Devoted to Managers and those that seek to improve their management skills

The quarterly reports of US banks seem to reveal that the sub-prime mortgage problems have extended beyond the high-risk loans they represent.

Another reality is the $6 billion in reserves added by banks during the second quarter; more importantly, the reserves aren't only for mortgage defaults, but also for defaults on credit cards, car loans and home equity loans. This speaks to banks believing consumers won't be able to pay their loan obligations in a variety of categories.

As Michael Mayo, a Deutsche Bank analyst says, “What started out merely as a subprime problem has expanded more broadly in the mortgage space and problems are getting worse at a faster pace than many had expected.

“On top of this, there is an uptick in auto loan problems, which may or may not be seasonal, and there is more body language from the banks that the state of the consumer was somewhat less strong [than thought].”

Loans that are in trouble which could also turn to losses has more than doubled also, making the potential for more disruption increase.

For the housing market itself, many think it'll struggle throughout all of 2008.

We'll need to keep an eye on the auto, home equity and credit card debt areas closely, as along with the know housing market problems, they could really make a huge impact on consumer spending and difference in our strategies.