Quote of the Month:
"To the surprise of many economists, housing starts rose in January, increasing 0.2 percent to a seasonally adjusted annual rate of 1.85 million, the highest level since May 1986."
| Forecasts & Statistics |
| Product Trends |
| Industry Trends |
| Issue Archive |
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| War and the U.S. Economy |
| As it looks increasingly likely that the United States will begin using military force to bring about a regime change in Iraq sometime in the next 4-6 weeks, one can't help but speculate what this will mean for the economy back home. The economic forecasting firm Economy.com recently did just that. |
| Bankruptcies Continue to Break Records |
| Personal bankruptcy filings in the U.S. show little sign of abatement. Statistics just released from the Administrative Office of the U.S. Courts indicate that more non-business bankruptcies were filed during the 12-month period ending December 31, 2002 (1,539,111) than during any previous 12-month period. |
| Housing Starts Rise |
| Housing starts measure the number of residential units on which construction is begun each month. To the surprise of many economists, housing starts rose in January, increasing 0.2 percent to a seasonally adjusted annual rate of 1.85 million, the highest level since May 1986. |
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| Sears Credit Problems Continue |
| In an earlier issue of Spotlight we noted that Sears, Roebuck and Co. was experiencing severe delinquency problems with its credit cards. According to the article in the Wall Street Journal by Joe Hallinan and Amy Merrick, "Sears is the third largest MasterCard in the world, trailing behind only Citigroup, Inc. and MBNA Corp." |
| Credit Card Consolidation |
| According to the American Banker, the top 5 credit card issuers in the U.S. are expected to gain further market share during the remainder of 2003. By the end of the year, they will account for 64% of all U.S. general purpose card receivables (i.e., Visa, MasterCard, Discover, American Express). |
| Providian Reshapes Itself |
| The new management team at Providian is hard at work reworking its portfolio and recasting its image with consumers. Providian fell into serious performance trouble two years ago with its $32 billion card portfolio that was heavily biased toward subprime borrowers. |
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| Fraud and Identity Theft Rise |
| In its recent report to Congress, the Federal Trade Commission reported that there were 380,103 cases of consumer fraud and identity theft reported in 2002—an increase of 73 percent from 220,089 in 2001. Dollar losses to consumers associated with fraud and identity theft in 2002 totaled $343 million, up from an estimated $160 million in 2001. |
| Consumer Survey |
| The Federal Reserve Board has just released its latest Survey of Consumer Finances. In last month's issue of Spotlight we examined differences across income groups in the types of debt held and changes over the prior decade. This month we will examine several measures of household debt burden. |
| Online Banking Surges 164% Since Early 2000 |
| The Pew Internet Project reports information on the motives that drive consumers to the Internet. In March 2000, Pew researchers report that only 17 percent of Internet users (about 14 million Americans) had ever done banking online. By September 2002, 36 percent of Internet users (about 37 million Americans) did their banking online. |
| G.E. Purchases UK Consumer Loans |
| General Electric has announced that it will pay $1.4 billion to purchase most of the assets of the consumer lending division of the Abbey National, a large British bank. |
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| Credit Card Issuers Face $Millions in Refunds |
| When you use your bank credit card to purchase a new hat at Harrods in London, the international banking system manages to pay Harrods in pounds and charge you for the purchase in dollars. When we received a new bank card, most of us received a little booklet that explained, among other things, the various charges for using the card, including the extra costs of using the card outside of the U.S. How many of us (a) read the booklet and (b) know where it is now? |
| Movement Toward Federal Preemption of Predatory Lending Laws |
| This headline in the New York Times caught our attention for obvious reasons. Authors Diana B. Henriques and Jonathan Fuerbringer assert that federal laws regulating residential mortgage lending have provided insufficient protection to consumers. |
| Bankruptcy Reform |
| According to a press release from the American Collectors Association, there is still a possibility of bankruptcy reform. |