national debt

Colorado stock prices in the green after Monday’s frightful plummet

Debt has been the topic for nearly everyone these days whether they are individuals, business owners, economists, investors or federal government officials. Most people across the nation have faced the stress of debt in the past few years with record numbers of bankruptcy filings.

After the national debt was downgraded by Standard & Poor this past weekend, the United States stock market experienced one of the largest declines in the past several years of financial struggle. What could be considered a record one-day selloff on August 8, 2011 had nearly everyone with debt on their mind wondering about the future of the economy, including most Colorado business owners.

When stock prices plummet, it is never considered a positive event for a corporation and many business owners could be seen biting their nails after the stressful Monday. Although stock prices are certainly not back to where businesses want them to be, local Colorado businesses were amongst those who saw a small increase early this Tuesday morning.

By 9:00 a.m. Mountain Daylight Time, several Colorado based businesses including Crocs, Liberty Media, Molycorp and TW Telecom saw a slight increase in the prices of their stocks. In fact, the Dow was up 207 points to 11,017, which measures out to about 2 percent. The Nasdaq and S&P 500 tickers also showed numbers printed in green, coming in at over 2 percent.

Although the surprising increase came as a relief to people in Colorado, businesses continue to look for ways to restructure their debt with creditors as an alternative to filing for Chapter 11 and having the court do it for them or for Chapter 7, a complete liquidation of assets.

Source: Denver Business Journal, “Stocks jump in early trading; most Colorado shares rise,” Mark Harden, Aug. 9, 2011

Americans May be Aware of Debt, But Research Shows We Have not Stopped

Americans during this economy have become extremely aware of the fact that the country is in debt, and even more so, a significant number of individuals have felt the financial strain. Even while the income that a lot of people bring in each month is barely enough to cover the necessary bills, one study shows that Americans have again begun to slip further into individual debt.

American citizens have collectively experienced a $6.5 billion increase in the amount of credit card debt accumulated in the past quarter year. According to CardHub.com, most of the debt calculations fail to include the amount of debt that banks have charged off. Researchers took a second look at the data reported by the Federal Reserve and found that in the past few quarters, banks had charged off about 8.5-10.9 percent of their debt, and when debt is in the millions, that amount can be extremely large.

CEO of CardHub reported that “the alarming part is in this quarter, Americans got $6.5 billion more in debt, and if you look at the increase in debt between the second and third quarter combined, that’s 11% higher than the increase last year.” Researchers cited the fact that Americans had managed to reduce a portion of their debt in early 2009 and 2010, but that as the year went on, debt repayment was down 9 percent.

Predictions made based upon the report estimate that by January 1, Americans will have completely canceled out the debt repayment progress they made in the past couple years.

Source: Wallet Pop “Research Shows We’re Digging Ourselves Back Into Debt” Martha C. White 12/8/10