Thursday, August 30, 2007

Son of subprime: Credit card debt

Let me get the Hat Tips out of the way right up front, this from Andrew Leonard at Salon:

Somehow, the global financial system managed to survive while How the World Works was on blissful vacation. But while quailing in fear at thousands of unread e-mails and blog-reader items, one data point about the U.S. economy caught our eye. The Financial Times reported on Monday that "U.S. consumers are defaulting on credit-card payments at a significantly higher rate than last year..." (Thanks to Calculated Risk for the tip.)

...In other words, is there a derivatives house of cards balanced on the ever-popular "slicing and dicing" of credit card debt comparable to the subprime mess that precipitated August's credit crunch? MORE

I'd be a bit suspicious of sub-prime plastic co.'s, One in particular. Cof, cof.