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Capital One reported an abysmal quarter last night.

I’ll update our economic outlook. Unemployment and home prices have been and continue to be the economic variables with the greatest impact on our credit results. We now expect unemployment rate to increase to around 9.6% by the ends of 2009. Our prior assumption for home prices was for the Case Shiller 20 city index to fall by around 37% peak to trough. We now expect a modestly worse peak to trough decline of around 39%. …

We expect further increases in U.S. card charge off rate through 2009 as the economy continues to weaken. It is likely that will our U.S. card charge off rate will increase at a faster pace than the broader economy as a result of the denominator effect and our implementation of OCC minimum payment requirements … We expect monthly U.S. card charge off rates to cross 10% in the next couple of months.

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We’ve seen this movie before.  All of the large banks are reporting similar trends.  Credit is deteriorating and the consumer is actually showing signs of further weakness.