Credit card companies respond to threat of legislation by saying they’ll need to charge ‘good’ cardholders more

I think I can respond on behalf of every non-delinquent cardholder in America:  I dare you.

The story is all over, but here’s my usual source’s article (The New York Times):

“Even as card companies imposed punitive fees and penalties on those late with their payments, the best customers racked up cash-back rewards, frequent-flier miles and other perks in recent years.

Now Congress is moving to limit the penalties on riskier borrowers, who have become a prime source of billions of dollars in fee revenue for the industry. And to make up for lost income, the card companies aregoing after those people with sterling credit.

Banks are expected to look at reviving annual fees, curtailing cash-back and other rewards programs and charging interest immediately on a purchase instead of allowing a grace period of weeks, according to bank officials and trade groups.”

I call bullshit.

Even considering the recent spate of poor decisions that have blown up in the faces of banks and credit card companies, even they aren’t stupid enough to pick on customers who have choices.  Granted banks and credit card companies probably do not make much money on clients who never pay any interest (I think I paid $7.49 in interest on my credit cards in my lifetime… I misplaced my statement once and paid it a week or two late) but they do make money off retailer fees and annual fees.

And who the hell with a good credit score and good income is going to stick with a company that eliminates the beloved grace period, increases annual fees above its competitors, or removes our favorite travel and cashback perks?  We are not the chronically-delinquent cardholders that the proposed legislation is meant to protect: We have options.  And we can take our business wherever we want.

Let’s see how many retailers are willing to pay American Express service fees when AmEx holders no longer benefit from grace periods or card rewards.  And let’s see how many new cardholders are gained from competing companies when the first credit card company eliminates their perks.  If my credit cards no longer offer me any real benefit, I’m more than happy to return to making my purchases with cash or debit and save the retailer some fees.

This is a bullshit bluff meant to stroke outrage among the influential moneyed classes and nothing more.  There is no substance behind this threat and that should be patently obvious.  Let’s see what equally bullshit news organizations pick up on this argument in service of ignorance or the companies that stand to lose should the legislation pass.

… and the cow goes moo

Even the NYT Editorial page addresses the John Murtha “decades of corruption” thing

See the NYT’s short editorial from last week.

(and my previous post here)

There’s nothing shocking about Congressman John Murtha’s (D-PA) corruption: it seems to be an open secret among those who follow politics.  What is surprising is how brazen the conflicts of interest are.

How many dozens or hundreds of people must turn a blind eye or be cowed by the powerful office of Mr. Murtha to allow millions in no-bid contracts to go to his nephew?  No-bid meaning there was no competitive bidding process.  For whatever reason (is blood a reason?), legislators decided that Mr. Murtha’s nephew’s company was the only company worth considering for multiple projects.

Honestly, Democrats who pretended to be disgusted by Senator Ted Stevens (R-AK)’s better be equally loud about this, lest they appear more team-oriented than ethics-oriented.

… and the cow goes moo

John Murtha treats the US taxpayers as his personal bank

And John “Tough Shit!” Murtha (D-PA) doesn’t even bother to hide it.  Why bother?  He’s a high-ranking Congressman, former Marine, and a Democrat to boot.  Who would suspect him of using his authority over public funds to distribute wealth to his family members?

Committed Democrats may wish to stop reading.  Republicans and any open-minded members of no party or any party, please visit Bill Moyers Journal’s blog here.

The author of the blog post, Michael Winship, provides all you need to see in the opening quote:

”Murtha: If I’m Corrupt, It’s Because I Care”

Well, I certainly wouldn’t accuse Murtha of not caring…

And to do your own little investigative journalism about Uncle Moneybags, check out The Seattle Times’ The Favor Factory: A most awesome source of information about our nation’s leading corruption artists.

How can he be so shameless?  There isn’t even an effort to conceal his nepotistic distribution of money that, last I checked, isn’t his.   Please read the Moyers blog post.  The post is nothing short of damning.

… and the cow goes moo

Banker confessional: The TARP is a taxpayer subsidy for investors

Here’s something I’ve been waiting to see for a long time, but never really expected to:  An investor who recently purchased a bank using TARP matching funds puts his investment in stark terms for all to see (please see Naked Capitalism’s comment, introduction, and excerpt.

Here is the key quote from the investor, included at NC, taken from The Telegraph (I believe this is NC’s source):

“The taxpayers ought to know that we are in effect receiving a subsidy. They put in 40pc of the money but get little of the equity upside,” said Mark Patterson, chairman of MatlinPatterson Advisers.”

Goddamn, that’s forthright.  It’s almost like the transaction is not just for the profit of his organization as it is as a proof of concept and example of how the TARP lends itself (or even outright encourages) abuse.

Let’s see if this catches on in American media (kind of sad that a Google search on the returns mostly blog and European news provider hits.  Where is the American media on this bold exposition?).

… and the cow goes moo

So just what am I getting paid for?

That’s the question I wish Meg Whitman and Thomas Friedman asked themselves (both links were originally found at the Exiled Online’s links/ticker).

First the biggie:

Ms. Whitman, former CEO of eBay (back when their stock used to go up), prospective future Republican Governor of California, and friend/associate/advisor to the economically unfamiliar John McCain during his 2008 campaign, apparently got a sweet little (relative to her vast personal wealth) $1.78 million kickback from Goldman Sachs for steering her company, eBay, towards GS’s services.  Kind of like a finder’s fee.  Except she worked for eBay at the time, not Goldman (see this article at the Huffington Post… which suddenly is full of titty links and coverage.  Did they always have so much NSFW content??).

So it’s perfectly understandable if GS happened to be the best contender to provide eBay investment banking services and for Whitman to steer eBay’s business Goldman’s way.  But when Goldman ‘awards’ her service to eBay (and it’s shareholders) for her choice in investment banks by providing her with inside access to profitable IPO issues (remember:  this is inside access for Ms. Whitman, not for eBay), doesn’t she ask herself if it could be a conflict of interest?

And if so, doesn’t she think to herself maybe enriching herself $1.87 million in such a — to be gentle — dubious transaction might not be worthwhile (the article indicates Ms. Whitman is worth about $1.4b.  $1.87 million is worthwhile chunk of change for anyone, but is it worth some potential lawbreaking when you already have a billion?)

Now the piddling $75,000 speaking fee for the journalist:

The New York Times’ star columnist and prolific author (and serial-metaphor mangler), Thomas Friedman, was revealed as having been paid $75,000 for a speaking engagement for the Bay Area Air Quality Management District, according to this article at the LA Times.

It is certainly understandable, given Friedman’s positions on renewable energy and his advocation of it’s role in maintaining American technological and industrial leadership, that such a group would wish to organize a presentation by Friedman.

As a journalist, does he not ask himself how this might skew his reporting when clearly the subject matter (and his advocacy) of topics can net him such extraordinary rewards?  Does he worry that may effect his writing and compromise his journalistic integrity?  And even if not, does he (and his employer) not worry that it could be perceived a possible corrupting of the purity of his reporting?  Well, apparently it did, as the $75,000 fee was returned.

These two stories have very little to do with each other, and are certainly quite apart in scale, but definitely share the post’s titular question.  And it does make me wonder why these rich and successful people don’t have an internal regulator that asks themselves what exactly they’re being paid for.

[Full disclosure:  If my employer sent me an extra $2k in my next paycheck, I probably would be quiet as a mouse.  So I'm a big, fat hypocrite.  And this is a real problem pronounced only among the rich and famous, but present probably universally:  We all think we deserve every penny we get, and more, and probably see each dollar paid to us as a dollar paid to us late and few.  This is a social problem, where we are inclined to take whatever we get rather than what we deserve, and not a susceptibility unique to the rich.]

… and the cow goes moo

Countrywide Financial Corp’s Angelo Mozilo will be charged for insider trading!

In my previous post, I cried with some dismay about what it would take to be charged with insider trading (referring to recently resigned NY Fed chairman Stephen Friedman and his millions of dollars in profitable trading of Goldman Sachs stock while being involved in the regulation of Wall Street banks).

Well, apparently it takes being the world’s biggest asshole!

(From Ritzholtz’s The Big Picture)

Hallelujah!

… and the cow goes moo

Former Gov. Eliot Spitzer exposes the NY Fed’s design for captive regulation

I love this post (and pre)-political Eliot Spitzer.  Not only is the Customer #9 stuff hilarious (see: the past weekend’s SNL Weekend Update sketch) but his public appearances and articles have been expository, to say the least.

His latest article at Slate (found at Some Assembly Required) continues to provide his Inside Baseball opinion, albeit he abstains from making any damning accusations (further hints of his re-nascent political ambitions?).  The article focuses on the New York Federal Reserve Bank in particular, in light of the recent scandal surrounding recently resigned (his letter can be found here) Chairman Stephen Friedman’s ability to regulate his former company (Goldman Sachs), and to purchase thousands of shares in GS while Chairman of the NY Fed (so what does it take to be suspected for insider trading?).  If I weren’t so numb to it all, I would pretend to be shocked.

Spitzer provides a passing mention of that scandal, but his articles focuses on a story tangential to Friedman’s:  The NY Fed, the most important Federal Reserve Bank, is captive to its regulatory charges by design.  The choice of Chairman (remember, current Treasury Department Secretary Timothy Geithner preceded Friedman as Chairman) is made entirely by the banks under regulation under the guise of representing ‘the public’.

The top regulator at the most important Federal Reserve bank is SELECTED by those he is purportedly regulating.  If that isn’t complicity by design, I don’t know what is.

Once again it is shown that regulatory and institutional failures are only failures from the public’s perception.  To those involved, failures are only the proper products of design.

… and the cow goes moo

Penny Stock Pump ‘n’ Dump meets the Internet Age

The New York Times had an interesting, albeit sparce (on the good side, it’s short!) article by Floyd Norris, probably their strongest business reporter, about how some small stocks seem to be the object of manipulation by culprits unknown hiding behind internet pseudonyms, creating apparent momentum in its stock price and real profits for those who have access to the stocks at low prices, either via being shareholders while the pump is being primed, or a finance bigwig with access to special discounted share purchase agreements.

Check out the article.  I promise, it’s short.

Nothing too mind-blowing takes place as much of it I think most investors already assumed takes place regularly, but it does make me glad I don’t base any investing on share price movements I can’t explain (which is why I am a bystander for this recent rally in financial stocks).  And it makes me more wary of the convincing arguments that can be made by charts alone.

… and the cow goes moo

Lakers win! Wish they could have done it clean though

Last night’s Rockets vs. Lakers contest was a disappointment compared to Game 1 on a couple of levels:  Sadly, the Rockets hardly put up much of a fight, allowing the Lakers to lead almost the whole way without every appearing like a plausible threat (largely due to Yao’s absence and ineffectiveness due to foul trouble); and also, the volume of dirt present.

The Derek Fisher bodycheck:  Absolute dirt.  And Derek’s bullshit excuse makes no sense.  He claims he bodychecked Luis Scola (himself a dirty player, but not in a way that causes injury) while Scola was setting a screen because Scola was farther than him than he expected.  Which is ridiculous, since replays show Derek clearly looking over his shoulder and seeing Scola come up for the screen right before the hit.

He claims his arm came up higher than usual during the hit because of that added distance as well, which is also ridiculous.  When you’re running over a screen (the implication being that Derek was intentionally running over the screen to pick up a foul, as the Lakers had a foul to give, but not intending to absolutely bowl over Scola), you lead with your shoulder to cause the damage.  Your lead arm has nothing to do with it, and you certainly shouldn’t be throwing your arm out lik ea hockey player delivering a bodycheck.  Regardless of the distance of the screener.

And why the fuck would the greater distance make the impact any harder?  If you’re intentionally running over a screen and expecting near contact, you take one big bounce (on your first step) to cause the damage and create the impact.  If the screener isn’t there, most of your momentum is wasted and you should have a softer hit, if anything.  You put all your weight into the first step because if you kept running the screen past the first step, you’d trp over the guy’s corpse.  As a dirty basketball player, I should know.  That Derek had so much force in his hit even on his second step, and considering the route he took to hit Scola which really wasn’t the route he would take if he thought Scola was closer (and didn’t even run parallel to the movement of Aaron Brooks, who I believe he was guarding at the time), it seems certain to me that Derke Fisher knew exactly where Scola was and the outcome (except for the Flagrant 2 foul and subsequent ejection) was exactly what Derek intended.

So Derek Fisher, a player I generally like (even if he’s a corpse on defense now), is officially a dirty player.

But the biggest loser in the game isn’t even Luis Scola, the victim of Fisher’s dirty hit: It’s legendary crowd-charging lunatic, Ron Artest.  Mamba’s hit on him wasn’t as dirty as Fisher’s hit on Scola (Mamba was trying to box out the much heavier and stronger Ron Artest, trying to keep his center of gravity low to seal Artest from the offensive reboudn, but Artest just leaned on Mamba’s shoulder and neck and forced Mamba underneath the rim.  Mamba took offense and swung his elbow very deliberately — but quickly and furtively — into Artest’s chest and neck area as the rebound came to make space or just do damange).  Ron did exactly what a non-legendary crowd-charging lunatic basketball player would do: He protested to the referee immediately to no avail.

A less sane player (say, the Ron Artest of his Indiana Pacer days, or probably 40% of the league) would have reacted with a physical reprisal but Ron Artest in this one instance did exactly what the marketable ‘NBA Cares’-type player would have done:  He went straight to the referees.  And got absolutely no attention for it.  So he got into Mamba’s face on the subsequent defensive possession for Houston and the referees (Joey Crawford, if memory serves) immediately had to separate Artest from Mamba (who wanted no part in it) and ejected Artest the six potentially vital minutes of the 4th quarter remaining.

So the refs missed the original call (and surely Stu Jackson, upon further review, will miss it as well rather than suspend Kobe Bryant or punish him in any way that could have an effect on the series… since any move against Mamba could decide the outcome of the next game and perhaps the series).  No surprise that the officials missed the call.  It was a tough call to see, since Artest didn’t opt to flop on the contact and is too big and strong to really even show contact when it occurs.

The great tragedy is that Ron Artest, finally rehabilitated this past half season or so, it seems, is likely to fall to recidivism.  Seeing what little good the appropriate course of action, I fear he will return to his old ways of defending himself on the court.  Artest, who may have been Houston’s playoff MVP up to this point, carrying the same burden on offense as Yao Ming, and providing an equal performance to Shane Battier on defence, might return to his crazy Tru Warier ways and destabilize the underdog Rockets enough to take them out of contention.

This was shaping up to a great series, but the skillful manipulation use of the officials by the Lakers, and their general dirty play (Vujacic’s bloody hit on Shane Battier in Game 1 was a cheap shot as well… Who follows through like that on a tip?  And he should have know that Shane Battier was right there next to him) will probably send this series into the trash.  And the Lakers will close out this series in three more games, if Ron Artest returns to crazy.

Fucking Lakers.

… and the cow goes moo

Americans cause the financial crisis, but the Chinese come to the rescue with a cure

Just light one up!

Or says the BBC:

“The authorities in Gong’an county had told civil servants and teachers to smoke 230,000 packs of the locally-made Hubei brand each year.

Those who did not smoke enough or used brands from other provinces or overseas faced being fined or even fired.”

Awesome!

… and the cow goes moo