Marketplace has a new podcast for kids, "Million Bazillion!" EPISODE OUT NOW
My Two Cents

Citigroup Earnings Are Worrisome

Chris Farrell Jul 20, 2008

The stock market staged a stong sigh-of-relief rally on friday on news that Citigroup’s $2.5 billion dollar loss was better-than-expected.

But I didn’t take much solace in the news. The growing losses in credit cards is worrisome. From today’s Wall Street Journal.

A similar trend is evident in Citigroup’s giant credit-card business. Defaults in North America rose in the second quarter to 6.53% of total loans from 5.81% three months earlier. That’s the highest loss rate since mid-2005, when a wave of borrowers rushed to file for bankruptcy protection before a new law took effect that made it harder for them to wipe away their debts.

Mr. Crittenden [Citigroup’s CFO] warned that credit-card losses could rise “beyond their historic peaks” of about 7%, a level last seen in early 2004.

The credit problems continue to spread.

We’re here to help you navigate this changed world and economy.

Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.

In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.

Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.