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Doomsday Scenario: Credit card problems, PE downsized, American workers lag

 Jun 15, 2009 10:00 PM UTC
Return Risk
-60.14% LOW
Tracked Blogger
Symbol Sentiment Start Return Closed
AXP n/a
COF n/a

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Filed under: Bad news, American Express (AXP), Economic data, Recession

Not a good day for those looking for green shoots with markets down strongly. And no wonder. Credit card problems with the U.S. consumer are off the hook as CapitalOne (NYSE: COF) charge-offs rose to their highest historical level of 9.91% (via ZeroHedge) and American Express (NYSE: AXP) rose to 10% (via Mish Shedlock).

Higher chargeoffs and retracting credit means further consumer spending retraction. A semi-annual survey by Collier Capital found that 20% of institutional investors plan to downsize their target allocation to private equity, (via PEHub) the largest negative response since the survey started in 2004. An article by two Harvard University economists found that the biggest reason for the growing income inequality is lagging educational improvement in the American workforce (via VoxEU). There is no quick fix for this so its fairly bad news (although better than blaming the inequality on globalization and some neo-capitalist cabal).

Alex Salkever is Director of Research at Piqqem.com, a stock analysis site powered by the Wisdom of Crowds.

Doomsday Scenario: Credit card problems, PE downsized, American workers lag originally appeared on BloggingStocks on Mon, 15 Jun 2009 17:00:00 EST. Please see our terms for use of feeds.

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