dwy000

20% interest rates reflect default risk. If it was excessive, other lenders would swoop in there and offer cheaper credit.

I cant figure out if thats a compliment to me or an insult to your own kids.

No foresight? Its the ultimate foresight! The cc companies are looking out there and asking who doesnt have a card right now, who is likely to have an above average income in the future and who can i get in with who will need lots of banking down the road? All of those are college students. Its incredible foresight.

Well ultimately it is the bank that pays the price at the end when the customer defaults. Which is why rates are set so high.

Because the cc companies know they are the most likely group who is going to be great customers for decades to come and want to get them early. And then cross sell them.

Nobody applies with that intention but they know that is the outcome if they dont pay it off every month. And they know their own likelihood of not being able to do so which is why they take all the introductory offers and transfer benefits. The only people who dont care about rates on cards are people who pay it off every month and its moot.

Doesnt almost every loan have a legitimate means of repayment when its issued? If there isnt, the applicant is rejected. Ironically, its student loans that have the least legitimate means of repayment because its just a trust me on finishing school and getting a job. The interest rate is determined by market forces required to cover a return after defaults.

This is actually my point (and seemingly Greg's). Getting a credit card is a personal choice. Its not forced on you. You know the rates when you sign up. Yes, CC companies turn people down and thats a good thing because the people they turn down are the ones most likely to default - if they accepted them the interest rates would need to be way higher. There seem to be 2 issues here. 1. Should there even be subprime or similar lending to those who cant afford it; and 2. What interest rate should they be charged. The first is answered by the fact that we are a free society and it provides needed credit for those who have few other options. And most people happily apply. The second is just market forces. Thats the rate thats needed to justify providing credit to this group. If you cap it, as everyone has pointed out, the reaction will be to immediately cut off needed credit for a massive portion of the population

Because like any personal loan it provides financing for those who either have a temporary need for funding or who have no alternative funding but still need to live. The interest rate only comes into play as a risk/reward for those who provide the credit. If defaults drop, competition drives rate compression thru switching cards and introductory rates. If you are suggesting that there should not be credit offered to anyone who actually needs it then you would eliminate mortgages and corporate lending and pretty much most banking.

Its not usury if its required to earn a return on capital through the credit cycle. The people regularly paying 20-30% are also the ones who are the first to default because they have no other source of funding. Look at all the surprime and auto lenders who bite the dust when the economy slows. I didnt hear much whining when Trump cancelled Biden's $8 cap on late fees.

Thats because the market has clocked onto the "Trump just lies about everything" mantra and reacts accordingly. Plus multiple GOP senators have told him they'll freeze out his replacement if he doesnt back off

Its arguable whether it is good for society as a whole but thats true of many, many things (alcohol, gambling, etc). We live in a free society and products get developed where need and demand encourage it. Providing credit for personal need is probably older than mortgages. This horse left the barn centuries ago. Capping credit card interest is not only a horrible way to tackle the perceived problem (because it punishes those who need it most) but it drives activity to worse providers. This isnt a solution, its a headline and the consequences are worse than the problem.

Agree. Every time the govt steps in and distorts the free market it has, generally bad, unintended consequences. Look at rent control. Driving the natural market underground is rarely a good outcome.

It's not a generalization at all, its data. Over half of Americans carry credit card debt. They pay for it - thats why rates are at 20% and people who dont carry debt get free 30 day financing. This is so obviously irrational that the only people I see supporting it are the far left (who dont understand basic economics) and people who blindly go along with anything Trump says.

Which is most of America. What do you think happens after the year at 10%? All those people who still have credit cards will now have engorged balances that jump to 20% and theyre in a worse position.

They wont have to pay them because they wont be spending. This would be devastating to the economy. And its not usury if those rates are needed to profitably operate the business through credit cycles. Theres a reason this proposal was originally put fwd by AOC and Bernie Sanders. Because its so socialist that even the democrats wouldnt move it fwd.

I think its also in the margins. If you have 50% operating margins over a longer period of time you probably have a moat. Bezos' old "your margin is my opportunity".

Well thats kind of the question. Yes they probably could and they could also raise the price on the $1.50 hot dogs and $4.99 chicken. But they dont. Because the minute they do they start to undermine their reputation for putting the customer ahead of maximizing profit. Its exactly the same question as to whether its truly a moat if you cant raise prices.

That was my point on geography not the product. You can increase prices right up to the delivered cost from the next closest aggregate mine. The product itself is a commodity. Charter can increase prices in the 30%+ of their geography where they are the only option for gig speed broadband. But they cant where there's competitors.

Not sure id consider broadband something that no one seems to want but I agree on the value of sports teams (although all that pricing power goes directly to the players not the owners).

If you consider a moat to be pricing power then thats a very different thing than most of the companies listed here. Aggregates dont have pricing power. Coke doesnt have pricing power. Costco doesnt have pricing power. Real estate companies dont have pricing power. Disney and Comcast have incredible moats on their parks. Prices go up every year and the parks are still packed. Vegas as a city has a moat, but over exploited their pricing power.

Half of these companies dont have pricing power despite the "moat". Coke doesnt. Costco doesnt. Comcast, Charter, the aggregate companies, the real estate companies, MSG, all have moats because of geography not because of a differentiated product.

Some people gamble. Some people play golf. We have to get our kicks somehow.

All I have to go on is what's discussed here. And every single issue (every one) you have supported even when it contradicts a previous position of his. When we discuss an issue and you come out and say that you disagree with Trump and he is wrong we will have something to discuss. Until then you have met every bit of the cult definition you had me post yesterday (maybe not the chanting part but I dont know how you spend your evenings)

No. But when they speak up supporting Trump on every single issue that has come up - even when it is a contradiction of his previous position and even on ones that make most republicans shudder, then what else would you call it?