jeffreymark

DESPICABLE WANNABES

Those who arrogantly flash the bling belong to one of the most despicable classes of people on earth-millionaire wannabes. Read the nature of true millionaires here. (via Instapundit)

MCCAIN LETTER IN 2006 DEMANDED REGULATION OF FANNIE AND FREDDIE

In 2006 John McCain signed off on a letter to Senate Majority leader Bill Frist and Richard Shelby, chairman of the Banking, Housing, and Urban Affairs Committee, warning of the need for tighter regulation of Fannie and Freddie. Not a single Democrat signed the letter. Remember this letter when Obama makes his false claims that McCain called for deregulation.

(Via Human Events)

SCOURGE ON THE LAND

The unsecured credit industry, from a moral perspective, represents a more seminal spiritual scourge on our nation. Materialism and a desire for relevance, measured by one's possessions, has grown horns labeled "credit card." This multibillion dollar industry hooks young, idealistic couples in the same way "big tobacco" glamorizes smoking. These semi naive upstarts eventually wake up around middle age only to discover they sold their souls for a mess of pottage. Yesterday, 15 witness testified before a panel of the House Financial Services committee seeking sweeping reforms for what they view as unfair credit practices. While the consumer blames the credit industry, the credit industry inadvertently unmasked the sin:

Critics have charged that many credit card issuers engaged in "unfair" practices such as raising interest rates on debt even when consumers pay on time or imposing excessive fees.

Credit card issuers have argued, however, that such a law would have dire consequences on all consumers by making credit more expensive and less easily available. [bold mine]

Therein lies the rub. Making credit less available might solve a host of issues. But, then with less credit available we may find other self destructing means with which to fill the spiritual vacuum.

In addition, Methodist Church mentor John Wesley once warned about the danger of money:

Are not you hurt with regard to your humility? If you are increased in goods, it cannot well be otherwise. Many will think you a better, because you are a richer, man; And how can you help thinking so yourself? Especially considering the commendations which some will give you in simplicity, and many with a design to serve themselves of you.

If you are hurt in your humility it will appear by this token: You are not so easy to be teachable as you were, not so advisable; you are not so easy to be convinced, not so easy to be persuaded; you have a much better opinion of your own judgment and are more attached to your own will. Formerly one might guide you with a thread; now one cannot turn you with a cart-rope. You were glad to be admonished or reproved; but that time is past. And you now account a man your enemy because he tells you the truth. O let each of you calmly consider this, and see if it be not your own picture!

Elsewhere Wesley launches this convicting observation:

...when the Possessor of heaven and earth brought you into being, and placed you in this world, he placed you here not as a proprietor, but a steward: As such he entrusted you, for a season, with goods of various kinds; but the sole property of these still rests in him, nor can be alienated from him. As you yourself are not your own, but his, such is, likewise, all that you enjoy. Such is your soul and your body, not your own, but God's. And so is your substance in particular. And he has told you, in the most clear and express terms, how you are to employ it for him, in such a manner, that it may be all an holy sacrifice, acceptable through Christ Jesus. And this light, easy service, he has promised to reward with an eternal weight of glory.

Read more House Financial Services committee here.

THE INFAMOUS TRUTH

Our hearts inform us that the IRS does not tolerate coloring outside the lines.

W$J

HOME FORECLOSURES JUMP BIG TIME IN DALLAS

Travel to North Dallas, represented by Collin and Denton counties in the chart below and one can see for themselves why foreclosures are rising. I call it, "keep up with Joneses syndrome". Affluent fever wears off on the most average Joe when introduced to North Dallas.

Residential properties scheduled for foreclosure auction in February for each of the counties: Dallas County 2,351 22%

Tarrant County 1,775 29%

Collin County 623 32%

Denton County 566 50%

D-FW area 5,315 31%

Dallas Morning News

CREDIT CARD COMPANIES ON THE HOT SEAT WITH CONGRESS

...and well they should be. Don Corleone could fare no better than credit card bosses if he were running the banks himself. AFP explains the latest concerning Congress and credit card abuse:

A US congressional panel Tuesday will ask some of America's largest financial institutions to explain how they set interest rates on credit cards after hundreds of consumers complained to Congress. The Senate subcommittee on investigations has scheduled a hearing at which consumers are expected to relate how they were subjected to sharp rate hikes on their credit card bills despite paying the bills on time. The panel, headed by Democratic Senator Carl Levin, held an initial hearing on credit card practices in March, but the lawmaker told reporters Monday that "abuses" were still occurring. "People who have paid their bills on time, have paid the amount that they are required to pay, nonetheless may face these unilaterally gouging interest rate increases," Levin said. Many US banks and credit card companies use a process called Universal Default to justify sharp interest rate hikes on credit card bills. Under Universal Default, a bank will sometimes automatically hike a consumer's interest rate if they are late paying a bill to an unrelated third party such as a department store. Banks can track consumers' spending, debts and other financial relationships through reports compiled by the Fair Isaac Corporation which also puts together influential credit reports on millions of consumers.

APPLE STOCK MOVING UP 15%?

So asks blogging stocks:

A Credit Suisse analyst, Robert Semple, said that the iPhone's superior technology stemming from the Mac operating system will make it a hit. The different uses as well as it probably becoming a must-have fashion item, will hike up iPhone's sales. Semple estimates 5 million iPhones will be sold this year and 15 million in 2008 for $2.2 billion in revenue. He therefore raised his earnings estimates and upped his target price on AAPL to $140 from $120, implying a 15% return. Today Apple also updated its MacBook Pro notebook PCs in advance of the company's worldwide developers conference next week, upgrading the standard features. It is interesting to note that today also marks the 30th anniversary of the Apple II computer, which first made its appearance on June 5, 1977 along with the famous Apple logo. I remember a few years later when my parents bought me that Commodore, my friend got an Apple. Oh, was I jealous. Now, I can only hope that by the time the iPhone comes to Canada it might come down in price a bit. Barring anything going awfully wrong, Apple is probably on its way up. 15% higher? That doesn't sound far-fetched when it comes to Apple.

I'll take the stock and let Apple have the over priced iPhone.

CREDIT CARD REALITY

James Scurlock at Newsweek puts forth five myths of the credit card industry. This industry, in my opinion, is one of the most corrupt out there.

BANK OF AMERICA PREYING ON LESS FORTUNATE

The Wall Street Journal reports that Bank of America made a decision to offer credit cards to illegals without social security numbers. I'm not an economist, but in my opinion BOA took another step in the apparent downward spiraling out of control loan shark like activities of this company. Their new targets represent the most vulnerable among us. Smart business people know to stay away from the credit card scam. Those with lower incomes, however, become mesmerized by the enticing easy cash scheme a credit card presents. Used to, high risk individuals found it difficult to get a loan. WWII vets returning from war suffered countless credit rejections because of their job instability. Although sometimes unfair, this strict policy guarded both consumer and lender. The WSJ explains one potential card owner's glee this way:

Typical of the new card's customers is Antonio Sanchez, a Mexican immigrant whose only major asset is a white 1996 Ford Thunderbird, which he drives to the two restaurants where he works each day on opposite sides of Los Angeles. Mr. Sanchez, who says he sneaked across the border a decade ago, has been a customer of Bank of America's East Hollywood branch for nine years. He has no borrowing history and no Social Security number.
To obtain a Bank of America Visa card with a $500 line of credit, Mr. Sanchez had to put down $99. If he stays within his $500 limit and pays his balances in a timely fashion, he will receive his $99 security payment back in three to six months, and his credit limit might be increased.
"I always wanted to start building credit to buy a home, but I couldn't," says Mr. Sanchez, a father of three, who earns about $25,000 a year from his two jobs. "When a señorita at the bank told me about this card, I couldn't miss the opportunity to get it. You need credit to succeed in this country."

If not careful Antonio may soon embark on the most gut wrenching journey of his life. As a minister I hear this tragic story all too often. Antonio receives his BOA credit card. He uses it faithfully, keeping a balance, and making regular payments. Soon BOA sends him a letter that says something like, "Congratulations Mr. Sanchez. Because of your excellent credit history we want to reward you by increasing your credit limit to $1000. Start using your card today for a new purchase, that vacation you always dreamed of, or to pay off some bills. Go ahead. You deserve it." An ecstatic Antonio runs into the kitchen and relays the good news to his lovely family. They dance with joy, thanking God for his great abundance. His wife, in spite of her reservations, trusts Antonio. He's worked hard for this gift. Antonio uses the card immediately. He takes his wife to that new restaurant down the street he could never afford. On the way home he stops at the jewelry store and buys his wife a little token of his love and charges it. Mrs. Sanchez silently worries about her husband's newly discovered treasure. Days later Antonio opens his credit card bill. He's maxed the card out and his minimum payment doubled. "How could this be," Antonio wonders. "I'm always so careful." Antonio makes the minimum payment only. He struggles to do so. He must now cut back on his beer and movie rentals. Life goes on. Antonio works hard. He looks forward to the day when he can vote as an American citizen. Days turn into weeks and the weeks into months. Antonio receives another congratulatory letter from BOA. This time, giving him a new, shiny credit card. They call it platinum. It still feels like plastic, but Antonio notices with the new card comes an increased credit limit. So he dances for joy and forgets about the details. Now Antonio can rent those weekly movies his kids so wanted to see. He also takes a little trip. Before he goes on this little vacation, however, Antonio makes needed repairs on his car and charges them to the shiny card. He receives the bill weeks later. When he opens the letter Antonio feels a sharp pain shooting through his left arm. He's maxed his card out again. What's worse, the minimum payment doubled. He panics. He tells his wife, "I cannot make this payment." Mrs. Sanchez cries, "Antonio, what are we to do?" "You must get a second job," he demands. "You know I can't take on any more," she replies. "I have all these mouths to feed." "You must work more," Antonio exclaims. "Oh that card," she replies. "That card let the devil into our house. He made all kinds of enticing promises to us. He made this card look like the forbidden fruit in the garden of Eden, Antonio, and you fell for it." Antonio plugs his ears with his index fingers, stomps off and mutters, "Those fools. They screwed me." Meanwhile, Antonio misses a payment. He anxiously opens the next BOA letter. What Antonio reads now increases his angina pains greatly. The letter states: "Mr. Sanchez, we have reviewed your credit and made a decision to increase your interest rate from 12% to 32%. Please make prompt payments. If you have any questions, feel free to call us at this number." Antonio runs immediately to the phone. He dials the toll free number provided in the letter. The recorded voice goes through a menu. He pushes the number for customer service. They tell him he must wait 2 minutes before speaking to a customer representative. Finally, after 15 minutes a friendly young woman who speaks in broken English comes on the line. Antonio says he cannot make this payment. The nice young lady tells him she will direct his call to someone who can help him. An hour later Antonio speaks to a fourth representative. This time he feels hopeful. The customer rep. sort of empathizes with him, but ends the call abruptly by declaring, "I'm sorry Mr. Snachez, you must make this payment. I cannot lower the interest rate. These are our rules. Have a good day." Antonio feels helpless. What shall he do? He has no one to turn to. His brother gets him in touch with a lawyer. This attorney makes a long story short and admits, "Mr. Sanchez, BOA's policies are legal." Meanwhile, Antonio's relationship with his beloved wife looks like a sinking battleship. Each shoots at the other until they see a marriage full of wounds and scars. The children develop wounds from the battlefield's flying shrapnel. Mrs. Snachez can no longer stand in the ring with her husband. One day, Antonio returns from work and discovers the tragic note left on the refrigerator. He struggles to read the scratching. Tears begin to flow. He wads the letter up in anger, picks up the phone and calls his his sister-in-law. She claims Mrs. Sanchez cannot talk to him now. Perhaps he could call back in a few days. Antonio's heart breaks. His soul feels so hollow. He cries out to God, "Please Senior, help me get my family back!"

Anyone who suggests this story appears far fetched needs to visit with a few ministers and several district judges. Judges inform me that approximately 80-90% of all divorce proceedings in their courtrooms came by way of credit card debt. The industry wreaks of immorality. Banks entice unsuspecting people with these starry-eyed propositions, encourage them to increase their debt, then hit them with an unmanageable obligation. It's all perfectly legal. Again, most responsible individuals realize that interest can either work for you or against you. Some folks wake up to this reality early. Yet, others wait late in the game- almost to the point of losing their very souls.

ECONOMICS 101

This cartoon from the Wall Street Journal sheds a little light on the dynamics of the American economy. Maybe we should label credit card economics as the "trickle up" theory for the banking industry and the "chapter 11" theory for the consumer.