Post Tagged with: "credit"
Weak consumer spending will last for years
It has been my thesis for some time that we are seeing a secular change in consumption patterns in the United States. This will have grave implications for a world economy used to seeing the American consumer as an economic growth engine and consumer of first choice. Retail sales in the United States have fallen
Looking beyond the fake recovery
I have been taking a bit of a break as my trip to the Ontario’s Lake Country winds down. It’s a beautiful place. But, as Marshall Auerback and I were lamenting, it has become the Hamptons of Canada as everyone from Toronto is up here for the summer holidays. But, it has been relaxing. Since
Chinese officials warn banks about reckless lending
In late June, I posted two items China’s present growth story is built on malinvestment and Chinese stock market bubble inflating, on the building bubble in Chinese lending and asset markets. The crux of the posts was that China, in its efforts to reflate the economy to meet very high growth short-term targets and start
Transferring Swedish bank risk onto Latvian taxpayers
This is my translation of an article from Dagens Nyheter, a Swedish daily. Swedish banks are planning to write down Latvian personal loans by 10 percent. However, the proposal includes only a small part of the Latvia’s mountain of debt. The criteria for qualifying for the program, as it stands right now, is quite strict.
Consumer loan delinquencies paint bleak picture
This comes from Reuters: Fallout from a still deteriorating housing market caused the rate of consumer loan payments at least 30 days late to rise to 3.23 percent in the January-to-March period from 3.22 percent in the 2008 fourth quarter, the American Bankers Association said. Delinquencies were the highest since the ABA began tracking the
A conversation with Pete Peterson on Charlie Rose
Peterson is the former Nixon cabinet secretary and founder of the Blackstone Group. He is also a well-known deficit hawk and founder of the Peterson Foundation. He recently wrote his autobiography, “The Education of an American Dreamer.”
America’s Fiscal Train Wreck
I think a technical recovery will happen in the Q4 to Q1 timeframe. But this recovery is likely to be weak, if it happens at all. Downside risk remains. Unfortunately, the Obama administration has fired all its bullets, spending huge political capital bailing out the big banks and putting together a weak stimulus package we
Bank crisis for prostitutes
Credit is still tight despite the low Libor rates and other signs that market stress has died down. Case and point is an item I ran across on the Norwegian site E24. Apparently, Amsterdam is losing revenue as its prostitutes in the red light district cannot get credit. Here is my translation of the story:
Is the new affordable FHFA loan program predatory lending?
Let’s say you’re an American named Maria living in Southern California. The year is 2006. You make $45,000 and your husband David makes another $40,000. You have two children aged six and four and your two-bedroom apartment is getting too small. So you decide to consider buying a house. Eventually, you and your husband find
Consumer credit down a massive 33% in Spain
Credit in Spain is contracting at an unprecedented rate, down 33% in the first quarter as Spain faces a housing bust and near 20% unemployment. Below is my translation of part of a Spanish-language article explaining the situation. Consumer credit fell by 33.7% in the first quarter, to €5.796 billion, and late payments rose to
Can I borrow the full amount and an extra 25% too?
Apparently the answer to this question is yes. CNBC is reporting that home ‘owners’ who refinance their mortgages through loans backed by Fannie and Freddie will be able to borrow up to 125% of their homes’ value (hat tip Marshall Auerback). That’s not a typo: we’re talking no-money down and 25% cash back. Sign me
What’s in your wallet? Probably higher interest rates.
FT Alphaville is reporting that the credit rating agency Fitch puts credit card losses at 10.4% of outstanding loans. This is a record. Bad news if you are a credit card company. So, what does one do in that situation? You raise rates on customers that are paying, silly. Citi’s rate increases emerged on the