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Politics : Politics for Pros- moderated -- Ignore unavailable to you. Want to Upgrade?

To: LindyBill who wrote (133044)	8/17/2005 9:21:41 AM
From: greenspirit	Respond to of 793843

That's a good contrarian article describing a point of view you rarely see. It can be summed up this way, when people are confident about their future, about their ability to make more money, provide for their family etc, they spend.

To: LindyBill who wrote (133044)	8/17/2005 3:17:15 PM
From: frankw1900	Respond to of 793843

Sooner or later, Americans seem bound to react to rising debt burdens and disappointing asset values by slowing their shopping. But in a country of passionate spenders, it's hard to know when the reckoning will occur or how damaging it will be. Umm...we are in a period of great prosperity and savings rates bottom during such times and they top out at the depths of recession. Credit taking and savings move in opposite directions because both are dependent on the degree of optimism (somethig difficult to quantify). However, during a period of prosperity it is notable that folk do pay down debt: slate.msn.com Americans Pay Off Credit Card Debt! This is not science fiction. It's really happening. By Daniel Gross Posted Friday, April 22, 2005, at 12:14 PM PT [Listen to this story on NPR's Day to Day] Listen to this story on NPR's Day to Day. [Click image to expand.] Credit: of no interest to consumers? This should be a springtime of joy for credit card companies. On Wednesday, President Bush signed the new bankruptcy bill, which they helped to write. Short-term interest rates are on the upswing, which means they can jack up interest rates from, say, 13 percent to 17 percent, without customers asking too many questions. And with employment growing modestly and new unemployment claims down, credit card delinquencies should be on the decline. But all is not tulips and nectar over at MBNA, the largest independent issuer of credit cards. Yesterday it reported a poor quarter and ratcheted down earnings expectations for the year. Its stock sank to a two-year low. Credit card giant Capital One Financial had a better quarter, but its stock has been slumping lately, too. Bad news for the credit card companies may be better news for us. There are signs at both companies that consumers may be responding to higher rates by doing something almost completely unexpected and practically un-American: paying down credit card debt. [More at URL]