Solid Evidence of Subprime Spill-over

Discussion in 'Economics' started by Comanche, Sep 5, 2007.

  1. I know all of you have your favorite indicators and oscillators, convergences and divergences, etc, etc. And alot of you like to cipher through projections and such. But I have found rock-hard solid evidence that the subprime problems have already poured over the spillway.

    I am sure I am not alone in receiving large daily quantities of un-solicited credit card offers in the mailbox. At times it seemed like they were chopping down a tree every week just for me. Well, over the last several weeks these have completely dried up, nada, zilch. I almost thought my mail must not be getting delivered. It isn't because I am subprime, my score is in the top 10%. This is contagion from subprime, and it is spreading.

    This is going to hurt the consumer in a big way, argue what you will. Some of the smarter consumers were continuosly rolling debt from card to card to take advantage of introdutory rates to help manage their debts. Now that these offers are drying up, this is going to put further strain on the consumer and tighten up spending. And all of this is going to cause earnings guidances to lower, making the valuations some think are cheap, look more expensive.

    I know some of you will argue this data, to me it isn't just a data set on a piece of paper, it's a real time casualty of credit tightening, not some bullshit doctored up number derived from our government that has told you the worst of housing is over for the last year and a half. And make no mistake that the larger piece of the "economic growth" of this latest bull market was purely driven by cheap credit and the consumer willing to take on debt to buy things they don't need.

    Excessive consumer debt is a burden on economic growth, period.
  2. I've seen the same thing and I agree with your conclusion. In some ways I'm glad cap one will stop wasting all those trees and my time.

    Couple months ago I called the number to be put on the 'do not send' list. This helped cut it down to about 5 credit card offers a week from 10+ before that.

    I hope those people moving debt around to 0% offers every six months can find a low fixed rate before the music stops....
  3. I agree and they're all trying to cover their asses. I received an offer from Countrywide a couple weeks ago. They do hold my mortgage. They offered a card with 0% on balance transfers until 2009. Hell, I took'em up on it. Got a card with a nice big line of credit, but alas, some bullshit about not being able to do the transfer. Typical bait and switch. They're obviously hurting for money if they are pulling crap like that.
  4. I am seeing excellent special offers on my current lines of credit,.
  5. I too haven't seen a change in offers in my mailbox. I'm also still getting "checks" for my current LOCs. I usually get them once a month and just received more.
  6. Only indication I've gotten so far is Bank of America sending me notice that they were raising their rate on balance transfers and cash advances. As if I'd ever do one without a promo rate.
  7. Keep in mind that with globalization the American consumer isn't as important anymore.
  8. Last I checked, we still buy the majority of their shit, so I would say at this point that yes, the American consumer does play a pivotal role in emerging markets. We also provide many of their jobs through outsourcing.
  9. Also remember that while housing has been in a slump for years consumer spending is still strong.
  10. vectors101

    vectors101 Guest

    the banks are holding loans don't people aren't even paying interest on it. loan default.
    #10     Sep 5, 2007