Credit Crisis and crunch

" It's just an aside did you happen this seat Jacoby Ellsbury steal home based web site we knew it -- all kinds of amazing great things happen and that's series but that was just like the opera."

" Yes that was they -- a stokes stealing home is one of the great great place in sports mother -- I hope he's a Republican. Because we need Republicans to have this kind of spirit you know --"

" In the -- paper says that."

" Match -- opt to snatch control away from those who have two currently -- believe you're others fear to -- that's something like this stealing home is about a brave. Things filled with gusto he had a lot of so we're talking about the economy the credit card crisis what is the credit card crisis I'm seeing headlines about that today."

" That -- has been rolling through the system for. I don't know prayer for months now but it's a really going to get bigger through this summer and and later this year. And -- it's just a normal extension of of what you. I think you can see and feel around you we didn't in every daylight. People struggling to get 51 of the few things that they do are one of the the common things that they do. If they get a slowdown has stopped paying their credit card bills and that they wouldn't you know. Rely on the plastic one they can't afford things and so you get out. A bigger and bigger problem in this is really coming to roost and that number is that the big banks just put up in recent weeks you know."

" Is the -- that story it is the -- story that as people build up a larger balance on their credit cards they're also getting these letters announcing that the outstanding balance goes from me you know eight or 9% to 22%. Or whatever."

" It's not so there's a very big squeeze going on right now that he'd -- you know. In both consumers and banks to some degree are our our in this bind where one aside they're they're they've realized that they have these huge. Credit bubble problems. -- they have too much credit outstanding that they're trying to shrink down and the same time everybody's being told that we got a lot spend money or just start the economy again been. You know banks have to lend them money to start doing things and that this sort of rubber hits the road to a great degree and everyday life and credit cards and that squeeze that you're talking about where banks are trying to. Get those balances down a little bit there are a lot by by starting to dramatically increase. The interest rates on higher balances and train the amount available on individuals."

" But this this concerns me Steve there were allowing the same thing that happened again we saw this with the housing market where. Things by its restarted spin out of control as there were foreclosures going on when people couldn't make payments. When we really should have banks going out there may be working in conjunction with -- local governments to figure out how to keep people on their homes rather them. Are allowing that kind of knee jerk. On negative response to -- two. The -- mushroom. And now with credit cards you're taking people might. Being able to sustain their payments if they weren't getting whacked with a higher interest rates are a lot of credit card companies to force them into default."

" I agree I think and -- I think is -- listened to sort of Obama and what he's talking about going forward and -- their. I believe that he has fairly intricate credit card plant here that that they I don't know what it's going to be but I think. Is going to be something -- it's. Addressed this issue exactly that you're talking about that there's in the have been that it can have the history of the credit card business. There really isn't. That. Big of the background of helping people work out the problems that. That history is you know did indeed people with credit and expect that some percentage are going to we get into trouble and you're really going to write them off or you're gonna. Put into bankruptcy or something like that -- that. You know that number is small enough that a reasonable economy that you can live with that and you can you know sort of just chopped off that way clearly we're not an -- kind of economy anymore and it would be of interest for both sides or the consumer who. Obviously. Does it is looking for more trouble and banks that are trying to figure out what to do with these problems to to try to what the mountain. We will -- something comes along -- but in the meantime. You know -- see. The first quarter. Financial results at the banks just put out that there they're taking these gigantic. Reserve's financial reserves against. Credit card losses that are going to pile up through the spring into the summer just one specific example Bank of America which is I think. Of all the big banks the most represented a -- of didn't -- the main street economy across the the country. You know. Billion dollars in the first quarter that they set aside just for credit card problems going forward that's. As you know last year was already a troubling year from credit card from the early stages of."

" You know you saying that's anticipated losses this year on credit card sits there if you are on an accounting basis planning for."

" Bet that's money that they're setting aside saying here's this reserve that we're gonna have credit card problems down the road. And -- write off debt we're gonna take it out of this file. That that's not the the total size that's what they added to it in the first quarter to eight billion dollars a year ago is that what what what they do want a year ago. It was four billion dollars that was already considered a big number of them."

" but you can look at that is -- just being have particularly prudent as opposed to. Just coming up actual losses at this point it's anticipatory. But it did just to -- the question is whether there are other policies say instead of writing people lost may be they could give people a month to let them skip a month and payments add that into the debt and be better off than longer and the question is are they missing opportunities have better outcomes."

" Yeah it's hard to say I'm a lot of added it is that. Wouldn't we go loan by loan it's one thing to do it without house if it's you know alone that's 300000 dollars if you know. -- The average balances -- you know 15000. Dollars on a credit cards for example. It becomes harder to go one by one by one to try to create a solution that a lot of different obviously. Specific circumstances but it -- you're absolutely right in terms of trying to find a way to to. Caught a break and you know we've -- people selling cars have found a way to do this right now and that if you Hoosier. Your job will make prepayments for your we'll take -- so it's not like that there isn't any kind of precedent for trying to. Soften the -- of these things and -- way is to you don't over the expense. A months payment -- two months payment or whatever into your balance or to you know. -- down you know part of your credit outstanding. And take some of -- reserve that you built up and say instead of wiping you out you know we all. You know we'll figure some way out the cost us some money that may be cost -- 5000 dollars but gives you the shot -- you know paying back the last. Eight or ten grand that we keep rolling here."

" will let you go shopping okay. Ha ha Hai -- I keep that consumer credit problems and a half -- one man bands are you tired from crossing all business."