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The real problem is big banks are hoarding the bailout money to ensure they have the capital to pay on credit default swabs and other derivates in the event their bets lose. If a big bank has bet a lot on CDS and it loses, they must have the money to pay or they will fail. Keep in mind the CDS market is still greater than 34 trillion dollars, so the mortgage, CC and auto crisis pales in comparison to the CDS mess.
CC issuers are lowering their risk profiles in many cases. In other cases they are just plain lowering the total amount of money they have out on float. Total defaults at the moment may be 7% (which is quite large when you think about it), but is anticipated to drastically increase as the mortgage mess perculates. Homeowners don't have that magically bottomless well of home equity to tap anymore when they need to pay down their CC's. It is also expected the unemployment and underemployment will continue to increase. In the case of AMEX the situation is slightly different. They do not have a divesified banking operation behind them and are having operating, profitability and financing issues. This is all reflected in the stock price, which has been hammered.
I am sure you are aware that there is a credit crunch going on, effecting business even more than individuals. If you don't think this effects CC issuers read this:
Credit Card Bond Sales at Zero, First Time Since 1993:
http://www.bloomberg.com/apps/news?pid=20601110&sid=awS5vZQvmwd4
Given this news I would anticipate more of the same.
In you particular case, louiep132, you have no cause to complain. You have three CC's, all of which are recently issued. You've been given credit and with some patience it will mature and grow. Just remember in this climate missteps are devestating. So always pay on time. Never be late!
@jmbfl wrote:CC issuers are lowering their risk profiles in many cases. In other cases they are just plain lowering the total amount of money they have out on float. Total defaults at the moment may be 7% (which is quite large when you think about it), but is anticipated to drastically increase as the mortgage mess perculates. Homeowners don't have that magically bottomless well of home equity to tap anymore when they need to pay down their CC's. It is also expected the unemployment and underemployment will continue to increase. In the case of AMEX the situation is slightly different. They do not have a divesified banking operation behind them and are having operating, profitability and financing issues. This is all reflected in the stock price, which has been hammered.
I am sure you are aware that there is a credit crunch going on, effecting business even more than individuals. If you don't think this effects CC issuers read this:
Credit Card Bond Sales at Zero, First Time Since 1993:
http://www.bloomberg.com/apps/news?pid=20601110&sid=awS5vZQvmwd4
Given this news I would anticipate more of the same.
In you particular case, louiep132, you have no cause to complain. You have three CC's, all of which are recently issued. You've been given credit and with some patience it will mature and grow. Just remember in this climate missteps are devestating. So always pay on time. Never be late!
im not complaining . ihavent been cld or closed yet either
but the president said to loan the money
and banks are rasing standards so the people that really need credit cant get it
i have scores in the low 700s and it mean nothing thanks
@fused wrote:The real problem is big banks are hoarding the bailout money to ensure they have the capital to pay on credit default swabs and other derivates in the event their bets lose. If a big bank has bet a lot on CDS and it loses, they must have the money to pay or they will fail. Keep in mind the CDS market is still greater than 34 trillion dollars, so the mortgage, CC and auto crisis pales in comparison to the CDS mess.
This is exactly correct. In fact almost all the bailout money has be used to stabilize the capitalization of just a handful of banks under the justisdiction of the NY FRB. Due to this fact there will almost certainly be Bank Bailout, Part II. The companion piece will be Economic Stimulus Package, Part II. Mix that with commodity deflation, real estate deflation, increasing unemployment, incredibly huge deficits and an incoming president with protectionist proclivities I'd say we are heading for a real mess!
@Anonymous wrote:im not complaining . ihavent been cld or closed yet either
but the president said to loan the money
and banks are rasing standards so the people that really need credit cant get it
i have scores in the low 700s and it mean nothing thanks
Not to be critical, but it your scores mean little because you have no credit history. You actually can have 700+ credit scores with a shallow credit file and have great difficulty obtaining credit. If you don't exercise some patience you are going to be a very frustrated person.
The bank bailout package was not put in place so that you could get a CC. It was put in place so we all could have a functioning banking system!