Consumer Credit Reveals 26th Consecutive Decline In Revolving Credit, Ex-Student Loans Consumer Credit Drops $28 Billion

Tyler Durden's picture

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HarryWanger's picture

And may I add:

"Gains in non-revolving reflect strong demand for vehicle loans which based on last week's solid unit vehicle sales are likely to show strength in the November report."

In other words, people ARE buying big things, like cars for example. You don't buy a car if you're "worried" about the economy.

 

Cheesy Bastard's picture

Unless you need it to live in.

Tyler Durden's picture

Wrong again: government merely funding intermediary dealer purchases of (mostly domestic and recently IPOed) vehicles as end demand refuses to materialize. Also known as channel stuffing and inventory hording. Let's see: 27,000 cars stuffed at about $12k average loan per car... There's your government's dollars working overtime for you.

A for effort though.

Channel Stuffing At GM?

HarryWanger's picture

What does vehicle inventory have to do with more people obtaining credit. The point is, people are getting credit to buy new vehicles. Sure, inventory may be up but the point here is credit and credit is reflecting demand for vehicles. Right?

SpeakerFTD's picture

I am also embarrassed to admit how much I love watching HarryWanger get faced.  You made my day, Tyler!

johngaltfla's picture

I'm not embarrassed. It's sort of fun. Like watching the opponent's team mascot falling into a woodchipper.

ForWhomTheTollBuilds's picture

Ditto.  Does he reply with a characteristic nothing, or a craven apology only to appear in the next thread with aggressive accusatory rant sure to lead to more hilarity?

Spalding_Smailes's picture

Tyler, a chart on the silver crash below $29.

Tyler Durden's picture

As requested:

In all seriousness, rumor that Wolverine Trading went tits up and was liquidating everything, and was the catalyst for the ES dump just before 3 pm.

Cdad's picture

LOLOLOLOLOLOLOL!

Wooooootinany!

papaswamp's picture

Comes down a bit more and I will go on another buying binge....

 

and wow that is one heck of rumor.

Spalding_Smailes's picture

Can you use a chart that updates (5 min -Finviz) ?.... It will not stop falling !!!

Now $28.50

ForWhomTheTollBuilds's picture

But gold is up $2 in the last 20 minutes!

 

Tyler, graph it on a logarithmic scale quick!

Hephasteus's picture

But wolverine trading has unwavering integrity and proprietary algorythms. They should at least be able to outlast the JP Morgue.

What happened. Hippies are supposed to drop out and drop acid. Not drop out and buy silver and blow everything the SEC won't regulate to all hell.

Joe Davola's picture

In these days of free ponies for all I'm sure the program was extended beyond the initial date of Sept 30, but I don't see anything on the SBA site stating it has.

johngaltfla's picture

Man, you are fun to watch being p0wned.....

Cursive's picture

@HW

I work at a car dealership.  NEW AND USED ARE HURTING FOR BUSINESS!  I'm hearing the same from friends at other dealerships.  Gotta rely on the Service and Parts sales.

prophet's picture

Listen carefully, to what you are saying.  I'm sure it makes perfect sense to you.

docj's picture

You don't buy a car if you're "worried" about the economy.

Seriously?  There are literally billions of reasons why people buy cars, Harry - they break, for example - that have precisely nothing to do with worry (or not) about the economy.

Holy crap, man.  Do you talk with anyone who doesn't work in the finance industry?

centerline's picture

OK, here is a sad story.  I personally know someone who had to replace a vehicle.  They had no cash whatsoever.  It is all gone trying to stay alive.  Savings kaput.  And no other credit lines to pull from.  So, this person wound up getting a cheaper new car instead of a used car (or fixing the first one) because the new car could be financed at a lower rate without any money down.

 

Post edited...

MachoMan's picture

I begrudgingly bought a new camry...  hell, the prices on used cars are painfully close to new...  ok, so for ~$5k difference I get 35k+ less miles and no lardass eating cheetos/semen in my car...  I go ahead and pony up the extra clams.  It was a really, really shitty feeling, but I had to pull the trigger after totalling another vehicle.

centerline's picture

Found that out myself when I had to put a good chunk of change into my wife's car.  Was shocked to see how small a difference in price there was.  No easy answer.  I felt horrible having to put a big wad of money into repairs.  In my case, car was repairable - so I am looking at it from a risk perspective.  In the case of a totaled vehicle, if not deciding to get a beater for awhile, the choices are not that good between used and new unfortunately.  Sorry to hear about your dilemma.

Cursive's picture

MachoMan drives a Camry?  Buzzkill....

MachoMan's picture

I don't, the wife (Mrs. Elizabeth if you will) does...  she was also the one who wrecked...

Idiot Savant's picture

Pay attention here Harry, as I'm the perfect example. My car finally died on Thanksgiving. I took delivery of my new vehicle last Saturday. Did I want to buy a new car? No, but I need reliable transportation. I considered paying cash, as I hate paying interest. However, due to my concerns about the economy, I decided I'd rather pay the interest and keep my powder dry.

Hell, even CNBC backs up what Tyler is saying.

http://www.cnbc.com/id/40554201 

More auto loans going to subprime buyers

http://www.google.com/hostednews/ap/article/ALeqM5jHFgDgIfxH0KtnPyMLGyI17HZKeQ?docId=c6669d4119194e08ae304bacd5a1e838

HarryWanger's picture

The point is, credit is up and some of that is from people, not the government or space aliens, obtaining credit from banks to purchase autos.

Even your CNBC example backs that up:

Some of the strength last month also came from a rise in auto loans, reflecting stronger auto sales.

So thanks for making my point stronger with yet another quote from another source.

papaswamp's picture

...subprime autoloans...which saw the largest rise since 2007. 

ghostfaceinvestah's picture

I don't see anywhere in the Fed data that backs up the assertion made by both you and CNBC.  Nothing in the data suggests auto loans increased this past month. ex-the federal government, non-revolving credit was down.

prophet's picture

They are not sales, they are loans!  What a bunch of twisted ..., well never mind, you just go on doing what you do best. 

centerline's picture

Edited my post above to be more fair.  The logic you are using is in essence the same argument I have been pushing over the last couple of years.  That is, not knowing what is coming, it is better to stay liquid instead of throwing cash at debts when interest rates are so low.  If rates rise, you can always lighten the load by paying debts down.  It's all about having the resources to service debt - not actually throwing towards the debt right now - then winding up with squat and having the system implode.  When this mess goes down, all bets are off.  Keeping some powder dry is a great idea.  Of course, you have to be able to afford the car in the first place.  In my story above, the person could have fixed the first vehicle for a fraction of the cost of the new car - but lacked the cash and financing capability to do so.  Therefore was stuck getting another vehicle which could be financed.

 

Of course, this says nothing about a healthy economy.  

docj's picture

Bingo.  I mean, just my own personal situation I have a pair of Priuses - both over 100k miles - both running just fine.  My hope is to get another 100k out of both of them (that's +200k total for the math challenged) before replacing the one that looks most likely to give up the ghost.  The last thing I want right now is a car payment - but that's precisely what I'm going to have if one (or, Heaven forbid, both) of my cars croaks prematurely.

HW's assertion along the lines of "people don't buy cars if they're worried about the economy" is ludicrous on its face.

johngaltfla's picture

Guess what sparky? The US government buys GM and Chryslers on non-revolving credit too.

papaswamp's picture

Yea govt sponsored sub-prime auto loans!!! Weeeeee!

http://news.yahoo.com/s/ap/20101207/ap_on_bi_ge/us_autos_credit

As the article put it so well..."The percentage of loans going to subprime buyers rose 8 percent in the third quarter, their first year-over-year increase since 2007, according to a report issued Tuesday by Experian, a credit reporting agency. "

Oh yea...2007 what happened after that?

 

Loans with the highest rate of default..student loans...yeaaaa!

SheepDog-One's picture

Harry back for more beatings directly from Tyler...awesome!!

Mr Lennon Hendrix's picture

Remember Mike Tyson fights from the '80s?  Yeah, it's like that.

Spalding_Smailes's picture

Whats up with silver/gold after hours ?

 

papaswamp's picture

Big profit taking run (unless someone is dumping). Seems to happen about every 15 to 20 days. Then is marches back up. 

johngaltfla's picture

Dear Hairy Wanker,

Since you don't believe Tyler, and you won't listen to anyone else here, I shall link you to a liberal website called The Atlantic, which says everything everyone has been trying to tell you in this story:

Government Helps Boost Consumer Credit in October


Enjoy your p0wnage.

Merry Christmas,

John

Panafrican Funktron Robot's picture

http://research.stlouisfed.org/fred2/series/CONSUMER?cid=100

Yeah, consumers are looking super duper confident in the economy. Hence the 105 billion dollar drop in consumer borrowing since the February 2009 peak.

BORT's picture

Going to college on the Fed is the new CCC.  At least in the CCC you got paid and didn't owe anything at the end.  Parents also telling kids they aren't going to foot he bill to learn how to be a meeting planner

Cursive's picture

Now we know why Benron made a mention of "education" gaps in the awful Scott Pelley interview.  Indoctrination of new debt slaves.

ElGuappo's picture

I think it is GE that is buying 30,000 GM Volts. I have cash but in no way buying any NEW car.

Shameful's picture

Ah perpetual indentured servitude via student loans is alive and well.  Already past the point where it's a positive ROI for most, and with the vig running might as well be slavery.  Going to get real interesting in a few years.  Going to have a hoard of massively indebted, unemployed, young people with no way to pay or clear the loan. 

moldygoat's picture

They can work it off in FEMA labour camps. Their reward for a good ditch dug will be access to the TSA "best of" photos.

NBD

Shameful's picture

Guessing that with the attitudes of our bureaucrats, politicians, and oligarchs that the reward post ditch digging would be a bullet in the back.  I'm half expecting some bailout program or special service program to cover the student loans.  The Stasi isn't going to man itself after all.

Ragnarok's picture

So, your not going to buy a house? Fine go get your PhD.

 

Regards,

Your Debt-Slave Masters