Household HSBC Watch

“It is clear that growth models in our industry based on high and increasing leverage will no longer be sustainable,” said HSBC chairman Stephen Green. Changes are being made at HSBC, partly to appease Knight Vinke. Don’t tell Green, however, because he wants the world to think it is all his idea. HSBC is exiting the auto finance business. Many people are asking about motorcycle and ATV financing. Wake up, please. HSBC financed motorcycles and ATV’s on credit cards with daily interest. Your motorcycle will be 40 years old before it is paid off if you make the minimum payments.

HSBC’s credit card business and the mortgage business is going strong, although losing money. Another merchant aligned with HSBC went bankrupt this week. HSBC and Orchard bank credit cards have such a bad reputation that few people want them. If HSBC has any chance of opening real bank branches in the United States Mr. Green must do something about the predatory Household International HSBC Finance sigma. That is exactly what he is doing, before it poisons his entire bank.

When the entire world realizes that the “Household Model” was shared with other banks and mortgage lenders, either intentionally or unintentionally, Green will have a huge problem. As a global bank the last thing Green and HSBC want is for the world to realize that the “Household Model” of tainted mortgages and tainted paper spread around the world like an unstoppable epidemic. Green let HSBC Finance infect the entire HSBC system, and it infected the world financial markets.

“It is clear that growth models in our industry based on high and increasing leverage will no longer be sustainable,” said HSBC chairman Stephen Green. Translate that to “Oops, that idea didn’t work.” That is what Kinght Vinke and others have said all along. Household International was failing when HSBC bought the predatory lender. Just putting it on a bigger stage with brighter lights and more money certainly would result in another failure, because the company was flawed. It still is.

Left unchecked HSBC Finance could bankrupt HSBC USA and possibly HSBC North America. As a stand-alone company HSBC Finance is already bankrupt. Household International would not have lasted any longer than mortgage lenders that went out of business early into the crisis. That is, if Household International had not gone bankrupt well before that.