Bad credit threatening US economy: Research

[OhioChick]

Source: Zee News India

New York, Aug 25: Bad credit has supplanted terrorism as the gravest immediate risk threatening the economy, a key national research group reported Monday.

Borrowers' withering ability to pay their bills and the subsequent fallout in the credit markets this summer topped the list of short-term risks on peoples' minds, according to a survey of 258 members conducted by the National Association of Business Economics.

NABE, a Washington-based association, said 32 percent of its surveyed members cited loan defaults and excessive debt as their biggest near-term concern.

Only 20 percent of members cited defense and terrorism as their biggest immediate worry, down from 35 percent when the survey was last conducted in March. Credit risk also topped gas prices, inflation and government spending.



Read more: http://www.zeenews.com/articles.asp?aid=390969&ssid=51&ssname=World&sid=BUS&sname=LATEST-BUSINESS-NEWS

---

Surprising, given this booming economy. :sarcasm:

[Warpy]

1. Funny how this ticking time bomb is only reported offshore

Some of us have been sounding the alarm for years: keep offshoring the paychecks and importing the debt and you've made a depression inevitable.

Right now, the only things supporting the economy are easy credit, happy talk and wishful thinking. Our economy has become unsustainable.

[tanyev]

2. Nuh-uh. This economy is STRONG.

Why, it's so STRONG that nothing could ever bring it down. Let's cut more taxes! Wheeeeeeee! :party:

[onewholaughsatfools]

3. After 911

bush said go shopping, his approval rating was 94% of course the seriousness of this would be a time to stay home with family and reflect. This is just another topic of Bush's suggestions that has now come home to bit America in the ass..........

[no_hypocrisy]

4. It's a multilevel credit crisis.

Insurmountable personal debt with dwindling job security, inflation, compound interest, no relief in the court system.

State and local spending based on bonds, which are nothing more than IOUs.

Federal spending based on treasury bonds, deficit spending, insufficient funds, "borrowing" from social security contributions.

This is a clusterfuck house of cards.

[NYC]

10. House of Cards. House of Credit Cards.

[L0oniX]

5. We just filed for bankruptcy too

[Spazito]

6. AMERICAN CONSUMER LOOKS INTO THE ABYSS (Canadian article)

He bought 23 million digital TVs, 34 million MP3 players and 127 million wireless communications devices last year. To fund the purchases he cashed out hundreds of billions of dollars in equity from his newly purchased home -- a piece of cake since his house was posting blistering double-digit price gains.

Now his mortgage payments have snapped higher as his teaser rate expires, his house is starting to lose value and some analysts are predicting a double-digit price slump--a deflation the likes of which the United States has not seen since the Great Depression.

snip

Financial markets have been badly shaken by trouble stemming from the housing slump, but some analysts say the full impact on the underlying U.S. economy has yet to be felt. Add in the recent gut-wrenching volatility in the stock market and the belated tightening in credit standard, the chances of the first consumer-led recession since 1991 is ticking ever higher as consumers move to rebuild their tattered savings.

"We are now in a serious housing recession," said Susan Wachter, professor of real estate at the University of Pennsylvania's Wharton School in Philadelphia. "The increase in wealth that came through refinancing was what took us out of the 2000 recession. The real concern is that we'll go down the same way we came up, which is that housing prices will cause consumers to pull in and stop spending and that will throw us into a recession. But that hasn't happened yet and we won't see whether that happens for another three to six months."

more

http://www.canada.com/nationalpost/financialpost/story.html?id=7a61fd5b-3974-4055-9dbf-4ed6c735a575&k=40709

[Exiled in America]

7. I just filed bankruptcy too :(

[Carni]

8. You're not alone out there

Sorry to hear about your tough time!

A lot of people got screwed over during the last 7 years--once again thank you GW (the gift that keeps on giving)

[lovuian]

21. in the old times you would have gone to Debtor prison

this is true evil putting people in massive debt and making them slaves for the rest of their lives

[Danger Mouse]

9. Is there ANYTHING in this country that hasn't been thoroughly fucked by Bush?

Just one thing?

[OhioChick]

11. After Much Thought....

Not a thing comes to mind.

[Danger Mouse]

19. Someone very helpfully pointed out that...

Bush's friends are doing very well.
Good for them. I guess. Bastards.

[THUNDER HANDS]

13. Laura?

I kid, I kid.

[Danger Mouse]

17. Gah. GAH!

:puke:

[Joe Bacon]

14. His fellow Bonesman and thier stooges!

You can bet that EVERY member of Skull and Bones is crying all the way to the bank and every TV Preacher who enables them is feasting on chateaubriand financed by those tax financed "faith-based" bribes!

[Danger Mouse]

18. Sadly, that's about it. Halliburton and their scum-sucking cronies...

have done VERY well.

[3waygeek]

22. Laura Bush n/t

[cliss]

12. Interesting that this article

is from India.

Well, regardless of the source, the fact remains the same: the U.S. is tapped out. Living INSIDE a House of Cards. And those walls are starting to tremble.

I have SO many friends who are living on the brink. They are somehow surviving, but they are just 1 pay check away from disaster. This is no way to live. Several of them have lost their businesses. I've heard through from others that they just walked away from their homes. Took all their possessions, and left the keys on the kitchen counter.

We have not even seen the full effects of this disaster. It's really just starting. I expect homes will be for sale in 2 years time, for 10 cents on the dollar.

[Trajan]

15. Wages .... wages ..... WAGES !

DAMNIT !

When are they going to 'get it' ?

When you deny workers a decent wage: THEY CANNOT PAY INCREASING EXPENSES ! ....

House payments rising ? ..... Grocery bill ever escalating ? .... Energy costs spiraling through the roof ? ....

LET WAGES INCREASE ALONGSIDE !

I cannot get this through local repugs thick skulls: You cannot expect more wealth from a stagnant source ..... You cannot 'get rich', if there isn't a consumer base to buy your merchandise ...

Supply side is BULLSHIT ..... Demand side feeds the kitty ....

BOOST OUR WAGES .... assholes ....

The short-term-bottom-line thinking is a dangerous money grab .....

Give us money enough to pay our bills, and they WILL be paid .....

[DuaneBidoux]

16. The analogy I use is the kid who is great at the playground game of marbles.

Eventually those who are very good at the game have all the marbles, and if those who are not so good at collecting marbles (most people) don't find someway new of getting some new marbles then eventually it is "game over."

Fewer and fewer people have been getting more and more while more and more have been getting less and less. This leads to two separate but linked problems: the people with less and less go into debt deeper and deeper just to survive and their ability to pay back that debt (assets held by the wealthy) becomes more and more precarious and the people with more and more are looking for ways to invest this more and more in an economy that offers fewer and fewer ways to invest and get a return (because it takes broad based consumption to give good investment returns). This leads to asset bubbles. The Republican's solution to this problem has been to blow up one asset bubble after another and rescue those hit by the bubble when it deflates (i.e., taking care of the rich man when his investment goes sour).

The way to solve this problem is to make sure that those working to generate new productivity (the workers) get some share in the increased wealth their labor makes possible. When it all goes to owners eventually it collapses.

[lovuian]

20. suppressed wages skyrocketing healthcare skyrocketing food

the lies on statistics that all is well No inflation keep spending spending spending

it was bound to come falling down just like the Depression in 1929

the Robber barons are at work and we have Hoover in town