How did this all start again?

[Rugger]

 

[Vtaper]

Good find Rugger! I believe the foreclosure epidemic is what kicked off our current economic downturn. Funny, all we ever heard though was that it was Bush' fault, not some well intentioned Liberal lending program from a decade ago that put people in bad loans.

Oh well, the stimulus package is also well intended so it will fix everything!

Especially the $400,000 to help stop bullying.

 

[suncloud]

yep, this was clinton's brainchild. still doesn't excuse how GWB ran up the deficit though. i found it vaguely amusing that mccain was getting all huffy about the marine helicoptors equipped with kitchens, and called obama out on it, only to find it was a GWB idea... 28 helicoptors for what was it? 8 billion?

 

[EasyEJL]

yep, this was clinton's brainchild. still doesn't excuse how GWB ran up the deficit though.

yes, an entire net deficit over 8 years of around 400 billion.... obama is hoping that 2012 alone will only be slightly more than that.

 

[SilentBob187]

Huzzah! Clinton started it. Bush didn't help, but Clinton started it.

 

[OldGator]

The smoking gun that dems had denied for the last 6 months.

E-Mail this to Bill O'Reilly!!!!!

 

[Rugger]

yep, this was clinton's brainchild. still doesn't excuse how GWB ran up the deficit though. i found it vaguely amusing that mccain was getting all huffy about the marine helicoptors equipped with kitchens, and called obama out on it, only to find it was a GWB idea... 28 helicoptors for what was it? 8 billion?

Have you seen the CBOs projections of this years deficit? Obama is nearly doubling it with potential to triple it.

 

[EasyEJL]

wait rugger, you have it all wrong. the whole problem was that the evil bankers wanted to make a profit by only lending money to people who would actually pay it back. Clinton fixed that.

 

[suncloud]

Have you seen the CBOs projections of this years deficit? Obama is nearly doubling it with potential to triple it.

haven't seen it yet. this will be a frikken mess.

 

[suncloud]

wait rugger, you have it all wrong. the whole problem was that the evil bankers wanted to make a profit by only lending money to people who would actually pay it back.

but now its in even more of a mess. say you have a credit card with 10k available balance. if you only spend 100 bucks on it, and pay it off every month, the banks will lower their liability, and cut that card limit down to 1k. now instead of having 99% available balance, you've jumped to 10% use on your card, which sends off red flags for lending, and will lower your credit score by 40 points if they do this to two of your cards !

the banks are now screwing themselves out of lending, messing up responsible people's credit score, and shows another stupid trend in the credit/banking world IMO.

 

[EasyEJL]

but now its in even more of a mess. say you have a credit card with 10k available balance. if you only spend 100 bucks on it, and pay it off every month, the banks will lower their liability, and cut that card limit down to 1k. now instead of having 99% available balance, you've jumped to 10% use on your card, which sends off red flags for lending, and will lower your credit score by 40 points if they do this to two of your cards !

the banks are now screwing themselves out of lending, messing up responsible people's credit score, and shows another stupid trend in the credit/banking world IMO.

the banks dont actually do that though, as they want you to borrow more as you are a responsible credit risk.

 

[suncloud]

the banks dont actually do that though, as they want you to borrow more as you are a responsible credit risk.

it all goes off credit score though, so some of the responsible people are getting cut out of the loop, unless you have serious equity.

 

[EasyEJL]

what i'm saying tho is that the banks wouldn't lower your credit limit in that scenario, they have no reason to

 

[suncloud]

what i'm saying tho is that the banks wouldn't lower your credit limit in that scenario, they have no reason to

they are though. when they pull your cards history, they look at 99% available balance vs 90% available, and you're red flagged because your "spending" has increased, when that's not really the case. i have two friends who have lost 30 points off their credit scores from this happening - no increased spending whatsoever, just an adjustment on their cards maximum available.

granted, a credit card is entitled to do so, because it lowers their liability, which they're all trying to do, but to have their actions affect an individual is ludicrous. it defeats the whole purpose of building up your credit score in the first place.

it won't deny you a loan, but 30 points will kick you out of the "prime lending group" real quick.

 

[EasyEJL]

they are though. when they pull your cards history, they look at 99% available balance vs 90% available, and you're red flagged because your "spending" has increased, when that's not really the case. i have two friends who have lost 30 points off their credit scores from this happening - no increased spending whatsoever, just an adjustment on their cards maximum available.

I would speculate that their adjustment of maximum available came from other things - either increased inquiries, balances or delinquencies on other cards, other new accounts open, etc, not because of non-use of that specific card. It is not in a financial institution's best interest to lower available credit on people who will actually pay it back. And I work in the financial industry And 99% available vs 90% available doesn't change your credit score. Its when you go to less than 30% available that it does IIRC, adjusted by your overall debt:income ratio.

 

[suncloud]

I would speculate that their adjustment of maximum available came from other things - either increased inquiries, balances or delinquencies on other cards, other new accounts open, etc, not because of non-use of that specific card. It is not in a financial institution's best interest to lower available credit on people who will actually pay it back. And I work in the financial industry And 99% available vs 90% available doesn't change your credit score. Its when you go to less than 30% available that it does IIRC, adjusted by your overall debt:income ratio.

i was using 99 and 90 to make it more simplistic, which in retrospect perhaps i shouldn't have. i'm surprised you haven't seen this trend though, since you're in the industry. its also being done with cards that people get, and place in their safe for an emergency - those are being adjusted/canceled as well.

is your company not doing this?

 

[EasyEJL]

Nope, not at all. I have a number of cards as well with no balance, and even over the last few months their credit lines have been either raised or flat.

a FICO score is determined:
35 percent Payment History: "Having a long history making of payments on time and no missed payments on all credit accounts is one of the most important items lenders look for."

30 percent Amount Owed: "This measures the amount you owe relative to the total amount of credit available. Someone closer to maxing out all their credit limits is deemed to be a higher risk of late payments in the future and this can lower their credit score."

15 percent Length of Credit History: "In general, a credit report containing a list of accounts opened for a long time will help your credit score. The score considers your oldest account and the average age of all accounts."

10 percent New Credit: "Opening several new credit accounts in a short period of time can lower your credit score. Also multiple credit report inquiries can represent a greater risk, but this does NOT include any requests made by you, an employer or by a lender who does so when sending you an unsolicited, "pre-approved" credit offer. Also, to compensate for rate shopping, the score counts multiple inquiries in any 14-day period as just one inquiry."

10 percent Types of Credit in Use: "Your mix of credit cards, retail accounts, finance company loans and mortgage loans is considered."

again, I can't really see a bank lowering the credit limit on someone who is actually making payments, they are more inclined to lower limits on someone who is late (even if its on other banks's accounts) or has other credit issues. If you are making your payments they want you to have as much available as possible in the hopes you use it and continue to use it responsibly.

Dunno, it may have changed with some financial institutions over the last bit.

 

[suncloud]

weird. you're a lucky one IMO.

from the WSJ : http://online.wsj.com/article/SB123117246022354083.html?mod=googlenews_wsj

gotta get some errands done, though i'm interested on your feedback of this article.

 

[EasyEJL]

well, it pretty much matches what I said

"We are taking a more aggressive look at accounts to control risk given the current economic environment," said a spokeswoman for Bank of America Corp. "We are closing accounts with zero balances that have been inactive for more than a year and may adjust customers' credit lines up or down" based on "their risk profile and performance," she said.

A spokeswoman for J.P. Morgan Chase & Co. said "we will lower credit lines for customers who are showing signs of increased risk or inactivity."

And American Express Co., US Bancorp, Washington Mutual Inc. and Wells Fargo & Co. said they would reduce cardholders' credit limits because of perceived customer risk, such as high balances or late payments on credit cards, according to a July credit card survey by Consumer Action, a consumer education and advocacy group.

So they are adjusting lines for inactivity - that is people who never use the card at all. Or for other risk factors. But a card carrying a balance that they are making $ off of in interest they are not too likley to do anything about in the absence of other parts of your credit report changing.

Many people's credit lines are too high given their current credit risk. I know mine are

 

[suncloud]

For example, if your balance was $2,500 on a $10,000 line of credit and was then slashed to $5,000, you have gone from using 25% of your credit limit to 50 "without spending an additional dime," she said.

While scores depend on individual situations, they often come down to how risky you appear to credit issuers. And the percentage of credit limit used could carry more weight in determining your FICO credit score when Fair Isaac's new rules are released in 2009, said Careen Foster, senior product manager at Fair Isaac Corp., creator of the FICO score.

that's the part that scared me. thanks for your input EZ.

 

[EasyEJL]

yeah, it definitely has the chance to make things worse in the short term, whats even worse in thinking about it is if the bump downwards in limit drops your credit score, and then due to a lower credit score it raises your rate as you are now in a new tier.

the plus to all of this is that maybe it teaches us not to rely so much on credit, and try to live credit minimal lifestyles other than mortgage. And not oh i dunno, have your annual spending be 2x your income like the federal government will be the next few years...

 

[lutherblsstt]

I think this explains it fairly well chrismartenson dot com watch the crash course for free. The problem is apolitical,it had to come about sooner or later in an economy based on never ending growth.

 

[EasyEJL]

The problem is apolitical,it had to come about sooner or later in an economy based on never ending growth.

how is forcing banks to write loans to unqualified people apolitical? All economies are based on never ending growth, I have yet to see a country say "our economy is big enough, no more growth next year". Considering populations go up each year, the economies NEED to be based on never ending growth or else the standard of living will go down year after year.

 

[BabyHulk]

I won't mention the company, but I have been paying down a card, never late, never missed a payment, and I just had the limit lowered by several hundred bucks, bringing the ceiling down closer to my balance. This in turn, makes it where I am now almost maxed out again. This is insane indeed. I actually have good credit, and no I haven't used my card in a while, only because I try to do whats right. Pay it off and be responsible. Just my 2 cents.

 

[CopyCat]

Yet here I am also with good credit and they keep raising my limit.

 

[lutherblsstt]

how is forcing banks to write loans to unqualified people apolitical?

This is just not a partisan issue.

I don't see this as a matter of “left vs. right”, but rather “right vs. wrong.”


I am absolutely an equal-opportunity caller of B.S. when I see it. I really don’t care what race, religion or political affiliation a person holds. I will analyze their proposals on the merits as I see them.

All economies are based on never ending growth, I have yet to see a country say "our economy is big enough, no more growth next year". Considering populations go up each year, the economies NEED to be based on never ending growth or else the standard of living will go down year after year.

Growth merely delivers more of what we already have, but in larger quantities, with higher risks, costs, and complexity. Given this, shouldn't it at least be questioned and challenged?

Let me quote Albert Barlett who is a man I hold in very high esteem.

First, for his ability to speak in clear, concise language, which is the hallmark of someone who has mastered their material.

Second, because he sees the obvious and dares to point it out. Let me reframe that: He sees things that are incredibly obvious to others once he points them out. But because these things are most often "hidden in plain view," they are actually noticed by very few.

"It’s time to try again to correct the educationally credentialed but innumerate experts (innumeracy is the mathematical equivalent of illiteracy) who say that growth is inevitable. They fail to recognize that after maturity, continued growth is either obesity or cancer.

The arithmetic is clear. Steady growth produces impossibly large numbers in modest periods of time. SO GROWTH WILL STOP

The Legislature and all manner of public and private regional and local “civic groups” are promoting “economic development” which is the “politically correct” name for “growth.”

Predictably, this will produce more well-to-do people, more homeless people, more employed people, more unemployed people, higher average salaries, more people living below the poverty line, more traffic congestion, higher parking fees, more school crowding, more crime, more unhappy neighborhoods, more expensive government, more tax revenue, higher taxes, more fiscal problems for state and local governments, more tax limitation measures, more air and water pollution, higher utility costs, less reliable utility service, less democracy, more congestion pricing on busy city streets and crowded highways, more unmanageable costs of maintaining public infrastructures, higher food costs and more destruction of the environment.

It’s not clear why the Legislature would think that the people would want all of these known consequences of growth. However, innumeracy reigns. The promoters have demonstrated great skill in getting around minor obstacles such as “the will of the people.”


By their continued promotion of growth, the innumerates are speeding the arrival of painful but predictable shortages and consequent rationing of gasoline, natural gas and water in the Rocky Mountain area.

These shortages and the accompanying high prices will remake the urban landscape in ways that are probably not included in current “long-range” planning efforts of the City, County and State.

These problems can’t be solved by a nickel’s worth of “Smart Growth” tacked onto to billions of dollars worth of urban sprawl.

The arithmetic of population, resources and growth is inexorable. The consequences of the arithmetic can’t be avoided by believing that “Wishing will make it so.” (Walt Disney’s First Law)

Many years ago an innumerate graduate of the University of Colorado wrote to me, saying that he did not believe that this arithmetic holds in Boulder? What part of the arithmetic of growth is it that the innumerates don’t understand? "