You know there are some vibrant green shoots when major credit card issuers are voluntarily taking 65% haircuts on some outstanding balances.
Consider Bedros Alikcioglu, a gas station owner in Newport Beach, Calif. He owed $112,000 on four cards and was paying $3,000 a month in interest and late fees. “It was so hard to earn that money, and paying it to nowhere didn’t make sense anymore,” said Mr. Alikcioglu, 75.
He signed up with a debt settlement company named Hope Financial, which negotiated deals with his creditors to settle for about 35 percent of his balance. Hope Financial is charging Mr. Alikcioglu about 12 percent of his original debt.
So banks with major consumer exposure are now faced with a rather peculiar situation. The overly leveraged consumer who is chronically delinquent now has leverage over the banks because it’s increasingly likely the value of that debt to the bank will be zero in the coming months. You don’t need the threat of cramdown legislation when things are this bad.
Credit Bailout: Issuers Slashing Card Balances [NYT]
Wasnt this already reported in the opening bell?
Greg, I have been very impressed of late with your writing. Keep up the good work!
BB2N
Come on Greg, at least give us something new. I might as well read CNNMoney.
Opening Bell
Your brother Shawn needs to plant a kick on your face
Consider Bedros Alikcioglu, a gas station owner in Newport Beach, Calif. He owed $112,000 on four cards and was paying $3,000 a month in interest and late fees. “It was so hard to earn that money, and paying it to nowhere didn’t make sense anymore,” said Mr. Alikcioglu, 75.
- you know our country is in the toilet when completing online apps for four different credit cards is considered hard work.
Hey Greg — you’re a walking douchebag
This is why America is going down the toilet. When America was becoming great, taking money from someone else as a loan meant paying it back, with the risk of, you know, honor and pride if the money was lost. Now, we have worthless cumdumpsters like this guy who are all smug and happy to wiggle out of half of an agreed upon debt. By the way, nice rocking chair, you polesmoker. I’m sure it feels good to get your tiny cock licked by the old men from the nursing home next door while you rock back and forth in that empty room.
@4 – or get the Danza Slap from “Sean” Michaels.
Greg,
I hate you.
Sincerely,
Your Subconscious
What kind of American name is Bedros Alikcioglu?
Greg,
This is like the 10th time you’ve quite obviously lifted something already mentioned in Opening Bell. This is made worse by the fact that it takes you until Noon.
Seriously man, either communicate with OB if you’re gonna cover something, or get some new material.
@10
What exactly is an American name?
WOA…deja vu
read WASPY
Definitely BB2N
@15 Purple Eagles til I die!
Definitely BB2N
2 = greg’s mother
@7, couple other things about the good ol’ days: usury was illegal and lenders’ solvency wasn’t guaranteed by federal tax receipts.
Greg sucks.
@19 eat a dick asshole. If you don;t want to pay “usury” style interest rates then don’t borrow the money.
He’s 75 years old. Personally I would have just told the creditors to fuck off. I’ll be dead soon anyway.
Dear Edward McLelland,
Go get a real fucking job you talentless hack. That way my tax dollars don’t subsidize you “finding yourself” while working on your 17th piece of shit screenplay that will end up in someone’s trash just like all the others.
Or kill yourself.
Sincerely,
The Taxpayers
@21, I know it was a long sentence but see part 2, moron. Seeing as my taxes are going to support the banks that own these loans and my dollars are getting diluted by the Fed purchasing this same crap, I effectively get to pay the interest despite having never incurred any debt.
If the CC companies want to charge deadbeats 35% interest they shouldn’t be shocked when the same deadbeats start defaulting. Sounds like Mr. Alikcioglu and his creditors were made for each other.
I think you ladies are missing the fact that the “cutting” seems to be in the margin (profit), not principal…