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Despite 2nd Slowest Income Growth In 2014, Spending Rises Most Since March Driven By Subprime, Car Sales

Tyler Durden's picture




 

Mission releverage accomplished. Personal Income rose 0.3% in August (very slightly below Bloomberg's median estimate), the 2nd slowest growth of the year. Personal spending however jumped 0.5%, beating the 0.4% expectations, and its equal best growth since March. What was spending focused on? Why autosales, which accounted for about half of the spending. And what funded this spending? Why subprime car loans of course; it sure wasn't the real disposable income per capita which was a paltry $37,684 in August.

This is how the income and spending looked like:

 

2nd miss in a row and 2nd lowest growth in income this year.

 

But spending jumped (thank you Subprime bubble 2.0)

 

Finally, following several revisions and even more months of constant increases in the US savings rate, August finally saw a drop, from 5.6% to 5.4%, just as Goldman hinted to the Department of Commerce should happen late last week. 


 

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Mon, 09/29/2014 - 08:41 | 5266442 RattNRoll
RattNRoll's picture

"Niggas are broke these days"

 

-Smokey

Mon, 09/29/2014 - 08:44 | 5266449 GetZeeGold
GetZeeGold's picture

 

 

 

Personal Spending Beats

 

Health insuance premiums?

Mon, 09/29/2014 - 08:57 | 5266473 knukles
knukles's picture

Sub-prime Loans for Clunkers is likely to die off as Bill Gross' departure form PIMPCO will decrease the demand for purchasing of said loans 50% under the consolidated matrix pricing tape's grossly (no pun intended) inflated quotes for NAV calculations.  Thereby causing a decline in used auto purchases over the next quarter, to be cited as the primary excuse for a -7% GDP report in the 4th quarter.  Other reason was that this year's Christmas spectacular savings sales were backed up into 2013's October pulling demand forwards which once you get there later is pulling it backwards from today.  Karma is a bitch.

PS  Don't forget next April 15th when a whole buncha folks owe the IRS for Not Having ACA insurance and a whole buncha others find out that the rebates (subsidies) are being cut back.  Booyah!
Die you fucking useless eaters.
But not if you're a registered Democrat.
Them we'll refill your EBT card, no questions asked.

Mon, 09/29/2014 - 09:23 | 5266555 thunderchief
thunderchief's picture

I bet every one of those repo's has a crack pipe stuffed between the seat cushions somewhere. Then there's the stink!

Mon, 09/29/2014 - 08:42 | 5266444 pods
pods's picture

Well, I feel richer.  

Of course, if you adjust these numbers (in the odd case they are made up) for real world inflation, we fell further behind and the gap is merely buying gas and food on credit.

pods

Mon, 09/29/2014 - 08:44 | 5266447 Cognitive Dissonance
Cognitive Dissonance's picture

Let's see. Personal spending rose quicker than personal income. Sounds like a recipe for disaster. Time to get to work Mrs. Chairman.

Mon, 09/29/2014 - 08:58 | 5266482 knukles
knukles's picture

Does she do windows?  How about baseboards?

Mon, 09/29/2014 - 09:01 | 5266489 ejmoosa
ejmoosa's picture

Thank God for rampant deflation, or we would really be screwed.

:]

Mon, 09/29/2014 - 11:00 | 5266858 McCormick No. 9
McCormick No. 9's picture

Free Shit monthly Budget:

Income: Welfare check... 1000.00

             SSI check: 1400.00

             Bastard child check: 2000.00

             Crack sales: 3500.00

             Weed sales: 1700.00

             Tricks: 800.00

             TOTAL 10,400.00

Outflow: Drugs: 2500.00

              Kid's drugs: 3000.00

              Gigantric TV: 1500.00

              Rims: 800.00

              Baby-daddy drugs: 3000.00

              Bail: 4000.00

              TOTAL: 14,800

HOW IN THE HELL AM I SUPPOSED TO MAKE MY SUBPRIME AUTO PAYMENT????????????????????????????

Mon, 09/29/2014 - 08:46 | 5266455 papaswamp
papaswamp's picture

Auto purchases accounted for Half of total spending. Auto loan debt per buyer is the highest on record.... No bubble there...

Mon, 09/29/2014 - 08:50 | 5266462 RattNRoll
RattNRoll's picture

Love this country. Where else can a Free Shitter get a shiny new Benz living in a hovel with ssi and a foodcard? Good times are here again, bitches!

Mon, 09/29/2014 - 09:03 | 5266495 knukles
knukles's picture

Listen  A guy I know who is permanently disabled (mental problems.... kinda crazy.... you don't want to spend a lot of time alone with him in a locked room) is on state and federal welfare programs.  Dole, SS, SS disability, EBT, section8, Medicare, etc., etc., etc.   He lives in a nice 2 BR condo in a state/county sponsored underprivileged housing development for lower income folks and owns 2 cars.  A Mini and a Jaguar.   He's single and needs/can afford 2 cars.  A Mini and a Jaguar.

Mon, 09/29/2014 - 09:41 | 5266600 Wait What
Wait What's picture

lovely. that's the kind of story a guy who gets up at 5:30am likes to hear, to stay motivated, you know. /s

if he really is crazy, i wonder if his mini/jaguar came with a crash helmet...

http://www.youtube.com/watch?v=KyRHAvfA6Eg

Mon, 09/29/2014 - 10:25 | 5266733 McCormick No. 9
McCormick No. 9's picture

Hey, c'mon! You're just not thinking positively about this. Get outta the box and se the possibilities!

Here is a quote from a random google search, "subprime auto loans", the first hit:

"Instead of thinking of a sub prime car loan as a problem, think of it as an opportunity. With this loan, you will be able to purchase the vehicle you need now instead of waiting for your circumstances to improve. Visit RoadLoans.com today for a sub prime auto loan and auto finance made easy."

Here is the actal website. No-one can make this stuff up. This is real, not satire. Enjoy:

https://roadloans.com/car-loans/sub-prime-auto-loan

Mon, 09/29/2014 - 10:41 | 5266797 A Nanny Moose
A Nanny Moose's picture

Buying shit we don't need with money we don't have.

Mon, 09/29/2014 - 10:12 | 5266687 Government need...
Government needs you to pay taxes's picture

Dont forget to vote Progressive in the next election, so's you kin has 2 peemped rides, two.  They kin haz my guns, if they let's me smoke free dope and rid beeg on the freeway!

Mon, 09/29/2014 - 10:09 | 5266679 duo
duo's picture

The FS3 generation is reaching peak fertility.  The FS4 generation are being pushed around in WalMart shopping carts now.  The sense of entitlement will be strong in this generation.

Mon, 09/29/2014 - 10:37 | 5266786 McCormick No. 9
McCormick No. 9's picture

When the checks stop coming and the EBT cards stop working, then the whole country will go Ferguson on y'all's asses. The targets- producers, ie the people who actual work and make stuff. Because when the goose becomes malnourished and anemic because of abuse and neglect, and stops laying golden eggs, (or any kind of egg for that matter), what's the sensible thing to do? Feed it and take care of it so it will lay more eggs?

FUCK NO! What the hell's wrong with you people? That sort of answer betrays your racist, bourgeois, eurocentric, anti-semitic thinking! TRY AGAIN! Strip your mind of all those "two wrongs don't make a right" and "I cannot tell a lie" mental chains that keep you from true freedom!

Now you're thinking! You'll take that fucking gose, and youll kill it and eat it! Why? Because it deserves it for being lazy and not laying eggs! Serves dat goose right, why aint a niggah got no eggs bitch!

Mon, 09/29/2014 - 14:17 | 5267728 KnuckleDragger-X
KnuckleDragger-X's picture

This is about what I expect and when things go full Darwin, I'll laugh, open a home brewed beer and check the range markers on my property. Since I live deep in flyover country  I don't expect too many problems but I also intend to be a live pessimist.

Mon, 09/29/2014 - 08:48 | 5266457 Dr. Engali
Dr. Engali's picture

Please, there hasn't been any real rising income  for the middle and lower class since the seventies.

Mon, 09/29/2014 - 08:50 | 5266464 firstdivision
firstdivision's picture

Wait til Sep numbers are thrown in with 9,900,000 that skipped buying food for a month so they can buy an iPhone6.

Mon, 09/29/2014 - 08:52 | 5266469 SethDealer
SethDealer's picture

Broke people are only ones spending money (and having babies) hehehe

Mon, 09/29/2014 - 08:58 | 5266483 silverer
silverer's picture

This continues until the people who have worked and done it the right way all their lives decide to stop and sit down.  Then the dance is over.

Mon, 09/29/2014 - 09:00 | 5266485 silverer
silverer's picture

Yes, and they are exactly like the government:  They are spending somebody else's money.

Mon, 09/29/2014 - 09:09 | 5266514 knukles
knukles's picture

Us who work need not decide to "sit down".  At current rates, I simply will keep cutting back here and there.... each and every way.... little by little.... till I'm part of the Alpo brigade and start collecting my very own welfare necessary to eat and stay warm. 

Self-fulfilling prophecy, way the system's designed.
Everybody Must Be Dependent Upon The Teat

See Cicero regarding the Rise and Fall of Rome, his missives regarding Caesar's Bred and Circus Programs along side global Conquest and The Ubiquitous "They's" Raping of the Land's Riches.

Mon, 09/29/2014 - 08:57 | 5266478 youngman
youngman's picture

I dont blame them...credit scores mean nothing today...if you have gone bankrupt 10 times you can still get credit cards...or a car loan....why not play the free money game...if they dont pay it back...so what??? that is how they roll...there is no right or wrong anymore..just me me me..and I want it NOW

Mon, 09/29/2014 - 09:00 | 5266487 RattNRoll
RattNRoll's picture

Truth is, when they dont pay it back and the bubble goes nuke-u-lar, the tribe will just hit the big ole reset and wipe out mom and pop's 401/IRA's again to cover the ponzi.. Ssame ole song and dance, life's a bitch for most.

Mon, 09/29/2014 - 09:04 | 5266499 Notsobadwlad
Notsobadwlad's picture

I am thinking there is more to the world than mammon... sometimes we lose sight of that.

Mon, 09/29/2014 - 10:44 | 5266809 McCormick No. 9
McCormick No. 9's picture

Yeah, who needs mammon? Let's see...

Bankers and tribal members: They might need it, but they can gin up as much as they want out of thin air, so it sort of cancels itslef out.

Free shit army: They need it, and it is given to them. No pain, lots of gain.

Those who labor under the fatal delusion that one must work if one would eat: Ha ha, you stupid suckers! YOU'RE FUCKED!!!! HA-ha-ha-ha-ha-ha!!!!!

Mon, 09/29/2014 - 09:02 | 5266493 Notsobadwlad
Notsobadwlad's picture

In China, it is not uncommon to see 10 year car loans on a new Audi.

Mon, 09/29/2014 - 09:09 | 5266511 SDRII
SDRII's picture

all gdp management; just like the miraculous inventory adjustments to smooth the comps

Mon, 09/29/2014 - 09:08 | 5266512 madbraz
madbraz's picture

Another BS lie number.  No way auto sales were higher than in July, no way.

Mon, 09/29/2014 - 09:40 | 5266589 headhunt
headhunt's picture

Their computer algo's told them it was higher - so like global warming, it must be true... and don't look behind the curtain.

Mon, 09/29/2014 - 09:14 | 5266525 yogibear
yogibear's picture

 Max out your debt and buy physical PMs, then default. You have the store of wealth and the banksters are stuck with the non-performing loans which they will hide on their off-balance sheet.

Mon, 09/29/2014 - 09:49 | 5266628 strangeglove
strangeglove's picture

Iread the avg price of a car sold thru a dealer is about $10,380 USFiat if income is 37k this is a non issue.

As for me i bought a 2005 bmw w 127k for 5k cash put 1k in fixing a few things and if it lasts me to 200k in 5 years im good with that.

Mon, 09/29/2014 - 10:32 | 5266675 _ConanTheLibert...
_ConanTheLibertarian_'s picture

That pic looks likes a ship with something very big or a smoke trail on the back. Looking at the middle section it's the HMS Impaler.

Mon, 09/29/2014 - 11:00 | 5266857 starman
starman's picture

"Sales"? You mean 72 month 0 interest finances. 

 

Mon, 09/29/2014 - 11:10 | 5266893 Caveman93
Caveman93's picture

I hope someone hacks the GPS "fry switches" which are going to be installed on these newer vehicles sold on subprime and simultaniously fries em all!

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