U.S. Stocks Erase Gain as House Votes to Limit Card Rates

[progressiveGI]

Source: Bloomberg

U.S. stocks erased most of a 156- point rally in the Dow Jones Industrial Average after a House bill to curb credit-card rates spurred concern about bank earnings, outweighing the Federal Reserve’s plan to keep interest rates at a record low.

Wells Fargo & Co., JPMorgan Chase & Co. and Citigroup Inc. led financial shares to the steepest loss among 10 industries as the vote moved up the start date of many rule changes that will make it more difficult for lenders to raise rates on existing credit cards. The Standard & Poor’s 500 Index wiped out most of a 1.5 percent rally triggered when the Fed said it will leave interest rates at “exceptionally low” levels.

“The credit-card regulation and regulation in general, how much Congress is going to clamp down on financial company activities, is important,” said Giri Cherukuri, who helps manage $1.5 billion at Oakbrook Investments in Lisle, Illinois. “To the extent that Congress keeps their hands off of things, that’s better for financial stocks and financial stock prices.”


Read more: http://www.bloomberg.com/apps/news?pid=20601103&sid=anlKeQIz.vz4

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I pay off my credit card every month on time - carry no balance - have never been late - i just received a modified credit card agreement in mail that jacked up my interest rate to 30% - the credit card companies are trying to lock in high rates for when the new regulations go into effect

[FBaggins]

1. "To the extent that Congress keeps their hands off of things, that’s better for financial stocks "

Gee.... that's not what they were telling us a year or so ago.

If the federal government had "kept their hands off of things" we would have fewer banks (and lower financial stock prices for most).

[Interloper]

2. Rip Off

They think that the value of their stock is contingent on their ability to swindle us.
I think that they are trying to convince us to stop using their cards. Good idea.

[CoffeeCat]

3. Can I be a Wendy Whiner for a second?

Whining starts....NOW!

Thanks, for nothing Congress. You allowed the credit-card companies to charge whatever interest rates and
horrendous fees they wanted--for years. During the economy boom--you guys gave these credit-card companies
free reign. They could give a card to anyone that had a pulse. The monthly payments were so low, and so
many people thought they could live beyond their means without any pain.

We were bilked during the hey days. Now that the economic dark cloud settles in and there is no more money
to be pilfered---NOW you start clamping down on these credit-card companies. NOW you limit how much
they can screw us. BUT---you don't start limiting them for several months...

...which gives the credit-card companies another window to take what's left from their paying customers. So, these
companies are jacking up fees and rates on perfect customers--squeezing out those last few drops of blood.

All of this...the collusion between bought-off-and-bribed politicians and these corporate sharks...is an abomination.

Maybe I should just be a good little soldier, and thank my lucky stars that the politicians did SOMETHING negative
to these finance- and credit-card companies--but I'm just too ticked about what has happened to our economy and
to us as citizen consumers.

So tonight...I whine.

[paulsby]

4. i was trading it today

the selloff from the highs was WILD.

it was one of the more dramatic days of stock action i have seen in years, even with the FOMC

[DBoon]

5. And I'm sure that when slavery was abolished

the share price of cotton farms dropped, as they wished the Federal government would keep their hands off

[w4rma]

6. good analogy. (nt)

[msongs]

7. low interest rates = banks gouge people who work and save. then banks turn around

and gouge people who live on money they borrow. a double gouge thanks to federal laws. thanks, banks.

Msongs

[Vidar]

8. Time to make usury a hanging offense.

[merwin]

9. Try logging out and looking at the ads on this page...

All credit card offers from AmEx and ads for Capital One.

Ironic?

[dipsydoodle]

10. Which only goes to prove

That Mozilla Adblock really does work cos I logged out to check and got sfa adverts.

[merwin]

11. I normally run Firefox w/AdBlock Plus but for some reason am in IE.

Probably because I was doing something for work that required IE and left the window open.

Honestly, I'd put up with ads if they didn't pop up 10 windows and take up half of the screen... oh, and also infect your computer with malware when you run across an ad server that's been hijacked.

I run across so many computers filled with malware at my job that I seriously consider just not giving them back their computers :) I mean, if you don't have the sense to avoid clicking on every "You've won a free iPod" link you really shouldn't be on the internet.

Although I was very surprised when one of our clients, instead of clicking on the link in the e-mail, reported to us a fake security bulliten supposedly from Microsoft that was very impressive and actually looked authentic.

I believe this is the one they got (note that it's an article about it, not the actual page):
http://community.ca.com/blogs/securityadvisor/archive/2007/11.aspx

[Art_from_Ark]

14. The ads on my page are all for trading stocks and gold

with nary a credit card ad in sight

[dipsydoodle]

16. I've got a feeling

that the ads , as I recall , are directed to where we are. UK ads for example would be a fat of good to anyone in the USA. :shrug:

[Igel]

12. 30%? Wow.

My CCs have fairly high rates now, too, and we pay them off monthly. We also use them a fair amount, so even at $0 finance charges/year they're still making a decent amount.

Oddly, I have to wonder if they would have been increased in the absence of the law. As it was, if my credit rating suddenly took a nosedive they could adjust things quickly. Now, they can't.

So, on the one hand they have Congress-induced motivation to pre-emptively raise the rates. On the other hand, there's no way to tell if they wouldn't have done it anyway.

But the timing was odd. It happened a few weeks after Congress started talking about having the law take effect early, not soon after the law was passed. Whether or not it really was "odd" timing depends, I guess, on how quickly the CC companies can move--did they react slowly to a threat that was months away or did they react quickly to a threat they saw as imminent? (Keeping open the option that they acted for other reasons.)

[harun]

13. Some of my co-workers reported the same, cards going up to 27-30% APR.

[BREMPRO]

15. my citi card just went up for no reason from a ridiculous 19% to criminal 29%

I have great credit, and don't always pay off my balance- so i should be a customer they want to keep. and CITI execs thinks i'm ever going to use it again? wrong. I just paid off the balance and put the card in the drawer. What ever happened to anti-trust law and laws against usury? oh, that's right we have laws that allow credit card companies to "shop" states for lax regulations. That's what the republican "health care" plan does. That's a good idea.