The S&P is rallying back and we are full of confidence... I am still bearish and think that credit card defaults are a big reason to be so...
U.S. Credit Card Delinquencies At Record Highs: Same Dynamics As Mortgages?
• U.S. credit card defaults rise to 20-year high. Analysts estimate credit card charge-offs could climb to between 9 and 10% in 2009 from 6 to 7% at the end of 2008. In that scenario, such losses could total $70bn to $75bn in 2009. The $5 trillion in outstanding credit card lines (of which $800bn is currently drawn upon) are being trimmed even for credit worthy borrowers with Meredith Whitney estimating that over $2 trillion of credit-card lines will be cut in 2009 and $2.7 trillion by the end of 2010
• Losses are particularly severe at American Express and Citigroup amid a deepening recession. AmEx, the largest U.S. charge card operator by sales volume, says net charge-off rate rose in February 2009 to 8.7% from 8.3% in January 2009 as job losses accelerated and the economy deteriorated. For Citigroup, one of the largest issuers of MasterCard cards, default rate soared to 9.33% in February 2009 from 6.95% in January 2009
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Dube here. whats your thoughts on selling USD for INR now. With all the policy stimulus, revolution like populist bill frenzy, my guess is people are sufficiently spooked about the govt ability to solve the crisis. Add the money printing part and outlook for US recovery is pretty sad. Even if it recovers, money supply should still kill the $. Guess buy oil or emerging currency basket?
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