It should not be surprising that with little in the way of positive economic news issuing from Washington that the mood on Wall Street remains decidedly black. The pessimism of many investors is just a sign that there is little trust in the promises coming out of the nation’s capitol. Read more
When it comes to debt management, one thing a lot of people have trouble with is the concept of debt vs investment. One reason for this might be the traditional terminology of bad debt and good debt. Certainly, this is a valid concept, but nowadays the term “debt” is just too encroached with negativity to be taken as anything but. Read more
The financial situation for banks continues to be volatile, and the situation they face has caused them to reduce their mortgage rates again, for the sixth consecutive week. Now, the rates sit at their lowest level in over several months, which have spurred an interest in homeowners wanting to apply for refinancing. Read more
Swarthmore College is joining a nationwide trend in erasing student loans from its financial aid offers.
Beginning next school year, loans will be replaced by scholarships at Swarthmore. The change is likely to affect more than 700 new and current students. That’s half of the school’s enrollment. Read more
American consumers appear to be engaging in some binge borrowing.
The Federal Reserve reports that consumer borrowing increased at an annual rate of 7.4% in November. That’s much higher than the 1% increase reported in October.
The segment of borrowing that includes debt from credit cards skyrocketed at a yearly rate of 11.3%. That’s a 6-month high. The surge apparently means that consumers are relying more heavily on credit cards, now that home equity lines of credit are drying up. Read more
The subprime mortgage mess is taking its toll on the nation’s investors. Financial experts say that fixed income investors have seen their share of losses this year because of the precipitous decline in the subprime mortgage market.
At the same time, defaults on car loans appear to be rising, increasing worries for investors. As a result, some investors are wondering whether another major market for fixed income investors, student loans, may be the next sector to fall. Read more
The Federal Reserve Board has once again tried to ignite a sputtering economy by cutting interest rates.
The Fed has decreased the federal funds rate, the rate that banks charge each other for overnight loans.
The rate cut marks the third one for the Fed this year. It follows a nationwide housing crisis—the worst housing slump in some 16 years. It also comes in the wake of a subprime loan crisis which has caused some financial institutions to leave the subprime business altogether. Subprime loans are those loans which are extended to individuals with shaky credit histories. The default rate on subprime loans has been incredibly high, giving rise to the current crisis. Read more
Consumer advocates are leading the charge for a federal bailout of the troubled housing industry.
The housing market has been in free fall for many months, the result of plunging home prices and sluggish sales. It’s also become increasingly difficult for prospective homebuyers to purchase houses because of stricter loan standards. Meanwhile, the foreclosure rate has doubled over the past year and additional foreclosures are expected because of the resetting of interest rates on adjustable rate mortgages. Read more
Summer 2007 may be remembered in economic circles as a time when new concerns were voiced about those handy debit cards that are appearing in just about everyone’s wallets.
Research indicates that consumers are often opting to pay for their purchases with debit cards rather than credit cards. Consumers appear to appreciate the convenience which debit cards offer—in fact, many consider them to be just as convenient as cash. With debit cards, consumers can also avoid the sticker shock that can occur when the monthly credit card bills arrive. Read more
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