US consumers are defaulting on credit-card payments at a significantly higher rate than last year, raising the prospect of problems in the stricken US subprime mortgage market spreading to other types of consumer debt.
Credit-card companies were forced to write off 4.58 per cent of payments as uncollectable in the first half of 2007, almost 30 per cent higher year-on-year. Late payments also rose, and the quarterly payment rate ”“ a measure of cardholders’ willingness and ability to repay their debt ”“ fell for the first time in more than four years.
Analysts at Moody’s, the rating agency, said the trend could be related to the slowdown in the US property market and a fall in the number of borrowers rolling their mortgage debt into new and cheaper home loans.
“The combination of higher interest rates and a softer real estate market diminished the attractiveness of mortgage refinancings in which many borrowers reduced their more expensive credit-card debt by drawing on the equity in their home,” Moody’s said.
Read it all (subscription required).
My summary:
“The British elites persuaded themselves that their great crime was to impose bourgeois values on everyone. In fact, it is the undermining of those values that is destroying the lives of the poor.”
We have done so in America as well – beginning with the promotions of the Congregational Church (anyone read the later chapters of “In His Steps”?) It is a combination of false guilt within the Church and then the rise of fatherless-ness (again) that creates our problem.
Poor history teaching results in lessons unlearned.
Also, As I would rather work for a rich man than a poor one, so would I rather get my values from a rich one rather than a poor one. One seldom can know about the values of a poor person but it is very very difficult that a rich person can hide his values.
A very, very insightful article.
Sorry! I apparently posted my text to the wrong article.