Recession of 2008 and impact on the DR

[mountainannie]

note also please

that it is really not GROWTH

when the net increase is for LOANS

which are offerred at extremely high

to my mind USORIOUS interest rates....

to get the population indebted.....

We did see how that worked out in the US, did we not?

So untill I see FIXED RATE 30 year mortgages at below 8% here

you will not be able to convince me that there is any real
certain dependable

growth

[mountainannie]

now I just logged into my AMEX account

and got a FRAUD ALERT notice

so I will have to call the number on the back of my card to talk with them

FRAUD ALERT

FRAUD ALERT

FRAUD ALERT

that is what we are all saying about this country!!

CLEAN IT UP!

we like it here

[cobraboy]

Debt is not growth, and all the pretty buildings, fdables told by gubmint mouthpieces/institutions and anecdotes won't make it so tofolks who actually understand economics. A leased car is not wealth.

My Visa got hacked again last week...the third time in almost 3 years...right after a purchase at Ochoa. My debit card has been hacked twice. Kudos to the nice people at the Fraud Department of my cc company for the heads up someone from the DR was trying to buy $4400 worth of stuff from Best Buy.

I never ever had a problem with cc or dc hacking in the states.

Nice...

I love this country. But it's a lot like The Picture of Dorian Gray. It's all pretty in many places on the outside, but there is a deeply flawed, ugly underbelly to many aspects of society.

[PICHARDO]

Ok Picardo... but underneath all those pretty figures (and pictures!) are some very serious faults in the infrastructure.. For instance.. I have accounts at Ban Reservas.. where you have to wait for an hour or more on line on the 15 or near the end of the month because they have not figured out that since all the federal employees are paid those days, they might actually need extra tellers.

I went to La Sirena two days ago to do a big shop for the holidays.. Then at check out... my American Express card was rejected.... Then my foreign Visa on an account in Rhode Island which has more than $2k in it,,, then my Ban Reservas card which had more than enough to cover the bill.. All three... rejected..

Then I went up to the BanReservas branch in La Sirena and they said |well, no, there is nothing wrong with your card.. and yes, there is plenty of money to cover the cost.... and no, we do not actually have the capacity to get into the computer and authorize the payment even though we are the branch that is right here in La Sirena and we are open late on Saturdays because of that... and no, we cannot give you more than 10,000 since you only have the card and that is the daily limit for withdrawals. and no, you cannot simply close the account.. even though you have your passport with with you because you do not have your passbook with you.. and you have to actually go to the branch where you opened your account in order to close it...


So I left the carts, full of decaying food and gifts, at the check out counter.
the bag boys wanted a tip for having to put it all back but since it was simply NOT my fault, I just left them to the work that they had in front of them, saying that I was going to have to come back in a couple of days and do the entire two hour expidition again after I had cash in my hand and no one was going to pay me for that.

The BanReservas card worked fine in the machine.. to give me cash and my balance. But this was the third time it had been rejected at a store.. at La Sirerena and Nacional. They had also issued me an international Visa on my dollar account which I could use for internet shopping and withdrawals in cash from abroad.. that card did not work when used in the States.

Now I opened the account at BanReservas because that was the easiest bank to deal with when I lived in Las Terrenas.. they did not require a letter from my bank at home or anything.. (note that I am only moving a few thousand dollars a month down here.. not trying to bring in hundreds of thousands to buy a house or anything). And then I kept it in use since I was working on the border and in those little pueblos like Pedernales, Ban Reservas is the only bank ... Even though it would regularly run out of cash at the ATM machine on Fridays and Saturdays!!! just when the tourists were there!!!!

Plus, I arrived just after the Banniter scandal and thought that the bank of the government must be the safest one...Since there was also brewing a scandal around one of the directors of Banco Popular.....

So, Picardo, there are still some very serious flaws in the system.

I will now spend this morning talking with my bank in Rhode Island so that they are clear that I AM here and the card has not been cloned... Ditto American Express.. and then I will get my bank books, go to the branch of Ban Reservas here where I usually bank, and hope to get my money. I am just hoping that they are not going to tell me that I will have to go back up to Las Terrenas to close the accounts!!!!

(I may need the Hondoran Team to come and rescue me as they were ready to do when I was making my stand against Ferreteria Americana for the broken new fridge that they were refusing to replace ... since it was one week after the three month return policy although well within the one year guarantee.....hope that Mike Fisher is still ready with his VW and the Che Guevara T shirt.. but I know that Cobraboy is busy with motorcycle trips and not available and LAS has left the country!)

Then I will go over to Banco Popular and open another account.. (I already have one so will hopefully not have to go through the two week check out process)

And take the cash over to Jumbo or somewhere else and do the shopping

AGAIN

Which... you will note... will be an entire extra DAY from my life...

Because the computer hook up from La Sirena up to BanReservas upstairs did not work.

So, Picardo, until the families that run this country open it up to some international banks.. and there are some international banks that are actually willing to work here..

we are going to see the same things here.

with ATM machines that are regularly hacked... and all the credit card fraud.. with tourists unable to manipulate funds.... with casa de cambio being the only way that foreign residents can change checks.. since banks keep the checks for months .. THREE MONTHS for clearance of a foreign check at BanReservas.. even though it clears my bank within a week!!!!!!!!!!!!

This is still the Third World, Picardo

You can just as easy replace the Dominican based names/companies/sites with any part of the world and they'll fit like a glove! Nor Ban reservas neither La Sirena were at fault for your woes, most likely the Cardnet system red flagging prevented your charges from going ahead.

As you posted, there are policies to follow for everything, even closing the account when is YOU 100%. This applies even in the USA and UK the same. Policies are there to prevent unauthorized things from happening in the first place. I see nothing wrong with there not being double the tellers at banks, since they can't go about hiring and training clerks just for the net few days it takes for that higher volume, when in fact people can just have their checks deposited directly to their accounts and withdraw at the bank's atm...

I see no flaws there!

[PICHARDO]

note also please

that it is really not GROWTH

when the net increase is for LOANS

which are offerred at extremely high

to my mind USORIOUS interest rates....

to get the population indebted.....

We did see how that worked out in the US, did we not?

So untill I see FIXED RATE 30 year mortgages at below 8% here

you will not be able to convince me that there is any real
certain dependable

growth

If you take a look at lending practices used by banks in the USA and that of DR, you'll see how formidable the banking system in the DR really is.

To begin with, in the DR unless your collateral or property is enough to cover the risks by 200% or the bank is outright using you to obtain cheap property, your odds of getting a balloon loan are remote to none. Property claimed values are not set by the hustle and bustle of flippers, but buy the bank itself. Let me tell you! Banks in the DR consider property at values that removes about 50 to 60% of actual market going rates when it comes to them lending you!

Loans are offered at extremely high rates for the same reason there's no RE bubble to pop anytime soon in the DR. If you can't afford the loan, then that means you wouldn't stand a chance if things turn sour in the economy. Take the ratio at which Ban reservas was able to lower the % of bad loans during the worst of the economic crisis! That will tell you a thing or two about how well baked those high risk loans really are by tangible assets.

On the contrary growth based on 30 years and below 8% rates are exactly the furthest away from the profit principles based on safe and sound economics.

[PICHARDO]

now I just logged into my AMEX account

and got a FRAUD ALERT notice

so I will have to call the number on the back of my card to talk with them

FRAUD ALERT

FRAUD ALERT

FRAUD ALERT

that is what we are all saying about this country!!

CLEAN IT UP!

we like it here

I'm 100% with you there! The current easy to crack credit/debit imported system is not good. That’s where the DR is working on a new multi-pin, fraud-proof system for both merchants and clients. Removing some layers of fraud and adding some new regulations and e-currency will solve 99% of problems.

In the meantime do as 99% of Dominicans do: USE COLD HARD CASH!

[PICHARDO]

Debt is not growth, and all the pretty buildings, fdables told by gubmint mouthpieces/institutions and anecdotes won't make it so tofolks who actually understand economics. A leased car is not wealth.

My Visa got hacked again last week...the third time in almost 3 years...right after a purchase at Ochoa. My debit card has been hacked twice. Kudos to the nice people at the Fraud Department of my cc company for the heads up someone from the DR was trying to buy $4400 worth of stuff from Best Buy.

I never ever had a problem with cc or dc hacking in the states.

Nice...

I love this country. But it's a lot like The Picture of Dorian Gray. It's all pretty in many places on the outside, but there is a deeply flawed, ugly underbelly to many aspects of society.

LOL!!!!!

Maybe a lot of people should bail out then and return when the fixes are completed?


Somehow the reverse is happening with alarming rates as of lately!

[cobraboy]

I don't see a direct connection between solvent banks and a country depending on external cash loans and remittances to survive.

I'm not aware of anyone who's made any statements that banks in the DR are on the brink.

I am aware that folks claim...rightly so...that huge debt does not a sound economy make no matter how pretty (and empty) the new buildings are.

[pedrochemical]

Read on the BBC the other day that the EU central bank has annouced that a country's private lenders will pay back future bailouts - or at least the country that is bailed out must pay the EU central bank first even if it means defaulting on other debts.

Way to reduce confidence.
But confidence needs reducing.
False confidence is not a good thing.

Hmmmm - trouble at mill.

[Onions/Carrots]

I am placing a video below to help explain what exponential growth is and why the DR economy is on the same trajectory. Once you've watched the video, it'll help you understand my charts and posts regarding the explosive moves in DR GDP on the upside These explosive moves are a precursor to crashes. Here's why.




Now that you've seen the video, you can better understand my charts and commentary as the one that follows:







AREA 3
One notices immediately the rapid rise in DR GDP in the enclosed area. It has also been a debt based production. The DR is tracking both Zimbabwe and Iceland in term of growth. Since it tracks their growth, it eventually will track their decline.

The inclination of the ascent is not as great as Zimbabwe (yet) but it is greater than Iceland's inclination prior to its collapse. Thus, the DR is situated between Zimbabwe and Iceland. As a result, one can state that the decline in DR GDP can be placed anywhere between 40 to 90%. In the '84-'85 time period, GDP dropped 50%. Thus, to state a drop in the range from 40 to 90% is not without historical precedent.

Can DR GDP continue rising? It most certainly can continue rising in an explosive manner as it has been exhibiting in AREA 3. It then would be following in Zimbabwe's footsteps. The pundits and cheerleaders will herald this continuation movement as proof positive of the resiliency of the DR economy.

Such a massive spike in DR GDP continued on an ongoing basis is the perfect set-up for an even greater decline in a very short period of time. At the rate at which GDP rises, it also falls.