Trump Interest Rate Demands

[Sportin' Wood]

I have an idea for RDP to debate and poke holes in.

When Politicians discuss interest rates, do they really mean consumer rates and not the Federal Reserve Rate?

https://www.reuters.com/markets/us/trump-says-he-will-demand-lower-interest-rates-immediately-2025-01-23/

My gut tells me that Trump can skin this cat without the FED.

IMHO the biggest challenge that "Interest Rates" present to the average American Consumer is reflected in revolving Credit Card Debt and Mortgages. The Auto Industry does not seem phased by the FED as they mitigate rates with subsidized lending. Commercial lending certainly could be mitigated as well, but let's set that aside for a moment and just talk about retail consumers. I understand the bond market influences this discussion, but I'm simple minded.

Credit cards seems easy, he can regulate them. I'm not a fan of that, but he can do it.

What I'm really interested in is Mortgages. What kind of tools can Trump employ as a work around to make home buying easier?

If I were king or Trump I would create a more meaningful VA loan discount ASAP. If you served, you get a very attractive loan rate backed by the government, much more attractive than it is now. Like 3% Drop PMI, keep the low down payment. I would follow that up with a similar program a little less attractive (Maybe 4%) for First responders, Teachers and LEO first time home buyers.

I'm sure this is crazy talk, but I tend to think Trump always had a hustle and is posturing with his demand. maybe he partners with a few of the national builders to get them to subsidize the rate buy downs in trade for lower regulatory costs. That does not help rural America, but it could easy housing costs for metro areas.

What say you?

 

[coolchange]

Isn’t there a VA already? Consumer credit rates 30%? That’s indentured servitude and a fee on being poor. I get if it’s a Nordstrom card that’s your bad. But if you have to live on the card for a couple
months because of a economic disaster you’ll take years to get even.
Makes more sense that student loan forgiveness.

 

[Havasu blue label]

Won’t happen

 

[CLdrinker]

Here we go

 

[BabyRay]

I could get behind a VA program, because our service members are mostly underpaid, and I value what they do for us, but extending it to other careers seems a stretch. Maybe the technician who makes dentures is providing an important service too, or the garbage man. What makes the others more deserving?

As to limiting credit card rates, I’d liken that to any other price freeze. While it would seem to provide a great benefit to consumers, there would be unintended consequences, such as limited availability (stricter qualifications).

 

[Sleek-Jet]

Here's my thinking... The supply chain is still broken, though it is functioning better than it was a year ago. Lots of my suppliers still have longer lead times than before the pandemic and prices will never return to those we saw before 2020.

If Trump unleashed a tide of easy money i.e. low interest rates on mortgages and the like, inflation is going to take off again. We need another 12-18 months to get supply chains back to a normal capacity, then interest rates can lower.

 

[Sportin' Wood]

Isn’t there a VA already?

I think they save a point and it is zero down. Not sure if they pay PMI, I assume yes.


For record, I would rather reduce inflation than interest rates, I was just thinking about this since I saw a headline flash about his demands to the FED.

 

[530RL]

If the government wants to spend more money subsidizing one taxpayers interest rate over another, they are either going to have to run larger deficits or raise taxes.

There is no free lunch, even though all politicians want their voters to think so.

 

[Cole Trickle]

I think the biggest issue with the current rate is that Americas debts are also inflated and currently out of control.

When you are 35 trillion in the hole they need to figure something out because its my understanding that just the interest owed has doubled since 2020.

The issue is lowering the fed rate will cause mass inflation. Personally I think we need to go a while longer as is but a Business man is now in charge and trying to lower what they pay.

 

[Sportin' Wood]

If the government wants to spend more money subsidizing one taxpayers interest rate over another, they are either going to have to run larger deficits or raise taxes.

There is no free lunch, even though all politicians want their voters to think so.

There is plenty of "Free" lunch if you know how to work the system.

Example: When I was in high school I walked into the cafeteria and picked a random number to get my free lunch on the days they served pizza. Since most people on the free lunch program did not want to eat in the cafeteria this became a pretty easy way to get free lunch when it was attractive. Some days I even got two free lunches.

Sure someone paid, but not me. FREE.

 

[RiverDave]

I honestly think the 27-30+% interest rates should be illegal..

It is really easy to trap the youth into that quicksand and they can never get out.

RD

 

[RiverDave]

There is plenty of "Free" lunch if you know how to work the system.

Example: When I was in high school I walked into the cafeteria and picked a random number to get my free lunch on the days they served pizza. Since most people on the free lunch program did not want to eat in the cafeteria this became a pretty easy way to get free lunch when it was attractive. Some days I even got two free lunches.

Sure someone paid, but not me. FREE.

With regard to the highschool out here the students get the lunch whether they pay for it or not.. even some of the more affluent families will just run up the debt and leave it because there is no actual way to collect the money.

Part of supercats charity in 2023 was more or less balancing that deficit for the lunch program for the highschool, or they district was going to take it out of the teachers supply budgets.. which the teachers are already purchasing supplies either out of their pockets or through donations from parents..

RD

RD

 

[EmpirE231]

Interest rates should be much higher, but you can't manage the govt debt. It is a double edged sword.

I can see good rates available for those who have served in the military / VA, but for cops, teachers and firefighters??? C'mon man lol

 

[DrunkenSailor]

Mortgages are securitized. In order for mortgage rates to come down bond debt would need to be cheaper. The government could become a bond buyer again and drive prices down but that goes against the current fed plan of reducing their holdings.

I think Trump is more concerned about the interest rate we are paying on our countries debt. If he can reduce the debt load he would have more funds to play with.

Lower mortgage rates = greater inflation. Government printing money to buy mortgage bonds = greater inflation. Get inflation under control first please.

 

[brgrcru]

I think rates are just fine

 

[evantwheeler]

Mortgages are securitized. In order for mortgage rates to come down bond debt would need to be cheaper. The government could become a bond buyer again and drive prices down but that goes against the current fed plan of reducing their holdings.

I think Trump is more concerned about the interest rate we are paying on our countries debt. If he can reduce the debt load he would have more funds to play with.

Lower mortgage rates = greater inflation. Government printing money to buy mortgage bonds = greater inflation. Get inflation under control first please.

He needs to reduce debt load, reduce spending, and make sure the spending that does take place moves the needle and isn't a massive waste of tax payers dollars.

Has he shut off the money spigot to the Taliban yet?

 

[Orange Juice]

You’re not supposed to use credit cards, unless you can pay then off within 30 days.

You're not suppose to buy a house until you can put 20% down, and pay it off in 15 years.

Pay cash for a car. Drive it for 10+ years.

You should have 10 times your salary saved before you retire.

Withdrawal no more than 4% a year from your retirement to make it last.


My advice is save your money while the getting is good. And spend it when the masses can’t.

 

[Dalton]

Not sure I want to see rates go super low again, house prices just now are starting to come back down to reality.

I think they save a point and it is zero down. Not sure if they pay PMI, I assume yes.


For record, I would rather reduce inflation than interest rates, I was just thinking about this since I saw a headline flash about his demands to the FED.

its zero down no PMI, that's what makes it attractive.

 

[gqchris]

You’re not supposed to use credit cards, unless you can pay then off within 30 days.

You're not suppose to buy a house until you can put 20% down, and pay it off in 15 years.

Pay cash for a car. Drive it for 10+ years.

You should have 10 times your salary saved before you retire.

Withdrawal no more than 4% a year from your retirement to make it last.


My advice is save your money while the getting is good. And spend it when the masses can’t.

I have flunked everyone of these but the last one. I guess I am doomed to work until 80!

 

[c_land]

Trump/Bessent can play the same game as Biden/Yellen did to get longer term rates down.

Issue heavily on the short end of the curve.

Less supply of long bonds, higher long bond prices, lower long bond rates.

 

[Backlash]

I have flunked everyone of these but the last one. I guess I am doomed to work until 80!

I'm happy I'm not the only one who's failed!

 

[rrrr]

Americans are locked in the same stupidity spiral as the federal government.

Overall, the national average card debt among cardholders with unpaid balances in the third quarter of 2024 was $7,236, up from $7,130 in the second quarter. That includes debt from bank cards and retail credit cards.

The Federal Reserve’s G.19 consumer credit report showed that the average APRs for cards accruing interest fell to 22.80% in the fourth quarter of 2024, down from 23.37% in the third quarter of 2024. Meanwhile, APRs for all current credit card accounts fell to 21.47% in the fourth quarter of 2024, down from 21.76% in the third quarter of 2024.

Both of these averages had been at record highs in the third quarter. However, the third quarter numbers were from August, prior to the Fed’s September, November and December rate cuts. Given that, the fourth-quarter decreases are no surprise, and cardholders should expect this to be the start of a downward trend that could last well into 2025.

2025 Credit Card Debt Statistics | LendingTree

Americans’ total credit card balance is $1.166 trillion in the third quarter of 2024, according to the latest data from the Federal Reserve Bank of New York.

www.lendingtree.com

The average 22.8% annual interest charge that accrues on that $7,286 outstanding balance is $1,650. Breaking that into monthly payments, it requires $137.50 just to service the interest. I'm guessing most people stupid enough to carry a balance in excess of $7,000 are unable to pay more than $200-$300 a month, so the principal on the debt is essentially untouched.

I am absolutely against any attempt by the federal government to manipulate consumer debt interest rates. Market distortions always have unintended consequences. Rent control laws are a perfect example of the follies that occur when these interventions occur. Idiots like Elizabeth Warren and Chuck Schumer would love to give their freeloading constituents more taxpayer money.

But former senator Phil Gramm, in his book The Myth of American Inequality, shows that the bottom 20% of American households receive the equivalent of over $60,000 per year in direct and indirect government transfer payments.

I'll post this link to a commentary on the book, if you are interested in knowing the real figures of what our tax dollars fund, read it. It's disgusting. Did you know about 54% of people that file an income tax return pay zero dollars in taxes? I didn't think so.

Setting the Record Straight on Income Inequality - Econlib

Book Review of The Myth of American Inequality: How Government Biases Policy Debate by Phil Gramm, Robert Ekelund, and John Early.1 Everyone knows inequality is growing. As a trio of economists consisting of former senator Phil Gramm, economics professor Robert Ekelund, and economist and former...

www.econlib.org

 

[boatnam2]

I myself like seeing the higher paying interest bonds now that I'm solid in my 60's, would it be nice to find a lower interest home loan, yes! but the amount the houses will go up will keep me out unless I move somewhere.

 

[Sportin' Wood]

You’re not supposed to use credit cards, unless you can pay then off within 30 days.

You're not suppose to buy a house until you can put 20% down, and pay it off in 15 years.

Pay cash for a car. Drive it for 10+ years.

You should have 10 times your salary saved before you retire.

Withdrawal no more than 4% a year from your retirement to make it last.


My advice is save your money while the getting is good. And spend it when the masses can’t.

Where are those rules posted, because in the ghetto where I grew up this is a pipe dream. I'm not just being a dick, I'm serious, if I would have followed this advice I would still be in poverty.

I would have never bought a house which is what help me climb out of poverty into a decent middle class lifestyle.

I'm 100% aware I need to go be poor somewhere else and that I'm hanging out with rich people, but your rules are impossible for 90% of Americans.

If these are the rules, I'm turning to a life of crime.

 

[Sportin' Wood]

Americans are locked in the same stupidity spiral as the federal government.

Overall, the national average card debt among cardholders with unpaid balances in the third quarter of 2024 was $7,236, up from $7,130 in the second quarter. That includes debt from bank cards and retail credit cards.

The Federal Reserve’s G.19 consumer credit report showed that the average APRs for cards accruing interest fell to 22.80% in the fourth quarter of 2024, down from 23.37% in the third quarter of 2024. Meanwhile, APRs for all current credit card accounts fell to 21.47% in the fourth quarter of 2024, down from 21.76% in the third quarter of 2024.

Both of these averages had been at record highs in the third quarter. However, the third quarter numbers were from August, prior to the Fed’s September, November and December rate cuts. Given that, the fourth-quarter decreases are no surprise, and cardholders should expect this to be the start of a downward trend that could last well into 2025.

2025 Credit Card Debt Statistics | LendingTree

Americans’ total credit card balance is $1.166 trillion in the third quarter of 2024, according to the latest data from the Federal Reserve Bank of New York.

www.lendingtree.com

The average 22.8% annual interest charge that accrues on that $7,286 outstanding balance is $1,650. Breaking that into monthly payments, it requires $137.50 just to service the interest. I'm guessing most people stupid enough to carry a balance in excess of $7,000 are unable to pay more than $200-$300 a month, so the principal on the debt is essentially untouched.

I am absolutely against any attempt by the federal government to manipulate consumer debt interest rates. Market distortions always have unintended consequences. Rent control laws are a perfect example of the follies that occur when these interventions occur. Idiots like Elizabeth Warren and Chuck Schumer would love to give their freeloading constituents more taxpayer money.

But former senator Phil Gramm, in his book The Myth of American Inequality, shows that the bottom 20% of American households receive the equivalent of over $60,000 per year in direct and indirect government transfer payments.

I'll post this link to a commentary on the book, if you are interested in knowing the real figures of what our tax dollars fund, read it. It's disgusting. Did you know about 54% of people that file an income tax return pay zero dollars in taxes? I didn't think so.

Setting the Record Straight on Income Inequality - Econlib

Book Review of The Myth of American Inequality: How Government Biases Policy Debate by Phil Gramm, Robert Ekelund, and John Early.1 Everyone knows inequality is growing. As a trio of economists consisting of former senator Phil Gramm, economics professor Robert Ekelund, and economist and former...

www.econlib.org

I agree, I'm not a fan of manipulating the CC debt, however, there should be some regulations that require the lender to more easily explain what people are signing up for. It's predatory and legal loan sharking.

 

[530RL]

I agree, I'm not a fan of manipulating the CC debt, however, there should be some regulations that require the lender to more easily explain what people are signing up for. It's predatory and legal loan sharking.

That type of regulation was the entire point of the CFPB.

I’m not certain more regulation is the right path.

I can’t imagine that anyone doesn’t fully understand that credit card debt is very very expensive?

 

[lbhsbz]

I can’t imagine that anyone doesn’t fully understand that credit card debt is very very expensive?

You underestimate the number of completely ignorant and stupid people we have living in this country.

 

[BabyRay]

I agree, I'm not a fan of manipulating the CC debt, however, there should be some regulations that require the lender to more easily explain what people are signing up for. It's predatory and legal loan sharking.

That type of regulation was the entire point of the CFPB.

I’m not certain more regulation is the right path.

I can’t imagine that anyone doesn’t fully understand that credit card debt is very very expensive?

From Microsoft Copilot;
In the United States, there are regulations that require clear disclosure of debt risks associated with credit card lending. The **Truth in Lending Act** (TILA) and its implementing regulation, **Regulation Z**, mandate that credit card issuers provide clear and conspicuous disclosures about the terms of credit. This includes information about interest rates, fees, and other charges.

Key points of **Regulation Z** include:
- **Annual Percentage Rate (APR)**: Credit card issuers must disclose the APR clearly so that consumers understand the cost of borrowing.
- **Fees**: All fees associated with the credit card, such as annual fees, late fees, and balance transfer fees, must be disclosed.
- **Minimum Payments**: Issuers must disclose the cost and time frame for repaying the balance if only minimum payments are made.

These disclosures help consumers make informed decisions and understand the potential debt risks associated with using credit cards.

 

[lbhsbz]

From Microsoft Copilot;
In the United States, there are regulations that require clear disclosure of debt risks associated with credit card lending. The **Truth in Lending Act** (TILA) and its implementing regulation, **Regulation Z**, mandate that credit card issuers provide clear and conspicuous disclosures about the terms of credit. This includes information about interest rates, fees, and other charges.

Key points of **Regulation Z** include:
- **Annual Percentage Rate (APR)**: Credit card issuers must disclose the APR clearly so that consumers understand the cost of borrowing.
- **Fees**: All fees associated with the credit card, such as annual fees, late fees, and balance transfer fees, must be disclosed.
- **Minimum Payments**: Issuers must disclose the cost and time frame for repaying the balance if only minimum payments are made.

These disclosures help consumers make informed decisions and understand the potential debt risks associated with using credit cards.

The problem is, people don't like to read anymore.....I see it constantly with my sales on eBay...lots of incorrect orders because people flat our refuse to read the description of what they're buying.

Maybe if the CC companies were forced to make a tik tok video explaining the dumbed down version of it, things would be different?

 

[angiebaby]

You’re not supposed to use credit cards, unless you can pay then off within 30 days.

You're not suppose to buy a house until you can put 20% down, and pay it off in 15 years.

Pay cash for a car. Drive it for 10+ years.

You should have 10 times your salary saved before you retire.

Withdrawal no more than 4% a year from your retirement to make it last.


My advice is save your money while the getting is good. And spend it when the masses can’t.

You obviously live a charmed life. Your "supposed to's" completely leave out 100% of working class people who weren't born with the lucky sperm of parents who have wealth. A new car is what? Minimum 30K right now? The working class is expected to come up with $30K cash working paycheck to paycheck, maybe saving $200-$500 every month? What do they do in the meantime when they are saving up for a car for 10 years until they can pay cash for one?

If they had to use the credit card to buy tires because the belts were starting to show because they don't have $600 for new tires, how are they going to pay that off at the end of the month?

Buy a house with 20% down? The median home price in CA is nearly $800K. Where do people come up with $100K or more if they are working class? They just get assed out and don't get to buy a house under your rules?

I think you are out of touch with average people. I'm very glad we didn't follow this kind of advice. The only reason we were able to buy our current home with 20% down is by doing exactly what people like you said we "shouldn't." I'm not sure where all this cash comes from that you keep talking about. We cut out cable tv, and had a strict grocery budget, 100% covered health care at the time, and drove old cars when we were young. Had hand-me-down televisions and furniture for the first 15-20 years of our marriage and bought our first home with a zero down VA repo program. My parents loaned us $1500 for some of the closing costs, we had about the same amount, and our agent covered the last thousand. None of us could afford the $18K that would have been the 20% down payment at the time. Yet we were able to climb out of poverty thanks to that purchase. $20K in the bank was a complete pipedream for us. If we would have waited until we could miraculously save that $18K + CC, we'd still be making someone else's mortgage payment. As housing prices went up, and so did that 20% amount. Again, I think you're out of touch.

 

[Looking Glass]

Americans are locked in the same stupidity spiral as the federal government.

Overall, the national average card debt among cardholders with unpaid balances in the third quarter of 2024 was $7,236, up from $7,130 in the second quarter. That includes debt from bank cards and retail credit cards.

The Federal Reserve’s G.19 consumer credit report showed that the average APRs for cards accruing interest fell to 22.80% in the fourth quarter of 2024, down from 23.37% in the third quarter of 2024. Meanwhile, APRs for all current credit card accounts fell to 21.47% in the fourth quarter of 2024, down from 21.76% in the third quarter of 2024.

Both of these averages had been at record highs in the third quarter. However, the third quarter numbers were from August, prior to the Fed’s September, November and December rate cuts. Given that, the fourth-quarter decreases are no surprise, and cardholders should expect this to be the start of a downward trend that could last well into 2025.

2025 Credit Card Debt Statistics | LendingTree

Americans’ total credit card balance is $1.166 trillion in the third quarter of 2024, according to the latest data from the Federal Reserve Bank of New York.

www.lendingtree.com

The average 22.8% annual interest charge that accrues on that $7,286 outstanding balance is $1,650. Breaking that into monthly payments, it requires $137.50 just to service the interest. I'm guessing most people stupid enough to carry a balance in excess of $7,000 are unable to pay more than $200-$300 a month, so the principal on the debt is essentially untouched.

I am absolutely against any attempt by the federal government to manipulate consumer debt interest rates. Market distortions always have unintended consequences. Rent control laws are a perfect example of the follies that occur when these interventions occur. Idiots like Elizabeth Warren and Chuck Schumer would love to give their freeloading constituents more taxpayer money.

But former senator Phil Gramm, in his book The Myth of American Inequality, shows that the bottom 20% of American households receive the equivalent of over $60,000 per year in direct and indirect government transfer payments.

I'll post this link to a commentary on the book, if you are interested in knowing the real figures of what our tax dollars fund, read it. It's disgusting. Did you know about 54% of people that file an income tax return pay zero dollars in taxes? I didn't think so.

Setting the Record Straight on Income Inequality - Econlib

Book Review of The Myth of American Inequality: How Government Biases Policy Debate by Phil Gramm, Robert Ekelund, and John Early.1 Everyone knows inequality is growing. As a trio of economists consisting of former senator Phil Gramm, economics professor Robert Ekelund, and economist and former...

www.econlib.org

Maybe not paying MORE when filing, But what has been taken out of every paycheck all year?

 

[farmo83]

I made a decent sized bet on IR coming down and have gotten smoked on it. While I would be quite happy if they did as i would make money im not a fan of artifical controls amd fully support an independent fed. I do still think we have more deflation/unemployment risk then inflation taking back off though hence my above mentioned bet.

As far as getting ahead and the "younger generation" a lot of that IMO is the "me too" and "YOLO" movement that does not prioritize long term financial planning so people just pile it up on CC.

My cousin and I get our bonuses around the same time every year. In 2020 he used his as a down payment on a camper and I bought shares in NVDA and TSLA.

 

[BabyRay]

You obviously live a charmed life. Your "supposed to's" completely leave out 100% of working class people who weren't born with the lucky sperm of parents who have wealth. A new car is what? Minimum 30K right now? The working class is expected to come up with $30K cash working paycheck to paycheck, maybe saving $200-$500 every month? What do they do in the meantime when they are saving up for a car for 10 years until they can pay cash for one?

If they had to use the credit card to buy tires because the belts were starting to show because they don't have $600 for new tires, how are they going to pay that off at the end of the month?

Buy a house with 20% down? The median home price in CA is nearly $800K. Where do people come up with $100K or more if they are working class? They just get assed out and don't get to buy a house under your "rules?"

You are grossly out of touch with average people. I'm very glad we didn't follow your advice. The only reason we were able to buy our current home with 20% down is by doing exactly what people like you said we "shouldn't." I'm not sure where all this cash comes from that you keep talking about. We cut out cable tv, and had a strict grocery budget, 100% covered health care at the time, and drove old cars when we were young. Had hand-me-down televisions and furniture for the first 15-20 years of our marriage and bought our first home with a zero down VA repo program. My parents loaned us $1500 for some of the closing costs, we had about the same amount, and our agent covered the last thousand. None of us could afford the $18K that would have been the 20% down payment at the time. Yet we were able to climb out of poverty thanks to that purchase. $20K in the bank was a complete pipedream for us. If we would have waited until we could miraculously save that $18K + CC, we'd still be making someone else's mortgage payment. As housing prices went up, and so did that 20% amount. Again, I think you're out of touch.

When we bought our first home (1975), we were able to get a FHA loan with 2% down. I don’t know if those types of programs are available today, but if I were a first-time home buyer, I’d certainly look into it.

As to spending, back then we wasted absolutely not one penny, as we couldn’t afford to. We had a broken window in our bathroom, and couldn’t come up with $5 for the piece of glass for several months. Well, maybe we wasted a few penny’s; when friends came over we’d all chip in for a case of beer. We had one car, and when one of us needed to ride the bus, we’d search the couch in hopes someone had lost their change while drinking that beer. We sometimes stopped by to visit our parents near dinner time, as we knew they’d feed us. Not really wanting to be freeloaders, we sometimes ate dinner at Denny’s, because we had no cash, and grocery stores and fast food restaurants wouldn’t accept credit cards back then.

Oh, and our 2% down was $365. Housing prices were just a bit lower in 1976. Still, that $180 monthly payment was tough.

 

[prorider]

Trump once again proving he isn’t a free market guy. We need less government.

 

[caribbean20]

The market in US Treasuries (the bond market) is the most liquid market on planet earth. Traded 24/7/365. NOBODY tells the bond market what to do. It tells everyone else what to do. Directly or indirectly, the bond market sets the rates for every other debt instrument, one way or another.

Whether it be consumer debt, mortgages, auto loans, etc., they are all based on the 2yr, 5yr, 10yr or 30yr treasury bills. The fed can set the rate for overnight funds, but the bond market will react one way or another, thereby increasing or decreasing the borrowing cost for the US government.

As others have said, any government intervention in this process is just adding to our already $37 TRILLION US debt. To think otherwise is just naive.

 

[HB2Havasu]

I have an idea for RDP to debate and poke holes in.

When Politicians discuss interest rates, do they really mean consumer rates and not the Federal Reserve Rate?

https://www.reuters.com/markets/us/trump-says-he-will-demand-lower-interest-rates-immediately-2025-01-23/

My gut tells me that Trump can skin this cat without the FED.

IMHO the biggest challenge that "Interest Rates" present to the average American Consumer is reflected in revolving Credit Card Debt and Mortgages. The Auto Industry does not seem phased by the FED as they mitigate rates with subsidized lending. Commercial lending certainly could be mitigated as well, but let's set that aside for a moment and just talk about retail consumers. I understand the bond market influences this discussion, but I'm simple minded.

Credit cards seems easy, he can regulate them. I'm not a fan of that, but he can do it.

What I'm really interested in is Mortgages. What kind of tools can Trump employ as a work around to make home buying easier?

If I were king or Trump I would create a more meaningful VA loan discount ASAP. If you served, you get a very attractive loan rate backed by the government, much more attractive than it is now. Like 3% Drop PMI, keep the low down payment. I would follow that up with a similar program a little less attractive (Maybe 4%) for First responders, Teachers and LEO first time home buyers.

I'm sure this is crazy talk, but I tend to think Trump always had a hustle and is posturing with his demand. maybe he partners with a few of the national builders to get them to subsidize the rate buy downs in trade for lower regulatory costs. That does not help rural America, but it could easy housing costs for metro areas.

What say you?

One of the problems I see with the FED leaving the interest rates at Near Zero for so long after the 2008 collapse is that people got use to them being this low. Two of my adult children recently purchased homes in the last 1.5 years, both at approximately 6.5% interest. They told me we will just refinance when the rates come back down. I tried to explain to them that historically a 6%-8% rate is fairly normal, those 2.9% rates were an anomaly. They didn't like it when I told them that, and purchased anyways, lol.

Yore not going to see the Fed reducing interest rates again like they tried to do to keep Biden/Harris in office for another 4 years. With Inflation at 4% and rising they're likely to increase rates next meeting! Rates normally only go down when the economy goes down. Just Sayin!

 

[bowtiejunkie]

You obviously live a charmed life. Your "supposed to's" completely leave out 100% of working class people who weren't born with the lucky sperm of parents who have wealth. A new car is what? Minimum 30K right now? The working class is expected to come up with $30K cash working paycheck to paycheck, maybe saving $200-$500 every month? What do they do in the meantime when they are saving up for a car for 10 years until they can pay cash for one?

If they had to use the credit card to buy tires because the belts were starting to show because they don't have $600 for new tires, how are they going to pay that off at the end of the month?

Buy a house with 20% down? The median home price in CA is nearly $800K. Where do people come up with $100K or more if they are working class? They just get assed out and don't get to buy a house under your "rules?"

You are grossly out of touch with average people. I'm very glad we didn't follow your advice. The only reason we were able to buy our current home with 20% down is by doing exactly what people like you said we "shouldn't." I'm not sure where all this cash comes from that you keep talking about. We cut out cable tv, and had a strict grocery budget, 100% covered health care at the time, and drove old cars when we were young. Had hand-me-down televisions and furniture for the first 15-20 years of our marriage and bought our first home with a zero down VA repo program. My parents loaned us $1500 for some of the closing costs, we had about the same amount, and our agent covered the last thousand. None of us could afford the $18K that would have been the 20% down payment at the time. Yet we were able to climb out of poverty thanks to that purchase. $20K in the bank was a complete pipedream for us. If we would have waited until we could miraculously save that $18K + CC, we'd still be making someone else's mortgage payment. As housing prices went up, and so did that 20% amount. Again, I think you're out of touch.

The rules posted by @Orange Juice have been laid out in many investment books and articles for at least 30 years. It's no secret that once a person heads down the path of high debt, it is very difficult to climb out from under. Mis-use of credit card debt, high auto payments at high interest rates for extended terms, high mortgage debt at unfavorable terms, and lack of living under your means by 20%. All these contribute to being stuck in the debt machine. Although, I'd like to think of the "rules" as best case. I think they are certainly doable, however, you have to set priorities and right-size your expectations to your income level. Also, whether you are single, married, have kids, plays a big factor in following and achieving the "rules." Personally, I think a bit of debt leveraging is to be used when appropriate (think 0% interest auto loan or 0% credit card offer if paid in full by end of promo period). Bending the "rules" for specific periods of time to achieve the goal, while not digging a hole full of debt, is ok IMO. I view financial life as levers. The more levers available to push and pull, increases your chances of success (toward your goals). The levers being a mix of assets (home, rental properties, vehicles, life insurance, investments, savings), and liabilities (CC's, mortgage(s), auto loans), all used to improve or defend your financial life as needed.

 

[stokerwhore]

I honestly think the 27-30+% interest rates should be illegal..

It is really easy to trap the youth into that quicksand and they can never get out.

RD

they are except for CC companies. That's straight loan sharking.

 

[angiebaby]

The rules posted by @Orange Juice have been laid out in many investment books and articles for at least 30 years. It's no secret that once a person heads down the path of high debt, it is very difficult to climb out from under. Mis-use of credit card debt, high auto payments at high interest rates for extended terms, high mortgage debt at unfavorable terms, and lack of living under your means by 20%. All these contribute to being stuck in the debt machine. Although, I'd like to think of the "rules" as best case. I think they are certainly doable, however, you have to set priorities and right-size your expectations to your income level. Also, whether you are single, married, have kids, plays a big factor in following and achieving the "rules." Personally, I think a bit of debt leveraging is to be used when appropriate (think 0% interest auto loan or 0% credit card offer if paid in full by end of promo period). Bending the "rules" for specific periods of time to achieve the goal, while not digging a hole full of debt, is ok IMO. I view financial life as levers. The more levers available to push and pull, increases your chances of success (toward your goals). The levers being a mix of assets (home, rental properties, vehicles, life insurance, investments, savings), and liabilities (CC's, mortgage(s), auto loans), all used to improve or defend your financial life as needed.

I get that, but they are suggestions for a perfect world, IMO, which most folks do not live in. I think they are good goals to aim for, but for many people starting out, they are just hoping to purchase a home by an means necessary because it is the ticket to wealth for those who are born without it. But yes, reducing debt is key. Some people get into a cycle of endless debt, and that is dangerous to financial security.

 

[Sportin' Wood]

W know a couple that got married one year earlier than us. They have declared BK like 3 times. Neither has ever had a great job, they live the typical SoCa lifestyle and do it well. Murrieta home, pool, Cadillac sports cars, new vehicles with all the cool shit, Desert toys. It's been this way since 1988.

In hindsight I would say playing by rules is for suckers.

 

[Cole Trickle]

W know a couple that got married one year earlier than us. They have declared BK like 3 times. Neither has ever had a great job, they live the typical SoCa lifestyle and do it well. Murrieta home, pool, Cadillac sports cars, new vehicles with all the cool shit, Desert toys. It's been this way since 1988.

In hindsight I would say playing by rules is for suckers.

Helps me sleep at night and I never have to look over my shoulder.....

 

[rrrr]

Maybe not paying MORE when filing, But what has been taken out of every paycheck all year?

That 54% is concentrated in the bottom quintile of earnings. The standard deduction for married joint return filers is $29,200.

 

[Looking Glass]

That 54% is concentrated in the bottom quintile of earnings. The standard deduction for married joint return filers is $29,200.

The "Cliff's Notes" Version would have been sufficient.

 

[rrrr]

I agree, I'm not a fan of manipulating the CC debt, however, there should be some regulations that require the lender to more easily explain what people are signing up for. It's predatory and legal loan sharking.

That's why there's two pages with small print on both sides included in new credit card issuance mailers and unsolicited "pre-approved" offers. The terms for borrowing are explicit and written so anyone that reads it knows exactly what they're signing up for.

That being said, I'm sure it goes in the trash unread with the envelope the new credit card came in. Those people are in a hurry to get to The Room Store before it closes at 9 PM.

 

[rrrr]

The "Cliff's Notes" Version would have been sufficient.

Do you want to learn something, or are you just here to look at the "Good Morning" thread?

 

[530RL]

they are except for CC companies. That's straight loan sharking.

The law in Arizona defining a usury rate is “shock the conscious of the courts”. It was changed to that as the prime rate reached 21.5 percent in December of 80. You could imagine consumer rates at that time.

I have had rates in the high 20’s and low 30’s repeatedly confirmed by the courts in the last decade of low rates. The worst a judge ever called it was “odious but perfectly legal”.

Loan sharking is alive and well in America. Just ask any legal hard money lender out there.

 

[Backlash]

Do you want to learn something, or are you just here to look at the "Good Morning" thread?

Yes.

 

[Mr. Jones]

Hi Fed rates also mean high interest payments on the national debt, so it's a double edged sword on this one. The Fed has a mandate to moderate rates, even if they don't talk about it

 

[2Driver]

One of the problems I see with the FED leaving the interest rates at Near Zero for so long after the 2008 collapse is that people got use to them being this low. Two of my adult children recently purchased homes in the last 1.5 years, both at approximately 6.5% interest. They told me we will just refinance when the rates come back down. I tried to explain to them that historically a 6%-8% rate is fairly normal, those 2.9% rates were an anomaly. They didn't like it when I told them that, and purchased anyways, lol.

Yore not going to see the Fed reducing interest rates again like they tried to do to keep Biden/Harris in office for another 4 years. With Inflation at 4% and rising they're likely to increase rates next meeting! Rates normally only go down when the economy goes down. Just Sayin!

Yep Brian Moynahan ( CEO BofA) said the same thing at Davos. Mortgage rates are going to stay about where they are keeping housing soft.

 

[wzuber]

Where are those rules posted, because in the ghetto where I grew up this is a pipe dream. I'm not just being a dick, I'm serious, if I would have followed this advice I would still be in poverty.

I would have never bought a house which is what help me climb out of poverty into a decent middle class lifestyle.

I'm 100% aware I need to go be poor somewhere else and that I'm hanging out with rich people, but your rules are impossible for 90% of Americans.

If these are the rules, I'm turning to a life of crime.

He's bloviating as usual.....