Is AmeriCredit a Microcosm of U.S. Economy?

The fear may have become the reality at AmeriCredit Corp. (NYSE: ACF), a Fort Worth, Texas-based auto lender to consumers with weak credit histories.

AmeriCredit reported a loss of $19.1 million in its fiscal second quarter, in contrast to a $95.4 million profit in the same period a year ago. AmeriCredit also cut its fiscal 2008 earnings forecast to $170 million to $195 million, way down from the previous range of $295 million to $320 million.

The company nearly doubled its loan loss provision to $356 million. These results prompted the firm to lower its loan origination target for 2008 to $5 billion to $6 billion, from $6.5 billion to $7 billion.

AmeriCredit’s results appear to prove some economists worst fears – the subprime mortgage debacle is expanding into other consumer lending areas. As consumer payments for auto, credit card and other loans slowdown, lenders pull in, causing the broader economy to contract.

Daniel E. Berce, AmeriCredit president and CEO, told analysts during a conference call yesterday that the firm saw higher than expected losses in its subprime and near prime portfolios. “Credit deterioration occurred during the first two months of the quarter and accelerated in December,” said Berce.

Delinquency numbers increased virtually across the board for the company with Florida consumers posting especially bad numbers, said Berce.

Berce also said the company had completed the transition of the servicing of portions of its portfolio from its Orange, Calif. office to its Arlington, Texas office. AmeriCredit stock was down about 5 percent in mid-morning trading today.