Tuesday, March 17, 2009

Two Things

First, there's a small community bank, East Bridgewater Savings, that has pretty much completely avoided this credit crisis. How? They didn't lend to people who would never realistically be able to pay them back. They did their due diligence, and have had no foreclosures or delinquencies. The even made a small profit. And the FDIC lowered their rating and warned them to lend more.

Once again showing how completely and totally fucked up the economic situation is. A responsible financial institution that did WHAT IT IS SUPPOSED TO DO, and avoided this mess, gets bitched at by the government organization who's job it is to make sure banks are solvent, because it's being TOO responsible.

ANYBODY who thinks the economy is going to right itself because of what with the clowns in charge making these decisions are doing is delusional.

Second - Credit card defaults are up again. No surprise there. What kills me though, is the small business owners who are shutting down because their card company is raising its rates.

Rule #1 for any responsible financial planning? DON'T FUND SHIT WITH YOUR CREDIT CARD! There are very few lines of credit that have worse rates than these pieces of plastic. In fact, I can only think of two - loan sharks, and payday loan shops... which are essentially the same thing. For fuck's sake people, if you're running a business (hell, if you're just buying things), GET A LOAN to cover expenses in lean times. Paying 19-29% interest on your card to buy stock for your store is about the dumbest expense I can imagine a business incurring. If you are actually running a profitable, well-managed, successful business, and have a solid plan in place, then banks WILL lend to you. They aren't lending to giant credit risks, but if your business is really a business and not a hobby you sink your life savings into, or some sort of credit scheme disguised as a viable enterprise, then you can borrow for far, FAR less than what MasterCard is charging you.

How am I supposed to feel sorry for the world when it keeps punching itself in the face?


Hammer Player a.k.a Hoyazo said...

"How am I supposed to feel sorry for the world when it keeps punching itself in the face?"

Very well said Astin. For that I may just forego sucking out on you in the Mookie this week.

Alan aka RecessRampage said...

"ANYBODY who thinks the economy is going to right itself because of what the clowns making these decisions are doing is delusional."

Mutually exclusive, no? Economy is not gonna "right itself" because the govt is meddling. It would right itself if they stopped.

Riggstad said...

There is only one reason business people "fund shit" with their credit cards...

Because they can't get traditional credit in the first place.

Which you would think be a good reason to NOT open a business just yet. Dreams over power common sense though.

Astin said...

Hoy - that would be a nice change

Alan - Good point... fixed

Riggs - common sense? that's harder to find than credit.