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post #71 of 111 (permalink) Old 02-16-2009, 06:39 PM
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So your assumption is they can't pay off their CC's?

Maybe they are like me and not partaking in the recession!
Statistics don't follow your assumption.


Fitch: U.S. Credit Card Late Payments Hit Record Highs, Chargeoffs Spike

Last update: 10:11 a.m. EST Feb. 4, 2009

NEW YORK, Feb 04, 2009 (BUSINESS WIRE) -- Late payments on U.S. credit cards topped record levels and defaults rose sharply to just below all time highs last month as consumers struggled further amid the deteriorating economic environment, according to the latest Credit Card Index results from Fitch Ratings.
As anticipated, the negative chargeoff results were offset by lower funding costs helping to maintain excess spread cushions for credit card ABS. In addition, monthly payment rates snapped back from the prior month's four-year lows although they continue to exhibit slowing trends on year-earlier comparisons.
Consistent with previous indications, Fitch expects credit card ABS performance to worsen further given recent delinquency and bankruptcy trends and the rise in unemployment levels. Nevertheless, negative rating actions are expected to be limited in the near term.
'U.S. consumers continue to struggle in the face of mounting pressures on multiple fronts from employment to housing to net worth,' said Managing Director Michael Dean. 'While we expect these issues to further impact credit card ABS performance going forward, available credit enhancement and structural features help reduce the risk of widespread downgrades.'
Fitch anticipates chargeoffs will breach 8% in the coming months and approach 9% during second half-2009. Deterministic stress testing on Fitch rated trusts indicate existing ratings can withstand such scenarios with potential negative rating actions limited to subordinate classes. Additional information is available in Fitch's Dec. 15, 2008 report 'U.S. Credit Card 'What If?' Stress Scenario', available at Fitch Ratings.
Prime general purpose card results for the December collection period show Fitch's Chargeoff Index rising 66 basis points (bps) to 7.50%, the highest level since the bankruptcy reform spike in late 2005 when chargeoff rates reached 7.53%. Current levels are now 40% higher than year earlier results.
Late stage delinquencies continued to rise as well with the Fitch's 60+ day Index rising 47 bps to a record 3.75%. The previous high was 3.73% in February 1997. Although late stage delinquencies were elevated throughout 2008, they escalated rapidly in fourth quarter-2008 by 18% to current levels.
In other prime card performance measures, monthly payment rates partially rebounded from a substantial drop in November, rising 131 bps to 17.27%. This is indicative of some seasonal correction, as the index typically exhibits a slow payment rate in November. However, MPRs are still 174 basis points lower than one year ago. Excess spread levels increased by 12bps as they continue to benefit from falling LIBOR rates; the base rate, a measure of trust expenses including debt servicing costs fell 36 bps month over month and 311 bps lower than last year. Meanwhile, portfolio yields normalized to 17.21% after last month's drop caused by day count issues in November. Although yield is 245bps lower than last year, this is attributable to the drop in prime rate, which is down by over 300bps year over year.
Retail Card chargeoffs were flat to month earlier and retail card delinquencies rose further. At 10.51%, Fitch's Retail Card Chargeoff Index remains 44% above year earlier levels. Despite climbing 12 bps to 5.20%, the rate of increase in Fitch's Retail Card Delinquency Index slowed for the second straight month. Retail card excess spread (three-month average) dropped to 8.49% from 9.34% largely due to a decline in portfolio yields. MPRs remain low but seasonal trends show an average increase in the January collection period of 80-120 bps in prior years.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, Fitch Ratings. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.

http://www.marketwatch.com/news/story/fitch-us-credit-card-late/story.aspx?guid={0BF3CB7A-88BA-4629-A966-69FF84E09901}&dist=msr_2


Oh, and Fitch is the industry standard analyst of record.

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post #72 of 111 (permalink) Old 02-16-2009, 06:40 PM Thread Starter
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Which is, ironically where AQ is headquartered. Who would have thought that might be a good place to open up a front on the War against Terrorists?
Where is that , by the way , the AQ HQ's ?
Oh, you have no idea.

Do you mean we will have to trash the entire country and probably its neighbors too, in order to destroy AQ ?
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post #73 of 111 (permalink) Old 02-16-2009, 06:47 PM
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So your assumption is they can't pay off their CC's?

Maybe they are like me and not partaking in the recession!
Too bad McBear beat me to it. I was at dinner.

Now......we will soon find out whether they can pay off their CC soon enough. If they can't, it will be us paying for them, one way or another whether you like it or not. So don't sit around and think it won't impact you.

There is no pills for stupidity.

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post #74 of 111 (permalink) Old 02-16-2009, 07:14 PM
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Where is that , by the way , the AQ HQ's ?
Oh, you have no idea.

Do you mean we will have to trash the entire country and probably its neighbors too, in order to destroy AQ ?
Well, according to OUR intel it is in the mountains between Afghanistan and Pakistan. That is corroborated by Pakistani intel and pretty much everyone else.

So no, we don't have to trash the entire country. I would hope we learned that lesson from our Iraq vacation.

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post #75 of 111 (permalink) Old 02-16-2009, 07:20 PM Thread Starter
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Well, according to OUR intel it is in the mountains between Afghanistan and Pakistan. That is corroborated by Pakistani intel and pretty much everyone else.

So no, we don't have to trash the entire country. I would hope we learned that lesson from our Iraq vacation.
Which mountain ?
Oh, we have no idea.

Do you mean we have to blow up every mountain cave some of which are possibly holding some innocent Afghan civilians ?

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post #76 of 111 (permalink) Old 02-16-2009, 07:32 PM
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Too bad McBear beat me to it. I was at dinner.

Now......we will soon find out whether they can pay off their CC soon enough. If they can't, it will be us paying for them, one way or another whether you like it or not. So don't sit around and think it won't impact you.

There is no pills for stupidity.
That there is the problem, those of us who restrain from overspending pay for those who don't.

aka O BA MA's spread the wealth around plan!

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post #77 of 111 (permalink) Old 02-16-2009, 07:36 PM
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Statistics don't follow your assumption.


Fitch's Chargeoff Index rising 66 basis points (bps) to 7.50%, the highest level since the bankruptcy reform spike in late 2005 when chargeoff rates reached 7.53%. Current levels are now 40% higher than year earlier results.



Oh, and Fitch is the industry standard analyst of record.
So what percentage of patrons in the restaurant won't be able to pay off their CC meal?

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post #78 of 111 (permalink) Old 02-16-2009, 07:41 PM
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That there is the problem, those of us who restrain from overspending pay for those who don't.

aka O BA MA's spread the wealth around plan!
You have to go further back to the Gramm Leach Bliley Act which relaxed lending standards for banks and how they addressed credit cards. You will most likely remember that as the time you started getting daily credit card offers in the mail.

The problem was started nearly a decade ago. Obama is only in on the cleanup end of it. With $15Trillion in Credit Card accounts in the US alone, when delinquencies soar, it inhibits the financial sectors ability to lend to those who NEED and should have loans and its ability to conduct growing business to get out of its mess.

So no, it has nothing to do with an Obama "spread the wealth" anything. It has to do with a foundation of the financial sector. Do you have another viable solution to keep it afloat so business can be conducted?

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post #79 of 111 (permalink) Old 02-16-2009, 07:42 PM
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So what percentage of patrons in the restaurant won't be able to pay off their CC meal?
That depends on a bunch of variables.

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post #80 of 111 (permalink) Old 02-16-2009, 07:50 PM
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That depends on a bunch of variables.
Just give us your best guess Mr. Spock...


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