$2 Trillion Credit Contraction as Consumer Debt Defaults Soar

$2 Trillion Credit Contraction as Consumer Debt Defaults Soar

www.marketoracle.co.uk

Credit is drying up everywhere. Banks are now concerned (finally), about rising credit card debt. They have every reason to be. The bankruptcy reform act of 2005, which encouraged such reckless lending is now blowing up in lenders' faces.

Banks and credit card companies wrote that bill.

(visit the link for the full news article)

I wonder how soon till the fraudulent fed comes to the rescue of the CC companies and gives them billions more of their worthless dollars to bail them out? Since their predatory lending to desperate people can no longer be supported as the unemployment rate sky-rockets and people simply have nothing left to pay them with. lol

Regardless of what the law says, unemployed people are not going to be paying credit card bills. A second point is that someone unemployed, with no income, will meet the strict guidelines for wiping away all their debt.

Banks have finally beginning to get the bleak message that credit card defaults are going to soar. In response, Banks are Trimming Limits for Many on Credit Cards .

The easy money that led Americans to depend on credit cards to pay their bills is starting to dry up.

www.marketoracle.co.uk
(visit the link for the full news article)

[edit on 22-6-2008 by DimensionalDetective]

Well if the entire nation of credit card holders default on credit card it will be no body to suck up to pay for those that do not pay, but the elite.

Maybe, maybe we should stop paying taxes altogether and see what our corrupted corporate government even at the state level is going to do.

Originally posted by DimensionalDetective

I wonder how soon till the fraudulent fed comes to the rescue of the CC companies and gives them billions more of their worthless dollars to bail them out?

? what ?

the Fed is giving the banks/investments houses/the banks that issue credit cards....totally good money in the form of Treasury Bills that these private banks cash in with.

The result of all these hundreds of Billion$ 'swaped' or 'Lended' by the Fed... to these financial institutions is quickly making the USD decreasingly worthless ! Its not as your statement suggests...
its more of the Fed undercutting the value of the US dollar for the whole population ->> so that the elite bankers can keep living fat & happy as all their mistakes and monetary fraud are covered over by the Fed & the American middle class, and the fixed income people are the ones that will suffer at exhorbanent food, gas, and living costs that is the result of saving the finance industry !

off-with-their-heads...i say



~~~~~~~

oh, and at that market oracle site, they have a list of more & better topics than the one in the OP,
i might get in trouble with this: but i actually read and reply to some of those articles at the market oracle site.
i just had to make a response to your statement, and reflect/consider


[edit on 22-6-2008 by St Udio]

So what do the credit card companies do to remedy the situation? They run commercials telling people to go by plasma TVs on credit card. They push this consumerism message and dont push or give people incentives to save and now we are reaping the back side to this message. The fact is there is no incentive to save. Why when inflation is higher than any interest rate you will get in a savings or CD account. Its about time they banks got theirs but the fed WILL bail them out on our dime.

The FED will definitely not let these banks fail. But there is a limit to what they can do. The side effects of what they have already done are being seen in inflationary fire storms breaking out all over the world.

When the derivatives bubble, which currently stands at over a Quadrillion Dollars, pops we will see hyperinflation globally.

Well after the housing bubble crash this and anything that was linked to credit was going to be impacted.

So it was just a matter of time, so it is true when you hear that is not over until the fat lady sing.

This is horrible for everyone because it will hurt when it fully hits.

If the lessons I've learned about how our bank ruled economies function ("economy" for the globalists) then most of the debt isn't sured against real money anyway - bank "A" loans money to person "A", person "A" deposits that loan into another bank,"B" , which then assumes more money is in the economy than there actually is so it loans more money to person "B" on the strength of the money deposited by person "A" and so on..the hole gets deeper then wider as the banks try to hide it by filling it with surrounding dirt and before we know it we have a crater i.e the banks have created money which means that the amount of precious metals it (money) represents is spread against more and more money. Correct me if I'm wrong here (and before (I learned through ATS) but the economy needs to fail so that it can be re-established to something real not fake; so that control to issue loans can be taken from banks and given to the treasury.

I have a question: when a bank/credit card company issues credit with payment protection insurance (issued by the same bank or a subsidiary company) which is paid through the given credit, has the bank created "real" money from "fake" money? I wager it has.

It's going to be hard for everybody but it has to happen. I've had debts myself. I played fair and kept up repayments but when I left my job through illness and the insurance company failed to pay out despite all the evidence I provided to justify my claim, they said I'd resigned my position (well, yes, through illness), I told them where to go. The insurance was taken out with the credit company. The situation was quite complex so I'll not go into it any further. Needless to say..

..I sympathize with many people who default their loans. It isn't always their fault; and many loan providers push their products without really considering the hardships they will cause real people. I don't sympathize with those whom take out loans without any intention to pay back. I don't sympathize with banks (and other large creditors) that do not always get back their dosh because most of the time they know the debtor will struggle to live while paying it back.

Money (lack of) is quite nasty and I for one have learned my lessons. I don't borrow anymore and I will do my best to never borrow again unless it's an investment (e.g greater interest earned on my own money invested than paid back on any loan over the same time period).

I have a question: when a bank/credit card company issues credit with payment protection insurance (issued by the same bank or a subsidiary company) which is paid through the given credit, has the bank created "real" money from "fake" money? I wager it has.

reply to post by Rapacity


This situation is playing itself out right now. Ambac and MBIA are insurers of derivatives. They've just been downgraded and will not be able to right new insurance.

So, no real money is ever 'created'. The ponzi scheme just jumps a level. Unfortunately, it has maxed out and is crumbling.

reply to post by HimWhoHathAnEar


Thanks for that, I'd never heard of a Ponzi Scheme before. Just looked it up on Wikipedia. Ponzi fits the description of today's economy better than the preferred media terminology "Bubble".