BANKS AND CREDIT CARDS.
There is not a day goes by that the newspapers, radio and television are bombarding us with news regarding banks and the trouble they are in. Then we hear that they made zillions of dollars in profit. What are we to believe? The TARP money was given to the banks to loan out to consumers to get the economy going. What they did was park the money with the Federal Reserve at a 2% interest rate and then took it back at a profit. Some of them paid it back to the government so they can be free of the rules, and now they are free to mess up the economy all over again.
The other day something caught my ear listening to the radio while driving to work. The news was that the banks are losing money on credit cards, so there will be another problem to look us in the face again. Then I remembered the mailings we have all been receiving from our banks/credit card companies that they have reduced our line of credit and increased our interest rates to almost 30%.
I would be glad to tell them why they are losing money and how to solve it. Let's create an imaginary credit card where we have a balance of $4,825.00 and our current rate is 12% with credit limit of $10,000.00. We have been making payments on time and have never been late. This balance would have a minimum payment requirement of the current month’s interest for $48.25. Now let’s assume we are to pay an additional $50.00 toward the principle so our payment would total $98.25. This is something that we have budgeted for and we could keep up with.
Then we get the love letter from our bank and they decrease our credit limit to $8,000.00 and increase our interest rate to 28%. Now we have less access to the cash that we all need in this NO-BANK/CREDIT WORLD and our payments are changed.
Now your monthly interest increases to $112.58 and that alone is more than what you have in your budget to pay for the monthly payment. You have been budgeting and paying $98.25 per month and now interest alone is $112.58 which is $14.33 more that what you have been paying for both interest and principle.
This is what happens: People take a look and recognize that at this rate all they are paying is less than amount of the current monthly interest charge. Since this credit card will never get paid off, they completely stop paying, and this account becomes a bad debt for the banks. Banks have not woken up yet to realize that instead of helping people in this economy and in turn helping the economy turn around, their institutions have created another stupid situation that is worse than the prime loan episode…and they are wondering why they are losing money on their credit card business. Duh! Wake up you smart Harvard Graduate Geniuses who are trying to find the next scheme to make money. It does not take a rocket scientist to see this, but these people in charge are so smart that they have gone blind to realty. I am surprised that none of them have thought of opening a new bank called Capone Bank. At least Al Capone did you in if you did not pay rather than torture you to death.
If they would reduce the interest rate rather than increase it, more people would pay their credit card payments, and this would place more money in the banks. They would have more money to lend rather than steal TARP money to make money on us. Now back to our imaginary credit card situation. If they reduce the interest rate to 7%, we would all pay less interest and our payment would be $25.14 interest and let’s say we pay the $50.00 we have been paying toward the principle. This would make our total payment $75.14. What happens is from original total payment of $98.25 to $75.14, we have an extra $23.11 to spend which we would put in the economy to get it back on its feet. I know $23.11 does not look like very much money, but if this multiplied by the millions of open credit card accounts, we’re talking real money on a monthly basis. Let’s look at the statistics listed below for 2008. There was total of 798.55 Billion Dollar credit card debt balance. If the 5% reduction in the interest rate is applied to this amount, we would have a savings of 39.93 Billion Dollars for the consumers, which would be spent in the economy and give it a good start to recovery.
However, the banks’ greed will not let them do this. You think the politician will do it? Their campaigns are financed by banks and they are in the bank pockets as well. It is time for the public to bring it up and ask questions. We need to ask why are they doing this, and let them know that we know what they are doing.
EXISTING TERMS
BALANCE INTEREST RATE MONTH INTEREST ADD PYMT. TOTAL PYT. CREDIT LIMIT
$4,825.00 12% $48.25 $50.00 $98.25 $10,000.00
NEW TERMS
$4,825.00 28% $112.58 $0.00 $112.58 $8,000.00
$4,825.00 7% $25.14 $50.00 $75.14 $8,000.00
CREDIT CARD ISSUER STATISTICS
Market share
Top 15 issuers of general purpose credit cards for 2008 based on outstanding balances:
1. Chase - $183.32 billion
2. Bank of America - $166.32 billion
3. Citi - $106.74 billion
4. American Express - $88.02 billion
5. Capital One - $60.08 billion
6. Discover - $49.69 billion
7. Wells Fargo - $36.36 billion
8. HSBC - $29.97 billion
9. US Bank - $18.53 billion
10. USAA - $17.48 billion
11. Barclays - $11 billion
12. Target - $8.65 billion
13. GE Money - $7.51 billion
14. Advanta - $5.02 billion
15. First National - $4.93 billion
(Source: Nilson Report, March 2009)
This morning I was reading the business section of my newspaper, and the main article was titled “Fixed Rate Cards Topple”. As though we didn’t have enough problems with the Credit Card companies being allowed to go rampant with our money, now it looks like we can kiss the fixed-rate credit cards goodbye! Bank of America and Chase stated they would be “switching some fixed-rate cards to variable rates to ‘manage costs’ in light of the sweeping new reforms to the credit card industry.” The interest rate will be tied to the rise and fall of the prime rate, and it will start in August for both banks. How is the consumer supposed to “manage” his money when his monthly payment will change on a monthly basis?
When the government told the credit card companies that there had to be limits on how much they could charge for interest, rules put in place for how many times a credit card could change it’s payment due date, etc, the credit card companies were given almost 2 years to “get ready” for these changes. How long is the notice that they are giving the card holders for this latest fiasco? Today’s paper is dated 7-20-09. August 1st is 11 days away. Card holders have no chance to pay off any existing charges on their cards in 11 days to avoid the higher interest rates, and the banks are well aware of this. Again, the consumer is the victim here, and there is no one to rescue them.
Thursday, January 14, 2010
DRIVING IN OTHER STATES
DRIVING IN OTHER STATES.
When traveling frequently to other states, one is more aware of the surroundings and especially what is happening on the road. Driving is the most prominent. Certain states come across as having more aggressive drivers who insist on speeding and driving right on your tail.
I thought driving in California was bad. No way! There is more traffic on the road, and as a result you do not have the dare-devil driving as much as you see in other states. In the Carolinas, the roads are narrow and not many street lights to help you see where you are going, which slows the traffic. In Nevada, they have heavy traffic but the roads are in good shape, new, organized, and easy to drive on. In California the drivers are semi-courteous and you do get many dirty looks and finger gestures if you are holding up the traffic.
Now for Wisconsin. I find it very uncomfortable to be on the freeway. The drivers are all speed drivers who drive right up to your back bumper and keep it there following you, even if the next lane is open. I noticed they do not change lanes to take advantage of the open, traffic free situation, and they use cell phones freely, since it obviously is not mandatory to have hand-free phones. During my visit in August of 2009, I was going to work in the morning on Hwy 41. Two girls in the car behind me were laughing and talking on the cell phone. The traffic was heavy during that time of the morning, and they were right on my tail. At the exit for Wal-Mart, they are adding a lane. I was in the slow lane when the car in front of me suddenly hit the brake. At that point of recognition, I had only 3 car lengths left between us. I had to raise my arm to let them know to slow down. They almost hit me because they were too close and not paying attention.
When I got home in the evening, I decided to find out what states have the worst drivers by rank. To my surprise, Wisconsin was number 13 of the best drivers on the list, North Carolina was 22, California and Connecticut 33, Nevada 39, and South Carolina was 40. The best drivers are in Kansas.
For a complete list of all the states to see how your friends’ and relatives’ states are ranked go to: http://usnews.rankingsandreviews.com/cars-trucks/GMAC-Insurance-National-Drivers-Test-Rankings/
My apology to Wisconsin for thinking they would rank lower, but I still think they are the most aggressive drivers.
Remember, your family loves you and needs you as well as your fellow employees at the company. The next time you are on the road, please do not use the phone without a hands-free device, pay attention to your driving, respect the other drivers around you, and drive safely. Taking a few extra minutes to get to where you are going is far better than a serious injury or death. “Better late than never”…. We do not want to “miss” you because of an unfortunate driving accident.
When traveling frequently to other states, one is more aware of the surroundings and especially what is happening on the road. Driving is the most prominent. Certain states come across as having more aggressive drivers who insist on speeding and driving right on your tail.
I thought driving in California was bad. No way! There is more traffic on the road, and as a result you do not have the dare-devil driving as much as you see in other states. In the Carolinas, the roads are narrow and not many street lights to help you see where you are going, which slows the traffic. In Nevada, they have heavy traffic but the roads are in good shape, new, organized, and easy to drive on. In California the drivers are semi-courteous and you do get many dirty looks and finger gestures if you are holding up the traffic.
Now for Wisconsin. I find it very uncomfortable to be on the freeway. The drivers are all speed drivers who drive right up to your back bumper and keep it there following you, even if the next lane is open. I noticed they do not change lanes to take advantage of the open, traffic free situation, and they use cell phones freely, since it obviously is not mandatory to have hand-free phones. During my visit in August of 2009, I was going to work in the morning on Hwy 41. Two girls in the car behind me were laughing and talking on the cell phone. The traffic was heavy during that time of the morning, and they were right on my tail. At the exit for Wal-Mart, they are adding a lane. I was in the slow lane when the car in front of me suddenly hit the brake. At that point of recognition, I had only 3 car lengths left between us. I had to raise my arm to let them know to slow down. They almost hit me because they were too close and not paying attention.
When I got home in the evening, I decided to find out what states have the worst drivers by rank. To my surprise, Wisconsin was number 13 of the best drivers on the list, North Carolina was 22, California and Connecticut 33, Nevada 39, and South Carolina was 40. The best drivers are in Kansas.
For a complete list of all the states to see how your friends’ and relatives’ states are ranked go to: http://usnews.rankingsandreviews.com/cars-trucks/GMAC-Insurance-National-Drivers-Test-Rankings/
My apology to Wisconsin for thinking they would rank lower, but I still think they are the most aggressive drivers.
Remember, your family loves you and needs you as well as your fellow employees at the company. The next time you are on the road, please do not use the phone without a hands-free device, pay attention to your driving, respect the other drivers around you, and drive safely. Taking a few extra minutes to get to where you are going is far better than a serious injury or death. “Better late than never”…. We do not want to “miss” you because of an unfortunate driving accident.
KEEP OUR ROADS CLEAN
KEEP OUR ROADS CLEAN.
The United States is one of the most fortunate countries to have the best transportation systems which includes freeways, highways, streets and even back roads. We can travel to any point on the map and find civilization by driving on the roads. The scenery is impressive and sometimes breathtaking.
During the last 2 months of my travel in the US and Canada, I have noticed how disrespectful some people are to our roads. Look around the next time you are out driving and observe the sides of the roads and freeways. Note how much trash is obviously being thrown out of the car windows. It makes you wonder how safe our freeways are if drivers are dining while they are driving and then disposing of the trash on our roads. Where is the respect, and do they do the same at home by throwing their trash on the floor after they are done eating? Unfortunately, no matter what state you are in, you can see trash that has been thrown out of some car. Why can’t they just keep it in the car and drop it in a trash can at home or a public one that we all have available at some corner mall or store. Another thing that bugs me is the sneaky way that the smokers try to get rid of their cigarette butts by hiding it in their hand and dropping it slowly like we do not notice this while driving right behind them. How sad to think how many fires they have caused.
Everyone knows there is a fine for throwing trash on the road, but they still do it. I would be glad to see them get fined. I'm sure they think that it was just a little trash, but a little trash from every car becomes large amounts to ruin our roads.
A prime example of seeing the magnitude of this problem is when we see all the ORANGE BAGS on the side of the road that have been filled. Since our jails in our legal system are so crowded, and many of the "offenders" cannot pay their fines, these people have the option of doing "community service" which means we see many of them filling these bags on the weekends. Thankfully, this does help. But if everyone took care of their own trash properly, the counties could use these labor hours for other important and much needed services. Please keep your trash in your car and dispose of them properly. Consider the roads as being our exterior homes which should be respected.
And another issue....The next time you use a shopping cart/buggy, please return it to the area reserved for them. I try to take care of my cars, and it's not fair that some lazy person or someone who doesn't feel he/she has 30 seconds to return their cart, is responsible for dings and dents in my car and feels no responsibility for the damages. Let's keep our outside homes as beautiful as our inside residences. It all begins with us.
The United States is one of the most fortunate countries to have the best transportation systems which includes freeways, highways, streets and even back roads. We can travel to any point on the map and find civilization by driving on the roads. The scenery is impressive and sometimes breathtaking.
During the last 2 months of my travel in the US and Canada, I have noticed how disrespectful some people are to our roads. Look around the next time you are out driving and observe the sides of the roads and freeways. Note how much trash is obviously being thrown out of the car windows. It makes you wonder how safe our freeways are if drivers are dining while they are driving and then disposing of the trash on our roads. Where is the respect, and do they do the same at home by throwing their trash on the floor after they are done eating? Unfortunately, no matter what state you are in, you can see trash that has been thrown out of some car. Why can’t they just keep it in the car and drop it in a trash can at home or a public one that we all have available at some corner mall or store. Another thing that bugs me is the sneaky way that the smokers try to get rid of their cigarette butts by hiding it in their hand and dropping it slowly like we do not notice this while driving right behind them. How sad to think how many fires they have caused.
Everyone knows there is a fine for throwing trash on the road, but they still do it. I would be glad to see them get fined. I'm sure they think that it was just a little trash, but a little trash from every car becomes large amounts to ruin our roads.
A prime example of seeing the magnitude of this problem is when we see all the ORANGE BAGS on the side of the road that have been filled. Since our jails in our legal system are so crowded, and many of the "offenders" cannot pay their fines, these people have the option of doing "community service" which means we see many of them filling these bags on the weekends. Thankfully, this does help. But if everyone took care of their own trash properly, the counties could use these labor hours for other important and much needed services. Please keep your trash in your car and dispose of them properly. Consider the roads as being our exterior homes which should be respected.
And another issue....The next time you use a shopping cart/buggy, please return it to the area reserved for them. I try to take care of my cars, and it's not fair that some lazy person or someone who doesn't feel he/she has 30 seconds to return their cart, is responsible for dings and dents in my car and feels no responsibility for the damages. Let's keep our outside homes as beautiful as our inside residences. It all begins with us.
WATCH DIESEL FUEL PRICES.
WATCH DIESEL FUEL PRICES.
Every day we hear a different analysis of our economy and the world regarding when we will be out of this stubborn recession. Experts each have their ideas and give us all the economic models they have to predict the recovery.
I was on my 8 mile walk one Sunday morning at our neighborhood park. The park I walk at is on top of a very high hill. One section of the park has a total view of the freeway from above. On this particular Sunday, the weather was so great that I stopped to watch the traffic moving on the freeway. What caught my eyes was the number of the trucks on the road going both directions on the Santa Ana freeway, a major freeway called the “5”. I remembered from my college days in the economics class when we were told “Mobility is Prosperity”. Many trucks were moving down there, and I remembered that what drives prices is demand. What do trucks use to move? Diesel Fuel!
As soon as I got home I went on the internet and looked at the price history of the diesel fuel. Look at the chart below. From April 2007 when our economy was expanding and goods were moving, trucks were moving, using diesel fuel. The prices were rising due to the high demand, up until August 2008 just when we had reached the height of the growth and just before the Prime Loan CRASH. Then, as the chart shows, the prices plummeted because goods stopped moving via the trucks. As a result, prices that had reached $4.80 per gallon of diesel fuel took a steep nose-dive to $2.00 per gallon, indicating a 59% price drop, reflecting the recession that is affecting us all.
Now step forward to May 2009 and see the chart showing prices that are moving steadily up from the low of $2.00 to $2.60. Prices are moving up and that should be an indication that we are moving toward recovery slowly but surely. It is not going to be an overnight happening, but slow is good.
Who needs economists to tell us what the economy is doing. On your way to work every day as you pass the gas station, check out the diesel fuel prices on display. You have your own economic gauge of what is happening and how things are getting better. As the diesel fuel prices rise, more goods are being shipped. That means prosperity is back via mobility and the recession is retiring. Now I have my own economic gauge and can check it out on my morning drive.
Every day we hear a different analysis of our economy and the world regarding when we will be out of this stubborn recession. Experts each have their ideas and give us all the economic models they have to predict the recovery.
I was on my 8 mile walk one Sunday morning at our neighborhood park. The park I walk at is on top of a very high hill. One section of the park has a total view of the freeway from above. On this particular Sunday, the weather was so great that I stopped to watch the traffic moving on the freeway. What caught my eyes was the number of the trucks on the road going both directions on the Santa Ana freeway, a major freeway called the “5”. I remembered from my college days in the economics class when we were told “Mobility is Prosperity”. Many trucks were moving down there, and I remembered that what drives prices is demand. What do trucks use to move? Diesel Fuel!
As soon as I got home I went on the internet and looked at the price history of the diesel fuel. Look at the chart below. From April 2007 when our economy was expanding and goods were moving, trucks were moving, using diesel fuel. The prices were rising due to the high demand, up until August 2008 just when we had reached the height of the growth and just before the Prime Loan CRASH. Then, as the chart shows, the prices plummeted because goods stopped moving via the trucks. As a result, prices that had reached $4.80 per gallon of diesel fuel took a steep nose-dive to $2.00 per gallon, indicating a 59% price drop, reflecting the recession that is affecting us all.
Now step forward to May 2009 and see the chart showing prices that are moving steadily up from the low of $2.00 to $2.60. Prices are moving up and that should be an indication that we are moving toward recovery slowly but surely. It is not going to be an overnight happening, but slow is good.
Who needs economists to tell us what the economy is doing. On your way to work every day as you pass the gas station, check out the diesel fuel prices on display. You have your own economic gauge of what is happening and how things are getting better. As the diesel fuel prices rise, more goods are being shipped. That means prosperity is back via mobility and the recession is retiring. Now I have my own economic gauge and can check it out on my morning drive.
LET’S KICK 2009 OUT OF HERE.
LET’S KICK 2009 OUT OF HERE.
Wow! What a year it has been for all of us. Started in late 2008 and it did not get any better in 2009. It affected us all and the big guys got fatter by using all the sceams to take publics money and get their messed up house supposedly in order which did not work. Meanwhile we all cut back and sacrificed to just make it though this tough year.
As it has been said a million times “government is not the solution, it is the problem” and gets in the way and places policies and laws in place that stays with us for years to come and we have to live with.
We all have lost many nights of sleeps this year worrying and finding ways to overcome the unforeseen problems that came up daily and we had to find ways to solve it.
I want to thank all of you for being resilient and sticking together through this year to get us to the end of the tunnel that we hope to see the light in the economy and the turn around without government intervention in 2010 to get us back to the way we use to do business and not by trying to make to the next level. All our competitors are in the same shoe and cut prices to capture the business. The worse thing to have is deflation, which would restrict all companies from raising prices to become profitable again to take care of their devoted employees. Inflation is bad, but deflation is worse.
Let’s look forward to 2010 with positive outlook and hope this storm is over and we can do business like business should be. President Calvin Coolidge in the 1920 said “The Business of America is Business”. So let’s do business.
I wish you all the best 2010/
Wow! What a year it has been for all of us. Started in late 2008 and it did not get any better in 2009. It affected us all and the big guys got fatter by using all the sceams to take publics money and get their messed up house supposedly in order which did not work. Meanwhile we all cut back and sacrificed to just make it though this tough year.
As it has been said a million times “government is not the solution, it is the problem” and gets in the way and places policies and laws in place that stays with us for years to come and we have to live with.
We all have lost many nights of sleeps this year worrying and finding ways to overcome the unforeseen problems that came up daily and we had to find ways to solve it.
I want to thank all of you for being resilient and sticking together through this year to get us to the end of the tunnel that we hope to see the light in the economy and the turn around without government intervention in 2010 to get us back to the way we use to do business and not by trying to make to the next level. All our competitors are in the same shoe and cut prices to capture the business. The worse thing to have is deflation, which would restrict all companies from raising prices to become profitable again to take care of their devoted employees. Inflation is bad, but deflation is worse.
Let’s look forward to 2010 with positive outlook and hope this storm is over and we can do business like business should be. President Calvin Coolidge in the 1920 said “The Business of America is Business”. So let’s do business.
I wish you all the best 2010/
RETREAT TO SIMPLICITY
Jean Arthur (My favorite actress of 1920 - 1940)
Born: - Died:
- Occupation: Actor
- Active: '20s-'40s
- Major Genres: Comedy, Western
- Career Highlights: Shane, Mr. Smith Goes to
- First Major Screen Credit: Biff Bang Buddy (1924
RETREAT TO SIMPLICITY
I love all gadgets and enjoy any new ones that come on the market. I look forward to Fry’s Electronics advertisement in our Friday newspaper so I can see what’s new. My Saturday morning visit to Fry’s is now a ritual.
Last week when I got home from work, I checked to see what time the sunset would be, hoping to fit in my six-mile walk. I loaded my Ipod Shuffle with my favorite pod casts and rushed out of the house to utilize every minute of the day light that was left, since coyotes are all over the park after dark. When I got to the park, I realized I left my Ipod Shuffle still connected to my PC. I had to go on my walk without any distraction. As I was walking and thinking, I realized how dependent we are on items that were not even on the market 5 years ago. Now we can not live without them. I think the Fax was the first thing that got us all spoiled, and in turn disconnected us from each other. Then came e-mails, instant messaging, texting, and twitting. Our time is now taken up with these gadgets and new forms of communication, and there is no turning back. We have to live with it or become obsolete.
As I was walking, I realized how I momentarily escaped from this life-style, and something became very clear to me. It was actually enjoyable. I also realized that during my time of watching TV, I constantly go to the TMC channel that shows old movies. My favorites are from the 1940’s and before. They are all black and white, and it really displays the simplicity of life as it was, even though it was hard and all the comforts we enjoy were not available. I guess watching these movies is my escape from my gadget world that make up my business and personal life.
When I realized that the park was getting dark, I checked my Iphone where I keep track of my lap time, total time, and miles. I had done five miles and could not do the extra mile because of the coyotes. Somehow I was glad it was time to quit, since I was missing my Ipod to keep me company. I called it a day after the five miles and headed home.
I am sure each one of us has a way of escaping from the complicated lives we face every day. If you do not have any, find one as soon as you can. It makes the present more enjoyable and satisfying.
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