credit card debt and late payments go up every year around this time of year, but this year is 50% worse than last year. meanwhile all of the major retailers are reporting slow sales.
so, what are people buying on their credit cards if not ugly ties and unwanted sweaters?
a lot of people are relying on the easiest source of credit just to make ends meet while fuel, food, and energy prices rise. under normal conditions, this would lead to an increase in bankruptcies and foreclosures as marginal buyers were forced out of their houses. in the current bubbly conditions, with decreasing house prices and adjusting rates wreaking havoc and record high numbers of marginal owners in the market, i'd bet that people see the writing on the wall but don't want to ruin their kid's christmas, so they are pretending things are normal and pushing their problems off until the new year. lenders are probably also pushing foreclosures off until the new year to avoid being seen as the grinch.
if both lenders and homeowners are pushing things off until the new year, it seems inevitable that we will see an increase in foreclosure and bankruptcy activity early in the new year.