Monday, November 24, 2008

Credit Cards and Autocars

I just saw a nice news article about how we the tax payers just gave 300 Billion to CitiBank. This is of course followed closely by the Auto Makers flying to Washington on private jets looking for 25 Billion so they can continue to run their companies into the ground and keep the dead wood UAW (U Ain’t Working) employees on the payroll.

The next huge crisis that we are facing belongs to the holders of all this credit card debt. I mean the banks who issue the cards. With all the layoffs and work in flux we are going to see defaults on a major chunk of this debt. Now, also unfortunately, the same people who got mortgages under these stupid lending practices had a nice piece of information to put on a credit card application. I own my own home. So these same folks who are financial geniuses probably have built up some credit card debt on top of their unpaid mortgages that they are not paying. Now I have made a late payment on a credit card from time to time and guess what happens when I do that, my 9.9% rate jumps to 19%. I immediately pay off that card and stop using it just in case it ends up with a balance for a few months. Well these folks don’t have that option so guess what. Their rates are at 19%+ and they will stay there until the balance is paid off. This is loan sharking and it will hurt our already damaged credit markets. I think that any company who gets 300 billion from the people of this country needs to fix the rates on those cards to something reasonable so the folks who own money on them have a chance to pay them down. For my money to go to these banks and they continue to rape my neighbor who is down on his luck is criminal.

Here is what needs to happen to the automakers. Now I know some you have family members who belong to the UAW, so sorry for the reality check here but we have very few options. They need to collapse and the UAW needs it’s back broken. Let it all shake out and we may end up with a single auto maker which encompasses the best of all the lines. Then can then hire back the workers based on merit and productivity rather than stupid union seniority. The simple fact is, as stated in my previous post, those that occupy space in a company and don’t contribute to its growth need to find something else to do.



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