Business conditions continue to weaken in the U.S. and so far this month we have seen credit indicators deteriorate beyond our expectations.
[RIGHT]-American Express Chief Executive Kenneth Chenault[/RIGHT]
It's not just mortgage industry that is hurting. A lot of credit card companies are re-adjusting their earning forecasts for the year as the rate of defaults increases beyond what they normally expect.
In January Amex's CFO thought the write off rate (defaults on credit) would peak at 5.1 to 5.3% this year. It already went past that number in March. My guess is some people that have adjustable rate mortgages have taken cash advances on their credit cards to pay them. Visa and Mastercard aren't really hurting because they make their money on the transaction fees but companies like American Express and Discover both issue cards and give the money so they are the ones that are feeling it.