Letters to the Editor
aveutter
Published Letters: 198 Editor's Choice: 32
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No help for these people
[Read the article: The plastic ATM machine]
[Read more letters about this article: Here]There are no figures to tell us how much credit card debt was consolidated over to a home equity line of credit. The common fallacies concerning credit card debt should be revealed. Unexpected health care costs may be the primary cause of non-discretionary credit card debt. Second on this list is home repairs. The rising costs of homes has pushed inflation higher into the home repair business. A new roof is simply going to cost you more than it did ten years ago. There is element of necessity in this, spending to repair a leaky roof, or adding a granny flat, because granny cannot afford a decent health facility.
I wish the Democrats would talk about this. Debtors are roundly villified for living a lavish lifestyle, while trying to work and live in an economy they didn't create. It's a myth that rising home asset prices, without an accompanying rise in wages and benefits, somehow benefits homeowners.
There is no certainty that even with a recession, that healthcare costs will drop, or that construction costs will fall as fast as housing prices. Looking at these figures may confirm this ugly truth, even if Bernanke drops interest rates to zero, and below, there is no help for these people.
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You can't sell your debt
[Read the article: The plastic ATM machine]
[Read more letters about this article: Here]You may put up the money for a Cadillac using a credit card, but you aren't going to carry it on your balance. That's where these figures are deceiving. On the non-consumer side, people tell me small business lending rates are brutal.
Rising home asset prices in this enviroment actually punish the homeowner. Assuming home prices drop 50% and your employment situation doesn't change, (as they didn't change much on the way up) your percentage of equity, assuming you have some skin in the game, goes up. All the standard metrics in this economy don't work. You can always sell that Caddy, but you can't sell the debt you owe on hospital care, or home repairs. If you're a politician you have to assume that debt is not going away.
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Doing their job
[Read the article: The U.S. military inflicts more damage on its own credibility]
[Read more letters about this article: Here]It was a smaller, less assuming boat which did serious damage to the USS Cole. My thought at the time is that they weren't vigilant enough, including keeping armed gunners on duty at all times, with clear rules of engagement.
I wouldn't have blamed our ships for firing across the bow of those speed boats, if they came too close. A military ship wouldn't have raised as much alarm as a private speedboat. This was definitely a harrassing manuever, which suggests a paramilitary Iranian group, not college kids on spring break. Our Naval commanders are going to take care of their ships first. The missiles Iran has could do serious damage to our fleet. No one likes it but in the abscence of diplomatic communications, what does one expect. Impeach the President and open a line of communication. Don't wait America.
Our ships and their men are simply doing their job.
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Plenty of intrigue
[Read the article: Bank of Countrywide America]
[Read more letters about this article: Here]Moody's upgraded Countrywide, after the BAC offer, then downgraded BAC. Moody's is 17% owned by Berkshire, and Berkshire has a sizable stake in BAC. The commentators were mostly incredulous. Why would BAC overpay for Countrywide? Probably because they knew they would realize an immediate benefit from the upgrade, as far the deal was concerned. BAC and Moody's are locked in a lovers embrace. According to the Economist Moody's and Fitch are about 80% of this market, and cross investment calls the integrity of these rating agencies into question. In the wake of the most recent meeting of the President's Working Group, the issue of government intervention also become an issue. Not allowing Countrywide to go bankrupt would send a message to the markets. Either BAC got the wink and the nod, or they feel pretty sure that the administration will cover their back. And as the article suggests, BAC could be the largest bank left standing, as some analysts feel pretty sure that Bear will go down this year, and Citi next. Enter Warren Buffett, who is not adverse to losing money. Recall JP Morgan put his fortune to work in the 29' crash, trying to put a floor under the market. It was a futile gesture.
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Is this a power play?
[Read the article: Bank of Countrywide America]
[Read more letters about this article: Here]Shareholders are lucky they got this. Bankruptcy would not have been any kinder to them. I'm not sure what BAC is getting, the future of NINJA loans, and the entire go-go mortgage industry has been called into question. Those proposed Countrywide kiosks will disappear quickly. It may be that BAC is already sufficently at risk, being the originator of many of these loans. It may be that when the courts start assigning ownership and responsibilty for these loans, (BAC automatically assumes responsibility for its share of the loans) that holding the axe over other banks like Wells Fargo will provide them some benefit. There is also a question of who has first rights to liquidate the property in the loan portfolio, all a legal morass.
BAC owns Country, Country sues Wells Fargo, et al. . BAC gets top rating in huge class action suit, which otherwise may have never happened, with BAC's team of lawyers putting it to the rest of the banks?