by Joseph Kenny | 12/27/08

The signs that the economic crisis will begin to affect the credit card markets are made clearer after a statement by Bank of America CEO Kenneth Lewis was released. Lewis shared the sentiment of many economic experts who say that the US economy will continue to plummet and worsen. Lewis was also quoted as saying that the credit card industry hit hard.

Lewis said, "We, as an industry, may end up with possibly the highest credit card losses the industry has ever experienced."

There also indications that the Federal Reserve will make another half-percentage rate cut at its mid-December meeting in an effort to deal with the ongoing financial crisis.

For Bank of America, there will be other measures enacted in the coming months, particularly those associated with its takeovers of Merrill Lynch and Countrywide Financial earlier this year. For instance, Lewis stated that there would be substantial job elimination plans resulting from its buyout of Merrill Lynch. Needless to say, investors are worried about the status of the Bank of America.

This natural fear may be offset by the likelihood that the bank will not be making any new acquisitions for the next few years; it will have its hands full with integrating its latest high profile purchases.

The inter-related nature of different industries was underscored when the Bank of America CEO spoke in Detroit recently, addressing not only the dubious status of its housing stocks, but also about how their conditions was worsened by economic recession and the downfall of the US's major automakers.

Both university students and local business owners listened to Lewis explain the effects of the financial crisis on the state of home ownerships in America.

Bank of America remains the country's largest mortgage lender and one of the biggest credit card issuers.