“Why So Serious?”

We got several responses to the question yesterday: “Why do you think there’s so much pessimism surrounding the U.S. economy right now?”

“I think the reason everyone is so pessimistic,” says our first contributor, “is because we all know, deep down, that we kicked the financial crisis down the road and that the price we will have to pay for that will be greater than in 2008. 

“It doesn’t take a genius to realize that when we have politicians who actually believe we can have free college, free health care and even pay each citizen a monthly stipend because all we need to do is print more money? We are in big trouble. 

“If any of us ran our personal finances the way the government runs the U.S. Treasury, we’d all be bankrupt.”

We’ll feature more opinions on market pessimism tomorrow.

And read on as we talk about the consumer credit crisis in America… we know you have opinions. We’ll entertain them — and might just publish them tomorrow.

Your Rundown for Wednesday, Aug. 28, 2019:

$1 Trillion In Credit Card Debt

According to the Federal Reserve, Americans have more than $1 trillion in credit card debt. Let that sink in for a moment — that figure’s roughly equal to 1/30 of the national debt.

While Sen. Bernie Sanders and Rep. Alexandria Ocasio-Cortez introduced legislation in May called the Loan Shark Prevention Act meant to curb exorbitant interest rates for consumers — capping rates at 15% — an article at The Brookings Institute says the trouble with our credit system goes deeper than high-interest rates.

Instead, the article says: “To make affordable credit accessible to a broader group, let’s fix the flawed scoring system that allocates credit.”

And for that, we take a look at the ever-elusive FICO score that determines creditworthiness based on algorithms that assign a range between 300 and 850.

“There is no universally accepted definition of what constitutes a prime or subprime credit score but, generally, people with scores above about 680 are rewarded with cheap credit and high borrowing limits.”

Below 680? Sucks to be you.

The algorithm, however, can be fed faulty information, meaning human error. In fact, “one out of 5 Americans has a material error on their score.”

Because “inequity is baked into a system that takes a narrow view of creditworthiness,” the article concludes, if Congress really wants to address the consumer credit crisis in America, they should start with the credit score.

Market Rundown for Wed. August 28, 2019

S&P 500 futures are up 4 points to 2,873.

Oil’s added $1.48 to its price of $56.41 for a barrel of WTI.

Gold is down $5.80 per ounce to $1,546.00.

Bitcoin is up $9.95 to $10,186.11.

Have a good day. We’ll talk tomorrow

For the Rundown,

Aaron Gentzler

Aaron Gentzler

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Aaron Gentzler

Aaron Gentzler is the publisher of Seven Figure Publishing. He is also the editor of The Rundown and has been with Agora Financial / Seven Figure Publishing since 2005. He's been covering technology and markets for over a decade.

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