Great news. Consumer credit SURGED in January. We blasted through the $2.5 trillion level. Car loans and student loan skyrocketed by almost $21 billion in just one month. Remember how I was wondering about all the new cars in West Philly? Here’s the answer. Ally Bank (GMAC in disguise) is making car loans of $35,000 to people in West Philly that have an average annual income of $16,000 and live in low income housing so they can buy Ford Expeditions. Imagine how smart all those people studying in their underwear at the University of Phoenix will be in two years when they graduate. Every dime of these $1 trillion in student loans are being covered by you. Obama is handing it out from your stash.  Sounds like a sustainable economic model.

Consumer Credit Outstanding 1

Seasonally adjusted
  Year Quarter Month
  2010 2011 2012
  2007 2008 2009 2010 2011 r Q4 Q1 Q2 r Q3 r Q4 r Nov r Dec r Jan p
Total percent change (annual rate)2 5.8 1.6 -4.4 -1.7 3.6 2.5 2.2 3.6 1.4 6.9 9.8 7.9 8.6
Revolving 8.1 1.7 -9.6 -7.5 0.4 -2.6 -3.7 1.5 -2.0 6.0 9.9 5.5 -4.4
Nonrevolving 3 4.4 1.5 -1.2 1.5 5.1 5.0 5.1 4.6 3.0 7.4 9.7 9.0 14.7
Total amount (billions of dollars) 2522.5 2561.8 2450.1 2408.3 2494.5 2408.3 2421.5 2443.3 2451.9 2494.5 2478.2 2494.5 2512.3
Revolving 941.9 957.5 865.5 800.2 803.8 800.2 792.8 795.9 792.0 803.8 800.1 803.8 800.9
Nonrevolving 3 1580.7 1604.3 1584.6 1608.1 1690.7 1608.1 1628.6 1647.4 1659.9 1690.7 1678.1 1690.7 1711.4
Terms of Credit 4

Not seasonally adjusted. Percent except as noted.
Commercial banks
Interest rates
48-mo. new car 7.77 7.02 6.72 6.21 5.75 5.87 5.86 5.79 5.90 5.45 5.45 n.a. n.a.
24-mo. personal 12.38 11.37 11.10 10.87 10.92 10.94 11.01 11.36 10.80 10.52 10.52 n.a. n.a.
Credit card plans
All accounts 13.30 12.08 13.40 13.78 12.74 13.44 13.43 12.89 12.28 12.36 12.36 n.a. n.a.
Accounts assessed interest 14.68 13.57 14.31 14.26 13.09 13.67 13.44 13.06 13.08 12.78 12.78 n.a. n.a.
Finance companies 5
Interest rates 4.87 5.52 3.82 4.26 4.73 4.57 4.73 n.a. n.a. n.a. n.a. n.a. n.a.
Maturity (months) 62.0 63.4 62.0 63.0 62.3 62.5 62.3 n.a. n.a. n.a. n.a. n.a. n.a.
Loan-to-value ratio 95 91 90 86 80 82 80 n.a. n.a. n.a. n.a. n.a. n.a.
Amount financed (dollars) 28,287 26,178 28,272 27,959 26,673 27,423 26,673 n.a. n.a. n.a. n.a. n.a. n.a.

Consumer credit surges again in January

By Greg Robb

WASHINGTON (MarketWatch) – U.S. consumers increased their debt in January by a seasonally adjusted $17.8 billion for a third month of sharp gains, the Federal Reserve reported Wednesday. Over the three most recently reported months, consumer debt has gained an average of $18.0 billion, compared with an average monthly gain of $5.3 billion from October 2010 until October 2011. The increase in January was larger than the roughly $10 billion gain expected by Wall Street economists. The increase was powered by non-revolving debt such as auto loans, personal loans and student loans-these three categories combined for a $20.7 billion jump in January, the biggest gain since November 2001. Credit card debt fell by $2.9 billion in the month, the first decline since August.

The credit card was essentially invented at the same time we went off the gold standard in the early 1970s. And look what has happened since. This will surely end well.

55 thoughts on “GO TO SCHOOL & BUY A CAR”

  1. I don’t think you understand kids today. If they get into too much debt, they simply download an app to their iphone that will get rid of the debt. They have apps to get laid, lose weight, cure acne, syphilis, or any other problem or concern in life. An app is all they need. They downloaded the loan forms for the student loans and car loans, they will download the cash to pay them off right? Right.


  2. “One of the most sickening kleptocratic rackets to come down the pike are the for-profit “educators.” It’s a scheme that is almost totally enabled by Government funding via Title IV loans. The loans fit the modern American model of getting people heavily in debt, who then have little ability to pay the loan back. This has been described as “Sub prime Goes to College”.

    For-profit college pays off much better than defense contracting:

    Guess picks up the tab for all the losses?

  3. AWD, if you wanna hit the gusher you go where the money is. Alaskan gold, Silicon Valley chips, right now the big bucks are coming from a completely out of control federal government.

    And so it continues. Until it all comes crashing down.


  4. Well, the for-profits are paying off lobbyists, and are goosed by progressive democrats that want to make sure underprivileged kids get to go to ITT tech for $14k per year. Meanwhile, the criminals running these schools are making a fortune. Same old shit.

  5. It appears significant that student loan debt, apart form all other forms of credit, is not dischargeable via bankruptcy. I would like to know all the history and politics of that decision. I am wary that as we descend into a deflationary ice age, debtors will be treated harshly, in sharp contrast to their currentstatus of victims. I wonder if we will see the revival of debtor’s prisons?

    1. Bob

      They changed the law regarding student loan bankruptcy after the Boomers piled into college during the Vietnam War to avoid service (Gingrich, Cheney) and then defaulted on their student loans after the war was over. Another feather in the cap of the Boomer generation.

  6. Admin,

    I thought you posted an article explaining how car sales are a big fat bullshit lie. Which is it?

    1. Work in Progress

      Are you a dumbfuck who can’t keep more than one concept in your pea brain at the same time?

      GM is channel stuffing cars into their dealers. Got that?

      The auto finance companies and the Wall Street banks are making subprime loans to deadbeats to sell cars. Got that?

      Are those two concepts incompatible, you dumbass?

  7. What beautiful, elite driven, success.

    Millions in colleges dumbing down the education for all.

    Billions of dollars in debts where the money is spent by both the academic idiots, the political-corrupt, idiot hacks and the bankers.

    All rolling in the dough today on our children’s backs tomorrow.

    And WE keep encouraging our kids to do it instead of sitting them down and explaining the real world facts of life.

    We allow mainly paid-for-life-on-the-taxpayer’s-backs-unionists to tell our kids what they should “do with their lives” and that it is perfectly acceptable to go $80k in debt and end up making $25k a year. Well, acceptable for our kids the advisers sure as hell wouldn’t work for that.

    100% percent of the population is being encouraged to go to college. According to most IQ charts it seems to me that less than 30% have any business – AT ALL – being there.

    I was taught to follow the buck, and if higher education were all it was cracked up to be they wouldn’t be lowering their standards and lightening their curriculum to produce more forced graduates.

    And student loan defaults wouldn’t be one of the premier growth engines (creating collectors and lawyers) in the country.

  8. “Work-In-Progress says:


    I thought you posted an article explaining how car sales are a big fat bullshit lie. Which is it?”

    Careful W-I-P, shit questions like that will rate you a dumbfuck.

    1. Look at the TBP dunce patrol – Dave Dumbfuck and King Shit for Brains – getting together and blinding us with their brilliance.

  9. Admin,

    Yes, I do understand. But one article said that cars are not being sold (the numbers are fake) and this one says that they are selling cars. Spell it out please before I get the kiss of death from all fire breathing TBPers.

    1. Which article said cars are not being sold dumbass? Please provide the article you are referring to so I can learn you something? Teaching dumbfucks with IQs of 50 is fucking exhausting.

  10. You’re the one quoting my old articles. You figure it out.

    If you want to go to war, don’t arrive with just your dick in your hand.

  11. Maybe this is why WIP is a dumbshit and can’t figure out cdo’s or abs’s, maybe hot chicks teaching today are too distracting, more weapons of mass dumbification.

  12. [email protected] says:

    “Every dime of these $1 trillion in student loans are being covered by you. Obama is handing it out from your stash. Sounds like a sustainable economic model.”

    Close, but no cigar, not a sustainable economic model. Thanks for playing!!!

    What this sounds like is good ole Democrat vote buying.

    What do you want to bet that West Philly goes 125% for Obama in 2012.

    1. HZK

      It was 65 degrees today. I took my usual route down 37th street through the hood tonight. The natives appeared restless. There were young hoodlums roaming about in packs. I had an uneasy feeling. I have a feeling the shit is going to meet the fan in the near future. It’s a feeling in the pit of my stomach.

      But, maybe it’s just gas.

  13. Well, can’t find it. I’m sure it was here. Maybe not. But I would never mistake your commentary for some one elses. Nobody fire breaths like you Admin. The article stated that car sales were bullshit because sales were counted from manufacturer to dealer and the manufacturer was stuffing cars down their throats.


    The name change signifies my awareness of the need to improve. Next time I shall battle more valiantly

  14. WIP

    I posted an article from Zero Hedge describing GM’s channel stuffing. The MSM was crowing about GM sales being fantastic. The data showed that their dealers had 200% more inventory sitting on their lots than 2 years prior. The gist is that GM and the other car dealers are making their sales appear higher than they really are by stuffing their dealers full of cars.

    In addition, the finance arms of the car dealers are making 45% of their loans to subprime borrowers (aka West Philly deadbeats). The data today confirms that billions of new car loans are being made to juice car sales.

    Do you think the surge in auto loans is due to strong demand from consumers with new jobs? Or do you think the surge in car sales is due to easy credit being peddled to idiots?

  15. January Consumer Credit Surges As Government Blows Student Debt Bubble To Epic Proportions

    Submitted by Tyler Durden on 03/07/2012 15:22 -0500

    One look at the just released consumer credit data would make one believe that the US consumer is getting back into it and the velocity of money is finally starting to ramp up: after all the headline January number came at a whopping +$17.8 billion on expectations of +10.5 billion. Nothing could be further from the truth. As the first chart below demonstrates, January revolving credit, as in that used on one’s credit card, actually declined by $2.9 billion compared to December, and was back to $800.9 billion: the first decline in 4 months as consumers spend less following an already weak holiday season. Yet offsetting this was an absolutely massive surge in Non-revolving credit, i.e., mostly student debt, which soared by $20.7 billion in the month, the highest sequential jump in this category in history, leading to a very misleading print of a major increase in credit. For earlier observations on the soaring student loan bubble see here. And it gets worse: when spread by sources of credit, the only place where credit came from was the US government, which funded a near record $28 billion, all of it going into student loans, even as every other source of credit declined in the month! If this is not the most blatant gaming of headlines, we don’t know what is. But yes, America’s lucky students get ever deeper into debt slavery, only to realize upon graduation that there are no jobs that pay high enough to allow them to pay off this debt. Thank you uncle Sam – may we have another bubble.

  16. Even Zero Hedge still gets it wrong about credit card debt.

    It is now $800 billion. At the end of the 3rd quarter it was $792 billion. The Wall Street banks are writing off on average $3 billion per month. That means the delusional consumer has actually added $20 billion of CC debt in the last 4 months.

    $792 – $12 writeoffs + $20 of new debt = $800

  17. Admin says…

    “Do you think the surge in auto loans is due to strong demand from consumers with new jobs? Or do you think the surge in car sales is due to easy credit being peddled to idiots?”

    A: ding, ding, ding #2.

    I have a 2004 Honda Accord with 164,000 miles on it. My wife has a piece of shit (but she loves it which makes me happy since there is no nagging for a new car) 2002 Chysler 300M. I just spent $3,000 on a new transmission for the Honda instead of buying a new car. I love paid off cars. Why don’t they sell any of those? I bet they would be big sellers.

    1. 1999 Olds Voyager – 150,000 miles

      2002 CRV – 180,000 miles

      2010 Honda Insight – 36,000 miles – will be paid off in 12 months after financing it at 0.9% for 3 years.

  18. Hey,

    Work-in-Progress (WIP) admitted his previous screen names were EricK/Snake/King-Shat. Stuck in New Jersey is now Stucky, along with about 3 dozen other screen aliases. Ass Hole Doctor is now AWD. Everyone calls Hope at Zero Kelvin either Hope or HZK. Muck About is Mucky. Newsjunkie is the Cat Lady. Kill Bill is simply KB. Admin is an asshole (he’ll never read this, so I thought I’d slip that one in). And so on.

    SSS is dry and uninspiring. I need a new screen name. Something soaring and uplifting to the spirit. Any suggestions?

    The following are not welcome. Dumbfuck. Dumbass. Dickweed. Dork. Doofuss. Dickhead. Or any other perjorative starting with the letter D.

    I know I can count on the TBP audience to come up with a dignified and respectful screen name for me that will advance the site’s growing reputation as an Internet “Big Tent” where all comments are treated with warm hugs and welcoming arms.

  19. Stucky

    “Sucks at Golf” may be a player. Not very dignified, but truthful. I’ll let you know after the tournament I’m playing in this weekend.

  20. How ’bout Da Spook? Think I’ll stick with Alaska Anonymous, or AKAnon for short. Or is it Also Known As Non? You be the judges.

  21. I kind of like Stacie, because when wip screws up again we can opened the pizza box and tell him to %$! the pepperoni.

  22. Davos

    I didn’t fuck up. Just can’t find the article. Although it was a Zero Hedge article not an Admin article.

  23. Work- In- Progress,

    I’m not sure about what was posted here but I certainly remember a CBS Evening News “newscast” a few weeks ago that reported conflicting auto sales info in two separate new stories about five minutes apart. Hubby & I talked about it at the time.The brilliant “journalists” didn’t catch that?

    Somebody’s lying!

    Hell..it’s ALL lies, ALL the time, about everything!

  24. Administrator says:

    Which article said cars are not being sold dumbass? Please provide the article you are referring to “so I can learn you something”? Teaching dumbfucks with IQs of 50 is fucking exhausting.

    Dumbass? Dumbfuck? SO I CAN LEARN YOU SOMETHING?
    Now that’s funny.

    1. Dave Dumbfuck is too dense to even get sarcasm.

      I should make members take an IQ test before they are allowed to post.

      To think that you taught young children. Now I know why the country is fucked.

  25. IQ tests for membership are fine with me, as long as you can grade on a curve for those afflicted by Alzheimer’s. We wouldn’t want any AGE DISCRIMINATION here on TBP, now would we?

  26. Whatever you say Stacie. I’m sending the pizza-boy over with pepperoni, be a good Stacie and tip him well. He’ll show you the article on 0Hedge too.

    Oh, the pizza-box has a TSA ad, you can apply, they hire morons.

  27. Maddie’s Mom says…

    Hell..it’s ALL lies, ALL the time, about everything!


    Yep, you nailed it. Hard to keep up with all the lies.

  28. Has anyone in the country heard of community college? Especially if you’re about to drop borrowed money into a for-profit…

    This shit is dismal.

    I cry and whine about tuition… and pay out of pocket while I work a trade… but when I see how much it is out of state I really wonder.

    Really, if you’re not on the “out of high school on the 4 year track at an ivy”, YOU HAD BETTER seriously consider community college and a transfer to a state school or, if in CA, the UC system.

    It has ups and downs… working and part time school will extend the time. Yet if you are not working and taking loans, I would suggest visiting a recruiter for your favored branch of the military because, at the end of the day, this default shit won’t fly…

    Bank on it.


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