LinkBack URL
About LinkBacks
American consumers are under intense stress. Now that there is no equity to borrow against their houses, Americans have done the next best thing. They whipped out one of their 30 credit cards. The credit card write-offs will be the next tsunami that hits our banking system and will be subsidized by taxpayer funds.
According to bestselling author and financial guru John Mauldin, credit card debt has exploded in the last few months. Mauldin states: “Commercial Bank 'exposure' via the total amount of credit card 'loans' outstanding has risen more in the last ten weeks, than it did in the previous ten months combined !
Moreover, the growth in the last ten-weeks, $32.3 billion, or about $600 million per 'shopping day' since the beginning of August ... represents nominal growth of + 9.3 percent ... or ... + 48.3 percent annualized over the last ten weeks."
According to American Express, delinquencies on credit payments rose to 4.1 percent of all credit outstanding in the Q3, up from 2.5 percent in Q3 of 2007, with Bank of America's rate rising even more steeply, to 5.9 percent in the quarter. What’s more, the 'pool' of loans deemed 'uncollectable' rose to a high 6.7 percent in the Q3, soaring from 3.6 percent last September. What consumer spending there is has been fueled in part by credit card. The second largest "merchant-vendor" for credit card use is now McDonalds. This suggests that many consumers are in serious distress when they need to get their $4 Big Mac and fries with a credit card.”
Full story:
The Cutting Edge News
Reply With Quote
