Fitch: Downgrades of credit-card bonds could rise

Fitch: Downgrades of credit-card bonds could rise

biz.yahoo.com

Credit ratings agency Fitch Ratings said Monday that ratings downgrades to credit card asset-backed securities could increase in the near future as lending margins narrow while defaults continue to climb.

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Credit card defaults are on the rise and this will be a good measurement of how our economy is slumping and will continue to add pressure on the banks.

I read in another article that by the end of 2009, we should have about $200 billion in credit card write downs. It's not nearly as big as the subprime mess, but $200 billion is a significant hit to the economy and should drive the markets even lower.

So this is part of what we are facing in deleveraging process:

1. Write downs in credit cards
2. Write downs for construction debt
3. Write downs for commecial paper as some will go default.
4. Write downs for the mortgage mess.

Anyone here think that $700 billion is going to be enough?

biz.yahoo.com
(visit the link for the full news article)