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95% Of Total Consumer Credit Lent In Past 12 Months Is For Student And Car Loans

Tyler Durden's picture


Another month, another disappointment for all those who hope the consumer will finally "charge it." In November, consumer credit was expected to grow by $14.25 billion, instead it rose by $12.318 billion. However, it was once again the components that were key, because while $11.9 billion or the vast majority of November's credit growth was in the form of car and student loans (i.e., non-revolving), a tiny $458 million was for revolving, or credit card, purchases.

That's the demand side. On the supply side, no surprises here, the bulk of credit creation continues to come from the Federal Government whose contribution can be seen on the chart below courtesy of @Not_Jim_Cramer. In fact, if one excludes the contribution of the Federal government and compares how the current "expansion" matches to the last 11, well... instead of describing it see for yourselves:

Finally, putting it all into perspective, of the total $178 billion in consumer credit expansion in the past 12 months, a tiny $9 billion, or just 5% of total, was to fund credit card purchases. The rest went - you guessed it - into purchases of cars and paying for tuition, for which GM and strateospheric college tuitions are most grateful. And that is the New Normal economy in a nutshell.


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Wed, 01/08/2014 - 16:22 | 4312691 pragmatic hobo
pragmatic hobo's picture

i don't get it ... are people trading cars?

Wed, 01/08/2014 - 16:25 | 4312707 Skateboarder
Skateboarder's picture

That shiny new 25MPG (folks from 1920 would be proud) Dodge RAM aint gonna pay for itself, you know. That shiny new bro studies degree aint gonna pay for itself either. Are you questioning my hard earned loans!?

Wed, 01/08/2014 - 16:41 | 4312760 Boris Alatovkrap
Boris Alatovkrap's picture

This is like song by Alice Cooper:


Cannot get girl, 'cause I ain't got car

Cannot get car, 'cause I ain't got job

Cannot get job, 'cause I ain't got education

So I look for girl with job and car

Are you know where you are

Lost in Amerika

Why is Alice Cooper name "Alice"? Is like Thai cocktail "waitress"!? 


Wed, 01/08/2014 - 17:00 | 4312824 Skateboarder
Skateboarder's picture

Because Vincent Furnier is not a shock rock name, of course. Hail the Coop!

Also reminds me of this Metric song, Hand$hake$:

"Buy this car to drive to work. Drive to work to pay for this car."

Whoops I forgot, there is no work!

Wed, 01/08/2014 - 17:34 | 4312960 Boris Alatovkrap
Boris Alatovkrap's picture

In Amerika, you are pay to not work. Government is give many $ for unemployment! Forward FSA Army!

Wed, 01/08/2014 - 19:36 | 4313373 Boris Alatovkrap
Boris Alatovkrap's picture

Boris is receive down arrow!? WTH!? Maybe Boris is offend foot soldier of FSA Army?

Wed, 01/08/2014 - 20:19 | 4313534 F em all but 6
F em all but 6's picture

In Amerika no one needs to work or produce anything. We just live off each other and borrow the difference.

Wed, 01/08/2014 - 17:01 | 4312828 fonestar
fonestar's picture

At least you can get a few hundred dollars for scrap cars.  Diplomas for studying the movies of Keanu Reeves?.... not so much.

Wed, 01/08/2014 - 17:26 | 4312923 Rentier
Rentier's picture

No they are getting owned by 25% interest car loans...stupid does as stupid is.


no different in Canada it seems.

Wed, 01/08/2014 - 20:51 | 4313685 fonestar
fonestar's picture

I saw that on the news while watching TV in Canada.  The couple had just gotten out of years of credit card debt but they were having a baby so obviously they had to go out and buy another vehicle for $15,000 or something at 25% interest.  What's wrong with people's brain?  My family did not even have a car until I was 10.  We just walked to get groceries or to work.

Wed, 01/08/2014 - 16:22 | 4312693 NOTaREALmerican
NOTaREALmerican's picture

Well, when everybody has new automotive Bling then we'll see Credit Card debt increase so people can have new and better Bling.

Bling makes the world go `round.

Wed, 01/08/2014 - 16:29 | 4312694 Yen Cross
Yen Cross's picture

   Pullin it...pullin it... pullin it...forward.

  All this ZIRP free money shit is going to end horribly. I can't wait until all the inventory build numbers late last year ruin the numbers in February and March. ( it was weather related) I can hear it already.

  Like I need a new fucking refrigerator and toaster every year. /s

Wed, 01/08/2014 - 16:34 | 4312738 Hal n back
Hal n back's picture

problem is the life expectancy of a refridgerator is 7 years-we have a relic and try not to open and close it often-good for dieting too.


Wed, 01/08/2014 - 16:43 | 4312768 Boris Alatovkrap
Boris Alatovkrap's picture

You are store unstable radioactive isotope in refrigerator?

Wed, 01/08/2014 - 16:51 | 4312788 max2205
max2205's picture

MA at the depression over? 

Wed, 01/08/2014 - 16:22 | 4312695 Greenskeeper_Carl
Greenskeeper_Carl's picture

this should end well....quick, package up and sell some car/student loan backed securities to the muppets before this comes crashing down...

Wed, 01/08/2014 - 16:22 | 4312698 mayhem_korner
mayhem_korner's picture



Leveraging two things - cars and college degrees - that decrease in value precipitously once you drive the off the lot...not a sustainable model.

Wed, 01/08/2014 - 16:26 | 4312711 rubearish10
rubearish10's picture

....and that college degree used as toilet paper becomes worhless too, ROTFLMFAO!!!

Wed, 01/08/2014 - 16:46 | 4312776 Boris Alatovkrap
Boris Alatovkrap's picture

Boris is see ad for University Degree in Amerika, not so expensive, is take payment by credit card. Where is University of FedEx?

Wed, 01/08/2014 - 16:27 | 4312720 Rubbish
Rubbish's picture

Both the Parents and Children have more than a screw loose.



Wed, 01/08/2014 - 16:55 | 4312779 Boris Alatovkrap
Boris Alatovkrap's picture

USSA is have many screw loose, start from top with Screw-Loose-in-Chief.

Wed, 01/08/2014 - 16:23 | 4312702 rubearish10
rubearish10's picture

Student loans and cars,,,,all financed at ZIRP promotional and artificial demand back by the "full faith and CREDIT of the US Governmnet"!

Wed, 01/08/2014 - 16:57 | 4312805 Boris Alatovkrap
Boris Alatovkrap's picture


Same guarantee as FDIC is promise. FDIC is $500 Million in reserve and is guarantee $2T of deposit:

If one of USSA largest 10 bank is fail, fund is bankrupt...

Please explain Boris what is mean, "Deposit Back by Full Faith and Credit of U.S.S.A. Government"?



Wed, 01/08/2014 - 18:09 | 4313110 ultraticum
ultraticum's picture

Me think Boris A. is one best of ZH posters.

Wed, 01/08/2014 - 19:40 | 4313390 Boris Alatovkrap
Boris Alatovkrap's picture

Spasibo! You are too grateful! You are come work for Boris extract urban copper ore!

Wed, 01/08/2014 - 16:24 | 4312704 Greenskeeper_Carl
Greenskeeper_Carl's picture


Wed, 01/08/2014 - 16:25 | 4312708 ArisAron
ArisAron's picture

Wait until all those new student loan folks graduate and realize there aren't any FUCKING jobs. What to do? Oh yeah, I'll fucking go to graduate school and get more loans. party time a few more years!!!

Wed, 01/08/2014 - 16:27 | 4312719 Fix-ItSilly
Fix-ItSilly's picture

Credit card expansion will be under pressure for many years to come - baby boomers are retiring now.

Wed, 01/08/2014 - 16:43 | 4312767 Hal n back
Hal n back's picture

I'll attest to that--at age 70 I look around and do not see much that I want to buy.


can't even go out for sushi anymore or copper river salmon.


Make pot roast in pressure cooker using cheaper cuts of meat.




Wed, 01/08/2014 - 16:31 | 4312729 ArisAron
ArisAron's picture

I'm getting a divorce in a couple of weeks and paying off all our debt. Can't fucking wait. No more debt for this MF.



Wed, 01/08/2014 - 16:40 | 4312761 U4 eee aaa
U4 eee aaa's picture

Paying it off? Don't people usually try to leave the other partner holding the bag?

Wed, 01/08/2014 - 16:42 | 4312765 ArisAron
ArisAron's picture

I consider it a small price to pay for freedom.

Wed, 01/08/2014 - 16:58 | 4312778 centerline
centerline's picture

Knew some people who went through this and found out in divorce proceedings that they each had credit cards the other did not know about.  Total of the debt between them that was owed was nearly $70k.  lol.

My wife used to look at thier life and think they had it made (and we were retards for not having some sort of magic formula for money).  I laughed my ass off when I found out how it all went down.  They even had a car on one of the cards.  lol.  Priceless...  and more common than anyone wants to admit.

Wed, 01/08/2014 - 16:46 | 4312775 walküre
walküre's picture

marriages are like mortgages

French : mort = death / gage = grip

death grip

nice to see anyone come out alive at the other end and live to tell about it

Wed, 01/08/2014 - 19:16 | 4313316 Incubus
Incubus's picture

america is a fucking joke.


mortgages and then fealty to the glorious empire by way of property taxes.

 I wish I could go to mars.

Wed, 01/08/2014 - 16:33 | 4312732 Musashi Miyamoto
Musashi Miyamoto's picture

I just refinanced my 97-month car loan so I could afford payments on my new Ipad.

MOAR DEBT BITCHEZ! I can take it.

Wed, 01/08/2014 - 16:33 | 4312734 JR
JR's picture

“Let’s see if I get this right,” ponders Bill Sardi in an exclusive article in a review of the Bernanke Fed legacy today on Lew

“Outgoing Federal Reserve Chairman Ben Bernanke blames Congress for federal spending cuts that cost the US economy up to 1½% growth.  He says Congress cut 700,000 jobs (2) at a time when the nation’s central bank was dispensing money at low interest rates and Congress should have been on a spending spree to invest new money into growing the economy.”

Says a perplexed Sardi to Ben: “You must know US tax revenues are just $2.4 trillion, while spending is actually 6.6 trillion if you adhere to Generally Accepted Accounting Practices (GAAP).”

Adds Sardi:

“And Ben, we know you have to keep calm and fudge the numbers and not bring on undue panic or trigger bank runs with a slip of the tongue about the real US economic numbers.  But you well know that the US economy is living on borrowed and newly printed money, and if that newly created money gets into circulation in the economy it will trigger out-of-control inflation.  So, for now, it is best to keep new money circulating between the banksters and the stock market and let the rest of America suffer (the so-called Wall Street over Main Street argument).”

And concludes Sardi under the subhead: What will Wikipedia say about you, Ben?

“But you need a legacy Ben.  You know you can’t walk out the door and say things are rosier than when you first arrived.  So you lay blame on Congress.  Will there be a book in the works now?  Maybe a $1 million advance from a publisher?  Maybe a Ben Bernanke library?  Maybe $500,000 fees for speeches.  A movie with Robin Williams playing your part?  All the paybacks for prior favors are really worth looking forward to, huh Ben.

“Hey, the prior Fed chairman at least had thick glasses and said he didn’t see the financial storm coming.  He was a former Presidential speech writer.  But you were a student of the Great Depression.  But you claim you didn’t see it coming either.”

Poker-faced to the end

“I’ll give you credit. You were better at counterfeiting than any prior chairman. You kept a poker face while you were there as chairman at the Fed.  You didn’t let on that the US economy is a charade.  You kept the bank runs from happening.  Old ladies won’t see you as a bank robber who siphoned their saved money away via inflation.

“’He saved America from the worst financial crisis it has ever faced.’  Your mother will be proud.

Wed, 01/08/2014 - 16:37 | 4312745 Musashi Miyamoto
Musashi Miyamoto's picture

GAAP is for suckers. Don't be a sucker. Move your business HQ to the the Bahama's. Its all paper work and you'll be saving mad bank.

Wed, 01/08/2014 - 16:45 | 4312772 Hal n back
Hal n back's picture

you too noticed most companies reporting non GAAP earnings huh?


everything is a push now



Wed, 01/08/2014 - 16:38 | 4312746 rubearish10
rubearish10's picture

Hmmm, Supply List =







Wed, 01/08/2014 - 16:39 | 4312752 U4 eee aaa
U4 eee aaa's picture

I thought about getting a student loan myself but I didn't find any students I wanted to buy

Wed, 01/08/2014 - 16:41 | 4312764 centerline
centerline's picture

Try over in the communications/journalism buildings.  (hint: stay out of the engineering buildings).

Wed, 01/08/2014 - 16:42 | 4312766 wnoise
wnoise's picture

I went to college in a civilised country and paid very little for my higher education. Then I came to the US to do a master's degree, for which I was paid (it was supposed to be a TA, but ended up being a full scholarship). I  do understand the principle that someone who is IQ-challenged but has rich parents should be able to spend 4 years at an expensive but mediocre college and get a  "degree". What I fail to understand is how a supposeldy civilised country cannot get itself organised to provide free higher education to those of its youth who deserve it.

Wed, 01/08/2014 - 16:59 | 4312787 centerline
centerline's picture

Easy to understand.  Made free (edit:  better word is afforable) for those with aptitude and drive in places where the country/community/etc. wants to succeed as a whole.  Where education is valued.  Where intelligence is valued.  Etc.

That is not where we are.  This is a every man for himself, screw your neighbor, thug worshipping, hedonistic demise of current culture.

Wed, 01/08/2014 - 16:52 | 4312796 Ulterior
Ulterior's picture

I can smell ruskie from a mile

Wed, 01/08/2014 - 16:57 | 4312815 pods
pods's picture

Well, lemme take a shot at this one for all Amerikans.

You cannot provide "free" anything in terms of cost.

I agree the system as it stands sucks dog balls, but making it "free" on the price side will only make it worse.

And to borrow a line from another Amerikan:  Deserve's got nothing to do with it.


Wed, 01/08/2014 - 17:04 | 4312839 viahj
viahj's picture

the answer to your question is what happened to you...scholarship (academic).  maybe you should return your degree.

Wed, 01/08/2014 - 17:13 | 4312858 PrecipiceWatching
PrecipiceWatching's picture

Your IQ may be "high" but you are economically obtuse if you think a product of any sort, particularly something as complex as a higher education, can be provided for "free".

Read some basic economics books.


Start with Hazlitt's classic "Economics in One Lesson".  Concisely: BOTH sides of ANY economic transaction must always be considered.  Then get back with us on your thieving Socialist gross misconception of "free".

Wed, 01/08/2014 - 18:19 | 4313151 EuropeanBankster
EuropeanBankster's picture

Many european countries offer free higher education.. some nations even pay students.. i studied in US 6 mths.. worthless low level of education..and  expensive too.. sorry but its actually possible to get better education for free.. i pay 50 % income tax to pay for the next generation.. fair enough!

Wed, 01/08/2014 - 18:56 | 4313250 PrecipiceWatching
PrecipiceWatching's picture

So the "free" education for the next generation, is paid for by the previous one.

Ergo, NOT free.

Worse still, it is not financed by choice, but on a Collectivist (as opposed to individual) basis, by the coercive, taxing powers of the State. 

Wed, 01/08/2014 - 20:52 | 4313689 FredFlintstone
FredFlintstone's picture

Wait until these formerly homogeneous societies start footing the bill for the third world to all go to school for free in their countries. We will see how these more "civilized" societies deal with it.

Wed, 01/08/2014 - 20:50 | 4313674 FredFlintstone
FredFlintstone's picture

A problem with your idea is that it is not politically correct to say that some are not deserving. We bend over backwards to pretend that if only a little more taxpayer money was spent we can assure equal outcomes. So we end up footing the bill for every lazy idiot to give it a shot.

I was very deserving and worked my way through school while watching the undeserving get government grants to fuck off.

Wed, 01/08/2014 - 22:10 | 4313918 falconflight
falconflight's picture

Well then, a civilized country would also provide 'free' medical, housing, and food security for its denizens.  Please, go back to Europe.

Wed, 01/08/2014 - 16:44 | 4312769 buzzsaw99
buzzsaw99's picture

1.5M bankruptcies per year can't wipe out student debt but it does discharge cc debt so people can go buy a new bling bling car.

Wed, 01/08/2014 - 16:47 | 4312782 realWhiteNight123129
realWhiteNight123129's picture

Success !!! 

There are about 785 cars per 1,000 inhabitant in the US, that is exactly a part of the economy which is efficient to stimulate with subprime borrowers. The concept of a single passenger carrying huge amount of metal and materials for transportation is stupid.

How about promoting affordable safe public transportation with non-corrupt tender process?

As for student loan, also yet again a great allocation of resources given the poor technical skills of the typical graduate from College. At the same time the US has to improt half of the engineers working in high tech in teh US.


Wed, 01/08/2014 - 17:00 | 4312825 pods
pods's picture

There are a lot of engineers in the US.  They just don't want to work at the "imported engineer" price point.

Now most stay away from engineering in school simply due to the market being depressed, you guessed it, by imported engineers.


Wed, 01/08/2014 - 18:02 | 4313087 U4 eee aaa
U4 eee aaa's picture

Where I live public transit take three times the amount of time to commute to and from work that an automobile does. My time is more valuable than that. Public transit is a huge drag on productivity. It also takes huge chunks of time away from families. You would rather spend your time during the day beside some sweaty dude instead of your kids?

Wed, 01/08/2014 - 22:07 | 4313910 falconflight
falconflight's picture

thumbs down only because you're suggesting another prepetual 'taking' from the TaxPayers to forever fund mass transit.  Maybe we don't wanna be herded into the cities. 

Wed, 01/08/2014 - 16:55 | 4312806 Bunga Bunga
Bunga Bunga's picture

My bank offered me a loan for my junk car. Very, very productive, Bernanke-Yellen!

Wed, 01/08/2014 - 17:15 | 4312868 Save_America1st
Save_America1st's picture


it's just a matter of time...probably very, very little time. 

Tick-Tock, Tick-Tock

Those people shoulda just bought phyzz and said "fuck college" at this point.  That's just bad dollars flushed down the toilets straight into the eager mouths of the scum-sucking Marxist college profs and administrators to fill up their greedy fat bellies.  Fucking scumbags all of them.


Wed, 01/08/2014 - 17:24 | 4312914 Rentier
Rentier's picture

This is good no?  People can't borrow and get into more debt now on their credit cards...:p

Wed, 01/08/2014 - 17:30 | 4312944 -.-
-.-'s picture

1. College is a business. The fact that it is referred to as "higher education" is merely coincident. Please, let go of your emotional connection to the idea/word itself and you can then easily see that a college is a type of firm, an economic agent. They compete for customers (students). They provide services (the higher education) and products (the fucking sports jersey bro). Needless, to say we can make this more complicated than this, but for barebone sake: it's a business. Now, if the majority students are paying for the services with loans what does this mean to the business other than the obvious notions such as conserving/creating a customer base, paying salaries, and basic financing of operations? What is the true picture, then, between a bank and a college as firms in separate markets that share a consumer base? 




Wed, 01/08/2014 - 17:45 | 4312995 PrecipiceWatching
PrecipiceWatching's picture

If only.

True market rigor introduced into the entire hugely protected, government subsidized, BigEducation scheme, would quickly exterminate many of the assorted parasitic academic cockroaches, gross inefficiencies, waste,  and economic insanity in general.


But, we are a long way from "college is a business". 

Wed, 01/08/2014 - 18:08 | 4313105 centerline
centerline's picture


Note, thinking of everything in terms of profit is also a problem.  But, human nature is what it is.  And it isn't going to change any time soon.  We are however at an extreme.  What is "normal" here is distorted, even in human terms.

Wed, 01/08/2014 - 18:35 | 4313195 JimmyRainbow
JimmyRainbow's picture

wwell well well....

had to say it: and the 9 billion are just by coincidence nearly the actual market-cap of bitcoin....

its hard to hear all the : spent all my family money on bitcoin-highs and lost it in the next 25% crash

in the btc-e trollbox (one of 3-4 famous btc exchanges)

Wed, 01/08/2014 - 19:57 | 4313460 Haloween1
Haloween1's picture

Those automobile sales are going to head south once buyers realize the impact O'Care will have on their finances.  It already started in December and will snowball from there.


Wed, 01/08/2014 - 22:04 | 4313898 falconflight
falconflight's picture

I read that much of the growth in auto loans guessed it, subprime.  Again

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