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July 31, 2010


It's weird, my understanding is that the banks are sitting on a lot of cash, but they are looking for every dime they can find.

I just got a notice from one of my credit card providers that they want to raise my rate to, basically, prime plus 14%.

I doubt they even pay prime for whatever they borrow, so they're looking for a clean 14 or 15% from me.

And I have a freaking great credit rating.

The result of this is that they are going to lose a customer. It doesn't make sense to me.

But then, like Jacob, I don't work in banking.

russell: It's weird, my understanding is that the banks are sitting on a lot of cash, but they are looking for every dime they can find.

They're broke, and desperate to build capital reserves any way they can. From what I can tell just from reading around, the big US banks are not in a position to deal with another big dip in house prices. But prices are still too high. Frankly I think that everyone knew that and were just hoping that high growth and a little inflation would show up and sweep it all away.

As an entirely inexpert outsider just trying to figure out what is going on, it seems like a major second crash in house prices with accompanying bank failures/bailouts is almost inevitable without major action on jobs & deflation. But what do I know.

It doesn't help that a lot small commercial properties—less than 5,000 square feet—were financed with home mortgages. Oops!

It's fracking by other means.

In return for granting corporate persons First Amendment rights, flesh and blood persons should be given the ability to transfer their outstanding debts to subsidiaries created for the express purpose of going bankrupt without affecting the assets of the original person. It's only fair.

This seems to have less to do with the big banks, who have willing buyers for old bad debts if the banks will sell it cheaply enough. But it does say something very disturbing about the prevailing American economic paradigm that people think it worthwhile to buy up expired debt and harass people to collect it. It reflects a seriously distorted view of money as a real thing rather than a surrogate for thought, invention, services, energy, resources, and all the other things that make up the actual running of the oikos, or household, where humanity lives and from which we derive the English words economy and ecology.

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