Guidant Financial Group Blog
Uncertainty in the financial industry and policies surrounding it, have led some banks to look for alternative methods to make gains.The Street reported that "Bank of America announced on Thursday that it will start charging a monthly fee of $5 to customers who use debit cards to make purchases in any given month."
"The bank said it was levying the fee because the 'economics of offering a debit card have changed with recent regulations.'"
Read the full article here.
The regulations the banks are referencing are the new ". . . federal limits on debit-card 'swipe fees' are expected to cost U.S. banks an estimated $6.6 billion a year in lost revenue."
Read product recommendations about Guidant Financial products.
Operation Twist, announced by the Fed Wednesday, is a plan to increase borrowing and loans through long-term interest rate incentives. CNN Money reports that the ". . . Federal Reserve wants consumers to apply for more mortgages and businesses to take out more loans, in order to boost the sluggish U.S. economy."
Although, some people have expressed skepticism about the effectiveness of Operation Twist.
CNN Money defines the plan as "only available to homeowners with pristine credit ratings and steady income, leaving out the roughly 22% of homeowners who are currently underwater in their mortgages, not to mention those struggling with unemployment."
"Mortgage rates are already at record lows. While that helps some homeowners refinance their existing mortgages, it has done little to boost new home sales so far. That's because credit standards are still tight."
Read the full article here.
For many prospective homeowners, the uncertainty about the future of the real estate market seems foreboding.
Christopher Thornberg, quoted in a Nuwire article, suggests to these prospective homeowners that this is not necessarily a bad thing.
"We have this weird dichotomist view of housing. If you think about oil prices: if they go up, that's bad. You think about clothing prices: if they go up, that's bad. Energy prices: if they go up, that's bad. But somehow if the cost of housing goes up, that's good? It doesn't make any sense," he says.
Read the full article here.
Fed Chairman Ben Bernanke spoke this morning in a much anticipated meeting before global policy makers about the U.S. economy and the Fed's response. The Fed announced its decision to put stimulus into their upcoming discussions.
The Wall Street Journal quoted Bernanke saying, "Although important problems certainly exist, the growth fundamentals of the United States do not appear to have been permanently altered by the shocks of the past four years." Read the full article here.
Bernanke also noted that, "The Committee will continue to assess the economic outlook in light of incoming information and is prepared to employ its tools as appropriate to promote a stronger economic recovery in a context of price stability." Read The Street's full article here.
Many anticipated the speech to have an immediate effect on the stock market. But CNN Money reported that, "Immediately following the speech, stocks sold off broadly and sharply, only to recoup all those losses fairly quickly." Read the full article here.
Bernanke also announced that their discussions on stimulus will begin at the Fed's upcoming September meeting.
The number of loan-guarantees by the Small Business Administration (SBA) reportedly shrunk 57% during the last quarter (ending Dec 31) last year—YIKES!In addition, a survey of loan officers by the Federal Reserve shows that 75% of banks have tightened their underwriting requirements and 90% were charging more for loans. Again ... YIKES!
If fewer entrepreneurs are being approved for business capital and the cost of obtaining that loan is more expensive, then how can a new business be capitalized?
Consider investing in yourself! There is a way (through Guidant’s 401(k) Small Business Financing vehicle) to invest in a business with your IRA or 401(k) without penalties. In addition, there are no underwriting requirements—you either have the money, or you don’t. Also, you can use your IRA and 401(k) funds as the down payment for a loan if you want to buy a bigger business! Lastly, you get to invest in something that you own, control and can build.
How have your stock market investments performed? If you are like most Americans, then probably not too well. A small business may be an interesting investment alternative worth considering!
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