On the surface, JPMorgan Chase’s first quarter 2009 earnings look auspicious, reversing the red ink of the last few quarters and exceeding what was expected by investors.
... Today the disastrously managed credit card business threatens to be a major impediment in the economic recovery because the only way the banks can extricate themselves from the mess they have created is literally to shut down the industry. They may not view it that way, but their customers do. When you punish your best customers, the ones who pay on time and pay far over the monthly minimum, by (1) forcing them to pay higher interest rates, despite the lowest interest rates in the country in over fifty years, (2) increasing their monthly payments (3) shortening the payment terms and (4) reducing or even cancelling their credit lines, you are saying you don’t want to be in the business.
The excuse the banks are using is that the economy is difficult and everyone has to share in the pain. But who was sharing in the profits for all those years when the business was the most profitable one for the banks? Nobody but the banks reaped those rewards. They should now suffer the losses on their own.
Government involvement in industry is not good for industry or for Government. But the impact of what the banks are doing to their GOOD customers is so harmful to the economy, that it behooves the Government to open its eyes to it. It has a responsibility to its constituents. ...
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