Wednesday, March 03, 2010

ADP and Challenger Data

The ADP data was inline with expectations and Challenger said fewer companies were planning layoffs which combined with more "Greece is SAVED" headlines seems to have put a bid under the market this morning.

Separately, I'll throw my name in with others calling the creation of a consumer finance protection agency inside the Fed a sham.

Consumers are financial illiterates. We can't fix that overnight, so the idea was to create a standard form for major finance purchases — mortgages, cars, revolving credit which would allow you to see

1) how much financing would actually cost

2) if you could actually afford the good or service

3) if you could get a better rate elsewhere.

The best analogy I've seen is that it would be like the nutritional content on a food packaging. If you really want to know how bad those Twinkies are just turn over the package. The same thing should hold for financial products.

Well, some people in the banking, consumer credit and auto financing business would rather keep you fat, dumb and broke, so they lobbied hard to water down this legislation and have it stuck inside the Federal Reserve. Shame on Congress for allowing this to happen.

I don't excuse the ignorance of American consumers, but we should not encourage banks to prey on this ignorance. A simple consumer protection clause that would require a bank to show how their loan compares to a traditional loan should not be controversial and should pass Congress easily. However, logic is sometimes lost inside the beltway triangle.

1 comment:

Anonymous said...

Don't know if you've seen this (prob a lot more like it out there). Meanwhile the pres of the other Sawgrass development down here committed suicide about a month ago as well due to financial ruin