Personally I think the HELOC (Home Equity Line Of Credit) crisis has yet to play out yet. These are second or later lien mortgages on houses whose values have plummeted. They are worth, eh, zero on mark-to-market and not much on cashflow (as more people default).

In addition, auto loans are not done. The same logic as jingle mail will be ruthlessly applied. When you can buy a newer car for less than you owe on the financing of your current (old) one...

So youre saying people are going to drive their cars to the bank and leave them outside with the keys in. I dont think so.

Auto loans are recourse loans unlike the mortgages that caused jingle mail. A repossessed car will still leave the borrower with any difference between the asset value and outstanding loan.

American Express have sold some of their dodgy loans to the Fed. And theyre also trying to call in a lot of credit card debts. Last week American Express started to offer $300 cash to select (dodgy) cardholders if they closed their accounts.

http://blogs.courant.com/george_gombossy/2009/02/amex-offers-300-for-high-risk.html

If American Express are desperate for cash, can you imagine what kind of situation MBNA/Bank of America are in. Amex was one of the most conservative card issuers.

Credit cards are recourse too...

Car loans are like credit cards - people are convinced they can't live without them. Once they realise they can buy a car for cash (that is, retain their car-based mobility without paying for a rapidly depreciating asset), the middle digit will go up...

Although I did find this opinion from May of last year in support of your position:
http://www.belligerati.net/archives/200 ... to_lo.html

I think times have moved on.

PS Many mortgages are recourse too, but chasing dead-beats is really expensive...

Exactly, thats why you cant walk away from them.

The middle digit may go up, but the debt collectors will be able to seize their new cash purchased car for settlement of the old car loan.

And thats why they sell the debt to a collection agency.

You appear to be contradicting yourself euribore - will credit card debt be a problem or not?

My point is the HELOCs and auto-loans will be a serious problem before credit card debt will be...

HELOCs have been a problem since 2006.

Credit cards are starting to become one, as evidenced by my post on American Express.

Auto-loans will be last, for the reason that cars are more important than anything else in the US. Even homeless people have cars. Lot of foreclosed people are now living in their cars. Car loans are secured, unlike credit card debt.

Now that is a fair argument.

I don't think the two are that tightly connected but yes, Like myself, remove short term debt(CC) and then move onto long term debts(Car Mortgages).
Helocs and car loans are somewhere in a longer frame time. i'd argue car loans especially are going to be the most resilient, given the modern day reliance on them, especialy in the states,

You can't argue with that.

One of my long-standing memories of the United States is ending up boozing in a trailer park where most of the residents cars were worth more than the trailers.

This piqued my interest in the thread on mortgage debt, but since I'm experimenting with the idea that threads should remain on topic, I said I'd put it here.



Credit card debt in Ireland, in March 2007 was €2.698 billion, the population of Ireland is 4,156,119
Which would give us a credit card debt of E649 per person.
What really matters, well to my way of thinking anyway, is how much is just an ongoing balance and isn't being paid off.
Assuming the E2.698billion is roughly the same as current debt, then based on the payments detailed by 2pack there is roughly 1.73bn of outstanding high interest credit card debt out there.
That would be E417 per person in Ireland.

The numbers for the UK I could find were
£53.5billion, population 60,943,912
Debt £878 per person.
£39bn earning interest, or £640 per person


http://www.dcmmoney.co.uk/credit-card-d ... istics.asp
http://www.consumerconnect.ie/eng/News_+_Research/Research/Credit%20card%20debt%20up.html

I see your point Jess .

The problem is that

1. You need to find out who clears their plastic in time ( thereby not paying interest)

2. You also need to assume that those in trouble tend to have more than one card whereas those not in trouble tend more to have only one card .

eg Ireland has one card for every 2 people ( 2.3m for 4.3m people) while the US has almost a billion Visa Mastercard ( not Diner Amex Discover Card mind) for 330m people which is 3 for every person . see stats here

Comparisons are a bitch ....but you started it

We do not break out outstanding debt , the US does , in that link is is the top 10 positions.

1. Chase - $183.32 billion
2. Bank of America - $166.32 billion
3. Citi - $106.74 billion
4. American Express - $88.02 billion
5. Capital One - $60.08 billion
6. Discover - $49.69 billion
7. Wells Fargo - $36.36 billion
8. HSBC - $29.36 billion*
9. US Bank - $18.53 billion
10. USAA - $16.61 billion*
(Original source: Nilson Report, February 2009)

and issuers

Most general purpose credit cards in circulation in 2008
1. Chase - 119.4 million
2. Citi - 92 million
3. Bank of America - 80.2 million
4. Discover - 48 million
5. American Express - 46.5 million
6. Capital One - 46.3 million
7. HSBC - 38.8 million
8. GE Money - 27.2 million
9. Target - 23.4 million
10. Wells Fargo - 17.3 million
(Original source: Nilson Report, February 2009)

American Express miss earnings:
http://www.tickerforum.org/cgi-ticker/a ... ost=103895
Net write-off rate 10% up from 5.3% a year ago...