Category Archives: Credit cards

Once Again on the IT Challenges in Converting to the Drachma

Why the left is not doing itself, or the Greek people, any favors by minimizing the difficulties in converting to the drachma.

Why the Greek Government Rejects a Grexit

Why the Greek government and Greek citizens recognize that a Grexit is a terrible idea for them.

The Card System, Demystified, and Implications for Re-Introducing Drachma

A detailed explainer on how card systems work and what the impact of a drachma re-introduction would be for them.

Cecilia Nahon: Argentina vs the Vultures

This Institute of New Economic Thinking interview describes how Argentina’s completed sovereign debt restructuring was derailed by vulture fund NML Capital in a reading of the original bonds’ pari passu clause that was contrary to well-established practice. Even the US Treasury had weighed in on the side of Argentina in an amicus brief. The interview of Argentine ambassador Cecilia Nahon by Marshall Auerbach goes into the backstory of the restructuring, that Argentina’s woes in no small measure resulted from following the IMF’s neoliberal fads du jour.

The Economics of P2P Lending

Yves here. The odds are high that if super low interest rates continue (virtually certain), P2P lending will continue to rise rapidly as yield-desperate investors seek better returns. As more money flows through these channels, it virtually assures less careful selection. The question is how bad the downside will be when lenders get bruised and how the market evolves after its inevitable first large-scale setback (the first venture in this market ended in tears, but it was sufficiently small so as not to have burned enough people so as to sour the image of this concept).

Rolling Jubilee: A Wolf in Sheep’s Clothing?

Yves here. As much as we we’ve been vocal supporters of many of the initiatives of the Occupy Wall Street movement, such as the excellent work of Occupy the SEC, the impressive relief efforts of Occupy Sandy, the success of local Occupy Homes groups in combatting foreclosures, the many projects of the Alternative Banking Group (including both a book explaining the crisis and its 52 Shades of Greed card deck, and last but not least, Strike Debt’s Debt Resistors’ Operations Manual.

However, Rolling Jubilee is a notable exception.

Has Apple Pay Just Put Apple in the CFPB’s Crosshairs?

I strongly suggest you read Georgetown law professor Adam Levitin’s new post on why he believes Apple’s newly announced Apple Pay service puts Apple under the CFPB’s jurisdiction but virtue of having made itself a regulated financial institution. And Levitin means all of Apple’s consumer services, not just Apple Pay. He believes that Apple is […]

Banks Scapegoat Regulations for More Costly Loans Post Crisis

Banks and their allies have been using every opportunity possible to blame regulations for changes in their business models after the crisis, particular if they can make it sound like the broader public, as opposed to their bottom lines, is what is suffering. Normally this messaging effort stays at the background noise level, but sometimes the lobbyists succeed in getting their message treated as a story in its own right.

A recent example is a Financial Times story early this week…

New In-Depth Study Shows How Debt Collectors Abuse Legal System and Borrowers

The Loyola Consumer Law Review has just released an important paper by Peter Holland of the University of Maryland Francis School of Law. It’s a large scale statistical study, the first of its kind. Its conclusions are not pretty.

Target, Neiman Marcus Credit Card Hacking Reveals Third-World US Payment Systems

Occasionally, we’ve commented on the shoddy state of US credit card payment infrastructure. One of the noteworthy aspects of the fiasco of recent US retailer security breaches is that the media has more or less ignored the question of what could have been done to forestall these incidents, which in the case of Target involved as many as 70 million customers, and Neiman Marcus, under (but presumably not much under) 1 million.

Tom Adams: Citigroup is the Real Reason We Need the Volcker Rule

In my view the real purpose of the Volcker Rule is to prevent another Citigroup bailout and therefore the measure of its effectiveness is whether the rule would accomplish this.

Ilargi: No Vigilantes Or Vultures Need Apply

With media and technology becoming faster and more pervasive at a rapid clip, it shouldn’t perhaps be a big surprise to see the ease with which war-mongering news flashes come to dominate the story of the day. But maybe this should be received with an increasing dose of skepticism…

California Attorney General Sues JP Morgan Over Debt Collection Abuses, Including Sewer Service, Robosigning

California Attorney General Kamala Harris is on a roll.

Michael Hudson Explains How Deficit Hysterics Target the Wrong Type of Debt

I was at the Atlantic Economy conference the week before last, and Michael Hudson got in one of the best quips: “Helicopter Ben has taken off and has been dropping money all over Wall Street. But he hasn’t dropped any on Main Street.” He has an informative talk with Paul Jay of Real News Network on why the fixation on public debt is wrongheaded, and we should worry about private debt instead.

Cyprus: The Next Blunder

Yves here. Our post today on Cyprus provides some broad background, including the political dynamics and the not-terribly-defensible reasons the Eurozone went that route, and a short discussion of the large risk that this inept move precipitates a wider crisis. This article by Charles Wyplosz serves as a companion, since it discusses the “tax,” um, expropriation option versus other alternatives. Even more important, it sketches out why this scheme, even if it manages not to kick off a crisis, is still inadequate to rescue Cyprus. It is thus a toxic variant of the Eurozone “kick the can down the road” strategy.