mainstreet

In a world of contracting global demand the lead $ 17 trillion economy will at the margin have part of the seven year free money subsidy withdrawn

$ 11 of the 17 trillion is consumer demand. Over 90 % of the $ 3 trillion in taxes collected are personal income taxes.

The impact can not be calibrated with an excel spreadsheet

The marginal, leveraged speculator and asset owner will attract the first margin calls

Then as the tide rolls out the naked will be revealed


http://nypost.com/2015/12/12/what-to-expect-after-this-weeks-interest-rates-raise/

It’s finally near. That long-awaited day when the Federal Reserve removes the training wheels from the US economy and raises rates, if they have the intestinal fortitude.

Yes, after a full seven years of pegging the federal funds rate at a never-before-seen zero, the Fed — barring any disasters or last-minute political wrangling — will almost certainly announce a rate raise Thursday.

With a still-soft, sputtering economy, it means the next president will have to deal with economic realities and all of Barack Obama’s economic policies without the Federal Reserve subsidy the president enjoyed for seven years.

For starters, Chair Janet Yellen and her band of banking buddies certainly missed other, more ideal times to begin raising rates earlier this year, when the markets were far more liquid and not up against the holidays and year’s end.

But here’s what it means to Main Street Americans when they sit around the kitchen table.

One of the first things you’ll notice after Thursday’s announcement is that your 401(k) may take a further hit as stock and bond markets adjust to the new paradigm.

The second notification will be a second gut shot when your credit card companies notify you that your rates will increase.

In fact, you’ll be getting lots of notices as all variable-rate products will surely take this opportunity to raise rates on consumers.

So if you have a small-business line of credit or a home equity loan, be prepared for a bump up in borrowing costs.

New and used car purchases will get more costly. An increase of 0.25 percentage point can add $5 to $10 month to a payment on a midpriced car — up to an extra $120 a year out of Main Street’s pocket.

When it comes to housing, adjustable-rate mortgages will be more costly on reset, as their pricing mechanism is tied closely to the shorter end of the yield curve than traditional 30-year mortgages.