The top 100 stock
market authors
selected for publication in the last week
market authors
selected for publication in the last week
Tuesday, February 9 2010 |
04:13 EDT |
DJIA (DIA)
S&P 500 (SPY)
- Transcripts & Events
- Transcript Center
- Conference Calendar
- Strategies
- Dividends
- Growth vs. Value
- Market Cap
- Themes
- Research Tools
- Business Intelligence Search
- Banks are closing millions of credit-card accounts and cutting credit lines in an effort to inoculate themselves from a tsunami of defaults that could rival the subprime crisis. Too bad they're late to the party, again.
-
The Seeking Alpha 100
See all
Seeking Alpha 100 » -
Fastest Climbers
Those with the largestSee all
increase in followers
in the last week
Fastest Climbers » -
Top Commenters
Top commenters,
as ranked by their peers-
1
User 353732
-
2
Moon Kil Woong
-
3
doubleguns
-
4
optionsgirl
-
5
Mayascribe
Top Commenters » -
1
-
Top Instabloggers
The 100 most activeSee all
Instabloggers.
Top Instabloggers » -
Top StockTalkers
TopSee all
StockTalkers.
Top StockTalkers »
This news story has 1 comment:
Watch what happens to the default rates when unemployment hits 10+%.
Whats more, most credit card companies failed to price in the consequences of default rates being triggered on many / or all of a holder's accounts simultaneously, at which point, what was a manageable problem (e.g. 15-19% interest) becomes an unmanageable one at 30+% interest.
If the cards are close to the limit, the credit line is quickly exhausted, and the whole thing blows up, leading to predictable outcomes of default.
From a systems perspective, once these issues arise on a significant number of cards, the default rate can spike very quickly.