Forums: Consumer Finance

FDIC's expanded authority is part of the 2,300-page Dodd-Frank Wall Street Reform and Consumer Protection Act signed into law on July 21. The new regime for dissolving megacompanies -- one with almost no judicial oversight and in which creditors' rights are few. A company has essentially no choice about the FDIC taking over as receiver. "It may be difficult to try to draw a box around what that is," said Renée Dailey

In George Orwell’s brilliant novel Nineteen Eighty-Four, one of the characters, Syme, in discussing the nature of Newspeak, says “It’s a beautiful thing, the destruction of words.” Newspeak was a systematic attempt by the dictators of Oceania, a totalitarian society eerily similar to North Korea, to control thought by eliminating words that gave rise to ideas they disapproved. What Syme and Orwell are talking about is that the destruction of words is the destruction of ideas. There is a parallel to this in contemporary economic thought. Mainstream economists, Keynesians, Neo-Keynesians, and Neoclassicists, would have you believe that what common sense...

Grab the resuscitation paddles. The American consumer has lost the will to shop. Haven't you heard? Jolts of stimulus cash are needed to get sales registers ringing again and restore lost jobs. Don't believe it. Such logic was used to justify programs like the "cash for clunkers" incentive, which expired a year ago, and additional cash perks for home buyers, which ran out in April. Judging by data reported by the Bureau of Labor Statistics, the programs failed to produce a surge of home-building and car-making jobs. The two charts below suggest why. The first shows our supposed crisis of...

In another sign the economic recovery is stalling, Intel -- whose fortunes are a key barometer of the technology sector's health -- cut its forecast for third-quarter sales, citing "weaker than expected demand for consumer PCs in mature markets." The Santa Clara company -- the worlds' biggest chip maker -- said it now expects its revenue for the quarter to range between $10.8 billion and $11.2 billion, compared with its previous prediction of $11.2 billion to $12 billion.

Uncertainty about the economy continued to shake consumer confidence in July, pushing a key measure of morale to the lowest level since February. The Conference Board, a New York-based research group, said Tuesday that its Consumer Confidence Index dropped for a second straight month, to 50.4 in July from June's upwardly revised level of 54.3. July's reading was lower than expected. Economists had forecast the index to have ticked down to 51 in July from 52.9 in June, according to a consensus estimate from Briefing.com. "Consumer confidence faded further in July as consumers continue to grow increasingly more pessimistic about...

Battle brews over director for new Consumer Financial Protection BureauThe agency with the power to make rules for credit cards, mortgages and other products is created as Obama signs the financial overhaul law. By Jim Puzzanghera, Los Angeles Times July 22, 2010 Reporting from Washington — President Obama reversed decades of lax oversight of the financial industry Wednesday by signing a landmark overhaul of regulations, but he still faces a major task — appointing a director for the powerful new agency charged with protecting consumers from unscrupulous deals.

White House senior adviser David Axelrod told reporters Friday that Harvard Law professor Elizabeth Warren is a candidate to head the Consumer Financial Protection Bureau created in the recently passed financial reform legislation. Warren, who currently heads the TARP congressional oversight panel, was one of the first to propose such a bureau. But making Warren the consumer finance protection cop is a bad idea. She has been more than willing to produce research on consumer finances that is shoddy at best and dishonest at worst.

The number of filings rose to 770,117 from 675,351 a year earlier, the group said, citing data from the National Bankruptcy Research Center. Sam Gerdano, the ABI's executive director, said the increase stemmed from years of rising consumer debt levels and low savings rates, together with high unemployment and the nation's housing difficulties. Though consumer filings dropped 8 percent in June from May to 126,270, Gerdano projected there will be more than 1.6 million new bankruptcy filings in all of 2010. The U.S. Labor Department earlier said U.S. nonfarm payrolls fell 125,000 in June, the largest drop since October. An...

NEW YORK – Americans, worried about jobs and the sluggish economic recovery, are having a relapse in confidence, causing a widely watched index to tumble in June and raising concerns about consumer spending in the critical months ahead. The Conference Board, a private research group based in New York, said Tuesday that its Consumer Confidence Index dropped almost 10 points to 52.9, down from the revised 62.7 in May. Economists surveyed by Thomson Reuters had been expecting the reading to dip slightly to 62.8. June's reading marked the biggest drop since February, when the index fell 10 points. The index...

Why Retails Sales Are Much Better Than They Look Vincent Fernando, CFA Jun. 11, 2010, 10:12 AM Econompic breaks down today's retail sales report nicely, showing how retails sales missed expectations mostly due to falling building materials and gasoline sales. Econompic: Building materials (which fell back to earth following a spike in April to take advantage of the end of the tax credit) and a 20% decline in the price of gasoline led the fall (these figures are nominal). Subtracting those outliers we still have a decline, which shows weakness. Just not as weak as early reports would indicate. So...