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APR Shocks Many, but Issuer Says They Are Pricing for the Risk If you have bad credit in the new era of credit card regulation, be prepared to pay -- dearly -- for the privilege of using credit. That's the message underlying recent credit card offers that feature jaw-dropping interest rates of up to 79.9 percent. The sky-high rates may be a sign of things to come in the market for so-called subprime credit cards as issuers who lend to the riskiest of borrowers try to figure out how to stay in business and comply with the new credit card...

It could be the bets are off on low interest rates. In uncommonly frank remarks yesterday, the Fed's Ben Bernanke blamed lax regulatory oversight -- not super low interest rates -- for the housing bust. "All efforts should be made to strengthen our regulatory system to prevent a recurrence of the crisis, and to cushion the effects if another crisis occurs," he told the annual meeting of the American Economic Association in Atlanta. "However, if adequate reforms are not made, or if they are made but prove insufficient to prevent dangerous buildups of financial risks, we must remain open to...

The Federal Reserve has decided to hold interest rates at a record low and pledged to keep them there for an "extended period" to keep the recovery going and drive down double-digit unemployment. But in a more upbeat assessment, the Fed says the economy has "continued to pick up" and that "deterioration in the labor market is abating," a nod to the recent slowdown in the pace of layoffs. Despite some improvements, Fed Chairman Ben Bernanke and his colleagues said there's still reason for caution. Spending by households, while growing at a moderate pace, remains "constrained" by the weak job...

Ignoring The ProblemThe Cost of Paying the Debt NowBy starting today, the Federal Government can pay off the National Debt in 30 years by making interest and principal payments of $699,013,323,930.52 per year (see the chart below). In Fiscal Year 2009 the government made interest payments of $383,656,592,545.78. So it would take an additional $315,356,731,384.74 in annual payments to completely extinguish the debt in 30 years. By starting now, the total cost of interest will be $8,883,038,042,900.88, at 4%, over 30 years.Opportunity Cost: Waiting until 2019If the Federal Government chooses to wait until 2019 before addressing the debt, the cost...

LOS ANGELES (Reuters) - U.S. actor Alec Baldwin says he has lost interest in acting and considers his film career a failure. "I don't have any interest in acting anymore," Baldwin, 51, told "Men's Journal" in an interview for its December issue. Baldwin, best-known for his Emmy-award winning role in the NBC comedy "30 Rock" and the man chosen to co-host the 2010 Oscar ceremony, added: "Movies are a part of my past. It's been 30 years. I'm not young, but I have time to do something else".

NEW YORK (CNNMoney.com) -- Here's a new way to think about the U.S. government's epic borrowing: More than half of the $9 trillion in debt that Uncle Sam is expected to build up over the next decade will be interest. More than half. In fact, $4.8 trillion. If that's hard to grasp, here's another way to look at why that's a problem. In 2015 alone, the estimated interest due - $533 billion - is equal to a third of the federal income taxes expected to be paid that year, said Charles Konigsberg, chief budget counsel of the Concord Coalition, a...

Repeat After Me.... "There Is No Carry"The Market TickerTuesday, November 10. 2009 Posted by Karl Denninger in Editorial at 10:45 From this morning's open (there have been many essentially-identical charts over the last months...) You can argue anything you'd like, but this - the chart of the SPX cash and the dollar, overlaid - put the lie to any claim that "there is no carry" at play. Today, as with many days before (and I'm sure will be since) is stunning evidence that indeed there is a monstrous carry being perpetrated against the dollar and our nation, Bernanke knows it,...

U.S. stocks erased most of a 156- point rally in the Dow Jones Industrial Average after a House bill to curb credit-card rates spurred concern about bank earnings, outweighing the Federal Reserve's plan to keep interest rates at a record low. Wells Fargo & Co., JPMorgan Chase & Co. and Citigroup Inc. led financial shares to the steepest loss among 10 industries as the vote moved up the start date of many rule changes that will make it more difficult for lenders to raise rates on existing credit cards. The Standard & Poor's 500 Index wiped out most of a...

Roubini Sees Market Crash All Over the World By Rocky Vega 10/29/09 Stockholm, Sweden – New York University Professor Nouriel Roubini, who recently saw the recovery as “U-shaped,” is now concerned a dollar rebound will cause global markets to crash. His main concern is the carry trade in the US dollar. The dollar is being borrowed at near-zero interest rates to then be invested into a wide array of now-popular assets including gold, commodities, equities, credit, and emerging markets. There are simply more dollars available in the system that are chasing the same types of things. The risk is that...

Defeat the Debt Children: I pledge allegiance to Americaʼs debt, and to the Chinese government that lends us money. And to the interest, for which we pay, compoundable, with higher ...

One of the important messages coming out of the central banker’s annual retreat in Jackson Hole, Wyoming is that once the crisis is over the Federal Reserve’s (Fed) tightening of monetary policy may be abrupt. If so, increases in short term interest rates will not be gradual but jarring. The reasoning behind this approach, as I understand it, is that (1) since there could be political pressures to monetize the government debt and (2) given the large amount of existing liquidity that needs to be drained the Fed’s exit strategy needs to be unmistakably clear in communicating that it will...

US government bond prices, especially those of longer maturities, lost considerable ground in the latest session. Bonds were hit across the board due to next week's supply, an improving tone in US jobless claims and productivity data, a jump in crude-oil prices, mortgage-related selling as well as hedges related to new corporate bond sales. The seven-year and 10-year notes were the biggest losers, with the 10-year yield touching as high as 3.747 per cent, approaching the six-month high of 3.76 per cent set in late May. The US Treasury Department announced a sale of $US65 billion ($81 billion) in notes...

Stimulus with interest: $1.2 trillionJeanne Sahadi, CNNMoney.com senior writer Tuesday January 27, 2009, 5:25 pm EST The long-term cost of the $825 billion economic recovery package before Congress could rise to $1.2 trillion over 10 years, a top budget official said Tuesday. That's because the government will borrow to fund the plan and pay an estimated $347 billion in interest, Congressional Budget Office Director Douglas Elmendorf told the House Budget Committee on Tuesday. The calculation was made at the request of House Republicans who have questioned the size and effectiveness of the bill. When asked at a press briefing about...

With the country spiraling deeper into recession, the Federal Reserve is ready to slash its key interest rate – perhaps to an all-time low– in hopes of cushioning some of the economic fallout felt by many struggling Americans. To battle the worst financial crisis since the 1930s, Fed Chairman Ben Bernanke and his colleagues already have ratcheted down their main lever for influencing the economy – the federal funds rate – to 1 percent, a level seen only once before in the last half-century. The Fed opens a two-day meeting Monday to assess to economy and decide its next move...

Over the next year, the U.S. government will need to borrow somewhere in the neighborhood of $1 trillion, the most ever by far. Estimates go as high as $2 trillion, depending on how quickly the economy cools and how fast tax revenues fall. The simple question most of America has not asked is this: Where is the money going to come from? The federal government already knows the answer to that question, and it has implications Americans are not ready for but will soon be faced with. America is going cap in hand to Middle East oil exporters. What government...

Federal Reserve officials have pared their outlook for economic growth through 2009 to minimal levels and are prepared to cut interest rates further, while concern has risen that a deflationary spiral may take hold. The central bank expects growth in the United States to contract in the second half of 2008 and the first half of 2009, with some even were more pessimistic, according to minutes released on Wednesday of the Fed's Oct. 28-29 meeting, when it cut its benchmark interest rate by a half percentage point to a percent. "Even after today's 50 basis-point action, the committee judged that...

INTEREST rates may be slashed to zero after Mervyn King, the Governor of the Bank of England, warned that the economy could contract by 2 per cent next year. Mr King vowed to cut the official cost of borrowing to "whatever level is necessary" to boost confidence and stave off a long and deep recession. The government will outline its plans for the economy and spending in the Pre-Budget Report, which it confirmed yesterday would be unveiled on 24 November. Mr King revealed that the economy is already in recession in his latest inflation report. Confidence had been "shaken badly"...

High Street banks have told Alistair Darling they will not pass on any further interest rate cuts to consumers and businesses. The banks have warned the chancellor they are “not charities”. They said they could not afford further to reduce mortgage payments and interest rates to businesses if, as expected, the Bank of England continued to cut rates as the economy fell deeper into recession. The tough line from the banks will anger taxpayers, coming just a month after the government injected £37 billion into Royal Bank of Scotland (RBS), HBOS and Lloyds TSB to protect them from the credit...

On the fifth floor of an imposing building in London's Canary Wharf, six people are putting together one of the world's most important numbers. Every weekday morning, as the clock ticks round to 11, the group's members wait patiently for the numbers to arrive. These are the figures that will determine the day's Libor rate, or rather the rate banks charge when they lend each other money.

Federal Reserve Chairman Ben Bernanke predicted that the global financial markets crisis is likely to restrain the economy well into next year and signaled that the Fed may be getting ready to cut interest rates. But he said he believes the unprecedented steps taken to have the Treasury Department and the Fed intervene in financial markets were done in time to prevent more expensive and permanent damage to the nation's leading financial institutions. In a speech before the National Association of Business Economics in Washington on Tuesday, Bernanke said the threat of inflation has receded recently, while the economy has...