For the week ending May 22, 2009, these are the most important or newsworthy reels to hit this blog’s radar, summarized in 1,000 words (give or take a few thousand):

Senate Passes Credit Card Regulation Bill, Obama Signs into Law

Without much of a fuss, the House approved the final version of a landmark Credit Card Bill, 361-64, that would effectively require credit card banks and other companies to use more clarity and  fairness with their customers. After a busy morning graduating newly-minted second lieutenants and ensigns from the US Naval Academy, President Obama wasted no time signing it into law. Among the highlights of the bill: Credit card companies would have to give 45 days’ notice before any interest rate changes in plain English. They would also be prohibited from raising rates on existing balances unless 60 days overdue, and would have to reduce their rates back to their previous lower one when at least six months’ minimum payment has been made. It would also enforce more stringent standards for anyone under 21 applying, which means hapless college students would no longer be easy prey. There’s also a weird clause added by some gun-rights bozo, about allowing concealed weapons to be carried in state parks; is this some prescient thing for us to consider if negotiating with banks by diplomacy fails? Yee-haw! Though it’s too late for this writer, at least I’ll go knowing that some of our politicians are still looking out for us. I just needed to wait until a more sympathetic Congress and President got aboard. The bill is expected to be signed into law this weekend by President Obama. Credit card companies have whined about the bill, saying that it will make it more difficult for them to make an “honest” buck in the midst of this financial crisis. This, after all the bailout money some of them have received, to alleviate their burdens. Well, I say… GET OVER IT! To Congress and the President, I also say, “Give ’em more rope!” More Power to the People!

BankUnited Files for Bankruptcy

In more somber news, Florida-based BankUnited Financial Corp. FSB (BKUNA) filed for Chapter 11 bankruptcy protection today. Regulators closed the bank and began to auction it off to private investors after a gross imbalance of $500 million debt far outweighed its meager $37.3 million in assets. The spoils were divided among some big equity players like WL Ross & Co, Carlyle Group, Blackstone Group, and Centerbridge Partners, who pumped in a combined $900 million of capital in the rescue. There were no signs of immediate changes, and the bank was opened for business as usual today. Denial at work. The fate of BankUnited Center in Coral Gables, site of two presidential debates is uncertain, as is that of about 1,100 of its employees. So in the midst of the bailout in the financial crisis, there will be some losers. As with the rest, BankUnited had invested in Adjustable Rate Mortgages which later turned out to be toxic; unlike the big players, however, they were not deemed worthy enough to rescue with TARP funds, thus precipitating its demise. BankUnited’s new masters are looking at the declining housing market in Miami as a possible resurrector.  Good luck with that.

Ed Liddy & Heckler

Edward Libby Now the Latest AIG Casualty

The government-appointed Chairman and CEO Edward Libby threw in the towel and uttered “No Mas” today, saying he would step down as soon a new <cough>patsy<cough> would be placed in his stead. Libby was installed in September, 2008 after it was shored up with billions in bailout funds by the Fed. Among his follies while at the helm was approving huge pay bonuses for its idiot executives (under legislative duress), while the rank-and-file AIG and the rest of the world burned. “I got out of retirement from Allstate, just for this s*&!t?!” AIG’s board finally conceded that it would look for two replacements this time, to segregate the Chairman and  the CEO’s jobs. Unfortunately, most eligible candidates aren’t crazy about the job(s), especially if it entails a drastic pay cut (Liddy was supposedly getting $1 a year for this task). There’s also the issue of playing budget knife and cheerleader-from-government-hell at the same, something execs are loathe to do. To be able to turn this sinker around, you’d need to be a rabid cost-cutting Obamite with no loyalty to AIG employees whatsoever, a strong enough to stomach to be an asshole about executive bonuses and raises to say “No way, get over it. Now get back to work and fix your mess!” Especially at a time like this.  Unless the highballers start changing the way they think and first realize that they have to change the way they make their money to be trustworthy ever again, AIG will continue to sink. After all, it was a Big Man in insurance himself, Warren Buffett, who said that one’s reputation is everything, and if one couldn’t be trusted, forget about making money…


Instead of placing several other downers in separate paragraphs, here they are, lumped into one:


  • Because of the aforementioned S & P threat to downgrade, the US Dollar dropped to its lowest level in two months at the end of the week, $1 to 0.71 Euros. Something about a “Who’s next?” question was posed, meaning that investors have been worried that the Dollar would be the next to get on the crosshairs of analysts… and the US is a much bigger target than the UK. This might be nothing more than a premature reaction. But if it does turn out to be a recurring trend, the upside is that, well, more foreigners can buy American products. That would be great for trade, wouldn’t it? If we had more products to export (other than cars, that is).
  • The Labor Department announced today that more than 20 US states showed decreasing rates of unemployment for the month of April, 2009… of course, with May just having elapsed, and with several million new grads on the prowl (see above), that might change yet again. But have no fear, says Fed Chairman Ben Bernanke. In a commencement address to Boston College law school graduates, Bernanke said that the economy would heal eventually. He also exhorted the students to stay upbeat, even during tough times. Okay, Ben – I’m looking at my watch to see when that will be. Any day now.

So two out of six ain’t so bad, right? If  you’re not satisfied with #1, remember that there’s still the Gun Clause that’s part of the bill. Pack your derringer with you, and maybe you’ll be lucky enough to see your local credit card company guy in the park this weekend.

Happy Memorial Day!


Copyright Anabasius 2009


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