Late Payments on the Rise
I hate to end the week on a down note, but… According to the American Bankers Association (ABA), late payments on consumer loans increased to 2.65% during the fourth quarter of 2007 (the most recent quarter for which data are available).
This is an 8.6% increase over the preceding quarter, and is the highest consumer loan delinquency rate since the first quarter of 1992, when the U.S. economy had just emerged from a recession. Credit card delinquencies are also on the rise, with a 4.4% delinquency rate in the fourth quarter of 2007. It remains to be seen how bad things will get before we turn the corner.
As an aside… Given the rising tide of loan defaults, I find it amusing (and more than a bit ironic) that the web address for the ABA’s homepage ends with /default.htm — it sure seems like they could’ve picked a better name for that file. 
Published on April 4th, 2008 - 6 Comments
Filed under: Economy
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About the author: Nickel is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!
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Haha – the default.htm got a laugh out of me.
thx,
Comment by Four Pillars — Apr 4th 2008 @ 10:50 pmMike
Good. So the week wasn’t necessarily ended on a down note, then.
Ouch! That isn’t good news. As unemployment bumps up, these numbers will probably worsen.
David Rosenberg, the chief economist at Merrill Lynch, calls this a balance sheet recession. Most recessions are due to excess inventories and overcapacity. This one is due to the strains on the American consumer. They can no longer borrow to spend. This will take a few quarters, possibly years, to get through this. It requires that we begin saving as a nation. The more saved, the less the economy is spurred by spending.
Comment by Kirk — Apr 5th 2008 @ 8:26 pmI am having no trouble borrowing money. And if you mean borrowing money in “sub-prime” terms, we never should have been able to do that, anyway. Lack of regulation and lender greed is what got us into this mess.
Lisa
Comment by Lisa — Apr 6th 2008 @ 2:31 pmYou can see from the HTTP response headers that this is an MS IIS 6.0 server. IIS serves default.asp or default.htm by default. All other *normal* HTTP servers (Apache, etc) serve index.html by default.
Leave it to Microsoft to do something unique and confusing. ugg
Comment by mlathe — Apr 10th 2008 @ 7:44 pmPrices are going up, gas and food… the necessities. And it is not summer yet. Poor majority has no money to pay, plus it is getting more, as a volume. (understand…, more poor Americans). Pay on the other hand remains the same. Taxes may go up. So let me tell you a simple mathematical equation… 0 minus 100,000,000,000, is still 0. the wise guys in Washington are digging their own graves as we speak because we are way…, way below 0 point
My suggestion save your money on that fitness “thingy” you plan buying… you may need the money not the thingy.
Comment by Nick — Apr 14th 2008 @ 11:52 am