there is a possible economic shift taking place already that is not all that surprising to me and is just starting to get reported. the news is also just coming out prior to the effective date of the new BK laws {and credit card monthly payment minimums increase} and this is the new reports of a noticeable pop in the amount of late credit card bill payments. looks like everyone is "charging" up there additional fuel costs and getting a surprise at the end of the month when their bills arrive. There seems the probability that a very weak Christmas consumer will be caught in a tightening noose of credit problems --- this will most likely keep the consumer confidence numbers in a down trend and accelerate the economic slowdown. The credit card society of the last few decades looks like it may be setting up to take some serious heat --- this confluence of events mixed with the massive amount of mortgage re-fi's should be watched very closely by the fed and others going forward. what do you think?
I can't help but think that Christmas spending will hold up as consumers destroy their balance sheets. This could lead to a severe drop in consumer spending in 2006 as people get their credit card and heating bills at the same time.
Macro, Looks like that's the way it's going. Also people have bought way to much house for themselves. This with the home markets slowing mean little room for equity growth.
ZF true --- yes the heating bills will get ugly if the U.S. has a cold winter and that will hurt 2006 numbers.
good point as I have always said that homes are like a money sponge when the appreciations go flat --- more rooms and square footage require more heating/cooling, furniture, maintenance, etc.
http://www.aba.com/Press+Room/092805DBULL.htm CREDIT CARD LOAN DELINQUENCIES REACH RECORD HIGH IN SECOND QUARTER 2005 WASHINGTON, Sept. 28 â Credit card loan delinquencies reached a record high of 4.81 percent of accounts in the second quarter of this year, according to the American Bankers Associationâs Consumer Credit Delinquency Bulletin.
dad was in Hong Kong when the housing bubble burst and he mentioned that it was not nice to watch. (Retirees loosing overnight all their assets and not knowing what was happening around them.) Same thing with the .com bubble when the oldies were getting their last penny from under the mattress to put into some IPO. Maria
Put me in the 'me too' category. General public knows nothing about the new bankruptcy laws and hikes in cc minimums. Once they find out, there will be a big break in spending on consumer discretionals, which probably means a dismal christmas 2005 and worse 1Q 2006 for the retail sector.
Congress changed the laws to help consumers. The minimum was raised so people would pay back there debts faster savings themselves lots of money. We could do like europe I suppose and cap the total amount of credit to $1500 for all credit cards combined so some people dont feel like indentured servants to credit card corps.