Impact of TARP on Credit Cards
By Barry Ritholtz - November 16th, 2008, 10:30AM
In-Depth Look: Impact of TARP on Credit Cards
"My formula for success is rise early, work late and strike oil." —John Paul Getty
Macro Notes
Consumer Credit continues downward trendPeter Boockvar
Consumer Credit outstanding fell $14.8b in Sept seasonally adjusted, almost $5b more than expected and marks the 11th month in the past 12 of declines. At $2.456T outstanding, it is 4.9% below the record high in July '08. After a flat reading in Aug, (didn't fall b/c of the CARS program), non revolving debt outstanding fell by $4.9B. Revolving (mostly credit cards) balances outstanding fell by $9.9B. To fully put into perspective today's data, look at the current level of consumer credit (doesn't include mortgages, the biggest chunk of consumer credit) relative to GDP. As of Q3, it totaled 17.2%...
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November 16th, 2008 at 5:50 pm
What do you do NEXT year??? Another trillion?? They might as well be talking about colonizing Mars. You can spend money on a program to do it. But, you’re not going to land there this year or next.
So, if the credit card companies can’t securitize, don’t they have to ration credit? Doesn’t that mean that real interest rates should go up?