Charlotte based Bank of America posted better than expected earnings for the first quarter of 2009 earning 44 cents per share as compared to 23 cents per share a year ago.  This well exceeded the analysts forecast of 4 cents share. 

That was the good news….the bad news was that the bank posted a loss of $1.8 billion on card services after posting a gain last year.  CEO Ken Lewis indicated that “credit is bad and we believe credit is going to get worse before it will eventually stabilize and improve….whether that turn is later this year or in the first half of 2010, I’m not going to hazard a guess”.

Why do I write about this other than my love for the stock market?  Ken Lewis’ comments about the deterioration of the credit markets gives us great insight as to how the economy may very well continue to struggle and even get worse in the near term.   

Why is that important other than for the obvious reasons?  Unfortunately the Charlotte real estate market is inexorably intertwined with the economy and as such we more than likely will see continued downward pressure on our markets.  If people are not making their credit card payments I am fairly confident they are struggling with mortgage payments.  Struggling with mortgage payments means a higher probability of defaults and foreclosures.  More foreclosures mean more downward pressure on home prices in Charlotte. 

I remain cautiously optimistic the economy can stabilize by years end and we can begin to see the bottoming of the Charlotte real estate market.  Until then stay tuned….

Ciao Bella….