How can credit card lenders post losses?

Are bankers complete morons?

You may have heard that President Obama will let 14 honchos from the credit card industry know that there is a new sheriff in town. Good. The credit card industry is nothing but a huge scam preying on people's lack of self-control or -- worse -- their lack of money. That's why I have always paid my balance in full every month; never borrowed a dime from the Plastic Loan Sharks, despite their incessant entreaties. They're scum.

Unfortunately, not everyone is as lucky as I. A great number of people get in deep trouble with credit cards. Those are the people who pay the Deerfield and Yale tuition for the children of the Plastic Loan Sharks.

A lot of people have been complaining that the Plastic Loan Sharks have been raising their interest rates lately. It seems unfair, but it's right there in the 17 pages of fine print you didn't bother to read when you signed up for the card. I believe the legalese reads something like, "We shall own you from the moment you carry a balance until such time as you win the lottery and settle up."

Now, you would think that the Plastic Loan Sharks would make quite a bit of money. Millions of people are paying exorbitant interest rates on money that the bankers borrowed from the Fed for a song. The spread is enormous! They're charging people 10 percent, 20 percent, 30 percent (special rate for the poor) at a time when the Fed Funds Rate is around, what, 5 percent? Pretty sweet deal: Borrow imaginary money at a favorable rate, then lend it to suckers at a huge profit. Even with the recession, credit card "charge-off" rates are well under 10 percent, meaning that over 90 percent of suckers pay in full.

Here's what I want to know:

How the H-E-double-hockeysticks can you lose money if you're a Plastic Loan Shark?

Every darn thing is stacked in your favor! To run such a ludicrously simple business into the ground, you must be some kind of idiot. What did they teach those guys at Wharton, anyway?

Bank of America reported ~$4 billion in profits in Q1 '09, but its credit card division LOST $1.8 billion! Huh?!?! Are their accountants on crack? How do you lose money when your business model is basically taking free money from depositors and cheap money from the government, then loaning it to suckers at usurious rates?

Yes, I am a cynic. These guys are not that dumb. These "losses" are as contrived as everything else in the big Ponzi scheme we call a financial system, losses calculated to leverage political favor. The Credit Cardholder's Bill of Rights has been hanging over the heads of the Plastic Loan Sharks for quite a while now. It's about to drop.

When they talk to President Obama today, the Plastic Loan Sharks are going to plead poverty. Obama's going to tell them that the glory days are over. It's going to be awesome. I wish I could be a fly on the wall for that meeting.