Yeah, We Sure Showed Those Credit Card Companies

So the government beats its chest and enacts legislation to show how it is whipping those credit card companies and banks into shape, saving the consumer and making life good for us all. So the credit card companies respond and beat their chests and raise rates to the highest level in nearly a decade even though their borrowing rates are at record lows, thanks to our government (namely us taxpayers). Nice pay back.

http://www.nakedcapitalism.com/2010/08/credit-card-companies-jack-up-rates-despite-flagging-economy-super-low-funding-costs.html

Wanna' guess what this will do to the 70% of the GDP represented by consumer spending or the impact on small businesses that rely on credit cards to cover expenses? Go ahead, guess. Yep, not good.

That Real Estate Drum Keeps Pounding

Here is some hot off the presses news from Bloomberg - housing is putting a drag on our recovery from the recession.

http://www.bloomberg.com/news/2010-08-23/housing-slide-in-u-s-may-drag-economy-into-recession-as-foreclosures-rise.html

Glad they are on top of things.

Seriously though, they are right about it, just the news seems a bit old. Anyone really paying attention to real estate has seen this coming for a very long time and has known it is a key fundamental precluding the recovery so many economists envisioned. Then again, economists are a bit delusional (okay, a lot delusional). But I have had that rant here before. For a good gauge on where RE is and is heading, I recommend this link to Calculated Risk, where the author also seems to think the economist consensus is off the mark just a tad:

http://www.calculatedriskblog.com/2010/08/lawler-existing-home-sales-consensus-vs.html

Anyone want to bet on whether the mean economists' number from Bloomberg is too optimistic tomorrow?

Update 10/24: If you took the bet you can send your check to me. As expected, the delusional economists were once again with their heads in the clouds or the sand (your pick). The sales of existing homes number for July came out this morning and it was bugly. A drop of over 27% in the annual sales rate and inventories rising to 12.5 months, the highest in over a decade. Moreover, of the 74 economists surveyed by Bloomberg how many do you think either got it right or were even more pessimistic than the actual number in their forecast? If you guessed the big old goose egg, as in zero, zip, nada, you are correct. Seriously, not a one. The lowest of the 74 was at 3.96 million sales and the actual number was at 3.83 million. One "economist" predicted 5.3 million sales and he should have stayed home today. And it seems reality is setting in for the markets. When it sets in for economists, we are all in trouble.

http://noir.bloomberg.com/apps/news?pid=20601087&sid=aTa9xAXkpKaU


Disclosures: None.