CONSUMER REVOLVING CREDIT AT 2005 LEVELS

16 comments

Posted on 7th May 2013 by Administrator in Economy |Politics |Social Issues

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I find it fascinating that the horrible consumer credit data was released at 3:00 pm by the Federal Reserve and the “journalists” at the Wall Street Journal owned Marketwatch did not feel it warranted a headline on their site. You see the stock market is above 15,000 and they need to convince the sheep that this is great news for them. Therefore, they wouldn’t want any negative news to derail their 15,000 Dow storyline.

The blatant manipulation of our financial markets by Wall Street and their cronies in Washington DC is completely revealed by the data reported today. Revolving credit card debt tells the story. We already know that real wages have been falling since the mid 2000′s. We know there are 2 million less full-time jobs than there were in 2007. We know that payroll tax increases and Obamacare premium increases have sucked the life out of the consumer. Not only is credit card debt lower than it was 6 months ago, but it is lower than it was in May 2005. It isn’t lower because consumers are paying it down. It is lower because they can’t take on any more debt.

So riddle me this. If they aren’t buying Chinese shit with credit cards and their disposable income is declining, how does a country that depends on consumers to generate 71% of its GDP by spending on shit happen to be in an economic recovery?

Government sanctioned fraud, financed by you the taxpayer. Total consumer credit did hit a new all-time high in March. Since 2009, credit card debt has declined by $71 billion. Over this same time frame non-revolving debt has increased by $458 billion. That sure sounds like a disconnect to me. Using your credit card is a personal choice and can be restricted by the credit card issuer through reduced credit lines. Why would consumers be cutting back on credit card debt by 8% and increasing their use of non-revolving credit by 30%?

Easy answer – Obama and his government minions. They have doled out hundreds of billions in student loans to dullards going to the University of Phoenix to keep the unemployment rate on a downward track and they happen to still own 80% of Ally Financial (GMAC, Ditech, Rescap). Obama and his minions have used Ally Financial as their little engine of growth for GM and the rest of the auto industry. While automaker profits continue to fall, Ally Financial is giving auto loans to deadbeat subprime borrowers accounting for 45% of all vehicle sales in the country. 

When has subprime lending created problems in the past? Is there a more subprime borrower than a University of Phoenix dropout or a Cadillac Escalade owner in West Philly? The economy is in the shitter. The average person can’t afford a pot to piss in. The government is using your money to create the illusion of recovery. There will be hundreds of billions in loan writeoffs for this government sanctioned fraud. You will foot the bill, so work harder and pay more taxes. It’s your duty to comrade Obama.  

March Consumer Credit Increase Driven Entirely (And Then Some) By Student And Car Loans

 
Tyler Durden's picture

Submitted by Tyler Durden on 05/07/2013 15:18 -0400

The March consumer credit headline was a disappointment, increasing by just $7.97 billion, on expectations of a $15.6 billion increase, with the February total revised lower to $18.14 billion. So far so bad. It gets worse when one peeks beneath the surface and finds that discretionary consumer credit in the form of credit card and other revolving loans posted its first decline of 2013, dropping by $1.7 billion, the biggest decline since December’s 2.1 billion. So what rose: why debt for purchases of Government Motors and student loans of course, which increased by $9.676 billion in March. In other words: the student bubble keeps getting bigger, more and more GM cars are being bought on subprime credit, while the vast majority of Americans can’t even afford to charge toilet paper purchases as the discretionary deleveraging continues.

In the last year, of the $157 billion in total debt issued, $152.6 billion, or 97.5%, is in the form of non-revolving credit. Consumer credit created? A whopping 2.5% of the total or $4 billion.

Finally, who is the primary source of all this free credit? Why Uncle Sam of course (and all US taxpayers by implication, when the student and second subprime car bubble pops of course).

16 Comments
  1. AWD says:

    A new housing bubble, student loan bubble, subprime auto bubble, farm land price bubble, stock market bubble, bond market bubble, and government debt bubble. I’m probably missing a few others. All the responsibility and caused by Ben Bernanke and the Federal Reserve. All to make the rich banksters even richer. With the Fed loaning the government $1 trillion per year, they couldn’t hand out all the free cash.

    Remember the good ‘ol days of the housing bubble? or the internet stock bubble? One bubble popping was enough to wipe out the economy. Now, Bernanke has created bubbles in every asset class and category. It may be the last bubbles, as society is sent into the post modern dark ages. Ron Paul is correct; it’s house of cards, it is going to tumble.

    Bankers Warn Fed of Farm, Student Loan Bubbles Echoing Subprime
    By Joshua Zumbrun & Craig Torres – May 7, 2013

    A group of bankers that advises the Federal Reserve’s Board of Governors has warned that farmland prices are inflating “a bubble” and growth in student-loan debt has “parallels to the housing crisis.”

    The concerns of the Federal Advisory Council, made up of 12 bankers who meet quarterly to advise the Fed, are outlined in meeting minutes obtained by Bloomberg through a Freedom of Information Act request.

    Their alarm adds to a debate on the Federal Open Market Committee about whether the benefits from their monthly purchases of $85 billion in bonds outweigh the risk of financial instability. While Chairman Ben S. Bernanke has argued the program is worth pursuing, Fed Governor Jeremy Stein and Kansas City Fed President Esther George are among those who have voiced concerns that an extended period of low interest rates is heightening the risk of asset bubbles.

    “Agricultural land prices are veering further from what makes sense,” according to minutes of the council’s Feb. 8 gathering. “Members believe the run-up in agriculture land prices is a bubble resulting from persistently low interest rates.”

    The Fed first lowered its target interest rate to near zero in December 2008 and has pledged to hold it there until the unemployment rate, currently 7.5 percent, falls to 6.5 percent. The U.S. central bank has also engaged in three rounds of bond purchases, known as quantitative easing, driving the Fed’s balance sheet to a record $3.32 trillion as of May 1.

    Well-loved. Like or Dislike: Thumb up 10 Thumb down 0

    7th May 2013 at 5:54 pm

  2. card802 says:

    POP!

    Well-loved. Like or Dislike: Thumb up 8 Thumb down 0

    7th May 2013 at 8:20 pm

  3. Razzle says:

    @ AWD

    Ya know, I know you ‘get it’….I wonder what the percentage of people understand what is happening. Over 100 million are receiving some sort of gov. income. I wonder what percentage remaining are in the trenches are humping out a futile excistance, knowing they are cock blocked at every turn.

    Taxes and overegulation are making it virtually impossible to continue a business, much less start one.

    I will not obey, not through retaliation but through my RIGHT as a person on this planet to engage others in honest and fair transactions, no person can take that away from me.

    As this shitstorm concludes I will try to find every possible bit of decency in every person and every transaction I make, I am in control of MY morals and ethics.

    I truly believe that given the correct fertilizer, anything is possible.

    Well-loved. Like or Dislike: Thumb up 7 Thumb down 0

    7th May 2013 at 9:08 pm

  4. John A says:

    The US government and banks have no master plan to deal with anything. Many of you have probably seen/read these articles, but I thought I would link them. Alan Greenspan discusses the END of the Federal Reserve? So, the fucking “Maestro” Mister Magoo has gotten religion and now (at last) sees the folly of the Fed? They now admit PUBLICLY (and to elected officials) that can not account for literally TRILLIONS of dollars? The wheels are coming off this shit wagon

    http://www.thedailybell.com/28836/Anthony-Wile-Greenspan-Discusses-the-End-of-the-Fed–What-Comes-Next

    http://www.thedailybell.com/384/Federal-Reserve-cannot-account-for-9-trillion.html

    Well-loved. Like or Dislike: Thumb up 8 Thumb down 0

    7th May 2013 at 9:18 pm

  5. llpoh says:

    There is some amazing shit in this, and it is much more pertinent than the crap being discussed re Syria and Israel. That there have been only two comments is disgraceful. The Admin goes through a fair bit offffert analyzing this for us, chewinging it up so we can swallow and digest it, and we hardly comment. Disgraceful.

    Anyway, on to the thread. The ZH article says in its first line :

    “The March consumer credit headline was a disappointment, increasing by just $7.97 billion, on expectations of a $15.6 billion increase, with the February total revised lower to $18.14 billion. ”

    Think about this for a moment. What it is saying is that the US economy is so fucked up that it is begging for its citizens to go into debt. Can you imagine anything more fucked up?

    DEBT IS BAD. Debt is ESPECIALLY BAD if used to buy non-capital items. Yet the current situation is that the govt is praying its citizens take on more debt and desperately wants them to buy igadgets and TVs and shit – most of the cost of which will flow overseas. If there is good debt, and generally there is not, it would be debt used for buying US manufactured capital good, or debt used to build infrastructure. Think what $500 billion would buy in infrastructure or capital goods. It would go a fucking long way toward putting a patch on the issues confronting the US. But no, let’s totally piss it away on cars and shit-for-brains too stupid to actually get a quality education. Fuck me dead.

    Given that citizens have either 1) figured out that DEBT IS BAD, or 2) have insufficient cashflow to service more debt, the govt, in its eternal wisdom, desperate to generate debt in a ridicuous effort to prime the pump, is giving money away by the billions. They call it “loans” – but it is not a loan. Loans have a reasonable prospect of being repaid. The student loan and car loan money have alost no chance of being repaid. They have indeed created debt – but it is debt the working taxpayer owes. The recipient of the money is not going to pay it back, so they could not give a shit.

    Seriously – it is this type of shit that is going to bring the country down. Syria, etc are just fucking sideshows to keep people from realizing that these issues are the real issues. And it is working. Even astute readers of TBP are more focused on the sideshow, and cannot see the real game.

    This is the shit that will kill off the US: Obamacare, unfunded liabilities (govt drones, SS (bullshit on anyone saying it is paying fdor itself. It is so underfunded it will never get out of its hole), Medicare, etc etc etc.), the highest corporate tax rates in the world, the IRS persecuting honest men, women, and companies in an effort to squeeze ever more oney from them, rising taxes, legalizing 10 million immigrants at a cost of perhaps $6 – $10 trillion dollars (HOLY FUCK, BATMAN!), the erosion of individual freedom, the attempted confiscation of weapons, the vested lobby groups, the massive welfare state and FSA, etc etc etc.

    The wars and military actions are just a sideshow. It is the Circus part of Bread and Circuses. The Bread is the welfare state. They are doing everything possible to make sure that the people do not awaken to what is happening, and to ensure if the people do awaken they will have taken away their liberties to such an extent that they cannot do anything but subjugate themselves to the will of the govt and those puling the strings.

    Again I say – that the govt is praying for its people to go into debt tells you all you need to know about how fucked up things are. Think about it.

    And for fuck sake, what say that you shit throwing monkeys throw some shit on the threads that are really valuable. This is one such. .

    Well-loved. Like or Dislike: Thumb up 9 Thumb down 1

    7th May 2013 at 9:30 pm

  6. llpoh says:

    Two new contributors while I was typing the rant. It is a start.

    Well-loved. Like or Dislike: Thumb up 7 Thumb down 0

    7th May 2013 at 9:32 pm

  7. backwardsevolution says:

    “Learned helplessness” definition:

    “In the learned helplessness experiment an animal is repeatedly hurt by an adverse stimulus which it cannot escape.

    Eventually the animal will stop trying to avoid the pain and behave as if it is utterly helpless to change the situation.

    Finally, when opportunities to escape are presented, this learned helplessness prevents any action. The only coping mechanism the animal uses is to be stoical and put up with the discomfort, not expending energy getting worked up about the adverse stimulus.”

    While many, many people are benefitting (or think they are, until the car is repossessed or their house is finally foreclosed on) from government policies, “learned helplessness” might explain why others do not act.

    Well-loved. Like or Dislike: Thumb up 9 Thumb down 0

    7th May 2013 at 9:48 pm

  8. DaveL says:

    I’m so poor I can’t even pay attention.

    Well-loved. Like or Dislike: Thumb up 9 Thumb down 0

    7th May 2013 at 9:55 pm

  9. backwardsevolution says:

    llpoh – I agree that Admin does a fantastic job at chewing through all of the material. Sometimes I just read what he has to say in amazement, simply because it’s so well said, and then I don’t respond because what I have to say pales in comparison.

    I really think the only thing left to do is march on the Washington thieves (White House, Congress, Senate) and the Federal Reserve.

    Take back your country.

    Well-loved. Like or Dislike: Thumb up 8 Thumb down 0

    7th May 2013 at 10:11 pm

  10. Razzle says:

    @backwards

    I also agree, I don’t have too much to offer when it comes down to it. There will be no march on Washington.

    We WILL use our ‘Tackilin fuel’ or lack of it to resolve this issue.

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    7th May 2013 at 10:26 pm

  11. Anonymous says:

    At least, prior to the Civil War the slaves were treated better than the debt slaves of today. They had no chains dragging them down like Americans currently have.

    Ask an unemployed college grad with $50k of debt and no way to pay it, and no credit in a society where credit rules your life.

    Or a homeowner that owns a home that is ‘underwater’ and cannot sell it for enough to pay off the mortgage and has no income to pay even the payments.

    Or a family breadwinner who lost their job because the company moved to Asia and there are no other employers in the area hiring, the unemployment is running out, the kids are hungry, and the roof leaks.

    Invisible chains are the worse kind … and those are what the banksters use. Debt is servitude!

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    7th May 2013 at 10:46 pm

  12. Steve Hogan says:

    If anyone if reading sites like this, they must know something is terribly wrong. The system is coming apart at the seams. The money-printing is completely out of control. Government spending is destroying the world economy. Bubbles everywhere.

    I will be shocked if the arrogant pricks who are calling the shots can keep this jalopy rolling down the road until the end of 2013. The engine is smoking, the tires are flat, and it’s running on vapor.

    If you’re sitting on the sidelines thinking this is just a hiccup and that all will be well, you are a moron. Do your family a big favor, turn off the fucking idiot box, muster whatever savings you have, and purchase some bullion. Store it outside the banking system.

    Get a generator, some food and water, a firearm and ammo, things with which to barter, a well-stocked first aid kit. In other words, get off your ass.

    Well-loved. Like or Dislike: Thumb up 8 Thumb down 0

    7th May 2013 at 10:58 pm

  13. Novista says:

    Steve Hogan

    I’m sitting on my ass now because I did all that shit – and more -starting in 2006. Maybe you were earlier.

    Well-loved. Like or Dislike: Thumb up 8 Thumb down 0

    7th May 2013 at 11:19 pm

  14. Steve Hogan says:

    Novista,

    Looks like you’re sitting pretty. It’s the other 300+ million who need to get a clue.

    If all goes well, I’ll have enough time to get my ass to my condo outside the USSA and watch the fireworks from afar. It won’t be pretty, but it will be interesting.

    Well-loved. Like or Dislike: Thumb up 8 Thumb down 0

    7th May 2013 at 11:24 pm

  15. card802 says:

    The thing I find most difficult about the situation we are in is that the seams are unraveling so slow that most don’t see it.

    Which is a curse and a blessing.

    A curse because when the finale comes and the curtain falls, there will be a lot of dumbfounded looks and a lot of pain.

    And a blessing, many many thanks to the Admin and others on this site who have allowed a few to see the ending and get ready, or get as ready as we can. And is it just me, or does the finale seem to be rushing a little faster now?

    Like or Dislike: Thumb up 4 Thumb down 0

    7th May 2013 at 7:48 am

  16. napari says:

    Sad to say I think quality people are just going John Galt waiting for the collapse to happen. Its to far gone.
    Fat fucking lazy fucks voted back in the sorry ass government in control who dont give a shit about anything but getting reelected and feeding on tax payer money.

    Real WORK is for suckers!
    Honesty and integrity is punished!
    And back stabbing and stealing gets you ahead!

    The hope and change the majority wanted is here…

    Like or Dislike: Thumb up 4 Thumb down 0

    7th May 2013 at 10:46 am

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