[ExI] A new low

Amara Graps amara at amara.com
Fri Dec 21 22:35:39 UTC 2007

>I came to an uncomfortable realization.  Over the years, somehow we have
>come to regard a good credit rating as equivalent to money in the bank.
>Like the cold cash game, it somehow demonstrates a lack of understanding of
>the importance of negative numbers.  The critically important number now is
>not the amount of money one has in the bank but rather how much the bank is
>willing to loan one.

>Am I the only one who sees a deep pathological social condition here?

>I welcome the comments of Europeans, Aussies and others.  Same there?

First of all, I don't think the Europeans have caught up with the
Americans for the size of an individual's debt. For one thing, credit
cards are much more often of the American Express type, which means that
you have to pay the balance off every month. They have 'buffers',
however to help you manage difficult times: you can carry a negative
balance  up to some low-integer number (2, I think) of your monthly
salary for a few(?) months.  Therefore, with that kind of a credit card,
the personal debts are lower and there's some help.

In Italy, the credit cards are American style, but not salaries, and
guess what? Italians are carrying more and more personal debts now on
their credit cards. Not good, but I should say that the NASA Dawn VIR
instrument was built on the scientists' personal credit cards because
the money from the Italian Space Agency (ASI) for the Science team was
was delivered a couple of months before the instrument was delivered
and 3 years after ASI signed the contract. One can't build and test
and calibrate an instrument on zero money before you deliver it.

In my own limited Italian experience, credit rating doesn't seem to be on
people's minds because properties seem to be bought with large sums of
money for downpayment or for the full balance. The cosigners on the loans
are families, or else those with permanent jobs. People who have permanent
jobs, no mater what pittance their salary might be, are golden
people. They can walk into a bank and walk out with whatever loan that they
need to buy property. The bank is required to make sure that the mortgage
is payable with that salary, so mortgages of many decades (Rome prices...)
are not unusual.  Maybe this helps explain why my colleagues thought
that I was crazy to refuse that permanent IFSI job.

Here's another factoid to support why I think that credit rating is not
important in Italy. My 4.5 years of rent was paid off the record,
untraceable cash, which means that I have no printed piece of paper that
says how much I paid in those years for rent (it was ~40,000 euros). Such
a situation of owner insisting on untraceable cash is still common for
renting in the Rome area today, although it is changing to be less
common with time. When I requested from the landlord a recommendation
letter with the sum of money listed, he refused, and my argument that it
was important to help me show a bank for buying property in the future
was a disconnect to him. He didn't understand the concept of credit
rating, and that a bank in my future might want some proof that I can
pay large sums of money, regularly and reliably. I did secure a letter
of recommendation from him (he even signed two copies), that I was a
good tenant and paid my rent regularly, but nowhere does it list the
full sum of money that I paid.

I don't know the credit scene in other European countries, maybe others
can speak up.


 From Napili Coast, Maui, celebrating with her family, Christmas and her
stepmother's recovery from cancer.. When someone you love needs to
celebrate Life, then whatever side-avenues are necessary to satisfy
such a request is worth it ten times over. I'm going snorkeling now.


Amara Graps, PhD      www.amara.com
Research Scientist, Southwest Research Institute (SwRI), Boulder, Colorado

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