The New York Times continues its series on plastic, looking at how capping interchange fees on credit cards has played out in Australia. In Australia it’s basically raised costs for people who kept no balance and got lots of airline miles, aka the better-off people, who were being subsidized by those with poorer credit and were presumably poorer, period.
Mike Konczal points out that the current system here is a redistribution of wealth from the poor to the rich that plays out in rewards programs and low interest for those at the top, but fees and 30 percent APRs at the bottom. Felix Salmon says we should also cap interchange fees and “force the banks’ income sources out into the open.” That will decrease credit-card usage, which is a good thing.
— The IMF says half of the financial system’s trillions of dollars in losses may still be hidden. This would fit with the paper-it-over strategy we’ve seen since February or so. Barry Ritholtz says “This is due in large part to the suspension of Mark-to-Market and the current accounting principles of Mark-to-Make Believe.”
— Gary Weiss, who loves to follow the latest exploits of Overstock and its eccentric CEO Patrick Byrne, points out that the company paid for “travel and such” for two writers for the conservative American Spectator magazine who wrote a piece about the firm’s workforce. The two disclosed that fact, as they should have, but Overstock, which is under a cloud for accounting problems, sure got some great press out of it:
At the company’s invitation (and on its dime), we went to tour the Overstock’s warehouses in Salt Lake City, Utah, in September. We found a company that was working to enhance the quality of its workers and rewarding them for their efforts.
— Happy Thanksgiving, Auditeers! See you on Monday.