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
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).