patrick.net

we’re free riding on the backs of the poor, ignorant, stupid, uneducated, and financially existential.

Makes you PROUD to be an American!! ;)

I don’t mind paying $0,25 to use the ATM card at a gas station. That’s fair and square.

You must go to the wrong gas stations.

Visa is a transaction processing network. They get your 2.x% fee, paid by the merchant, price partially passed on to you.

Wachovia is the issuing bank. They survive off of member fees, late charges, penalties, and of course fat interest.

i have a friend who works in visa. he had told me some time back visa would get around 1.5% and wachovia would get around 1%. not sure about the exact %age, but they do get a cut.

The fact that the law provides various renegging tools does not change the welsher’s moral stance. The welsher is acting within the law, but not morally.

Hey! You are using an ethnic slur against people of Welsh heritage, like me.

Palo Alto observation: saw an open house announcement on Saturday (on Amarillo). Today, I noticed that the house was sold, and a sign upfront instructed "Open House Cancelled. House Sold".

The listing price was $1.2 million, and it was a 1600 sq-ft "charming" Eichler (i.e small and unattractive!).

And a friend who rented an apartment in Sunnyvale recently said how it was crazy, and stuff that appeared on Craigslist in the morning was gone by afternoon.

I don't understand anything anymore.

"Hey! You are using an ethnic slur against people of Welsh heritage, like me."

That is how "welsh" is defined in my old dictionary. I'm too scotch to buy a new one!

During the attack, the woman started to befriend him “in attempt to gain his trust,” Nelson said. She told him she wasn’t going to call the police and would try to help him, Nelson said. She even went as far as to promise to arrange a job interview for a security or bodyguard position for the man the following day, Nelson said.

Isn't that telling you something right there about trusting realtors and used car salesmen?

I don’t mind paying $0,25 to use the ATM card at a gas station. That’s fair and square.

You must go to the wrong gas stations.

By the way, justme, the merchant usually pays a "private tax" of 1.2% for debit or ATM transactions. So when they charge you that $0.25 they are double dipping and you're paying two "private taxes". I don't see their gas being listed 1.2% lower than the guys across the street.

I don’t know if you get the same TV commercials in Oz, but that’s one of the GEICO cavemen.

I was going to ask how you got the pic of my next door neighbour, must be off a dating site...

what's a geico, is it like a gecko?

GEICO is a US insurance company, who in fact has adopted a CGI gecko as a corporate "spokesman"...err..."spokeslizard". www.geico.com

eburbed,

Thanks for sharing the realtor rape story -- they should understand that this is an hazordous profession!

renter_paloalto Says:

I don’t understand anything anymore.

Maybe that's because you are a pea-brained dumb-ass fucking troll.

Did anyone notice a subtle change in the SJMN Sunday Realty section?

The Sunday Realty section often prints transactions of the week (with time lag of course) in San Mateo and Santa Clara counties. This week, they went with a slightly larger font and a slightly wider space in between the lines. Why?

Because for example, the entire Palo Alto had only 3 transactions, the entire Cupertino had only 7 transactions. To give you a starker example, Morgan Hill, a neighborhood with 387 listings (per ziprealty) has had only 6 transactions. More telling is the highest $ transactions of the week. Typically, each County has ~5 highest $ sales listed. This week, you still get the usual $3M houses listed at the top, but the list started to comprise very ordinary homes in $1.2-1.4M range which would have never made it into the list in the middle of the summer!

If you haven't thrown out your Sunday papers, check this part out.

RE: realtor rape story

Now, now, let's not let our dislike of the REIC's abuses override our humanity. Nothing funny about that.

OO:

I've been reading the transactions section in Saturday real estate section almost every week since the late 1970's. No kidding.

During the recent housing bubble, SJMN added a new feature to the section: in addition to showing the sales price, it also shows the year and amount of the last time that the property was sold.

But earlier this year, some of the "previous sale" info is omitted. Even on properties in my neighborhood that I know have changed hands a few times. Remarkably, every single transaction where "previous transaction" is not omitted, shows a gain for the seller.

sybrib,

I think in a few years, the million dollar homes will have a good chance of populating the "highest sales of the week" column of SJMN constantly.

The sales records quoted in the paper of last couple of weeks only reflect the trend dating back at least 2 weeks ago, so they are quoting transactions that happened before the jumbo loan was yanked. I am very, very intrigued to see what this section will look like in the next 2-3 weeks.

Can't wait.

There's a great book called "Credit Card Nation".

If you don't have time to read it you can listen to an NPR interview with the author:

http://www.npr.org/templates/story/story.php?storyId=952566

OO

This week, they went with a slightly larger font and a slightly wider space in between the lines. Why?

Same thing happend to the lenders classifieds in the same section a few months ago, with lenders dropping like flies, the point/font size for the remaining lenders were increased, I'm sure they didn't have to pay for that.

Skibum,

Good call. Sounds fishy.

DS said:
Say FB bought a house for $400K, and had to short sell it for $300K. The lender gives him a 1099 for $100 capital gains. BUT the FB can document a $100 capital LOSS on the sale of his house

But the 100K was not the FB's capital to begin with - the FB borrowed it but did not pay it back, hence it is income, not capital.

SP

RandyH said:
at worst we’re free riding on the backs of the poor, ignorant, stupid, uneducated, and financially existential.

Darwin would see nothing unnatural about that.

SP

renter_paloalto Says:
I don’t understand anything anymore.

Maybe you should look at the otherside of this retarded story you're making up.

SP

>By the way, justme, the merchant usually pays a “private tax” of 1.2% for debit or ATM >transactions.

I did not know that. Is that for a plain PIN-based debit transaction, or is that for one of those "signature-based" debit transactions that presumably go through VISA International? For a while, the banks were promoting the use of signature-based debit card transactions. It must have been because they got a cut from the merchant fee.

renter_paloalto Says:
I don’t understand anything anymore.

Maybe you should look at the otherside of this REtarded story you’re making up.

SP
(sorry for the double post, I forgot to upper-case the right letters.)

Is that for a plain PIN-based debit transaction, or is that for one of those “signature-based” debit transactions that presumably go through VISA International?

PIN based. I haven't seen sig based for a long time. If you want to ask someone in your neighborhood, try your local immigrant dry cleaner. That's how I found out about the ATM fees. He tries to get his customers to use their bank cards instead of credit cards so he can save money.

He takes checks or cash too, but you don't get a discount for using them, though he'll like you enough to let you add your bill to the next if you're dropping off when you're a bit short.

oh well, we may as well go the whole hog, here's Maxed Out: Hard Times, Easy Credit and the Era of Predatory Lenders - James D. Scurlock all over again...

HeadSet Says:
I put that credit card article paraphrase in as an example of the absurd. I do not think anyone really believes that paying off credit cards every month is immoral.

at last, the confession :cry: the intent of a poster is not always clear, but i certainly saw the quoted article as the work of a shill or a seriously deluded individual...

Randy H Says:
I admit using credit card “transactors” as a straw man argument of sorts. At best we’re arbitraging the system; at worst we’re free riding on the backs of the poor, ignorant, stupid, uneducated, and financially existential.

Not really. The 'poor, ignorant, stupid' etc are just people who willingly took on a CC knowing that they will have to pay ~15% on any balance outside of the grace period as a form of personal loan, and accepted it and use it on those terms. (Some CCs don't even have a grace period.) Lots of ordinary middle-class families carry forward credit card balances month after month to tide them over on bills, as a substitute for cash, or to 'buy now and pay later'. The only thing to avoid is not being able to retire the debt over time, or being unable to service the interest, as with any loan. If everyone was a transactor, the banks would stop offering credit cards, or stop the interest-free period in order to raise some revenue. After all, the banks' line of trade is debt and interest. But we're not free-riding on others, just not giving the banks their hoped-for revenue. The intent of the banks is to harvest interest, and they sweeten the deal by offering an interest-free period. They designed it in as a feature.

However, we are seeing the effects of increasingly liberalised credit right now, both in housing and household indebtedness on CCs, with the spectrum of results from misers to spendthrifts.

hmm, GEICO is the major engine room of warren buffett's prosperity -- he then plays his insurance money on the stock market -- and puts it all back in the pot at the end of the great game by giving it to bill...

I am surprised this wasn't mentioned, but that GEICO lizard has a distinct Oz accent.

DS

Seems I've hit a soft spot. For once you're taking the liberal markets defense. This weaves in well with the topic of this thread, methinks. If you spend a couple minutes googling the plight of the working poor and credit cards you'll see there are plenty of arguments involving the way in which credit cards are structured to allow free riders like you to benefit from the paycheck-to-paycheck, downtrodden.

You are certainly free to disagree with those arguments. I do. But for you to so voraciously argue the illegitimacy of their perspective altogether probably reveals more about you than about them. Aren't you the stalwart defender of the legitimacy of everyman's perspective as nothing more than yet another narrative?

Really, it's OK to be on the other side sometimes. No matter how far you go one direction there's always someone willing to go further. Even if you're an all-organic, vegan, someone will pipe up and call you a tool for the industry because they're a "fruitarian" who limits their consumption to biodynamically grown, locally produced communitarian non-money purchased fruits.

yes. actually, i'm carrying a CC balance myself that is hard to retire, altho it's a fairly trifling sum. it's purely philosophical, i suppose i commented cos i couldn't see what the fuss was about. i just don't see that socia1ism should extend to credit card arrangements. the comments i've made i thought sum up the ethos of CCs tho -- i have never thought about the interest-free period in quite that way before, i'm certainly not benefitting from someone else's credit situation. that's like saying my mortgage is influencing someone else's or vice versa, when they are separate dealings with the bank.

wiki says that the geico gecko is of east london origin as a surprise factor, but cockney and oz accents are very similar -- and geckos occur in australia naturally, not so much in east london...

Temporary OMO: Fed adds $5.25 billion with overnight RP

OT, but I found it hilarious. A friend's daughter just graduated, got a job, and moved here. She needed help with buying a car, I took her trawling through the used-car contract-seller lot on Stevens Creek yesterday.

While she was messing around inside some car, I saw a rather nice '05 Volvo - I opened the trunk and one of them open-house sidewalk signs from ERA was still lying in there. Looks like someone was in a hurry... :-)

SP

>out about the ATM fees. He tries to get his customers to use their bank cards instead >of credit cards so he can save money.

Presumably by getting charged "only" 1.2% private tax instead of the 2-4% of the real credit cards.

>At best we’re arbitraging the system; at worst we’re free riding on the backs of the >poor, ignorant, stupid, uneducated, and financially existential.

If you had said that it was the the banks and credit -card companies doing this, I would have been more inclined to agree.

Back to signature-based ATM/debit VISA-branded cards: In 2005 (in other words, not very long ago), the banks, including big ones like BofA, were promoting that cardholders should ask merchants for signature-based debit transactions. They offered lotteries/sweepstakes, cash back, that sort of thing. This must have been based on banks making more profit on such transactions by charging the merchant, because they certainly were not saving money by making the transaction handling MORE complex (the signature, potentially paper handling).

It just occurred to me that one important fact was missing from the whole CC discussion, and it might not have been obvious to the international crowd here
at Patrick's:

The US has State laws that prevent merchants from EXPLICITLY passing the CC transaction fees on to consumers. In other words, they cannot advertise a lower sales price for cash/check, and tack on an explicit fee to cover the 2-4% CC transaction cost.

This is the mechanism by which the CC companies have gamed the system so that everyone has to shoulder the burden, whether they pay cash or not. This is the "You might as well because you have to pay for it anyway" type of marketing.

Reference: Wikipedia, credit cards. Excerpt:

In the United States, until 1984 federal law prohibited surcharges on card transactions. Although the federal Truth in Lending Act provisions that prohibited surcharges expired that year, a number of states have since enacted laws that continue to outlaw the practice; California, Colorado, Connecticut, Florida, Kansas, Massachusetts, Maine, New York, Oklahoma, and Texas have laws against surcharges. Regardless of what state one resides in or purchases a product, however, both Visa and MasterCard have publicly stated that surcharges on credit card transactions are against the rules. [13]

***

Hence, even in states where there is no law, the practice is forbidden by the agreement that the merchant has to enter into with VISA/Mastercard or Discover.
In effect, they are using their duopoly muscle to make their wish into a de-facto law.

justme said:
The US has State laws that prevent merchants from EXPLICITLY passing the CC transaction fees on to consumers. In other words, they cannot advertise a lower sales price for cash/check, and tack on an explicit fee to cover the 2-4% CC transaction cost.

And yet, there are at least two establishments in the Cupertino Village that give you a small discount for cash. They don't "advertise" a lower sales price, so technically they are not really breaking any agreement with the CC-industrial-complex (tm) :-)
In fact, it is so unadvertised that I did not even know about this until some colleagues clued me in.

SP

I get 5% gas discount on gas and 1% discount on everything else. That is why I use Chase Mastercard for EVERYTHINg .... My average monthly rebate is around $50.00.

And if I'm not mistaken, Visa, MC, et. al. are not considered _banking_ networks. Visa itself is an odd entity. It has no customers, only members. It doesn't actually own the financial exchange between the merchant, bank and consumer; it just arranges for that transaction "between its participating members".

The regs are over my head but I believe a lot of this rigamarole is designed to avoid US and State banking regulations. I seem to recall that a number of large banks tried at one point to promote ATM debit cards without Visa participation, but they quickly ran into a bunch of regulations over who and when they could charge transaction fees. Since Visa isn't a bank but a member network its a lot harder for the regulators to get their fingers into the system. The CC industry also has effective lobbyists and very aggressive lawyers who regularly try to get state laws restricting their market power thrown out in Federal court on interstate commerce grounds.

Back to the gas stations charging $0.25 (mine charges $0.40 which is ironically right around 1.2% of the average fuel purchase): I'm not sure that doing this is actually legal. It may be a grey area that no one's challenged yet. If your ATM card is Visa then they're violating state law and their Visa merchant agreement (unless they have a custom agreement, which is possible). If you ATM card isn't Visa, then they might be falling afoul of banking regs, like having the right to receive cash back on every ATM purchase -- usually a minimum of $10.

"CC-industrial-complex" (TM)

I move for inclusion, a 2nd anyone?

Welcome to Oregon (home of the underground economy!)

We've been doing this for years! Whether it's auto repairs, landscaping or getting tooth decay treated... CASH TALKS in OR! (I've often wondered where that "mystery pitcher" magically appeared from?) "Oh, didn't that OTHER fellow order a pitcher? Don't worry about it hon!"

I don't see ANY problem (moral, ethical, ideological, etc.) with using a credit card for my own convenience, and paying off the full balance to avoid getting hit with interest charges. The reasons are very simple:

1. I _am_ following all the terms of the agreement that I have made with the CC-company. If they want to change the terms, they are free to do so - at which point I can decide whether those new terms are acceptable to me.

2. The terms are clear - as a card-holder, I am using the issuer's card instead of their competitor's. In exchange for this, I get the convenience of paying by card and not carrying cash on me. The billing cycle is the company's choice - they opted to bill me once a month. If they want to change this, reduce the grace period, etc., they are free to do so. (see #1).

3. The same terms are applicable to everyone - including the late-payers and balance-carriers. I am not asking for, or taking advantage of any special treatment here.

4. Carrying and using the card has other occasional penalties relative to cash payment - Forex transactions are almost always unfavorable to you. The CC-company collects and sells information about your purchasing habits to their 'affiliates'. And you cannot get into the express line at the supermarket (assuming you have any dignity, of course, because I invariably see some asshat with 14 items in the 10-item cash only lane). As a card-holder, I have to decide whether the convenience outweighs these downsides.

In other words, it is a pretty clear business agreement amongst adults who choose a course of action that is appropriate for them within the terms of that agreement. So, even if this means higher interest charges for cc-debt-users, I don't see what the big moral dilemma on being a no-balance card-user is all about.

SP