09/19/2008 08:41:17 AM EST

The next Economic disaster

posted by moogly81

The next market to collapse is very likely to be the credit card market.

 

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Many people, struggeling with their mortgage, report the problem further on their credit card. It makes the situation significantly worse. I would not be surprised if a major credit card company suddentlygoes bankrupt and needs nationalisation because it's "too big to fail"

- average debt per american household :9800$ in 2007

- total amount of debt 880 Billion $

( http://www.hoffmanbrinker.c om/credit-card-debt-statist ics.html)

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The next Economic disaster | 2 comments (2 topical, 0 hidden)
money funds are next (none / 0)

Credit card companies make bank on bad loans.
They turn a $100 bad loan into a $10000 tax write off, after you've paid them $200 in fees.

They bailed out AIG to save money market accounts.
It is a major player in them.

The only good thing in the new proposed buy out of the bad mortagages from banks is that it will stop bank and money market failures.

Make sure your savings are FDIC insured.

by beelzibub on 09/19/2008 10:36:29 AM EST

That's generally true (none / 0)
Except that the FDIC can only bail out a small fraction of the banks it insures.  A general collapse is way beyond it's means.  Just food for thought.

by bfaul on 09/19/2008 12:10:20 PM EST

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The next Economic disaster | 2 comments (2 topical, 0 hidden)
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