Yet Another Shoe Drops
Now that subprime plastic can’t be “refinanced” with another card or paid off with home equity, credit card defaults are beginning to spike. On the bright side, there was no federally-sponsored rent-seeking megacorporation encouraging every warm body to have six credit cards. On the not-so-bright side, there’s $950B in debt outstanding and banks are hoarding this “cash” stuff, which I’m told is fairly significant in a liquidity crisis.
I’d love to pay down my credit card debt. I’d have to get a full-time job first. For more jobs to be created, companies need to be starting new projects and expanding. For companies to start new projects and expand they need to have cash on hand. To get cash on hand they need to borrow it. To be able to borrow it banks have to be willing to lend it. For banks to be willing to lend it they have to be solvent. For banks to be solvent they have to get debts owed to them paid down, debts like credit card debt. For people to pay down their credit card debts they need real jobs….
— Freddie · Oct 16, 02:41 PM · #
- Underneath those numbers, due to such creative-capitalism innovations as ‘universal default’, how many people are paying the default rate without having missed a credit card payment but instead have missed a mortgage payment? Or the electric bill for a month?
- I remember when cc default rates dropped after the 2004 bankruptcy bill passed, and people were trying to figure out what had happened. Did the deadbeats finally get their stuff together? Or were they now just prolonging their defaults until the worst economic situations hit so they can all pool together with collapses elsewhere? Well played, lobbyists.
— rortybomb · Oct 16, 05:07 PM · #
Josh Xiong offers some interesting thoughts on John McCain’s responsibility for the crisis…
http://joshxiong.com/?p=107
— archie · Oct 16, 06:04 PM · #