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Last year, outstanding credit-card debt dropped an eye-popping $93.2 billion to about $876 billion, according to Federal Reserve data, which are not seasonally adjusted. During the same period, charge-offs -- the unsecured debt the banks determine they won't get back and charge off to loss reserves -- added up to $83.3 billion. In other words, only about $10 billion of the drop is attributable to consumers paying off their debt. Robert Hammer, chief executive of investment bank R.K. Hammer, said when credit charge-offs are exceeding receivables, the impact is clear. "For the first time in my 30 years in this business, the dollar amount of card loans finished the year lower than they started," he said. "That would mean that consumers have either put their credit cards in a safe-deposit box and only get them out for special occasions or that some are cutting them up and not using them at all. And we don't think any of that is going on."

"After analyzing risky mortgages made on homes in Arizona, California, Florida and Nevada, where the housing markets had overheated, Mr. Paulson went to Goldman to talk about how he could bet against those loans. He focused his analysis on adjustable-rate loans taken out by borrowers with relatively low credit scores and turned up more than 100 loan pools that he considered vulnerable, the S.E.C. said. Mr. Paulson then asked Goldman to put together a portfolio of these pools, or others like them that he could wager against. He paid $15 million to Goldman for creating and marketing the Abacus deal, the complaint says. One of a small cohort of money managers who saw the mortgage market in late 2006 as a bubble waiting to burst, Mr. Paulson capitalized on the opacity of mortgage-related securities that Wall Street cobbled together and sold to its clients. These instruments contained thousands of mortgage loans that few investors bothered to analyze. Instead, the buyers relied on the opinions of credit ratings agencies like Moody's, Standard & Poor's and Fitch Ratings. These turned out to be overly rosy, and investors suffered hundreds of billions in losses when the loans underlying these securities went bad. Mr. Paulson personally made an estimated $3.7 billion in 2007 as a result of his hedge fund's performance, and another $2 billion in 2008. He was also treated like a celebrity by members of a Congressional committee that invited him to testify in November 2008 about the credit crisis. At the time, none of the lawmakers asked how he had managed to set up his lucrative trades; they seemed more interested in getting his advice on how to solve the credit crisis. "

http://www.nytimes.com/imagepages/2010/03/05/business/20100306_CHARTS_GRAPHIC.html?ref=economy March 5, 2010 After Jerky Swings, the Economy Begins to Look Nice and Boring By FLOYD NORRIS A DEEP recession and the credit crisis led to extraordinary falls in the American economy and perhaps even greater disruptions in financial markets. Now, both economic and market indicators have returned to what Warren G. Harding called "normalcy" when he was elected president in 1920, after the end of World War I and a subsequent recession. A lot of worry about the economy remains, and some economists are forecasting a double-dip recession, as occurred in the early 1980s, or a very slow recovery, as happened after the 1990-91 and 2001 recessions. But as the accompanying charts show, three disparate indicators - covering unemployment, corporate financial distress and stock market volatility - have gone from very high to a little below historical averages. Abby Joseph Cohen, the Goldman Sachs strategist, told a conference sponsored by George Washington University this week that lessened market volatility was one of the reassuring signs she saw. She was referring to the VIX index, which uses index options prices to show how much volatility traders expect. Another way to measure volatility is to look at the range of share prices. The chart here shows the differences between the highs and lows of the Standard & Poor's 500-stock index during three-month periods. There have been some sharp movements on a few days, but the high from December through February was just 10 percent higher than the low, the smallest range since the summer of 2007. Similarly, Challenger, Gray & Christmas, an outplacement firm, said that only 42,900 firings were announced in February, the lowest for any month since 2006. The chart shows three-month totals, which are down almost three-quarters from the highest levels last year. The data "offers more support to the notion that U.S. employers ha

# bloodied and confused, much as if they were small birds that had strayed into a badminton game." # On the economy: "By the fourth quarter [2008], the credit crisis, coupled with tumbling home and stock prices, had produced a paralyzing fear that engulfe