Wells Fargo is ending all personal lines of credit the last time they did this was in 2008 right before the crash. This was after the federal gov gave 600 to 1200 checks to people during recession in 2007. The bubble is about to pop— Michael Kofi A.||♤🇬🇭 (@MikeKofiA) July 11, 2021
I know this tweet was posted a few days ago, but it didn't show up here. Shit's about to get real bad, real soon.
Wells Fargo didn’t directly answer questions as to what role, if any, the Fed asset cap played in its latest move.
The bank gave this statement: “In an effort to simplify our product offerings, we’ve made the decision to no longer offer personal lines of credit as we feel we can better meet the borrowing needs of our customers through credit card and personal loan products.”
After publication of this article, a Wells Fargo spokesman gave additional remarks: “We realize change can be inconvenient, especially when customer credit may be impacted,” the bank said, adding that it was “committed to helping each customer find a credit solution that fits their needs.”
So WF says why they did this but it's not much of an explanation. That was one of the questions asked: Is WF removing PLOC for added liquidity to cover some impending event? WF had removed HELOC a few months ago. Removing PLOC seems to be a strange move.
I don't think anyone thinks ending personal LOCs has anything to do with the current housing bubble.
It's just a sign of economic instability and a sign of impending crisis, generally.
I mean, the writer of the article called it strange and Wells wouldn't comment on the move.
the market is not unstable though, it's arguably harrowing how stable it is with the whole mass death thing going on. tech is booming, house prices fully recovered and more, and many large companies are hugely up this quarter as lockdowns end. wells fargo also still provides other forms of credit
I’m also immediately reminded of Stafford Beer’s Designing Freedom where he talks about institutions, how they can vary from very rigid and brittle (few avenues of response), or flexible (many avenues of response). It is equally plausible to me that the modern financial system is quite rigid (you see what happens if you step out of line!); that the major players have relatively few institutionally-sanctioned options to deal with the changing conditions. So the train stays, quite remarkably, on the rails. Until of course it doesn’t.
I’m not confident that this is the case tbh, but it does seem equally plausible to me
So WF says why they did this but it's not much of an explanation. That was one of the questions asked: Is WF removing PLOC for added liquidity to cover some impending event? WF had removed HELOC a few months ago. Removing PLOC seems to be a strange move.
https://www.nbcnews.com/business/business-news/wells-fargo-tells-customers-s-shuttering-personal-lines-credit-rcna1370
I found this reply/chain. It might explain it better than I can
https://twitter.com/1mikaelams/status/1414615064552919041
the market is not unstable though, it's arguably harrowing how stable it is with the whole mass death thing going on. tech is booming, house prices fully recovered and more, and many large companies are hugely up this quarter as lockdowns end. wells fargo also still provides other forms of credit
That’s one possibility.
I’m also immediately reminded of Stafford Beer’s Designing Freedom where he talks about institutions, how they can vary from very rigid and brittle (few avenues of response), or flexible (many avenues of response). It is equally plausible to me that the modern financial system is quite rigid (you see what happens if you step out of line!); that the major players have relatively few institutionally-sanctioned options to deal with the changing conditions. So the train stays, quite remarkably, on the rails. Until of course it doesn’t.
I’m not confident that this is the case tbh, but it does seem equally plausible to me
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