RM Howard

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