Busted: Bankers and The Global Economy

August 14, 2008

American Households Face Financial Headwinds

Americans survived the attack of Hurricane Katrina and much of the nation felt the effects for years. What Americans are going now is not a hurricane or strong storm winds, but headwinds of a financial nature brought about by a number of converging factors. If you pick up the paper or look at the internet, you can hardly avoid the headlines and the details of economic carnage.

financing prosperity
financing prosperity

Aside from the banking and mortgage crisis, automakers are on top of the economic worry list, facing a continual onslaught of sliding auto sales as Americans can no longer afford to finance overpriced vehicles. Instead, many Americans out of necessity are keeping what they already drive. That is life in America today in the current economic cycle of life.

Gasoline prices have brought about hardship and fueled inflationary pressures for the nation and the world. Complaining sources indicate that retail sales have fallen again after downward pressure from lack of taxpayer stimulus payments. All of that bad news is presented with the auto industry, which is pulling down retail sales figures. Indications were that stimulus payments received by Americans did what they were designed to do, but never enough for the longing imaginations of business. Were it not for autos, retail sales would be up .4 percent, comparable to the month before. The nation has seen gains in retail since February for small ticket items, a bright spot despite the bleak outlook. The majority of Americans are buying smaller purchases for disposable items. Devalued money only goes so far and consumers are stretching it to the max.

retailer desperation
retailer desperation

Retailers are once again grousing about less than perfect sales as back-to-school shopping hits the retail scales. This reality reflects the desperate nature of retailers. Business inventories are overstocked, even despite negative forecasts, business chose to invest in stock for sales in the hope for a better holiday. They choose to talk about the cautious consumer, further enforcing a negative business mindset by downplaying the prosperity they have. The reality is that business is counting on the Holiday Season to somehow pull them through into a pinnacle of victory that rarely comes. They talk the same games every year. Talking business down even when business is up is not the way to foster prosperity.

Enough with the auto industry and consumer financing schemes! Americans don’t need all that now. This writer has made certain that he is on a spending vacation. Many others are in the same reality, whether out of necessity or self-imposed discipline. Americans need to regroup and explore the economic world they live in for any advantage that they can find to keep them moving forward. The nation is catching its collective breath after a financial burnout. The nation cannot continue to finance away the future for the moment nor continue to give money away. Money is our blood, sweat and tears: the building blocks of life. Bankers and Americans alike must face the facts. We are at a new place in the business cycle and in life.

If we stop grousing about how bad things are when they are not Mr. Retailer, we can actually enjoy what we have. Prosperity is relative. Unfortunately, Retail America has outrageous expectations and government statisticians are ever hopeful of a tax windfall, yet eternally unsatisfied that they can’t fleece their victims more effectively to bolster government agendas with more give-away programs.

big ticket greed

big ticket greed

Hope springs eternal in government to squirm away from the worst slump in housing in many decades and a severe credit crunch from pushing the country into a deep recession, ignoring the fact that we didn’t get here as a nation simply as part of an economic cycle or downturn. Bankers and financiers brought us here, fare and square to this place in the road and aside from a few unscrupulous home buyers, Americans are victims from lack of banking regulation and integrity, endless profiteering through investment vehicles combined with government inattention, always hoping for better on the gravy train of tomorrow. The nation has been firmly addicted to credit and keeping up with the Joneses. This part of the cycle is payment for that.

It time for a new chapter in America including rethinking what we do for a better future, inflation aside. Todays sales figures will ultimately take care of themselves as the nation rebalances from a huge economic and worldwide debacle perpetrated through boundless greed and financed through predatory lending across the board by winners like GMC, Capital One and Countrywide. Financial predators have abounded.

What the nation does will either slow down the cycle of recovery or get it over with faster. The decision is up to America, partly grounded in our own attitudes. As a retired financial analyst and economist, I know the difference between economic theory and reality. I’ve lived it in the trenches. This writer is for getting the economic pain over with instead of prolonging the pain through more addictive medication. ~ E. Manning

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1 Comment

  1. IF YOUR TIME IS IMPORTANT TO YOU, NEVER USE CAPITAL ONE CREDIT CARD. They are the worst in the industry! For the 4th or 5th time in a few months, they have put a hold on my credit card for no reason. It is so embarrasing! I am waiting in line to pay the cashier at a supermarket and the card gets declined. I know that there is plenty of money on the card, so I called the customer service number. Guess what? I am transferred to India, where I could barely understand the customer rep’s thick Indian accent. I had to repeat my card number several times, then she argues that the number I gave is not a legitimate number. I said, “What?!” I am reading the card that you, guys issued me and I have been using this same card for years. Then, she puts me on hold for several minutes. Upon her return, I remind her that I am still holding up the line at the supermarket and people are starting to glare at me like it’s my fault that my credit card is having problems. The service rep asks me to repeat the credit card number 2 more times, puts me on hold for 3 more minutes and then says that there is no hold on the card and for the cashier to try to run it again. For the 4th time, the store cashier runs the card and again, the computer screen says that the card is declined. I tell the service rep this, and she still insists that it is not on their end, but on the store’s end. The cashier runs the card 2 more times. Same thing. I ask the service rep to be transferred to a supervisor and she says in “an-i-don’t-give-a-crap” voice, “I can’t transfer you until I exhaust all the troubleshooting possibilities. What are the last 3 digits on the back of your card?” I give her the number and she says, “That is an invalid code”. Again, I shriek, ‘”What?! I am simply reading the back of my card and I have used this code and this card for years? What is going on?” She says (amused), “Hold the line…” Again, I was on hold for several minutes, then she comes back on the line and said, “I don’t see any problem on the card. Run the card again… Maybe this time it will work.” I ask the cashier (who at this time, is now glaring at ME), to run the card one last time. Guess what? Card is still declined and the phone goes dead! Unbelievable!

    Believe it or not, this is a common problem with CapitalOne. I allowed this posting because there was no promotional link and this is a real problem for many. Don’t fall into the credit card trap, especially the one that “honest bankers” like CapitalOne promote.

    Comment by powerfulwoman — October 26, 2008 @ 12:26 am


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