Tuesday, October 25, 2005

The people whose life's work is to make us go broke apparently didn't have the foggiest notion how successful they've been:

...Bankruptcy filings were supposed to snowball in the months before the tough new law went into effect on Oct. 17. But the avalanche of petitions, and the lines of debtors streaming out the courthouse doors caught even the credit card issuers who supported the new law by surprise.

In recent days, the five biggest bank issuers of credit cards have said that the unexpectedly large flood of filings shaved hundreds of million of dollars off their earnings in the third quarter.

But with tens of thousands of petitions still being processed and Hurricane Katrina's impact on cardholders still being sorted out, the bankruptcy rush is likely to result in well over a billion dollars worth of losses by the end of the year.

"We thought it would cause a bubble," James Dimon, the president of J. P. Morgan Chase, said last week. "The bubble is just bigger than we thought."...

More than 500,000 Americans filed for bankruptcy protection in the 10 days before the law took effect on Oct. 17 ... some bankruptcy courts were so inundated with filers that thousands more could be counted this week....

Far too many Americans are financially overstretched. Every so often there's a news story about this problem, but then the overstretched people disappear from public perception again. But you'd think the credit-card issuers would know the truth behind the happy talk about our economic robustness. Apparently not.

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