Banks have soaked up a lot of flak for not handing out more loans to small-business owners in need of cash. Now comes a survey from an outfit called PayNet that suggests there’s a sound financial motivation for banks not to lend (besides greed). PayNet (which bills itself the “premier provider of market insight to the commercial credit industry”) says a primary reason banks have slammed the vault is they’re not getting paid back for loans they’ve already made. Accounts behind six months or more (also known as accounts never to be repaid), climbed to 0.91 percent in November, up from 0.87 percent in October. In other survey news, PayNet says overall business lending in November 2009 fell just 11 percent from November 2008, the smallest year-over-year decline since the recession began. (This was called “encouraging” by PayNet president Bill Phelan, who, along with others in the economy biz, have redefined optimism as, “Hey, things could be a hell of a lot worse.”)
America: the new third world? In another sign of the times, Grameen Bank, which till now has plied its “microfinance” trade in countries like Bangladesh, giving very small loans to poor yet hardworking entrepreneurs, is expanding in the U.S. Time magazine reports that nonprofit Grameen already has 1,700 borrowers in New York City and recently opened for business in Omaha, Nebraska.
Your next credit card bill: read it or weep. You know that old saying about a handful of sand? The more you squeeze it, the more it slips away. Credit card companies are like that. Squeezed by consumer protections in the new Credit Card Accountability, Responsibility and Disclosure Act (which takes effect in February), a lot of companies are rushing to change the terms on their cards. The most popular ploy: shifting people on fixed interest rates to variable rates. Why? Because the new law says cardholders must get 45 days’ warning if their fixed rate is going to change (and the right to refuse the change) but no such requirement applies if you’re on a variable rate. With the fed’s interest rate at rock bottom, credit industry analysts observe that this is pretty much a can’t-lose move for credit card companies. “These new rates basically have an unlimited upside but no downside to the issuers,” says Gerri Detweiler of Credit.com. “There’s no ceiling and consumers will never again see a low interest rate.”
Johnny Paycheck, where are you now? You remember Johnny, the guy who sang “Take this Job and Shove It” back in 1977. If only Johnny were alive today…he could make a comeback. A report from the Conference Board shows the majority of American workers share the sentiment of his hit song. Only 45 percent of those surveyed say they’re satisfied with their jobs, down from 52 percent in 2006 and from 61 percent in 1987. Now the kneejerk reaction to these unhappy employees might be: “Shut up! You should be happy you even have a job!” (Or, alternatively: “Shut up! You should be happy you don’t write a blog for a living!”) But this rising tide of anger threatens to sink all our boats, says the Conference Board’s Lynn Franco: “The downward trend in job satisfaction could spell trouble for the engagement of U.S. employees and, ultimately, employee productivity.”
Another kneejerk reaction to unhappy workers. “Shut up! You should be happy you’re not cleaning windows on the Burj Khalifa!”