpretation" came from...and holy schnit! It's directly from Boehner's YouTube site! Thanks, John.

$50 Million in AIG Bonuses Will Be Returned

NOW can we move off this goofy distraction?

Whatever the Reason...

...my 401k is grateful today. Now to find a way to dump it all into my mattress.

Krugman's "Despair"

Everyone's pointing to Paul Krugman's blog today where he destroys the Geithner toxic loan plan which was released early this morning. What's more important to me is his explanation for his "despair" which is here.

It's easy to proclaim failure. At least Krugman took a breath and explained his initial reaction. We still are weighing whether or not this is a real cause for panic or his dismay that they didn't follow his own plan. We'll get back to you.

Meanwhile, he also destroys the reporting of the CBO's projection on Obama's budget.

Layers and layers of greatness and evil. It really takes a freaking genius to follow it all.

Olbermann Special Comment: "Enough"

No one walked away from this excellent rage against corporate America. Not even NBC. This is seven minutes of outstanding.

Is This Anything?

Sen. Ron Wyden (D-OR) tells HuffPo about a provision he co-sponsored with Sen. Olympia Snowe a month ago which limited bonuses at firms like AIG to $100,000. The provision somehow disappeared in the House after it sailed through the Seante, which prompted the HuffPo story. But there's one thing about the provision I find kinda weird.

Any amount paid above that would have been taxed at 35 percent.

So we would have gotten some of it back. But it still rewards the recipients with 65% of their undeserved bonuses anyway. Tax it at 65% and you have a story.

It's a shame it got stripped, but it's not enough to warrant a national-emergency headline on the homepage.

The Result of No Regulation

There's a time for free market and a time to step in and slap people.

In the AIG situation, lack of regulation allowed executives to write their golden tickets by crafting contracts that allowed them to receive crazy bonuses under any circumstance. That includes failure. That includes incompetence. And that includes getting those bonuses no matter what the money source is.

WITH regulation, bonuses would be prohibited if the funds came from taxpayer money.

WITHOUT regulation, we're fucked with iron-clad contracts.

And that, my friends, is the dark truth about "libertarians" (what many embarrassed Republicans like to call themselves).

Republicans and "libertarians" like the ol' hands-off approach. It'll fix itself.

Obama's pissed off enough about it to step in. That's what Democrats do.

Call it socialism. Call it government intervention. Call it Penelope for all I care. It has to be done. Why?

The government's #1 job is to protect us. Just as much as that means military protection from enemies and law enforcement protection from terrorists, it also means economic protection from corporate thieves and corporate terrorists. That's what we're dealing with here.

Questions?

FIre Department / House on Fire Analogy of the Day

Thomas Friedman, a little late to the metaphor party, but he made it.

Yet I read that we’re actually holding up dozens of key appointments at the Treasury Department because we are worried whether someone paid Social Security taxes on a nanny hired 20 years ago at $5 an hour. That’s insane. It’s as if our financial house is burning down but we won’t let the Fire Department open the hydrant until it assures us that there isn’t too much chlorine in the water. Hello?

Stewart Takes CNBC Down ANOTHER Six Feet

And he used Jim Cramer as the drill bit. Catch the replays - it tops the show, and it was even more devastating than last week's CNBC "tribute." We'll put up the video as soon as it's available from Comedy Central. (Hey, that's what they insist, so we'll abide.)

UPDATE: Here's Cramer's sphincter enhancement procedure. He truly is the Limbaugh of financial media - loud, attention-getting and generally full of shit.

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