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Credit Losses Rising Anywhere and Everywhere
Remember when policymakers at the Federal Reserve told us in 2007 and 2008 that the credit problems were “contained†to the subprime mortgage sector? Or when then-Treasury Secretary Henry Paulson spouted the same line?
Oops.
We’ve already established how those guys were dead wrong about home loans. Indeed, the delinquency rate on U.S. mortgages surged to a record 9.12 percent in the first quarter of this year. Late payments rose in ALL categories, including prime fixed-rate loans, the absolute “cream of the crop†in the mortgage world.
Now, it’s clear they were dead wrong about the entire credit market! Credit losses and delinquencies are…
13Jul2009 | Money and Markets | 1 comment | ContinuedCredit Cards: The Next Debacle
WSJ
Meredith Whitney
Few doubt the importance of consumer spending to the U.S. economy and its multiplier effect on the global economy, but what is underappreciated is the role of credit-card availability in that spending. Currently, there is roughly $5 trillion in credit-card lines outstanding in the U.S., and a little more than $800 billion is currently drawn upon. While those numbers look small relative to total mortgage debt of over $10.5 trillion, credit-card debt is revolving and accordingly being paid off and drawn down over and over, creating a critical role in commerce in America.
Just six months ago, I estimated that…
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