From the "not news" file comes a report from credit rating firm, Equifax, that consumers are falling more deeply into debt. According to Reuters, Dann Adams, president of U.S. Information Systems for Equifax Inc, said, "Consumers are missing payments on mortgages, credit cards, and auto loans."
What Adams was less clear about is that there is still no exit from losses for banks and that consumer credit issues will cause red ink at financial firms which may rival the write-offs from the subprime mortgage fiasco. Credit problems will not simply come from normal defaults. Wall St. built an entire class of derivatives around consumer debt pools just the way it did with mortgages.
Banking earnings have a lot further to fall.
Douglas A. McIntyre