Visa has announced that spending on debit cards in the US has passed credit for the first time in history. For the period ending December 31, 2008, debit payment volume was $206 billion with credit payments at $203 billion. Consumers are going on a credit diet and in this new era of frugality, they would rather use their own funds to focus on household budgeting and cost control.

Bankruptcy filings surge
Consumer bankruptcy filings rose in April, according to the American Bankruptcy Association. Consumer filings jumped 3.5% MoM in April to 125,618. This marks the fourth consecutive monthly increase in consumer bankruptcy filings, over which time they have been up nearly 50%.

Online job demand drops in April
The Conference Board published its report on online help wanted advertising and the key takeaway is that while the decline in labor demand is moderating, the bottom in employment has yet to be reached. Online job demand fell 131,000 in April to 3.117 million. This comes on top of a 100,000 decline in March and a 6,600 decline in February. And, over the last six months online job vacancies are down 30%.

Food stamp participation surging
And, as another sign of the stress hitting the consumer sector, we see that food stamp participation jumped 1.1% in February, continuing a string of four consecutive monthly increases, and is running up 17.4% on a year-over-year basis. Nearly 15 million US households, or 13% of the total, are now participating in the food stamp program.

Ad spending continues to come under the knife
According to the researcher TNS Media Intelligence, US ad spending remained weak in March after a 9.2% drop in the fourth quarter of 2008. Newspaper ads sank 17%, magazine ads fell 14%, and radio advertising dropped 15% according to the group.

Soaking the rich
In the spirit of yesterday’s announcement by the Obama administration of going after the offshore accounts of US multi-nationals and wealthy individuals, we have little doubt as to who will be helping pay for the clean-up of the financial sector and economy. We will just remind investors that the tab to rescue the financial system and the economy has already hit roughly $2.7 trillion or nearly 20% of GDP, and if the 1930s are any guide, it is the rich who largely end up paying for it. There is clearly upside potential to top marginal tax rates.