Out of the Frying Pan and into the Fire — this past week we saw a new avalanche of bad news – in housing and consumer debt delinquency. While Wall Street talks up the further growth opportunities in equities (and further growth of their own bonus payments — partially aided by a borrowing rate of near zero percent supplemented by you and me), US consumers continue to hunker down.
Thanks to the FHA and the Federal Reserve — we can know ponder how quickly the economy is going to recover with nearly 1 in 7 homeowners in America at least one month delinquent on their mortgage (the 14th consecutive quarter of increase). That’s right — 1 in 7. Of that 7 — 2 are already in foreclosure.
Faced with already depressing and still growing unemployment numbers — and — a European-like 33 hour work week for those that are employed — Wall Street’s version of “Its Beginning To Look Like Christmas” sounds more like “Baby – It’ Cold Outside” on Main Street.
Q3 US Credit Card Statistics released by the FED show banks wrote off 10% of existing credit card debt outstanding during the quarter and still have 6.5% of all credit card debt outstanding debt delinquent. Hardly a ringing endorsement of the “recovery” theory. Here’s a closer look at these numbers:
Credit Card Chargeoffs:
- Q3 2009 – 10.10%
- Q3 2008 – 5.62%
- Q3 2007 – 4.05%
- Q3 2006 – 3.87%
Consumer Loan Delinquency:
- Q3 2009 – 4.71% (all) 6.51% (credit card)
- Q3 2008 – 3.72% (all) 4.83% (credit card)
- Q3 2007 – 3.22% (all) 4.45% (credit card)
- Q3 2006 – 3.01% (all) 4.17% (credit card)
To be fair — we can’t just focus on the poor debt laden, cash strapped, underemployed consumer. We also need to pay attention to the crash in the Commercial Real Estate market and dismal prospects for State revenues and budgets in 2010.
Maybe we’ll talk about that next time – meanwhile Throw Another Log on the Campfire…….DC