The Chimperator's Economic Miracle - Credit Card Debt a $915 Billion Disaster-in-Waiting for Banks

I know that at times I sound the pessimist, but I continue to believe that the U. S. economy is headed towards some very rough times. As if the housing market melt down ins't enough to worry about, there's also the credit card bomb that is waiting to go off (http://newsmax.com/newsfront/credit_card_debt_banks/2007/11/06/47264.html):

Think the estimated subprime debt load carried by the big international banks is big, at $1 trillion? How about this: Americans now owe nearly as much – a record $915 billion – on their credit cards alone. And defaults and delinquencies in the credit card sector are piling up – which means big banks are on the hook, again. More sand in the gears for the global economy. Credit card companies wrote off 4.58 percent in payments between January and May, almost a third more than in the same period in 2006, according to Moody's Investors Service. As a result, lenders such as Citigroup, Bank of America, and American Express, among others already reeling from the subprime mortgage disaster, are being further weakened.

Third quarter numbers for banks were the worst since 2001. First Citigroup took a 57 percent hit in earnings. The decline was attributed, in large part, to consumer-credit problems. Anticipating additional defaults, they stashed away $2.24 billion in loan-loss reserves. Other major banks also took a beating and are also preparing for the expected credit card delinquencies and defaults.

Falling home prices and rising gasoline costs also add to bankruptcy woes. U.S. home prices fell 3.2 percent in the second quarter, the sharpest decline since 1987, according to Standard & Poor's. As home prices fall, homeowners have a harder time getting cash by refinancing high-rate mortgages. The high cost of gas, often purchased with credit cards, doesn't help either.

Fears are now rising that U.S. consumer credit card problems could ripple out into the global credit market, starting in Europe. Deutsche Bank, for example, is now "…in a heightened state of alert to monitor a potential domino effect," says the bank's U.S. analyst, Michael Mayo.

We may be approaching a "perfect storm" in the financial realm, but what are the Chimperator and the GOP presidential candidates worried about? Gay marriage, immigration and kissing the butts of the Christianists! Go figure.