Debt for Debt: 'Financing the American Family' (Into Oblivion?)

In 2003, U.K.-based HSBC Holdings (the largest public company on Earth) bought the U.S.-based Household Finance Corporation (HFC) for $15.5 billion. At the time, HFC was known as Household International, and had been lending directly to U.S. customers with 'subprime credit.'

According to http://www.OligopolyWatch.com :

"The Household Finance acquisition was quite significant. HFC is the second largest consumer lender (homes, mortgages) in the U.S., after Citigroup. It is also a major issuer of credit cards. While the company is still digesting the HFC move, it is considered to be in the market for a regional US bank, trying to expand beyond its New York state base. As the U.S. industry consolidates, there will be few such opportunities left in a few years. HSBC is poised to grow. It has a strong expertise and growing presence in mainland China, the fastest growing economy in the world, and the world presence to handle international trade agreements with that country and others. It has a big presence in international banking havens (Switzerland, the Channel Islands, Panama, and, recently, Bermuda) for its numerous private banking clients. Like several of its main competitors, it has far more influence about where money circulates and ends up than any national government."

According to MSNBC.com, when British Prime Minister Gordon Brown announced the $88 billion recapitalization/partial nationalization plan for the country's largest banks in October 2008, HSBC:

"endorsed the recapitalization plan but said it intended to rely on its own resources and not take on the government as a shareholder."

For more on HSBC, visit:
http://www.citywire.co.uk/professional/-/news/fund-news/content.aspx?ID=317948

http://www.guardian.co.uk/business/2008/oct/08/hsbcholdings.banking

http://link.brightcove.com/services/link/bcpid1670081732/bctid1858922516

http://news.morningstar.com/newsnet/ViewNews.aspx?article=/DJ/200810080452DOW...

To download a Quicktime movie file of 'Financing the American Family,' visit:

http://www.archive.org/details/Financin1935

Category:

News & Politics

Tags:

• economy
• 1930s
• great
• depression
• banking
• finance
• household
• financing
• corporation
• consumer
• credit
• crisis
• UK
• HSBC
• mint
• subprime
• loan
• debt

[schizophrenic123]

I think it`s pretty safe to say standards have slipped a little.

Debt is treated as an entitlement now.

[FlintPublic]

Some say it's treated more like a weapon.

[Boomer1949]

At one time in my life I got a loan from this organization and was glad to have done it. This small temorary loan wasn't the cause of all of this crap going on now. It began with the Charge Card. One of the first of these was from Sears and JC Penny's. That spread to Visa and Master Card. The more people began to rely on Credit, the less employer paid them, which increased the dependancy on our credit cards.

[FlintPublic]

Thanks for the input, Boomer1949. I agree that there's nothing inherently wrong with loaning money to working families. Indeed, equal (or more equal) access to money banks readily lend to wealthy individuals & corporations was an important & just move. I just worry anytime banks lend money to help those already strapped with debt pay off that debt with more debt. Once that genie is out of the bottle, charge cards, credit cards & subprime mortgages aint far behind. Thanks again for commenting.

[Boomer1949]

I agree with your statement of lending money to people who are already in over their heads is a stupid move, not only by the lenders but the borrower, as in the case of consolidation loans..dumb, really dumb. I have to say I learned that the hard way..LOL!

[FlintPublic]

Too true! And that pie chart in the video seems to boast that some 75% of the loans they made under that program were used to pay off other debts. That seems less like a solution and more like another downward catalyst. It all comes down to making jobs pay. There was a great discussion of that point on Bill Moyers' Journal last night. Look up his interview(s) with Michael Zweig. Worth checking out. Take care, Boomer.

[Boomer1949]

I'll do that, thanks.