There’s a lot of news in the financial arena as of late. Some of it is good, and of course some of it is not so good, or at least not very hopeful. One of the biggest stories is the big stock market rally that occurred surprisingly at the end of October.
It was a nice Halloween surprise, that’s for sure. But it had me questioning why the stock market is rallying so much on so little good news. It seems the public is overreacting to good news. The news that made the market swing into the highs it experienced was news that there was an agreement made to get European debt problems under control.
I’m wondering why, when all other economic indicators seem to show that the economy is not really recovering that well, the market makes wild swings higher, to earlier highs when it did indeed seem a recovery was on its way. Of course, back then it was only because the government was still on its wild spending binge and propping up the economy artificially for a time.
I get a little scared when I see the stock market overreact to a little bit of good news. All this European news is telling us is that there are going to be serious austerity measures in Europe in order to get their debt under control. I’m not sure that starting the road to correcting something that went horribly wrong is a reason to start the party back up.
In other news, and one that got a lot of consumer’s boiling, including me, was news that banks may start to charge fees for customers using debit cards. Debit cards are something that we have all become so accustomed to using that this would greatly impact many of us in our wallets.
Debit cards are a great way to keep you out of getting into debt trouble with credit cards, because unlike high interest credit cards, you don’t get charged interest on debit card purchases, and you have to have real live money in your account when you spend.
So basically, debit cards are a way to make you spend only what you have and not live beyond your means unlike the unrealistic credit card. Low interest credit cards can be a great way to make purchases that you can’t pay cash for, but they are still a risk.
Banks are now actually backing away a bit from the whole debit card fee thing due to consumer pressure and an outcry that this wasn’t fair. It all stems from banks not being able to charge businesses huge fees any more on debit purchases.