A new Finance Round-Up has been posted at TOD:Canada.

In the US, as one door has closed on subprime lending, another has opened on credit card debt. Actually living within one's means doesn't always seem to be an option, for some due to poverty and for others due to greed. Either way, the debt hole Americans (and Canadians, and the British) are collectively digging themselves into is getting deeper by the day, and they start young.

As losses mount, the role of mortgage fraud, by both borrowers and lenders, and also potential securities fraud, is being revealed. The litigation is only just beginning, but be prepared for a storm of legal action and recriminations. The ratings agencies are looking vulnerable to European action as their ratings enabled the sale of bad loans to European institutions, under conditions of conflict of interest.

Signs of stress are spilling over from the world of high finance to the real economy, where trucking and shipping are feeling the slowdown. Meanwhile Canada (several months behind the US) is still seeing a booming housing market, but for how long?

Americans charge it as Bank of Subprime closes

The automated teller for home loans is empty and Americans are relying increasingly on credit cards to pay their living costs, indicating tough hurdles ahead for U.S. consumer spending and markets.

Federal Reserve data released on Friday showed U.S. consumer borrowing rising by $12.18 billion in August, more than 20 percent more than economists had forecast. Most striking was an 8.1 percent increase in borrowing on revolving credit lines, mostly credit cards, to a record $909 billion. Credit card borrowings rose at the sharpest rate since early 2002.

So what was it that persuaded consumers to rack up more debt during the month?

Was it the increasing press coverage, no doubt reinforced by friends and family, that their houses were worth less than a month or a year ago? Or was it the near meltdown in financial and credit markets that prompted a surge in speculation about an upcoming recession?

Quite possibly, it wasn't because they felt better, but because things had gotten suddenly worse.