Monday, June 25, 2012

Two More Articles and an Added Solution

It's been a while, but there are two articles on Yahoo Finance this morning worth reading. The first is "We Are Living in a Modern Day Depression" by David Rosenberg. To access this article, go to the Yahoo finance home page and click on 'THE DAILY TICKER' and page down until you reach the 6/25/2012 article. The second is "Don't Count on Consumers to Save the Struggling Recovery: Economist" by Matt Nesto. To access, again, go to the Yahoo Finance home page and click on BREAKOUT (right above THE DAILY TICKER. Again, page down until you reach the 6/25 article. Excellent article summed up by "You could call it a vicious cycle, or a high stakes version of chicken or egg, but the fact remains that unless and until we are able to create new paychecks, this recovery is going nowhere fast." I would also like to publish a comment to another Yahoo - CNBC article titled "A Global Recession? The Warning Signs Are Everywhere" dated 6/16/2012. Rich from New York, New York posted: "The FRB and the government are letting the banks pay near zero interests to bank depositors, but they are not forcing the banks to pass on the low interest rates to the consumers on Main Street. The oil-pump is hogging the lubricant, and the engine grinds to stop for the lack of plentiful lubricant. Like in the movie On the Waterfront and Rocky, the folks being ripped-off by the loan sharks, and the usury of the banks have a hard time getting out of their monetary fixes. Forgotten are the zillions of students and consumers of Main Street, who are the 99%. The Federal Reserve Bank lowered depositor interest rates, and T-Bill interest rates to near zero to benefit the banks, to benefit the government, and to benefit the 1%. Students and the consumers did not get that near zero percent interest rates, and the students and the consumers are forgotten. That's 99% of the people being ignored and forgotten. The banks, and the Government are not passing through this near zero interest rate reduction to the borrowers like student loans borrowers, mortgage borrowers, credit cards borrowers, and consumer loans. The banks and the Government are keeping the reductions all to themselves to further fatten excessively their selfish profits. The banks and the Government are screwing both the bank depositors, and the bank borrowers. The banks and the Government are ripping-off Main Street to enrich the greedy on Wall Street. Is it a wonder Main Street is hurting, when the banks, and the Government are shafting them from both ends of the street? It should not be any mystery what is happening. Right now, banks and the Government are paying bank depositors, and T-Bill buyers less than a quarter percent, while charging credit card borrowers from more than 10% to 25% or more. This is over 40 to 100 times over what the banks pay the depositors (ie. 4,000% to 10,000% markup.) If that is not usury, what is? If that is not usury, why banks have to move their credit card operations to the Dakota? Mortgage rates were traditionally less than 2 times depositor rates, and now they are over 10 times. Student loan rates are more than 10 times the depositor and T-Bill rates, and now the banks and the Government want to increase that to more than 25 times the quarter percent depositor and T-Bill rates. Mortgage rates should be limited to no more than 2 to 3 times depositor rates of half to three-quarter percent. Student loan rates should be less than 4 times depositor rates of less than 1%. Credit card rates should be less than 20 times depositor rates of less than 5 percent. And so forth. Pumping the same super low interest rates which the banks are receiving from the FRB to the consumers will get the other 99% of the economic sector on Main Street moving, in addition to the 1% of the financiers on Wall Street. It does not take 10 minutes to sign a law requiring the banks to automatically reducing borrower interest rates to much lower levels in line with reduced depositor-rates. The 99% will get a lot more money back to spend and stimulate the economy. Why continue to "bail out" and fatten the less than 1% banksters at the expense of the 99% on Main Street? Stop the loan sharking." While the issue with student loans and credit cards is considerably different than what I have proposed regarding mortgages, at least Rich sees that lower interest rates get people out of debt quicker, and that is the the key to a quicker recovery. If something could be done along those lines, it would certainly be beneficial.