Comments on: Does the bank guarantee do enough? http://www.crikey.com.au/2008/10/14/does-the-bank-guarantee-do-enough/ now with extra source Sat, 11 Feb 2012 23:34:35 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: Scott http://www.crikey.com.au/2008/10/14/does-the-bank-guarantee-do-enough/#comment-315 Scott Thu, 01 Jan 1970 10:00:00 +0000 #comment-315 I agree with Andy<br />These small credit card loans given out via the banks are some of its strongest assets (returning between 15-21%). When a bank falls, these will be the first things to be sold off to other banks, and other banks will be willing to buy them up. For the credit card holder, it will be business as usual (except they will be paying interest to the new bank). Look at RAMS. When they were in trouble, they didn't demand people pay up their mortgages, they just sold themselves to Westpac.<br />Stick with the history, Dave. I agree with Andy
These small credit card loans given out via the banks are some of its strongest assets (returning between 15-21%). When a bank falls, these will be the first things to be sold off to other banks, and other banks will be willing to buy them up. For the credit card holder, it will be business as usual (except they will be paying interest to the new bank). Look at RAMS. When they were in trouble, they didn’t demand people pay up their mortgages, they just sold themselves to Westpac.
Stick with the history, Dave.

]]> By: Confused http://www.crikey.com.au/2008/10/14/does-the-bank-guarantee-do-enough/#comment-316 Confused Thu, 01 Jan 1970 10:00:00 +0000 #comment-316 Let me see if I get how bank guarantee works. Money is taken from the poor (via taxes, printing, and weakening of the dollar) and given to the wealthy so the wealthy supposedly will have enough money to lend back (at interest) to those who have just been robbed. Is that how it goes? Let me see if I get how bank guarantee works. Money is taken from the poor (via taxes, printing, and weakening of the dollar) and given to the wealthy so the wealthy supposedly will have enough money to lend back (at interest) to those who have just been robbed. Is that how it goes?

]]> By: Mary Poppins http://www.crikey.com.au/2008/10/14/does-the-bank-guarantee-do-enough/#comment-317 Mary Poppins Thu, 01 Jan 1970 10:00:00 +0000 #comment-317 Taken a look at the classic 1960's Mary Poppins film. It's a great moral story with a subtext about banking. I has a great bank run scene started by a small boy who wants his tuppence back. Ambac (ABK) was in the guarantee business. It kept guaranteeing more and more stuff. Profits soared. All it took to collapse Ambac was sinking asset prices. If the stock market takes a further beating the guarantees will be worthless. No matter if it's Ambac or governments with printing presses doling out worthless promises. Only money backed by gold or silver is a credible guarantee. The US constitution demands the dollar to be gold and silver backed. Look what's happened when it was decoupled by Nixon. The crazies on the Wall Street asylum hijacked the economy and the currency with derivatives, naked shorts, SIVs, CDOs and an alphabet of garbage. Taken a look at the classic 1960’s Mary Poppins film. It’s a great moral story with a subtext about banking. I has a great bank run scene started by a small boy who wants his tuppence back. Ambac (ABK) was in the guarantee business. It kept guaranteeing more and more stuff. Profits soared. All it took to collapse Ambac was sinking asset prices. If the stock market takes a further beating the guarantees will be worthless. No matter if it’s Ambac or governments with printing presses doling out worthless promises. Only money backed by gold or silver is a credible guarantee. The US constitution demands the dollar to be gold and silver backed. Look what’s happened when it was decoupled by Nixon. The crazies on the Wall Street asylum hijacked the economy and the currency with derivatives, naked shorts, SIVs, CDOs and an alphabet of garbage.

]]> By: Andy Saunders http://www.crikey.com.au/2008/10/14/does-the-bank-guarantee-do-enough/#comment-318 Andy Saunders Thu, 01 Jan 1970 10:00:00 +0000 #comment-318 David Lewis may have no credit card debt, but I doubt he also has an in-depth understanding of the credit-card industry. "What happens if one of the major card suppliers (companies such as Visa, American Express, Mastercard, et cetera) goes broke?" Well, not much. Visa and Mastercard are franchises, the debt is issued by a bank (such as Westpac, NAB etc). Amex is mostly a charge-card operation with the charges payable once a statement is issued. Low credit exposure.<br /><br />If issuing banks (especially foreign banks) were to go under, a credit-card debtor would be in the same situation as now (possibly better off).<br /><br />David Lewis seems to be solving a problem that doesn't exist. David Lewis may have no credit card debt, but I doubt he also has an in-depth understanding of the credit-card industry. “What happens if one of the major card suppliers (companies such as Visa, American Express, Mastercard, et cetera) goes broke?” Well, not much. Visa and Mastercard are franchises, the debt is issued by a bank (such as Westpac, NAB etc). Amex is mostly a charge-card operation with the charges payable once a statement is issued. Low credit exposure.

If issuing banks (especially foreign banks) were to go under, a credit-card debtor would be in the same situation as now (possibly better off).

David Lewis seems to be solving a problem that doesn’t exist.

]]>