Credit Card Reform: Is it Good for the American Consumer?

A few weeks ago Congress passed the Credit Card Bill of Rights Act, a bill designed to curb many standard credit practices used in America today.  The bill was passed overwhelmingly by Republicans and Democrats alike, on a 90-to-5 vote in the U.S. Senate.

The bill is aimed to protect the 78% of American families that hold credit cards, about half of whom have credit card debt averaging $5729.  New York Senator Charles Shumer claims the legislation is a victory for “the little guy.”  The Bill of Rights will require credit card companies to give 45 days notice and a simple explanation before raising interest rates (currently they can raise interest rates substantially whenever they deem it necessary) as well as place a limit on penalty fees.  The bill further restricts credit lenders to only being allowed to raise interest rates if a payment is over 60 days late, instead of the status quo where they can raise rates for paying even a single day late.

Insure your credit rating by reading more

Insurance Bailout. Putting the Government Behind Your Protection

At Efinancialblog we keep a watchful eye on all things financial, especially the insurance industry.

The recent federal intervention in the financial services industry is well known when it comes to banks.  An underreported fact is that, as of last month, the Treasury Department has also extended bailout funds to help bolster America’s insurance companies.  While federal bailout funds were originally approved to help banks alleviate toxic loans, the Treasury Department has used such funds to help industries such as the auto industry and now the insurance industry significantly strengthen their financial status.

Read about government support for life insurance

Opposing Views: How Quickly Will the Economy Recover?

One of the hottest debates of the moment among economists, not to mention readers of this blog, is how quickly the American economy will recover from the current recession. Two polarizing views surround the issue. On one side of the question is the position that our economy will recover quite quickly. On the other side of the ring is the longer term, wait-and-see theory of our economic recovery.

Let’s start with the long, hard road. Despite the expectation of a major stimulus package, which is expected to be one of President Obama’s first acts in office, the market has not responded in any meaningful way. A part of this less than rosy forecast is that contraction within various markets is still likely to occur. Why? Corporate budgets have already been set for the year. Combined with a recession occurring in the rest of the world, US exports will remain low this year which will hurt corporate capital. Finally, fears arising from job loss, which may persist even as the economy improves, could keep people from increasing consumption. All of these factors suggest a slower recovery since anything and everything we attempt to do to fix the problem will take a long time to take effect.

Learn more about how economies recover

Energy = Economy

Throughout history, nations have relied upon and gone to war over, the resources they need to run their economies. These resources have evolved from water, to farmable land, to the ever more volatile resource of oil. Energy is the life force of a modern economy.  In the current equation, oil adds up to both convertible heat in a building furnace or combustion in an automotive engine to drive transportation.

Like all finite resources, our oil supply is subject to the market forces of supply and demand.  The commodity is on a trajectory to skyrocket in price, be it in the short term or long, and must be weighed against more economical alternatives.

Just as important as the economic impacts are the environmental benefits. The right energy policy can spark the dynamism of our economy through long-term investment in renewable energy. We can create potentially millions of jobs, starting with a 21st- century economic recovery plan that puts Americans to work building wind farms, solar panels, and fuel-efficient cars. At the same time, we can reduce the carbon emissions that threaten to warm the planet through the creation of greenhouse gases in the ozone layer.

Shifting from an oil based economy would also cut our dependence upon foreign entities for our economic survival. Imagine all the money Americans would have saved this summer if gas was less than $4 a gallon. If we do not need as much gas, the money saved could be funneled into our national economy, increasing our economic strength. Energy = economy if you do the math.

How do you think America’s energy policy has affected our economy? How could new energy sources  transform the economic landscape?  Energize us with your ideas!

The Economy as a Red Balloon

In the past week, the Dow Jones Industrial Average, one of the barometric indicators of upward or downward pressure in the American stock market, has been rising and falling like a red balloon caught in a windstorm. Many feel as tossed and tumbled as that helpless balloon, asking themselves “What’s next?” and “When will the wind change?”

According to the Chairman of the Federal Reserve, Ben Bernanke, the key is for that metaphorical balloon to settle back down to earth. “Stabilization of the financial markets is a critical first step, but even if they stabilize as we hope they will, broader economic recovery will not happen right away.” This is promising news for mid-to-long-term investors who have held on the wind tunnel that is the US economy the past two weeks, and suggests that stock market investors might be better off keeping that long term view.

Learn more about key economic indicators

Will the Bailout Help the Economy?

Over these last several, angst-ridden days, the red hot political topic has been the financial crisis that looms large over the American landscape. The $700 billion dollar bailout authorized by Congress begs a great many questions of the American taxpayer and, so far, this “perfect financial storm” has provided precious few answers.

Will the $700 billion relief plan bridge the chasm, or does it address just the tip of a titanic iceberg? Should the American taxpayer be held responsible for Wall Street institutions or is the rescue effort a question of survival, fundamental to buttressing America’s economic foundation? Is there a stimulus to energize market confidence and is it psychological, political or financial? Read more about the financial bailout

Is AIG Insurance Safe?

Given the recent and adverse news coverage regarding American International Group Inc. (AIG), and the fact that AIG is one of many companies which Efinancial allows to compete for your business, we wanted to take this opportunity to proactively address questions regarding an American General Life Insurance Company policy obtained through Efinancial.

Learn more about AIG and consumer safety