773 The Vig Today

773 The Vig Today

How do you know we're in economic trouble? Two ways, and they have nothing to do with official figures. Check your television set. It knows. First all those ads for reducing credit card debt. Second all those ads for payday loans, the single most unethical business since the mob figured out that "the vig," vigorish was much better than plain old interest.

"The banks are putting us out of business," says reputed mobster Glick, a grand nephew, he says, of the late Myer Lansky, "the underworld's accountant," by all accounts. "We're pretty much 'taillights," he says. "We can't compete with the big banks. Anyone can get credit. And the banks use scare tactics to collect... far worse than the gentlemen we used to send to remind people who were behind in their payments."

"They used to 'trow us in jail for charging that kind of money. Now, they give bailouts."

Well, credit cards have been "reformed." Now, instead of just squeezing you, they tell you first how long they're going to squeeze you and for how much and when. That's on your statement. Anyone read that stuff?

And with "official" interest rates -- the prime, the mortgages, etc., all low, why is it that credit card rates haven't followed, and are moving in the other direction? (That would be up.)

"It's our policy," says one MasterCard issuer. Oh. That explains it.

Then there are the TV ads, almost as numerous as the ones for accident lawyers. "Avoid Bankruptcy!" "Let Us Help You Into Bankruptcy While Still Keeping Your Car and Home (quietly: "in many cases.") "Call Us. We'll Save You Big Bucks With The IRS And Visa!"

What are these guys selling? Most of them are selling "debt consolidation loans." They mean "we'll pay off your cards, you pay us with one 'affordable' payment a month." Here comes Glick, again. Ever wonder about the rates these consolidators charge?

Things are going to get worse. Everyone in the bailout is suing everyone else. None of those suits will go the distance -- they'll all be "settled." That's still going to cost billions. And who will pay for that? The FDIC will kick in a chunk. So will the banks. So will the investors in those flim-flam debt swaps and evictions. But in the end, the money they lose will return to the till in the form of... still more credit card interest increases. So you have met the "final payer," it he is you. They won't kneecap you if you don't pay, they'll just take your house.

Shrapnel:

--Often the years fly, though the days may drag. But this year it seems the calendar is on speed. August and September raced past and October is doing the same.

--This is apple cider time. And what have they done to "improve" it? Larded it with fermentation retardant.

--Antioch College, now in new hands, is looking for students. That's a recent change, after a multi year shut down of the Yellow Springs, Ohio campus. And they want to make sure that you know they're not the same thing as Antioch University, even though they're in the same town.

(For the two year old Wessay™ on this situation, please see Antioch Posting, which was not received well on campus.)

I'm Wes Richards. My opinions are my own but you're welcome to them.®

©WJR 2010