Joseph McSpadden

Fed Rate Cut: What Happens When We Get to Zero?

I don't know if you've read the headlines, but we don't have a savior lined up. As bad as our politics are today, they will either maintain status quo or get worse in the 2008 election. If the dems win, we will be paying for everyone's healthcare through increased taxes and other means (bad for the economy) and if the reps win, we will be still in a very expensive war in Iraq (still bad for the economy). Nothing will change, regardless of who is elected President. I will go further to say the "savior" will probably be the President in 2012, because we will more than likely be in an upswing in the cycle. The President will have to do little more than show up to be declared an economic victor.

What's Wrong with this Economic Picture?

At least we'll die softly.

Stagflation in the 1970s vs. Today’s Economy

Do you think that the banks are creating an even larger consumer liquidity crises with their raising of interest rates? I've seen headlines here and there that highlight consumers' increasing use of credit cards and gift cards to pay for necessities. The consumer seems to be positioning his/herself for a major crunch in the next few months by racking up credit debt just to survive. If more banks follows BAC's lead and raise interest on credit card loans (sometimes by 10% per year), I'm afraid the default rate and bankruptcies on mortgages will be minor in comparison to what may be in store in the banks. The banks will become even more fearful to lend, which will lead to even less liquidity in the market. The fed cutting rates will not suffice. Do you agree?

Will the legislation passed a few years ago that complicated bankruptcy laws on credit card debt exacerbate the problem?