The looming credit card crisis

I touched on the likely credit card crisis a couple weeks ago. And today, CNN did this piece on a Robin Sidel article on the front page of the Money & Investing section of the December 11 WSJ.

If you click thru to the CNN piece, you'll see the looming credit card crisis is ugly... and it'll get uglier as layoffs mount. But one paragraph in the WSJ that I found interesting:

The three largest U.S. card issuers are J.P. Morgan Chase & Co., Bank of America Corp. and Citigroup Inc. Those three banks had nearly 60% of the $724.44 billion in outstanding loans at the 10 biggest card issuers in the U.S. as of June 30...

Card issuers are scrambling to reverse the trend... card issuers will reduce credit lines by more than $2 trillion in the next 18 months.

I'm sure Bush / Obama / Dodd / Frank will be ecstatic when they hear this. It'll mean that they need to keep the printing presses running that much longer... resulting in more jobs and lower unemployment!

And by the way, didn't Citigroup just go bankrupt? Oh wait... they got bailed out. That's totally different from going bankrupt.

But seriously, if you happen to get the WSJ or pop by the library, I recommend you take a read. It's explains a pretty big problem that I expect we'll hear a lot more about next year.

Tim White