Quote Originally Posted by Flur View Post
It seems like none of them are handling the economic crisis well.
Here's what's happening
- Credit Card companies depend on selling receivables to investors in pools to raise cash
- No one trusts the sellers anymore(me included) and everyone's concerned about the american consumer
- So, credit card companies can't sell outstanding receivables right now.

Credit card companies then have to maintain capital against their receivables and unfunded commitments.

So, they can't sell their receivables -therefore- they need to maintain much more capital (at a time when no one is willing to invest in financial institutions)

And, they need capital against unfunded commitments (which they don't make income from).

Therefore, they have a serious capital problem and need to start shrinking either receivables or unfunded commitments or both...and this further fuels the crisis.

So, don't take it personally...it's part of a vicious and unfortunate cycle that becomes a self fulfilling prophesy...