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Bank of America Not Raising Rates? Not really ! Smoke and Mirrors

Bank of America recently announce that they would not be raising interest rates on credit card holders. Read This From Washington Post.

What they are in the precess of is re-calculating they way you are charged interest. For instance:

You already have a inflated rate of 16.99% (or more) at this point.

You will be converted to a variable rate APR that is now indexed to your current margin over the published prime rate. Currently 3.25% which leaves you with their index of 13.74% which will not change now.

If the prime rate goes up (very likely to have two rate hikes in the next year) you would pay the 13.73% + the new rate.

In effect, they will be blaming the government on the increase of your credit card rate.

This, I can only imagine, will be followed by many credit card company’s as the new law governing how rate hikes are applied, will take effect early next year.

This reminds me of the 90’s when the utility company’s were advertising they froze the price of electricity to save you money (like they were doing you a favor) when in reality, the price trend was going down and they were locking in some big profits.

For the life of me, I can not seem to figure out just how it is profitable to raise rates and cause additional bankruptcy’s unless it is from a tax break that the federal government should eliminate in response to these kind of actions.

I propose an option whereby a person could agree to pay-off in 12 months and get a lower interest rate of say 9.99%. This would go a long way in shoring up those high debt to cash on hand ratios that got us in this mess and allow taxpayers to have their money back instead of US giving our tax dollars to shoring up the banks and paying high rates for their mistakes. (paying for it on both ends). And would stimulate the economy by having more cash on hand by consumers at the end of the period.

This could be done as a month by month basis. If you take a snapshot of a account and give the 9.99% and require a payment of 15% of that snapshot each month. If account holder does not for-fill, back to old rate + fees that would have accumulated anyway.

A one time deal stimulus while they figure out how to hold these loan sharks at bay. They are pretty crafty folks so I’m not sure it is possible.

Well Respected Bill Moyers Journal Hits Home Run On PBS !

If you were to sum up many of the posts here about the relationship of Big Corporations and the Government and our fate as a nation, Bill Moyers Guests said most all of it in his interview with MARCY KAPTUR & SIMON JOHNSON.

Please watch the video or the podcast HERE at the PBS.org site.

Thank You Mr Moyers. Please do not let it end there !

For more info on the Glass Steagle Act they referred to Click Here for a WIKI

The Sherman Act and Cell Phone Monopoly, Apple, AT&T, Verizon

For those not familiar with the Sherman Act, Please read this WIKI first.

The Obama Administration is dusting off the rule book made to keep company’s from unfairly dominating markets and prices. This rule book of laws has not seen the light of day for a while and has a serious long list that it should have applied to in the last 15 years. Banks, Oil Company’s, Oil Refineries, Insurance, Airlines are just the first to come to mind.

At the heart of this current dusting off of the act, is the activity of the cell phone company’s and cell phone manufactures. What most folks do not understand is how they have been manipulated without their knowledge with current market laws and exclusive contracts.

This goes further than just Apple giving a exclusive contract with the iPhone to AT&T because of these facts.

1 – There are 3 basic technologies that cell phone networks use. You can not take a phone from AT&T to Verizon and get service. It could not work if they wanted it to.

2 – When the deal was cut between Apple and AT&T they bought up many existing cell networks using the same cell technology (GSM). Cellular One was bought-out just for the iPhone well before anyone knew what a iPhone was. A new deal is coming with Apple and Verizon probably in 2010 and is why Verizon bought Alltel. So AT&T virtually has a lock on GSM cellular services as well as Verizon having a lock on CDMA cell services in the United Sates and Apple is getting a cut of services provided within the cell network (they are not just selling phones).

3 – Old law still exists when the Original Ma Bell AT&T (not to be confused with “the New AT&T”) with regard to how many cellular networks there can be in any original “baby bell network”. That number is 3. So you have AT&T, Verizon and Sprint leading the way exclusively as the leaders of their respective cell technology that they use. With the power that that brings to the market and exclusive deals that prevents a would be competitor from making a deal as they are not going to be big enough to supply the market for a exclusive position and those smaller cells are now vulnerable to a take-over when they eventually become worthless.

Now I am certain we will hear the muddying of the water once again by the same old neo-capitalist saying that these deals benefit consumers but explain to me how I can have a”Google G1s Cell Phone” when it is only offered through T-Mobile and they have no service for 50 miles of me.

If I want a similarly diverse phone like a iPhone I am left with AT&T and the Apple Store to allow me to do only what they can sell me so where are my choices? OK I have an Iphone that I paid $500 for and a 2 year contract for service that is not being delivered and who do I take the phone to for service as I can not get the bandwidth to do the fancy things Apple advertises to me even if I wait till my contract expires? The Google G1 uses GSM tecnology just as AT&T does but I can’t have(buy) one without the T-Mobile Service in my area.

To take this last a bit further, what happens if AT&T would fail (could happen from a class action suite from not providing services they charge for), who would I take the phone I invested $500 in to for service? Will they need bailed out?I have enough $500 paper weights.

Because these devices use the Public Airwaves Trust, it is double troubling that some company can have a exclusive on their use and what gets used on them and how the user is allowed to interact with their own device. They do not rent these, they sell them. The phone manufacture does not own the network, airwaves or device when purchased.

Regardless of a simple immediate solution that I will suggest, it should not take away from the fact that this clearly is a example of what the Sherman Act was amended to rectify and it is the office of the President that is tasked with Executing the Law through the Justus Dept.

A quick solution that will allow some space here while the President reacts and a legal battle most likely goes through the courts is to allow a 4th or perhaps 5 networks to enter each of the old baby bell networks or remove the restrictions all together as it will not progress to higher levels except where populations are higher.

The problem with this idea is that having that many cell towers in a area is not only unsightly, it is a health risk.

Its either that or a move to bust the mergers of these cell company’s of the last 7 years, and/or not allow exclusive contracts for device distribution where a similar competing carrier of the same technology is not available and/or no 2 year contract to buy one.

In any case I’m Glad to see some sunshine on the Sherman Act as it could be kept busy for the next 12 years just undoing things that have happened in the last 5.

Hey FCC… I want My Airwaves Back !

Do you listen to good old Public Radio and/or TV?

If you don’t listen to radio anymore, I understand.

To the FCC I say “I want my airwaves back”.

I fully support the right of free speech but it does most often come with a price. But gee-whiz I can not listen to the AM radio while traveling when 90% of the stations are carrying no more than 3 different Talking Heads and FM is starting to turn the same way. Can’t these folks take their agenda to XM and if folks want to pay for it they can hear all of it their hart desires. Continue reading Hey FCC… I want My Airwaves Back !

The Blame Game – Republicans Have Made Their Mess Obamas

Not many politicians will stand up and take the heat from problems they create. But it sure seems funny (not real) that the right wing talking heads have seemed to have created blame for the jobless rate and high deficit on Obama.

As I have said for more than 20 years, there is nothing a President can do to effect the economy in anything short of 18 months, good or bad. This means that for the first 18 months, you will be seeing the results of previous President and Congress (who has control of the spending anyway). There is one exception Continue reading The Blame Game – Republicans Have Made Their Mess Obamas

Moot Court -Democracy In Action -Everyone Gets Education

Well, I am not Calling any of our U.S. Courts Moot. For those that have never herd of Moot Court, it is a very good way for those students who are practicing law to get a real feel of a court room practice and In front of real judges sometimes Supreme Court Judges. A situation many are not likely to ever face but forces them into a real understanding of the principles and practice of law.

Students are given a challenging set of circumstances to argue under the law. Most are very principled in the constitution and conflicts within it. These are very interesting to watch as Continue reading Moot Court -Democracy In Action -Everyone Gets Education

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