Aces High Bulletin Board
General Forums => The O' Club => Topic started by: Muckmaw1 on October 01, 2004, 11:35:06 AM
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WASHINGTON (AP) - Construction spending surged in August to the highest level on record, fresh evidence that the housing market is helping move the economy ahead.
The Commerce Department reported Friday that the value of buildings put in place clocked in at a seasonally adjusted annual rate of $1.02 trillion, a record high. That represented a 0.8 percent increase in August from July's level.
The strength exhibited in August in part reflected a strong showing in residential projects by private builders, which hit a record high.
The 0.8 percent advance was twice as big as the 0.4 percent increase the economists were forecasting. In more encouraging news, July's performance turned out to be even stronger than previously estimated. Revised figures showed that construction spending jumped by 1.1 percent in July from the previous month.
The report reinforced the view of Federal Reserve Chairman Alan Greenspan and his colleagues that the economy has regained some traction after hitting a soft patch in the late spring and early summer.
Citing signs of some economic improvements, the Federal Reserve last month boosted short-term interest rates for a third time this year. That pushed up a key rate to 1.75 percent, still low by historical standards. The Fed wants to make sure that inflation doesn't become a problem for the economy.
The health of the economy and the availability of jobs are frequent sparring issues on the presidential campaign trail. President Bush says his tax cuts have helped the economy rebound and have spurred job creation. His Democratic opponent, John Kerry, says the tax cuts have benefited mainly the wealthy, squeezed the middle class and plunged the government's balance sheets deeper into red ink.
Although growth in the nation's payrolls picked up in August, the economy is still down 913,000 jobs since Bush took office in January 2001.
The housing market has been a key contributor to economic growth. Home sales are expected to hit record highs this year, aided by relatively low mortgage rates. That has kept home building brisk.
In August, residential projects by private builders rose by 1.7 percent from the previous month to a record high of $550.6 billion, on an annualized basis.
Commercial construction by private builders increased 0.8 percent in August to an annual rate of $227 billion, the highest level since June 2002. That's encouraging news for the commercial sector which has been hard hit by the 2001 recession and has struggled to get back on solid footing.
Government spending on big public works projects, meanwhile, dropped by 1 percent in August from the previous month to an annual rate of $237.6 billion. The weakness in part reflected cuts in spending on schools and highways and streets.
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There's also talk of a housing bubble, like the stock bubble of a few years ago.
Also, how much of that construction could be considered affordable housing? I don't know the answer myself, but most of the new construction I see in the Chicago area has $400,000 to $1 million price tags.
The average cost of a new house is $251,000. The Bureau of Labor Statistics shows the average salary at $36,764 in 2002. The average non managerial salary was $15.54 in March 2004. Even with two working spouses the ability of an average family to own an average house (even with dual employment), drive an average car and pay for an average college is marginal. And the trend is increasing.
Charon
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"Even with two working spouses the ability of an average family to own an average house (even with dual employment), drive an average car and pay for an average college is marginal. And the trend is increasing. "
When you consider that 40 years ago a family could do all that with just one spouse working and have money left over, one begins to understand that our standard of living and overall buying power is steadily decreasing.
This is especially true when you figure that an average car 40 years ago was something like a nice big Chevy Impala or such.....and now it's a POS like a Honda Accord. Statistics don't capture the quality decline in "average" goods.
PC's have remained largely static in price while greatly improving in quality, but they didn't exist 40 years ago. I do not expect that trend to continue indefinately.
I expect it to get worse before it gets better.
J_A_B
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40 years ago Impala was a good car for its time. Compared to any modern car it is junk. Not your best work JAB. :)
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90% of the new houses being built in my area are these huge monstrosities that have to run $300,000-$500,000 or more. I live in a generally blue collar area, and have no idea how these folks are affording these houses. I'm by no means wealthy, but I make quite a bit more than median wage, and wouldn't even think of putting myself in a situation like that with kids still growing and retirement to save for. These people have to be one family emergency or extended layoff away from bankruptcy. I think sooner or later there are going to be quite a few folks getting a rude awakening.
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Here in the Denver metro area housing projects are not going up any faster than they were say 2 years ago. Most of the houses are very expensive also. (300,000+)
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Hmm, I remember GB the First said something during his re-election campaign-- "But, you know, it's a great time to buy a house!"
I also think these housing numbers convey a skewed impression. It's probably all expensive houses, bought by folks who are already wealthy, and are simply taking advantage of interest rates. Same reason the housing market is so strong (and has been for some time). Doesn't mean the economy is doing good, I think. Job market still looks tight from here.
Then again, the economy is largely about perception, so if everyone thinks things are going great because of housing, then...Go Housing Market!
I have my doubts about tax cutting, though. We still have a large debt, and now a deficit. Doesn't seem very responsible of us.
JAB-- Impala vs Accord? People aren't forced into buying Accords. I'd wager that most folks who buy them like them, even more than a 69 Impala (strange as it sounds). Besides, you can still buy an Impala. Oh wait, it's a POS isn't it. :D
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Originally posted by Elfie
Most of the houses are very expensive also. (300,000+)
That would be 'low income' housing in so cal :(
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Actually Funked, that's my point exactly--
Impala was a nice car for its time (1960's), and was pretty typical. It was something you could be proud of owning and even brag about. Accord is NOT a nice car for its time (today); it's an econo-box.
I am disgusted when I see new car advertisements featuring 72-month loans and still over $250 monthly payments. That's just sick! I'm actually seeing 3-4 year old Fords and such selling for in excess of $10,000 now. Insanity!
Homes are even more disgustingly overpriced than cars are nowdays. I have to agree with Raubvogel in that the only way people can afford houses nowdays is by going into massive debt and praying that something bad doesn't happen.
Or appliances.....I see quite a few TV's now advertised for $5,000-$7,000 as if it's some kind of bargain. Mind you, they're not even NICE, but ugly, cheap plastic-looking things. I mean, for crying out loud, if I'm spending several grand for a friggin TV, shouldn't it at least look nice? Sorry, I'll stick with my 20-year-old RCA that has proper wood paneling and is FAR nicer than that new overpriced garbage. I'm still fairly young and I never would have dreamed that I'd see the day when a household TV would cost that much. I can not find a single TV on ANY of the major appliance store websites, for ANY price, that is actually NICE and built into its own woodworking. They're all cheaply-made, plastic junk. That's what I mean by stuff just not being as nice as it used to be, despite a much higher price.
And....the talking heads act like they can't figure out why consumer debt is at all-time highs. Gee....I wonder... Combine out of control rip-off pricing with falling real net incomes and is it REALLY that hard to figure out? And then the kicker, the stuff we're getting isn't even all that nice.
The housing bubble will burst eventually as all bubbles do, although I doubt prices will ever actually return to reasonable levels. The general decline of buying power and standard of living worries me a lot more. I for one do NOT consider it an improvement when it takes two people working just to live at the same level as families used to live at with one working spouse.
J_A_B
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not housing but a CREDIT bubble will be the next POP you hear
the average smo is up to his eyeballs in credit debt with no way to pay it off...
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Originally posted by FUNKED1
40 years ago Impala was a good car for its time. Compared to any modern car it is junk. Not your best work JAB. :)
I bought a '64 Malibu new when they first came out, kept it for 10 years and eventualy dropped a 427 in it two years before I sold it.
If offered a New car or my '64 Bu I'd not hesitate to get it back.
Cars today are a mechanics dream....for their bank account.
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Originally posted by J_A_B
Impala was a nice car for its time (1960's), and was pretty typical. It was something you could be proud of owning and even brag about.
Oh come on. The Impala sedan was about as interesting as a cinder block. The Impala is the Taurus of the 60s. You don't brag about that any more than a Accord.
Just cause you don't like Accords, doesn't mean the general standard of living has decreased because people have to buy them instead of 60s gas guzzlers.
But an average family car today is what, maybe 20k. Average salary is 36k or so, I guess. What were the prices/salaries back then?
Originally posted by MrLars
Cars today are a mechanics dream....for their bank account.
Not really. You take care of it, it will last just fine. And a lot more consistenly as well, thanks mainly to computers.
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"But an average family car today is what, maybe 20k. Average salary is 36k or so, I guess. What were the prices/salaries back then? "
Average new vehicle sticker price runs between $28,000 to $30,000 depending on which source you refer to (it hasn't been $20K for like 10 years). And that DOESN'T account for extra money paid for interest since the average car loan is several years longer now than it was in the '60's. Average sticker price in 1960 was about $2500, with average income being about $5500 (that's off the top of my head, been awhile since I researched this stuff). An average new home back then cost about $16,000
Point being...your "typical" car used to have chrome, whitewalls, (if you go back a little farther) fins, door window vents, and other such features to make them as NICE as the technology allowed. Compare that to the typical car of today, which is as drab and spartan as can be. What ever happened to the notion of affordable stuff being NICE as opposed to merely adequate? Why should people settle for overpriced mediocracy nowdays? Same with TV's....they used to be fancy pieces of furniture in built into their own cabinets....now they're just so much ugly plastic junk.
I wish stuff was still nice.
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Home prices have inflated more than anything else I know of. I don't see how it is sustainable.
J_A_B
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Actually, if you look at the numbers instead of your local advertising, most of the new residential construction, in raw dollars, is in apartments and homes under the median (about $157,000, if I remember right). It varies with area, of course, but overall that is what it is.
Home ownership is at all time highs, too, though that is part of the credit bubble that will burst someday.
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Well JAB, that stuff is a matter of opinion, not purchasing power. Anyway, it looks like the numbers show we have less purchasing power. Still I'd rather be around now than then. For one thing, there was no AH back then. ;) Quality of life is more than purchasing power.
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guys... homes will continue to go up in price. The cost of building is 4 times higher than it was even a decade ago and that is due to environmental and other regulations.
The developer spends millions on studies and environmental impact negations and infrastructure that is regulated by the EPA like wells, storm lift stations and wastewater treatment planet improvements along with "green areas" and parks...
even the water used during construction or rain must be stopped from going down the storm drains and hauled off at hazardous waste rates.
If you were a California developer and the lots cost you upwards to $150,000 (if nothing too bad goes wrong) to develop by the time all was said and done....
would you build houses that sold for $200K or $500K ??
tighter EPA and other environmental regulations for sewer and water quality and insect life (90% of endangered species are insects) will drive prices much higher in the next decade.
If you want what we have here in California then vote accordingly. Vote the way California does.
A decade ago 20% of Californians could not afford housing... this year it is 27% and going up
lazs
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We have been waiting for the prices to come down for almost two years. The avg price for a single family home in the state is well over 300k.
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I like my Accord. :cool:
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JAB you are wrong.
But lets test your theory here..
You can get a very well equpped Honda Accord for 25,000 dollars. What does that car lack in your opionon..
For that price you would want to add what to that car:
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Originally posted by GRUNHERZ
For that price you would want to add what to that car:
Well you know that ricers stick wings on their cars, and type-XZRTSF decals. All we need is some aftermarket fins and white paint for the tires. Hot pink for the fins of course. Same type of thing, no? :D Also some sandbags for the trunk, the car is way too light.
Accord: the Marine Edition.
Lazs-- I think the high land prices in CA are more due to a glut of rich people moving in, more than environmental regs. It's a great place to live, and everyone wants to be here unfortunately.
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"JAB you are wrong. "
About what? Cars, houses, and such cost more now in relation to the average income than they did 40 years ago; that's just numbers and is hard to argue with. Or are you taking issue with my belief that an Accord is a spartan, plane-jane car with no positive features?
"what does that car lack in your opionon.. " It lacks EVERYTHING Grun. In my eyes it has absolutely no redeeming qualities whatsoever. Grun, do you think the $25 grand Accord represents some sort of bargain? That $25 grand Accord 4-door doesn't even get you the V-6 (according to the Honda website). So you're left with an expensive, small, underpowered, half-plastic tin can. That same $25 grand can buy you a Chrysler 300 or a Ford Crown Victoria; both of which are utterly superior to the Accord in every possible aspect (and those are still overpriced and lack features).
If you wanted to present the Accord as some sort of deal, at least use the cheapest possible version and present it for what it is--an econo-box. Of course...then I'd just point out that $13 grand for a 2-door Accord is still several thousand more than other comparable econo-boxes.
To my line of thinking, the average car should cost about $20K and that money should get you something like a Crown Vic or a V-8 Bonneville. That would be reasonable. It'd be even better if they dressed them up a bit better; replace the plastic bumpers with chrome and such. Obviously the sad reality is we live in the world of the $25K Honda.....so I refuse to buy new cars. I think we're stuck with this overpriced junk forever now because too many people are happy to settle for mediocracy...a lot of them don't know any better.
J_A_B
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Originally posted by J_A_B
a lot of them don't know any better.
LMAO. This is the part that gets me. What do you know that they don't, other than your personal preference? The people who buy Accords know just as much as the people buying Crown Vics. A lot of people knowingly prefer an Accord to a Crown Vic. Who wants to own a taxicab? A bloated, wallowing whale. "Mediocre" is right. If you were talking about vettes and vipers that's one thing...this is another.
Have you actually driven a recent Accord? After 100K miles, that car is still more tightly put together than a Crown Vic is when new.
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Originally posted by phookat
LMAO. This is the part that gets me. What do you know that they don't, other than your personal preference? The people who buy Accords know just as much as the people buying Crown Vics. A lot of people knowingly prefer an Accord to a Crown Vic. Who wants to own a taxicab? A bloated, wallowing whale. "Mediocre" is right. If you were talking about vettes and vipers that's one thing...this is another.
Have you actually driven a recent Accord? After 100K miles, that car is still more tightly put together than a Crown Vic is when new.
No he hasnt.
In fact he has no idea what he is talking about when it come to the facts of these cars. He obviously hasnt checked them out..
For example at 25K you can get a 3liter V6 Honda Accord with 240HP. It does 0-60 in the very low 7 second range which is faster than my mustang...
A Chrsler 300 at this price only gives you a 2.7 liter 200HP V6...
A Cown vic gets you a V8 ok, but only 225HP and still that car is slower than the V6 accord...
And dont think 25K gets you any upmarket corown vic.. The BASE standard model starts at 24,915...
A 25K crown vic has no letater seats.
Has no standard side imact airbags.
No standard CD player..
No navigation sytem (not even available in any cv)
No keyless entry.
Its a breabones POS - no frills at 25K.
On top of that iot has poor build quality.
Poor handling.
Wallowy "smooth" ride..
Bad steering..
Bad fuel economy...
Etc etc...
Crown Vics are terrible cars, very outdated, very uninspired, very mediocre... And thats why very few people buy them comared to other MODERN cars in the 25K class like the V6 accords and Camrys..
But its really pointless to discuss facts with JAB. He obviously doesnt care about facts, he cares about his emotions and I suppose his memories of some ideal time.. Thats what drives his like for these cars...
Plus I think he just hates Japanese cars. Which makes sense since high quality japanese cars thankuflly ended the era of mediocre garbage US cars of the 70s and 80s. But of course he liked those cars..
JAB is the sort of guy who if he were his age today in 1950 would have bemoaned the arrival of new fangled cheap mass produced metal cars in favor of his dear old hand built wood coach limited cars of the 1920s...
I dont hold it against him, I'm just guessing he is an older man who has his old but outdated tastes and memories which cloud his judgement about new things.
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If liking quality things is outdated, then yeah I'm a relic of the past. I don't try to be "trendy" or "cool" or whatever the latest buzzword is. I never have. If something isn't very good, I'll say so...whether said item is the latest fad or not.
You might like an Accord...but do you really think $25K for a dressed-up econo-box is some kind of value? While I compared it to the CV, I also made the point of stating that in no way do I feel that the CV is a terribly good value either. Both vehicles have their faults and IMO neither is worth $25K. That's my point--stuff is overpriced across the board.
And it isn't only cars, so lets not get too focused on those. I brought up TV's as another example, in that you can spend huge obscene amounts on a TV nowdays and you're still left with the cheapest-possible ugly plastic box. What ever happened to the notion of trying to make this stuff look nice? Who wants their house to be full of plastic junk?
Prices keep rising, but look at what we're getting for that extra money. Economy cars at premium car prices, high-price TV's that don't even have their own woodworking, furniture that isn't even made out of real wood, bedframes that are just a bunch of metal bars; houses that cost as much as a mansion should; why should the public have to settle for this?
Houses are getting to the point of unaffordability. Is that accepable, that you should have to spend your entire life trying to pay off your house (only to lose it when you get sick and end up in a nursing home)? The average number of hours worked in a week is on the rise again; do we want to go back to the days of 12 hours a day 6 days a week? I for one am not far from that a lot of the time.
The American Dream wasn't about the poor kid who grows up to be president. No, it was the idea that a typical guy, working a typical job, could afford to have better than a mediocre life. That's an an idea which is gradually disappearing, bit by bit. Increasingly we live in a world where both spouses work, and the fruits of their effort aren't even as nice or fancy as the stuff their parents had.
Is this progress?
I wonder how things will fare after the consumer debt problem finally catches up with the country. I'm not a pessimist; I know that things will eventually improve again. But for that to happen, I sort of suspect "it will get worse before it gets better" is going to apply.
J_A_B
PS....no I'm not old although sometimes I feel like I am.
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Overall I think despite lower purchasing power, quality of life has improved. More reliable cars, asbestos-free houses, computers, cellphones, internet...we have it real good. The personal style stuff is a matter of demand--most people prefer Accords to 69 impalas, so that's what companies make. And most people prefer the crisp picture of a plasma HDTV to a fuzzy wooden box.
Coming back to purchasing power. I wonder how much of that decrease in purchasing power is due to the national debt, and the tying up of large amounts of wealth in T-bills. Seems like the debt is a "big picture" trend that is somewhat correlated with the big-picture purchasing power trend. Cause and effect?
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JAB you do realize that modern TV's have vastly better picture quality, better reliability, much bigger screen sizes on average - and these bigger screen sizes are more afforadable to the average person. The new TV's have much better sound quliaty, many now have progressive scan cpabilities to show smooth flicker free images, They have the resolution to support the advantages of DVD video, some have HDTV resolution as well, many have widescreens to show movies in the original aspect ration as in the theters.... Not to mention that we now have flat panel TVs that can be hung on a wall, and these are quickly dropping in price... On and on and on...
The modern TVs are vastly better performers and vastly better for your money than TVs of 10 or 20 yaeras ago... Thats a fact..
You seem to be stuck on some outdated ideas like wood cabinets for TVs... This adds nothing to the performamnce or reliabilty of the TV.. It only raises the cost of manufcature which would raise the selling price which would make the TV less affordable to more people.. Which would reduce peoples real purchasing power. Eliminating such useless features makes TVs more affordable and accesible to the public.. Thats why modern homes have more TV screens on average today than in the recent past...
Is an old fashioned wood cabinet more important to you than a TVs performance and affordability?
Similarly you seem to be stuck on solid metal chrome plated bumpers... These only add costs too - to the manufcturer and to you.. They can rust, they cant withstand low speed impacts without damage like the flexible platic bumpers have to, they are more dangerous to pedestrians etc etc. All in all it just adds to production, acquisition, maintenance, repair and insurance costs while adding nothing to the performance or safety of the car..
And guess what, thats why they are no longer put on cars. People, both car buyers and car designers made the rational decision to eliminate these useless features...
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Every time JAB describes his dream car I think of this baby.... :)
(http://culttvman.net/assets/images-shop-2003/HomerCar01.jpg)
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cars are pretty much a bargin for what you get and how long they last... 40 years ago cars needed a valve job a 60k and the motor was nmormally considered worn out at 100k... most did not have air conditioning or comfortable seats... no power options and drum brakes that lasted but could be tricky.... tires didn't go 10k... points needed to be adjusted every 5 or 8k and the plugs needed to be replaced.... don't forget to lube all the 20 or so lube fittings under the car every couple thousand... seat belt, lap belts were optional and you used leaded gas with no smog consideration.
now... you have computers on board... AC and power everything is standard as is a stereo that is more powerful than you foung at theaters 40 years ago... there is no maintenance or tune ups for 100k except oil change and the drive trains can go 250k easily.
but.... the cost is high.... safety and smog are the main causes as are union labor wages... safety bumpers and air bags and crush zones and safety testing and all the rest... Smog devices add 2k easily to the cost of the car..
The EPA and democrats will make sure that the things that are expensive on cars double in cost in ten years.
lazs
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Originally posted by lazs2
now... you have computers on board... AC and power everything is standard as is a stereo that is more powerful than you foung at theaters 40 years ago... there is no maintenance or tune ups for 100k except oil change and the drive trains can go 250k easily.
Yup. Good stuff.
Originally posted by lazs2
The EPA and democrats will make sure that the things that are expensive on cars double in cost in ten years.
What are you talking about?
Besides, emission control equipment is hardly what is expensive on cars. A cat is, what, a couple hundred bucks. Probably even cheaper for OEMs. All the other smog stuff (egr valve, etc) is small potatoes.
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Accord hater. :mad:
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LOL grunherz. Yes...supply and demand. Bart liked it, at least. Heheheh
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I dont get it , housing is no more expensive now than in the past . You all must know better than what your saying...Right?
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Originally posted by Eagler
not housing but a CREDIT bubble will be the next POP you hear
the average smo is up to his eyeballs in credit debt with no way to pay it off...
you're not kidding. i'm just waiting to see news of creditor after creditor folding. not that it would be a bad thing, though. lol.
creditors aggressively handed out credit to buyers who overspent through the nose - whether they needed to or not. and, as the jobs for the middle class disappear & remain harder and harder to find, the credit card bills are the first to not get paid.
how loud do you think the Credit Pop will be?
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Originally posted by TBolt A-10
you're not kidding. i'm just waiting to see news of creditor after creditor folding. not that it would be a bad thing, though. lol.
creditors aggressively handed out credit to buyers who overspent through the nose - whether they needed to or not. and, as the jobs for the middle class disappear & remain harder and harder to find, the credit card bills are the first to not get paid.
how loud do you think the Credit Pop will be?
well if a bank of america or citibank goes - it'll be a pop heard round the world making the WTC sound like a pin drop