Less available credit? I hope so
Politics, The Economy, Real Estate December 2nd, 2008
Nothing could be better news to my ears that seeing credit card companies cutting the credit they provide to American consumers. Obviously, the average American consumer has not been responsible managing credit so this is definitely good news.
According to Yahoo Finance:
(Reuters) - The U.S. credit-card industry may pull back well over $2 trillion of lines over the next 18 months due to risk aversion and regulatory changes, leading to sharp declines in consumer spending, prominent banking analyst Meredith Whitney said.
The credit card is the second key source of consumer liquidity, the first being jobs, the Oppenheimer & Co analyst noted.
“In other words, we expect available consumer liquidity in the form of credit-card lines to decline by 45 percent.”
Mortgages and credit cards are now dominated by five players who are all pulling back liquidity, making reductions in consumer liquidity seem unavoidable, she said.
“We are now beginning to see evidence of broad-based declines in overall consumer liquidity.”
