FICO and the Credit Card Financial Prison: How a Three Digit Credit Score Reflects Consumerism and not Financial Independence.
Americans carry $900 billion in credit card debt. Approximately 75 percent of all those eligible for credit, those that are 18 years or older, have a credit rating score at any given time. This mysterious three digit score named a FICO Score is the basis for loans, interest rates, and should reflect your ability to manage debt. Yet this is one of those confusing public relation developed ideas that tries to water down the fact that going into debt is somehow good for average Americans. Not only is going into debt good, you now have a credit score that is supposed to be some kind of financial report card.
American Financial Dream Deferred: How the U.S. is Mirroring the Japanese Lost Decade after the Heisei Boom.
This weekend I decided to take a trip to a couple of local stores to pick up some food that didn’t involve turkey so I wouldn’t be fatigued of eating the same thing for the entire week. A chain grocery store had about five people on a Sunday when it typically would have many more. Now this can be written off as a random case given Thanksgiving but this pattern has been hitting for a few weeks. After that I decided to stop by a local dollar store to pick up a few items. The place was so full that I had to wait for parking. This is the reality of the recession. Deferring higher end spending for more low cost goods. Even with recent reports we are seeing that holiday shoppers are buying but not at the high end. With unemployment still stubbornly at the peak it is expected that families will be cutting back on spending.
Credit Card Monopoly: Top 5 Issuers Hold $550 Billion in Credit Card Debt Taking up over 60 Percent of the Entire Credit Card Market.
As Americans rush out to shopping centers around the country on Black Friday many retail outlets have their fingers crossed that consumers will spend money that is clearly not on their balance sheet. The average American is maxed out. In fact, the typical American family has been subsidizing a decade of stagnant wages with credit cards and housing bubble equity. Credit card companies are turning the screws on average Americans even after taking trillions in bailout money that was supposed to be used to increase the flow of credit. Nothing is further from the truth. As we will see credit card companies have willingly taken taxpayer money while upping onerous fees and removing credit from the economy.
13 Million Negative Equity Homeowners and Negative Equity FDIC: The Shackles of Debt Leverage on the American Economy. FDIC $8.2 Billion in the red with 552 Troubled Banks on the Revised List.
The third quarter was devastating for banks and homeowners. To show the growing divide between Wall Street and the American economy, the FDIC just released its third quarter banking profile. The FDIC fund is not only broke, it is now in the red to the sum of $8.2 billion. We’ve been warning that the fund was insolvent for over a year but now the FDIC has joined millions of homeowners in the negative equity category. The problem with the system is we have a fund that is now negative, backing up some $4.5 trillion in U.S. insured deposits. Who will be on the hook when more banks fail? Isn’t the economy supposedly recovering?