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[Strike Debt] & [Rolling Jubilee]
A Very Perturbed Marmoset
Registered User regular
Registered User regular
What do you all think of Strike Debt (http://strikedebt.org/) and its project the Rolling Jubilee (http://rollingjubilee.org/)?
Bad idea? Good idea? Something that would destroy a chunk of the financial sector if it caught on?
I think it's an interesting way to crowdsourcing aid to persons who are kept in poverty by their debt, and thus more reliant on going further into debt.
Bad idea? Good idea? Something that would destroy a chunk of the financial sector if it caught on?
I think it's an interesting way to crowdsourcing aid to persons who are kept in poverty by their debt, and thus more reliant on going further into debt.
A Very Perturbed Marmoset on
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It's probably a little closer to what a lot of the bank bailouts could have/should have looked liked, but as a long term project, it seems counterproductive.
I'm not so sure. I imagine they lenders sell these things in graded buckets and if they're truly paying 5% of the outstanding balance, thems are probably some shitty poo poo notes, almost charge off worthy debt. I doubt there is much of a market for firms that actually want to try and collect this drek.
It would just crowd out debt collectors (BOO HOO) once the market value of the debt rose above what they thought they could recover at a profit.
EDIT: corrected. I shouldn't post while brunch tipsy struck out the errors, but left them in as a personal reminder to suck less.
*ugh. I know better than this. smh@deebaser
They won't really have the opportunity. If you're so far gone into default that the bank is willing to sell your debt for 5 cents on the dollar, your credit is already fucked.
I'm beginning to suspect they have no idea what they're doing and the next great recession is going to come from a row of dominoes collapsing on credit card and similar debt
I may be wrong and maybe we can light the @ronya signal so he can econ nerd it out for us dumbs.
My thinking is that if banks are lending on the basis that 94%* of the loans will make good and 6% will be problematic.
Of those 6%:
2% will be completely noncollectable because of bankruptcies, fraud, and deadbeat gypsy magic
2% are worth going to court, getting a judgment, and garnishing wages
2% are a pain in the ass and might as well be sold to a third party to recover something.
I don't see that last bit representing a large enough number or ever hitting a price that's high enough where debt collectors are bidding to get their hands on that poop debt and banks are like, "Who needs due dilligence when we can lend $100 and recover $15?! Lend out ALL THE MONEY! Cocaine and hookers all round!"
*all these numbers are made up.
If its a one time thing then the risk doesn't exist.
I think it's neat, personally.
The problem isn't the debtors, it's investment banks. If they know people will buy bad debt all day long, they'll make long bets on absolute garbage, knowing they don't really have a downside. Credit bubble 2.0!
Consider this post limed. I 100% agree with SKFM.
No bank is going to start lending out willy-nilly because of Rolling Jubilee. But if this were implemented on a large enough scale to make an impact, then it would reduce lenders' risk-aversiveness, which is a bad thing.
They're not dealing with the debtors directly; they're purchasing the bad debt from collection agencies. The debtors' credit has already been wrecked; the banks already have taken a loss by selling the debt at a fraction to the collection agency.
This is charity for collection agencies.
They can't really send out a 'you're fucking welcome, here's a flyer' letter. See above.
And I strongly disagree that this is more productive than "camping," but that gets into a discussion about the benefits and drawbacks of the Occupy camps, which is a huge can of worms.
the "no true scotch man" fallacy.
They can send letters to the people whose debts they buy. It's worded rather confusingly in their FAQ, but I think you're mistaking the bit where they say that they can't pick and choose individual debts to buy as they have no idea whose debts they bought.
I think the idea that it will actually raise people out of poverty is optimistic at best because the reasons the debts piles up and could not be pad off in the first place will still be out there.
Overuse of lending, lack of good well paying jobs, insane housing prices, effective destruction of parts of the social safety net and crushing health care costs will still be out there to keep people from actually moving up economically.
You're right; I misread the FAQ.
I still think that this is basically negotiating with terrorists.
the "no true scotch man" fallacy.
-They don't bother reporting or insist on making a STATEMENT to the credit reporting agencies about humanity, the moral bankruptcy of,like, society maaaannn, which experian et al interpret as "CHARGE OFF", which would hurt a little bit.
-They say "Yup, we're good. Paid as agreed!" and it helps the debtors credit a little bit.
That it was an outstanding debt at one point though will effect your credit but not as bad as a current one.
This comes from obsessively reading news stories and help and advise threads about debt, not like actual knowledge, so take it with a grain of salt.
I think deebaser's analogy is pretty apt here, wont fix the problem but at least it helps people.
The sick undesirable slaves that came over on boats and barely survived the crossing were often just abandoned on the dock if nobody would buy them. You're proposing (metaphorically) to make them profitable to sell, directly increasing the profit and the incentive of the slavers.
I don't think this is the metaphor you want to use.