Please know that I am not a big advocate of this bail-out. At the same time, I do appreciate how urgent of a matter that we are facing.  Therefore, passing this bill today in Congress was extremely important.

There is no good answer to the bursting of the greatest debt bubble in history.  Ultimately, the burden will fall on the tax payers.  This will be a difficult process for the stock market and the economy to work through.

I want to make sure you understand the significance of this statement.  Politicians allowed this debt bubble to occur and politicians just allowed this after-effect of the debt bubble to get much worse.  The even sadder part of the whole matter is that none of this, including today’s events, should have happened.

Today, the House vote for the bail-out plan did not pass.  In an unbelievable display of politics, a very important, although admittedly irresponsible, bill was just voted down by out politicians. 

Today represents what is wrong with America and the political system that governs this great country.  For years, politicians voted with their pocketbooks when it came to passing legislation and regulating this country.  It is the job of Congress to regulate, make laws, and protect the citizens of this country.  Today was a disturbing example of how politics is failing this country.

I would be the first person to agree with every politician that voted down this bill today as to the reasons for placing a no vote.  First, this type of thing should be carefully thought out and not rushed.  Second, passing a bill that will end up being paid for by taxpayers is hugely irresponsible. 

However, members of Congress, you didn’t have a choice but to pass this bill.  You helped allow this horrific situation to occur in the first place.

Fannie Mae and Freddie Mac were the poster children of the mortgage crisis.  However, they were allowed to get that way because Democrats voted along the party lines to shelve a bill that would have reformed Freddie Mac and Fannie Mae.  Had this bill been allowed to pass, this mortgage crisis would never have been created in the first place. 

These two companies desperately needed to be regulated.  Weren’t the accounting scandals during 2004 enough to signal there was a problem?

Of course, politicians have enjoyed all of the money that these two companies have donated to campaign re-elections.

Then there is Senator Richard Shelby who has been one of the biggest voices against the bill.  This was the same Senator who headed up the Senate Banking and Finance Committee when this mortgage crisis started. 

The bubble was created on his committee’s watch.  Where was the regulation?  Where was the oversight of the banking system?     

The politicians turned their backs as mortgage companies advertized zero down, low adjustable interest rates, and no income verification loans.  They then sat back and allowed Wall Street to take these horrible debts and turn them into securities. 

Anyone responsible who was charged with watching these problems unfold could have predicted what was coming down the pike.  There is no way that this could have a good ending. 

This same Senator voted against a bill that could have at least provided some stability for a very unstable market.   I don’t think that this is the long-term answer nor do I think it will solve the problem.  I do think that psychologically it was necessary. 

Unfortunately, the politicians don’t have a good understanding of that either. 

Going forward, we are going to have to get through the aftermath of the consequences of a debt bubble.  Most importantly, we need to look long and hard, not at how the banking system is regulated, but how the politicians are regulated.  There is no accountability.  As long as politicians are allowed to take money from the very people they are suppose to be regulating, we are going to continue to run into these conflicts of interest.

Yes, this credit crisis is the unfortunate result of conflicts of interest.      

Tags: bail-out, Bob Brooks, Congress, credit crisis, debt bubble, Deceptive Money, Democrats, economy, Fannie Mae, Freddie Mac, laws, mortgage crisis, Prudent Money, Senate Banking and Finance Committee, Senator Richard Shelby, Stock Market, Washington

I can almost predict the advice that will be given by the financial services industry.  It goes something like this -

“Stay invested and invest for the long-term.”

“You can never time the market.”

Then there is my favorite.  “You always want to buy low and sell high.  Why would you want to sell anything when we are probably at the end of the bear market?”

I heard that little gem yesterday on CNN.  A financial author basically telling you that you are stupid for selling any stocks right now.  Then they show a chart that graphically illustrated how investors always sell at the wrong time.

Well, let’s take a look at history and see if these experts are correct in being so convinced they are right.  I always like to look at past bear markets because bear markets have similiarities and you can learn things from past bear markets that can be applied to this current one.  Let’s look at the length of past bear markets.  Now this is the length of time, calculated in market days, that it took for the bear market to be completely through and the market stopped dropping.

1968 Bear Market – 408 market days

1973 Bear Market – 451 market days

2000 Bear Market – 549 market days

Current Bear Market  – 316 market days (based on the top being in July 07 and not October 07 – there is a long list of reasons why I believe that July was the top, not October)

Do you really think that the worst credit crisis since the Great Depression is going to produce a mild bear market?  Yes, I agree that you don’t ever sell in a panic.  However, you do reallocate your investments if it is interfering with your financial goals.  How do you determine if that is the case?  If this current bear market is starting to drastically interfere with you achieiving your goals, then a change might be in order.

You never change your investments out of panic.  You change your investments if it does not meet your investment profile.  Whatever you decide to do, don’t let some financial author make you feel stupid for doing something that is probably very prudent.

Please read this week’s Stock Market Outlook for more information.

Tags: bear markets, Bob Brooks, buy low, CNN, Deceptive Money, financial services industry, past bear markets, Prudent Money, sell high, stocks

Well, we finally have it.  The largest bank failure in history.  

Washington Mutual is now a bank failure.  Fortunately, JP Morgan has taken over the assets.  Thus, there shouldn’t be any change for customers. 

I talked on the radio show about fear today.  You can  listen here – Thursdays podcast . There is so much fear that has been created by the media and by the politicians.  Please know something – Yes, this is not a good thing long-term for this country.  It is one more step towards socialism.  However, this whole financial collapse opinion is way overdone.  The Government is willing to step in and that will fix the ultimate concern of financial collapse.  That is the difference between now and the Great Depression.  Below are some of my notes from todays show:

There is no question that the uncertain times that we face as a country is unsettling at the very least.  I would classify it more as disturbing when you think about how we got to this point and the fact that this could have been prevented had our politicians governed this country correctly. 

This is our new reality or another way to look at it – this is our new normal.  Our new normal is a Wall Street that is completely different than it was 2 weeks ago.  Our new normal is a potential taxpayer burden of enormous proportions.  Our new normal is a Government that had to step in to prevent a financial system from collapsing.  The new normal is one step closer to socialism.   

However, the point is that this is a historic and sad moment for this country.  Because of that, there is a tendency for the “sensationalists” to come out of the woodwork and stir up all types of panic which in turn creates bad decision making. 

Yes, there is the potential of financial failure.  At the same time, the Government has the ability to handle this.  Regarding the individuals in the media who are telling everybody to sell everything and go to gold or cash…. This is nothing more than irresponsible reporting.

No decision should be made based on panic.  Our Government is working to prevent financial collapse.  I have been notably bearish for the past 2 years.  I have spoken my mind about the grave situation we face.  At the same time, the dollar is not going to zero value and our financial system as we know it today is not just going to dissolve.  

Just remember something when it comes to these dires warnings.  There are many people who take these types of situations and use them as an opportunity to sell a product.     

Tags: bank failure, financial collapse, Govedrnment, Government Bail-out, Great Depression, JP Morgan, media, politicians, socialism, Wall Street, Washington Mutual

This is unlike anything that I have ever seen.  Granted, I was not in the business during the 70’s which would be the last truly turbulent time that this country has faced.  Before that, you would have to go to the 20’s.  Interestingly, there are huge similiarities between the late 20’s and the 30’s and today.  It was a debt bubble situation then and it is a debt bubble today.  The only two debt bubbles in the last 100 years. 

There is one big difference between today and then.  It is the ability for the Federal Government to step in and intervene.  There is a huge difference between the Government today and the Government then.  At the same time, the Government is in a high stakes game right now.  There is no room for mistakes.  We can debate all day as to the move that they are making.  None of us will know for years whether or not the final bailout is a good move.  Unfortunately, this is a move filled with risk.  It is also a move that does nothing to address the serious foreclosure crisis that we are facing.

There is one thing for sure.  They need to do something fast.  The markets need a boost of confidence. 

One good thing today is that interest rates in the bond market are falling today.  Ever since the announcement of the bailout, interest rates have soared.  That is not good for everyone who is attempting to refinance or who is tied to variable interest rates.

Tags: Bailout, Bob Brooks, debt bubble, Deceptive Money, federal government, Foreclosure, interest rates, markets, Prudent Money, refinance

(From this week’s Stock Market Outlook)

It is amazing how things can change in the course of a few weeks.  I typically write a market report on Mondays.  Honestly, I am not in the mood to write one.  With the events of last week and the changing of the rules of the game, it is tough to know what to say. 

At the same time, I do have very strong feelings about last week.  It makes me sit back in amazement that the very institution (Government) that allowed all of this to occur is the very institution that is going to take the problem over and manage it.  It makes me sick to my stomach to see the nature of politics and the major role it has played in the creation of this mess. 

As members of Congress point fingers in an attempt to cover up their own mistakes, banks and investment companies are bailed out by the trillions with our money.  You are kidding yourself if you think that this is only going to cost 700 trillion dollars.  This is a much bigger mess than anyone knows.  Further, we might be turning it over to an even more incompetent bunch of people to manage it.

So Congress wants to regulate Wall Street.  Well, it is a little too late for those actions.  Anyone with a basic understanding of Finance 101 could take a look at the mortgage markets and realize that this was going to end very badly.  As the greed grew ever so large, Congress, who is supposed to be the ultimate regulator, just turned the other way.  After all, a lot of greed produces a lot of economic growth which translates into re-election and some big campaign contributions. 

Yes, if you want someone to blame, just look at our elected politicians.  They stood back and allowed this to happen.  They could have put a stop to it.  They could have become aggressively involved years ago.  Yes, politics disgust me.  Yes, the very ones who are all of the sudden turning into regulators are the very ones that need the regulation.  How about term limits?  How about extreme limitations on who they can take money from for financing campaigns.  It is ridiculous to think that a politician can be in office for decades and die of old age while still an elected official.   

All of the above is an age old problem that will probably never get any better.  The very sad part is the unnecessary manipulation by the Government with free markets.  By banning short selling on stocks, they take the “free” out of free markets.  That is what angers me the most.  As an investor, you should be equally angered.  They just arbitrarily changed the rules of the game because they can dictate their power.  This is no different than being in Russia.

It was no big newsflash that we were going to pick up the bill for the mortgage party.  At the same time, the Government sets a dangerous precedent for the future by unnecessarily changing the rules of the game.  Short selling is a way of the markets and something very necessary to the overall balance of the market system.  To remove it for a list of 799 companies is socialistic. 

Then this morning they added more to the list.  Some of these companies are not even financial stocks.  I guess Hank had more of his buddies he needed to take care of. 

So, what does this do to the market going forward?  It creates a great deal of instability in a very volatile environment.  It could end up creating a massive imbalance that could ultimately crash our markets.  Further, the Federal Government has thrown out the ultimate lifeline and has nothing left to save this market. 

As someone who manages money for a living, this outright manipulation by the Government with a once free market system is very sad.  It is a different Wall Street now.  It is now a government controlled Wall Street.     

Tags: Bob Brooks, Congress, Deceptive Money, economic growth, Government, manipulation, mortgage markets, politicians, Prudent Money, regulators, Russia, Wall Street

Over the weekend, we got a taste of how the two presidential candidates would react to this credit crisis. 

Senator McCain- He won’t raise taxes at all.  Now, Mr. McCain, didn’t you learn from the mistake that President Bush Senior made when he promised no new taxes?  Do you really believe with the Government bailing everyone out, that taxes will not go up?  It is OK.  I think that you can say it.  I will raise your taxes.  You will not have a choice. 

Senator Obama – When asked how he would have reacted, he said, “I don’t want to detail my plan because I don’t want to cause any reactions in the stock market.”  (my paraphrase) 

With all due respect Senator, the stock market really doesn’t care what you would or would not do since you are not the current Treasury Secretary (the real President) 

When asked if the Treasury Secretary would remain in that position in the event of an Obama Presidency, he replied that Hank Paulson would “be involved.”  I am not a big fan of the Treasury Secretary because I think that he tends to take care of the good old boy fraternity on Wall Street.  However, I think that it would be suicide to remove him from that post until we are through this situation. 

Either candidate doesn’t provide much in the way of confidence when dealing with this horrific problem.

Tags: Bob Brooks, credit crisis, Deceptive Money, Prudent Money, Senator McCain, Senator Obama, Stock Market, taxes, Treasury Secretary

(excerpt from my client letter)

Hank Paulson is the most powerful man in the world.  When he speaks the earth moves and markets react.  Hank has spoken and everything is all right? 

Where do I even start?  History has been made numerous times over the past week.  As usual, I have a lot of opinions on what is taking place.  There are many thoughts and feelings running through my mind right now.  Actually, none of which are a concern about the management of your money (which I will get to by the end of the letter).

It is a sad day in the history of this country.  From the perspective of someone who manages money, I see the government manipulation, the self-serving politics, and questionable decision making that takes place in our financial system.  I like to refer to it as the “dark side” of my daily experience.  If you manage money, you unfortunately are exposed to it.  Until today, nothing really surprised me.  The recent actions by the Government are disturbing to say the least. It makes me very concerned for the future of my children.

Let’s take a look at the bail out of America by the Federal Government.  They have stepped in and bailed out Freddie Mac and Fannie Mae, two companies that will never suffer for the irresponsibility that they have participated in through this mortgage crisis.

They have bailed out AIG.  We are up to now about 285 Billion of commented money. 

The Government announced that they would insure against any losses in the 2 trillion dollar money market system. 

Then, as if it couldn’t get any better, they stepped up to the plate yesterday and announced that they would bail out the entire banking system by taking all of those “toxic” loans off of their books.

Let’s see…..we are up to about roughly 750 billion to 1.5 trillion dollars of US government pledges.  As taxpayers, we will all pay for the irresponsibility and greed of the mortgage and financial services industry. 

This is not what upsets me the most.  I will get to that in a minute. 

I think that we all knew that was coming.  Whether Hank Paulson throws it in our face by riding in on the white horse during the Wall Street’s darkest hour or whether the government just slowly over time allows us to take on this enormous burden of debt, the fact that we, the taxpayer, will pick up the tab is no newsflash.

The problem is that this does nothing to help the American consumer. The problems are still there.  The Government will tell you that they are saving the financial system and doing this for the American consumer.  Don’t believe it!  Yes, the financial system would have been in a crisis situation.  At the same time, when are they going to allow the markets to work this out without intervention and manipulation?  It will work itself out somehow. The Government continues to increase the risk every time they step in.    

Now, the thing that disturbs me the most was the ban on short selling by the SEC.  They have just taken the free out of free markets.  With this ban, we no longer operate in a free market system.  The Government has gone way to far and over stepped their bounds.  These moves have socialism written all over them.     

Tags: AIG< Money Market System, America, bail-out, Fannie Mew, federal government, Freddie Mac, government manipulation, Hank Paulson, short selling, socialism, stock markets

I wonder how much some of these commentators really understand about how markets work.  You would expect good strong commentary rather than something you would hear from a mutual fund salesperson.

The commentator says, “Just remember we are in it for the long-term.  Over the past 40 years, if you invested $1 it turns into $17.”  Then he goes through the most flawed reasoning ever given for investing for the long-term.  He goes through the “if you missed the 5 best days” example.

The whole premise is that if you were to try and attempt to time the market and miss a certain number of the best days your return would be horribly less versus staying invested.  The problem is that they don’t give the other side of the story.  Read this article that shows what happens if you miss the worst days. 

Remember it is the worst days that do the most damage to your money.  There are twice as many good years in the market as bad because the bad years do so much damage to your portfolio. 

Although the market had a pretty incredible bull market between 2002 and 2007, over the last 10 years, the S&P 500 has averaged 1.2% a year. 

Tell the retiree who has a portfolio of stocks that investing for the long-term makes sense. 

The bottom line is that there are times to be invested in stocks and times that it doesn’t make sense. Unfortunately, the financial services industry never wants you to sell.  Why?  It is bad for business.

Tags: bear market, CNBC

The Primary Reserve Money Market fund, a 64 billion dollar fund, did the unpardonable on Tuesday. Money market funds are supposed to be sacred ground.  They are the safe place an investor can park money without the fear of losing money. 

Money market shares are valued at $1 per share.  They don’t fluctuate from that share value.  Well, they are not supposed to fluctuate.  In another history making move, the Prime Reserve Money Market Fund reported that their per share value is now $0.97.  They “broke the buck.

Never has a money market of this size had to devalue their share price lower than $1.  This was as a result of investments that they had with now bankrupt Lehman Brothers.  Incidentally, the majority of money market funds are in good shape. 

Lehman going into bankruptcy, Merrill Lynch being taken over, the two mortgage giants Freddie Mac and Fannie Mae being taken over by the Government, and AIG almost failing…this seems to beg a question.  Is this the start of the Great Depression? 

Yes, I think that sounds ridiculous as well.  However, the media is blowing the credit crisis way out of portion.  The media is also acting surprised at all of the history making events of the past week.

It was no secret that these investment banks/banks have been in trouble.  It should be no secret that the stock market is in a bear market and these types of things happen in bear markets.  It should be no secret that the mortgage meltdown is creating an enormous credit problem.  It should be no secret that we are seeing bankruptcies and insolvencies.  In fact, there are probably more to come.

This is what happens when a debt bubble bursts.  Unfortunately, these events seem to be catching investors and Wall Street by surprise.  Yesterday, the market acted as if all of these credit problems were brand new problems. 

Yes, this is a serious situation.  However, the Great Depression this is not.  Could it escalate into a horrific situation?  Yes, that could happen.   However, it is not there at this time.  Investors are sure acting as if this is the case.  What I don’t like to see is the panic.  It is a little too late to panic.

Investors who have not planned for risk are all of the sudden thinking that they need to just get out of the market.   I always advocate that investors should be prepared for risk and bear markets.  If you read my market outlook, I have been advocating this for over a year.  

At the same time, these decisions shouldn’t be made out of panic.  These decisions about re-allocation for risk should be made because it makes sense for the investor.  If you are taking too much risk in your portfolio, then make some decisions to adjust your portfolio  However, do so logically. 

Decisions created out of panic rarely produce good results.

Tags: AIG, bankrupt, banks, bear market, bear markets, Bob Brooks, credit crisis, debt bubble, Deceptive Money, Fannie Mae, Freddie Mac, Government, Great Depressions, investment banks, Leham Brothers, Merrill Lynch, money market funds, mortgage maltdown, Primary Reserve Money Market, Prudent Money, risk, share price, Stock Market

You have to feel for Hank Greenburg.  He is the former CEO of AIG.  He ran that company for 38 years until he was forced to retire in March 05.  He is not responsible for the irresponsibility of this current situation.  He does own 11% of the company. 

He tried on several occassions to reach out to the current CEO and did not even get his calls returned.  As a result of the collapse of AIG, he has lost $2.4 BILLION in a matter of days.  That was the total loss when the share price was at $3.75. 

Today, AIG trades at $2.26 a share.  I would hate to figure out the additional billions he has lost.   You really have to feel for a guy who built an insurance empire only to see it destroyed by the irresponsibility of the current management.

Tags: AIG, Bob Brooks, Deceptive Money, Hank Greenberg, Prudent Money

The Federal Government has been busy pledging our money.  Last week, it was a pledge of $100 billion to both Freddie Mac and Fannie Mae.  Then today it was a $85 billion dollar “loan” to AIG. 

We can complain all we want about the Government and their practice of bailing out companies.  The harsh reality is that in all three cases it was critical.  Had there been no intervention with Freddie and Fannie, we would have faced dire circumstances in the mortgage markets.  Had they not bailed out AIG, the only word I would use would be “horrific.”  Trust me, you would not have wanted to see the state of our markets had AIG fallen apart.

AIG does business in almost every market all over the world and insures 88 billion dollars worth of assets including corporate loans and mortgages.

So, we the taxpayers are on the hook.  The reality is that we the taxpayers have always been on the hook.  It is just now becoming reality.  Eventually we will pick up the bill for everything.  Well, us and our kids and their kids.   

Just to think…it was only a few short days ago I wrote that the Federal Government was through bailing out companies.  Could there be another company out there too big to fail?

Tags: AIG, Bob Brooks, corporate loans, Deceptive Money, Fannie Mae, federal government, Freddie Mac, Mortgages, Prudent Money

This morning we are starting off in a tough position for the markets.  The pre-opening markets find the S&P opening at least 2% plus lower (at the time of this writing).  The foreign markets are getting hammered.

Goldman Sachs just posted a 70% drop in revenue.

Merrill Lynch shareholders filed a lawsuit against John Thane concerning the buyout by Bank of America.  They claim that the proposed $50 billion sale was “wrong, unfair and harmful to Merrill public stockholders.”   

Dear Merrill Shareholders,

Be thankful you are not a Lehman shareholder who gets nothing.  Fortunately for you, Bank of America was insane enough to buy Merrill.  As far as Merrill CEO John Thane who said everything was fine and that they did not need raise capital, your CEO could walk away with $11,000,000 in cash.  Not a bad deal for being irresponsible. 

So, shareholders of Merrill, if you want to sue someone, sue Johnn Thane for being irresponsible for telling you everything was OK when it wasn’t OK.  Twenty something a share is better than the Lehman “no deal” per share and bankruptcy.

AIG is getting hammered in the pre-market.  Go figure, a company worth 8 billlion trying to raise 40 billion (as pointed out by Todd Harrison this morning at www.minyanville.com)

More to come…….

The above is not a recommendation to buy or sell securities.  This is purely commentary on the current events of the market.

Tags: AIG, Bank of America, Bob Brooks, Deceptive Money, Goldman Sachs, JOhn Thane, markets, Merrill Lynch, Prudent Money, S&P 500, stock markets

The events of this weekend reveals volumes about our environment going forward. 

Let’s take a look at the financial landscape prior to this weekend.  First, we knew that many companies are in trouble and trying to raise money.  Second, we also knew that the government has been there to bail-out these business prior to this weekend.  Finally, we knew that companies were having to pay big bucks just to raise capital.  

Following this weekend, we now know the following.  First, companies are still in trouble and needing to raise money to survive. Second, it is very clear that the Government is through bailing out companies following the take over of Freddie Mac and Fannie Mae.  Finally, investors are no longer willing to throw good money after bad.   The ability for these troubled companies to get money looks slim. 

It was only a matter of time when reality showed its’ ugly face.  What does that mean going forward?  Well let’s just take the words of Secretary of the Treasury Hank Paulson.  In his press conference he stated that things will get better with the problem in the credit markets when the “real estate markets stablize.”

Oh, is that it?  So, the real estate markets will not stablize until the foreclosure crisis stablizes.  (which created this mess in the first place)  Unfortunately, it might be a while for that takes place based on the latest statistics.   

In no way is any of the above a solicitation or advice to buy or sell securities.  It is only intended to be commentary on today’s current economic and market events.

Tags: bail-out, Bob Brooks, Deceptive Money, Fannie Mae, Foreclosure Crisis, Freddie Mac, Government, investors, Lehman, Paulson, Prudent Money, real estate markets

College students are resorting to credit cards for financing college costs.  This can end up being a toxic combination of credit card debt and student loans.  So as a parent, what steps can you take?

1)     Assess your child’s situation – Have a good long talk with your child and assess the situation.  Ask some tough questions.  Find out the extent of the debt.  This might be tough considering that most students might be hesitant or embarrassed about the debt.  Approach the situation with a spirit of understanding and grace.  That will go a long way in building trust in a stressful situation.  

2)     Stress the seriousness of the situation – There is a tendency to just think that the debt is no big deal.  It is a big deal and make sure that they are going to take it seriously.  When in financial difficulty, there is also the tendency to just let the debts go.  This is extremely dangerous at this time in their life.  

3)     Make sure that they know to stay on time with payments – Emphasize to your college student that they have to stay on time with the payments no matter what.  Explain how late payments will send interest rates soaring.  Also explain how defaulted debt can damage credit scores.  Finally, explain the real hassle of dealing with debt collectors.  That should be motivation enough to stay current and in the good grace of the creditors.

4)    Help them with a game plan to get out of debt – Offer to help them get organized and start working towards a game plan to get out of debt.  It might look hopeless.   However, the good news is that once you get everything organized, the situation becomes much more encouraging.  

Tags: Bob Brooks, college debt, credit card debt, Deceptive Money, interest rates, payments, Prudent Money

A new poll released by a research group Kaulkin Ginsberg shows some alarming facts.  A good percentage of today’s college seniors are graduating with a toxic combination of credit card debt and student loan debt.  

The problem is the lack of availability of money from new student loans as well as the fact that most student loan programs don’t cover the full amount that is needed.  As a result, credit card companies are hovering like vultures just waiting to give away credit to college students, most that don’t really understand how credit and debt work.

Other surveys showed some additional disturbing feelings towards credit card debt.  

More than 25 percent of college students think it is “reasonable” to use their credit cards as a means to raise cash, according to a recent National Association of Retail Collection Attorneys (NARCA) survey. The NARCA survey also revealed that 31 percent of those polled did not worry about college student credit card debt.  They believed they could pay back outstanding balances once they were out of school and earning a regular paycheck.

These are two prevalent attitudes about debt that are very dangerous.  ”It is not a big deal and I can pay it back later.”  As a parent, it is so very important to make sure that you have a handle on what your college student is doing when it comes to credit.  I will post a few ideas a little later. 

The worst part of this situation is that most college students don’t understand the negatives to credit card debt.  This is especially important during a time when their credit score is so very important in getting a job.