MIKE CARR ON ECB AND NEGATIVE INTEREST RATES: WHAT IS SAYS ABOUT US BANKS

RECENTLY THE EUROPEAN CENTRAL BANK DROPPED ITS LENDING RATE SO IT IS ACTUALLY A NEGATIVE LENDING RATE.  WHAT DOES THAT MEAN?  AND WHAT EFFECT, IF ANY, WILL IT HAVE ON THE EUROPEAN ECONOMY AND US HERE IN THE U-S.  I ASKED MICHAEL CARR – OF THE PEAK PROFITS DOT-COM – TO EXPLAIN IT.  HE GETS INTO THE PROBLEMS WITH THE REGULATION ON BANKS AND ITS CONTRADICTORY EFFECT ON THE FUTURE ECONOMY.

MIKE AND I WORKED WITH NEWSMAX DOT-COM TO PRODUCE AN ONLINE WEBINAR ON HIS PEAK PROFITS INVESTING SYSTEM WHICH USES HIS PATTERN RECOGNITION QUANT TRADING SYSTEM.  AS WE CONTINUE OUR CONVERSATION, MIKE THINKS THE BIG BANKS HAVE BEEN PUNISHED TOO MUCH FOR THE FINANCIAL CRISIS.

SO I ASKED MIKE IF HE WOULD HAVE PREFERRED THE TARP MONEY WENT DIRECTLY TO HOME-OWNERS AND NOT THE BANKS TO GET INTO THE ECONOMY QUICKER.  HE SAYS NO.

I HAVE A LITTLE DIFFERENT TAKE ON THAT LAST POINT.  GRANTED, MANY HOME-OWNERS ARE NOT INNOCENT IN THE FINANCIAL MESS.  STILL, MOST CITIZENS AND CONSUMERS WERE AT THE MERCY OF A FINANCIAL INDUSTRY THAT WAS CREATING COMPLEX INSTRUMENTS THAT WERE NOT BEING DISCLOSED AND NO ONE – NOT EVEN THE C-E-O’S OF THESE BIG BANKS – UNDERSTOOD.  PLUS, THE BANKS HAVE HUGE AMOUNTS OF MONEY TO LOBBY AND PAY OFF POLITICIANS.  HOWEVER, THAT SHOULD NOT BE AN EXCUSE FOR A SOCIETY THAT IS SO UN-INFORMED.  STILL, WE HAVE CREATED A SYSTEM WHERE WE NEED THESE BANKS.  MAYBE WE NEED A LITTLE CREATIVE DESTRUCTION ON THE BANKING SYSTEM TOO.  BUT THAT COULD BE A BIG RISK.  FEEL FREE TO GIVE ME YOUR THOUGHTS.

MORE WITH MIKE CARR IN MY NEXT SEGMENT.  STAY INFORMED NOT INFLAMED.