» Continuing to Monitor Euro Mess

Reuters:

The euro zone’s debt crisis deepened on Tuesday as investors pushed the spreads on Spanish, Italian and Belgian bonds to euro lifetime highs and Portugal warned of“intolerable risks” facing its banks.

The euro dipped below $1.30 for the first time since mid-September, immune to new attempts by European policymakers to calm markets hell-bent on testing the EU’s determination to shield its financially weak members and increasingly nervous about the possibility of future euro zone defaults.

Two days after the bloc approved an 85 billion euro ($111.7 billion) emergency aid package for Ireland, worries about contagion to Portugal and Spain persisted and the borrowing costs of large countries like Italy and France shot higher.

…

Markets are already discounting an eventual rescue of Portugal although the government in Lisbon denies, as Irish leaders initially did, that the country needs outside aid.

While a Portuguese rescue would be manageable, assistance for its larger neighbour Spain would sorely test EU resources, raise deeper questions about the integrity of the 12-year old currency area, and possibly spread contagion beyond Europe.

Italy, the euro zone’s third largest economy, is now being referred to as“too big to fail” and“too big to bail”.

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» More Than 8 Million Drop Out of Credit Card Use

AP:

More than 8 million consumers stopped using credit cards over the past year. The decline stems from a combination of consumer choices and bank actions.

An analysis by credit reporting agency TransUnion found that use of general purpose credit cards bearing MasterCard or Visa logos, or issued by Discover or American Express, fell more than 11 percent in the third quarter, compared with the July to September period last year.

About 62 million people now have an active card, compared with 70 million a year ago.

The Chicago company found that consumers in the subprime category, or those with low credit ratings, were believed to be without cards mostly because they were shut down by banks after payments fell behind or balances were written off.

“One can quite reasonably infer that’s not voluntary,” said Ezra Becker, vice president of research and consulting in TransUnion’s financial services business unit. Banks have written off record amounts of credit card balances in recent years.

But a significant portion of the decrease in card usage reflects decisions by cardholders to stop using credit, Becker said.“They’re simply either not purchasing as much or paying down balances.”

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