Credit Cards, Other Debt Are New Worry For Banks

U.S. regulators said they are watching credit cards and commercial construction loans for signs they may be the next trouble spots as strained financial markets constrain credit.

The housing downturn, with its epicenter in the subprime mortgage market, remained atop the list of concerns. But banking regulators and Federal Reserve officials expressed concerns that credit risks may extend beyond mortgages.

Federal Reserve Chairman Ben Bernanke warned that mortgage delinquencies and foreclosures would likely rise and more house price declines could be expected.

"This situation calls for a vigorous response," Bernanke said in a speech to the Independent Community Bankers of America in Orlando, referring to government and private-sector initiatives to slow the rate of home loan failures.

Keep Reading

Comments

[Sundialsvc4]

Well, they consider this to be "a problem?" How interesting, because I just had to get a bigger box.

You see, whenever the unsolicited credit-card offers come through, we check to see if they actually have a live credit-card in them (those have to be shredded); otherwise, they just go into "the box." The pile quickly outgrew the shoebox and then the little shipping-box from Amazon and now it's graduated to a "small" square box from U-Haul. There are sometimes eight or ten of these pieces of mail coming in every day.

There is an obvious desperation in the banking industry, as the screws of inflation take hold. We are not presented with images of post-WW1 Germans shoveling wheelbarrow-loads of currency into their stoves because it was cheaper to burn them than to buy wood with them, but basically that is what we have going on here. And the financial system is no more willing to acknowledge the problem now than they were in 1929.

Wile E Coyote is just now beginning to realize that he is hanging in mid-air. . . .

"Beep, Beep! G'bye!"

[Razz]

Federal Reserve Bank is the biggest problem in the US economy. Most of our debt is to the Federal Reserve Bank, which is a privately held bank. According to our constitution no private entity is allowed to print US currency. We (tax payers) pay billions of dollars a year just in interest to the FRB (8,500,000 a day). Go to Google video and watch America: Freedom to Fascism - Director's Authorized Version. Here"s the link http://video.google.com/videoplay?docid=-16568803038673901733) I hope everyone sees this. We are becoming a "slave" country to what the banks have created. We need to somehow break free from the bonds of "slavery". This credit system is wiping the middle class as we know it.

[mrcontinental]

Becoming a slave country? I appreciate your optimism Razz but we are already there.

[mmckinl]

Slaves are too expensive to keep ...

The chains of debt are stronger and more politically correct.

[Razz]

I'm really, really saddened by this. What is to become of this great country of our? I love this country. I am truly am SAD!!!

[mmckinl]

As newly minted working class they will bolt for the Dems. Should the Dems disappoint a whole new political movement will evolve.

[WorkingClass]

Trust me. The Dems will disappoint. The new political movement will be known as terrorists.

[zizyphus]

http://www.thenation.com/doc/20071217/faux

Read here about what Citigroup has been up to in Mexico. I hope the people of North America wake up before they shove this North American Union scam down our sleeping throats.

There is something inherently wrong with foreigners owning our banks, something wrong with letting sovereign wealth funds bail out our banks, and something very wrong with our government bailing out these crooks at our expense.

[mrcontinental]

There is something inherently wrong in this country period zizyphus.

[EattheRich]

Ho-hum. It's just karma, baby! Americans thought they were the cheese on Ritz crackers...and now the crackers crack and the cheese tastes like shit. Sad? no...

[HouseOfRoberts]

We never had these loan shark rates and practices until the no-bankruotcy bill passed Congress. If that were recinded these crooks would have to work with debtors. Most people are using credit cards, not to live beyond their means, but as a stopgap to going under immediately. They're not buying big screen tvs and cars anymore, they're buying groceries and paying power and phone bills with credit cards to free up their paycheck to pay the mortgage.

[gappytoofcondi]

Spot on. The credit card companies are raping the consumer, thanks to the bankruptcy bill passed. If they would charge a reasonable rate of interest, one could feel some sympathy. However, these shylocks deserve to get screwed. After all, the interest charges more than covers the outstanding debt owed. They are beyond greedy- they are criminals.

[elpollo]

Hey, I watched the Merchant of Venice (Pacino movie) recently and these credit card guys are a lot sleazier than Shylock ever was. You"re lucky he's dead and can't sue you for defamation of character.

[ErnestineBass]

Look for explosive growth in the collection agency sector!

[fact finder]

EB; You can not get money from people who have none. Let the collection agency's explode as long as the shrapnel does not hit any one but them. 1776

[SubparDude]

:
The Surge Is Working.

So sad that nothing was even tried here at home.

Bush led by vacationing, and here are the results.


:

[Enid]

However the likes of Warren Buffet will make billions.

[mrcontinental]

Of course it will spread. Inflation on food and fuel will take additional dollars out of family budgets. That money will be missed in the average family's monthly budget

[mmckinl]

The debt spiral is crashing , sucking huge amounts of M1 out of the system.

What this means to the average person is no more credit and maybe no more job. There's the squeeze, less and less money for higher and higher prices channeling available money into fewer and fewer sectors of the economy.

[mrcontinental]

Yep. The FED contracted the money supply during the Great Depression and it looks as if they are doing a variation on a theme here.

[joebaggadonuts]

"This situation calls for a vigorous response," Bernanke said...

Like what, grovelling before the masters of Sovereign Wealth Funds? Pleading with the Saudi's to pump more oil? Or simply taking on MORE debt to pretend we don't have to pay taxes to bail us out after the liquidity crisis is over? Whining that it's money we can spend better ourselves rather than having the government spend it is a loser's game. We spent it and now it's gone. There's no Social Security trust fund to raid because we made fun of the "Lock Box" concept in 2000. Privatize this on the backs of the billionaires, eh? Nope, they have too much power so let's sock it to the middle class, again, instead.

When will it be over? What's the light at the end of the tunnel? Until recently you wouldn't admit we were in a tunnel, and we should listen to you? How stupid ARE we anyway?

[mrcontinental]

They can start by getting rid of the usury in finance.

[mmckinl]

No they can't really ... they'd go belly up ...

Usury , outrageous late fees and unearned service charges make up 90% of their profits.

[ErnestineBass]

Beware that "light at the end of the tunnel".

It could very easily be the headlamp of an oncoming freight train...

[jinjinpinti]

...Or the light over the medical gurney as they pronounce you dead fron starvation?/

[drkazmd65]

And,... yet another shoe starts to drop,...

[BC33]

How many shoes do we get before tree-of-shoes collapses?

[GreedyOldPsychopaths]

Just one. And it's a big boot up the a**.

[mmckinl]

Of course the crisis is spreading. Our whole economy is based on debt, without more debt the whole game comes crashing down as money is destroyed.

It is all too clear that massive amounts of debt will not be repaid. Consumers are either broke , near broke or saving and retiring debt ... All those strip malls and office buildings will be emptying out. Limits on Credit Cards will be frozen or contracted. As the debt crisis spreads through the system more and more people will be laid off , starting yet another round of contraction.

[jinjinpinti]

Gosh. Them maybe it's a GOOD thing that Dubai now owns my husband's company? In that they are loaded and can pay his wages?

[mmckinl]

Should they not make any money he will be laid off as well. Then there's the option of moving the jobs overseas to pay Indians, Chinese or Phillipinos peanuts to do the job. And if that doesn't work import workers into the US on visas.

[nomoredead]

bingo ! jin