Got a question about the economy? Join me at noon today for questions and answers. You can submit a question in advance here.
Top of the News: As the banks and government were trumpeting the results of the bank-crafted stress tests on Friday, my cabbie to Sea-Tac was giving his own report card. He prefaced it with, “Don’t even get me started on the banks.”
But I did. He said he had seen the interest rate jump from 8 percent to 29 percent on his credit card. His infraction: Apparently his online bill pay arrived at the bank 2 hours late. The call-center employee refused to negotiate. Now the cabbie says he will refuse to pay. Talk about a tea party.
The bank in question is Citigroup, which has taken at least $36.5 billion in TARP money from taxpayers, as well $2.3 billion as a “counterparty” to AIG and who knows how much through the secretive “lending facilities” of the Federal Reserve.
The cabbie had a thorough and, well, stressed, knowledge of how he was getting double-dipped, as taxpayer and customer. He’s not alone. According to the Center for Responsible Lending, at least 10 million cardholders have experienced similar skyrocketing interest rates, and from no fault of their own. In addition, new fees have been added by five of the eight top card issuers.
In his weekly radio address on Saturday, President Obama called for new limits on these practices. For many Americans, they may be the tipping point into bankruptcy. Not surprisingly, the market is nervous today about the prospect of massive writeoffs from Americans’ $1 trillion in card balances. Even the highly suspect stress tests warned the biggest banks could expect $82.4 billion in losses by 2010.
The votes are in from our rigged Diebold machines and the winner of last week’s haiku contest is:
More layoffs? But keep steady
Don’t jump from Windows
We do this silliness every Friday at noon.
Today’s Econ Haiku:
May be coming down the pike
But not to the banks