It looks like it's going to be one of those days when the good news is more limited. Consumer credit delinquencies should not come as much of a surprise considering the massive amounts of credit taken on by consumers in recent years. It was unsustainable and irresponsible to allow banks to even hand out so much credit. Now they are getting their bailout though for consumers, it's another story. Not that they were right in piling on the credit, but it's a striking difference.
According to the American Bankers Association, which represents most large U.S. banks and credit card companies, the percentage of consumer loans at least 30 days late rose to a seasonally-adjusted 3.22 percent in the October-to-December period from 2.9 percent in the prior quarter.The good news is that in early trading on Thursday, the markets have ignored the bad news.
The ABA said the fourth-quarter rate was the highest since it began tracking the data in 1974, with delinquencies rising in nearly every category. It said these credit trends are unlikely to improve before 2010. Many consider the deep recession the worst since the Great Depression of the 1930s.
"Job losses have really hurt the economy and will continue to inflict pain for several months," James Chessen, the ABA's chief economist, said in an interview. "The greater the losses are, the more severe an impact it has on all credit markets."
