Sunday, April 26, 2009

News & Points of View - April 26

In due course, I will list some very good articles and editorials, but during the week, I noticed one article that hit home with me.

I would imagine that most of the readers of this blog have absolutely excellent credit and no issues at all. Thankfully, I am the same, and so it struck me as rather odd that Bank of America would send me a notice saying my credit card interest rate was being increased. While this sort of thing could happen from time to time, the rate was being increased from Prime plus 1% (currently 5.25%) to Prime plus 3%. Not much of a difference till you read the fine print that shows the minimum rate would now be 11% (from it's current rate of 5.25%). This is a quite dramatic change indeed.

I called BofA to discuss it, and I was told my credit was in fact excellent. The changes that were going to affect me had absolutely nothing to do with me. In fact, the bank was altering the agreements with all cardholders. Obviously, I should not be the only one with this issue, so it was with great interest that I read our first news story for the day...


Credit-card shocks - Marketwatch - "He asked why the bank jacked up his rate for what he believes was no apparent reason and was told it was necessary to offset losses from the growing numbers of low-performing or default accounts. 'It was just incredible to me that they would do that like that,' he said. 'I said it sounds like they're spreading the wealth and the rep said, 'Yep, that's what's happening.'"

IMF Plans to Issue Bonds to Raise Funds for Lending Programs - Bloomberg - "China and Brazil are among a handful of countries that have expressed interest in purchasing IMF-backed bonds which would give member states a different way to contribute to the Washington-based fund. The IMF has never issued bonds."

GM Employee Stock Fund Dumps All Company Shares - Yahoo/AP - "General Motors revealed in a regulatory filing late Friday that its employee stock-purchase plan has unloaded all shares of the company in favor of short-term and money market investments."

Points of View

We Need Public Directors on TARP Bank Boards - By Robert B. Reich - The Wall Street Journal - "I don't know whether Bank of America shareholders will oust Ken Lewis from his chairmanship next week. I don't know if Treasury Secretary Timothy Geithner will eventually do it, either. What really worries me is I don't know who would actually be responsible for doing the deed, or by what criteria."

The Stress Test Results - The New York Times - "The nation’s largest banks received the results of their government stress tests on Friday. The rest of us should get the news next week. For the Obama administration, the tests could be a major success, if they provide clear data on which to base a bank-rescue strategy. Or the tests could be one of its worst failures, especially if they are not seen as credible."

Moore’s Law and the Law of More - By Thomas L. Friedman - The New York Times - "It is not an exaggeration to say that the team that President Obama appointed to promote his green agenda is nothing short of outstanding — a great combination of scientists and policy makers committed to building an energy economy that is efficient, clean and secure."

Political Wind Blowing Against Unions - Investor's Business Daily - "When Barack Obama won the election, Big Labor's ambitions soared. It spent $400 million to elect Democrats and expected an easy ride ahead. A hundred days into the Obama administration, it's playing defense."

Card Check Is Dead - By Thomas Frank - The Wall Street Journal - "Now, to be pro-labor is to resign yourself to years of failures and defeats, with few tea parties along the way for consolation. Even so, the setback on EFCA has to be a bitter one. Union members worked hard to elect Barack Obama and the Democratic Congress, as they did to put Jimmy Carter and Bill Clinton in the White House. And now, just as in those previous two periods of Democratic governance, labor's friends are having trouble enacting basic labor-law reforms."

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