A couple of personally observed credit bubble data points:
On Monday, I'm working on the computer, planning my trades and trading my plan. The phone rings...it's a rep for MBNA, calling to tell me they were jacking up my credit limit, and that they had 0% financing, allegedly including CASH ADVANCES through February! WTF, free money, literally!
Knowing those slimy weasles, there's probably a catch that would render said free money payable at 17%, but interesting if true.
Yesterday I receive an unsolicited mailer from WAMU, offering me a NO-FEE, preapproved $100,000 home equity line of credit at 4.5% adjustable. All I had to do was show up at there local office, prove I had a pulse, and VOILA!
This tells me one of two things. Either my FICO score has just rocketed passed Stephen Hawking's combined SAT scores, or these companies are deep into Ponzi finance. I.E., they have literally exhausted the entire pool of profitable loans, and now have to generate new loan volume (at a LOSS) to dilute the rising tide of delinquincies on their books. I wouldn't rule out the former (I have a superb credit record, FWIW), but I suspect the latter is at play. |
