This page has been archived and commenting is disabled.
Credit Card Debt Tumbles Most In 1 Year As US Households Resume Deleveraging
Once upon a time the health of the US consumer was gauged by one simple thing: how much credit card debt did US households take on in any given month. Which makes sense: American consumers would not go out and spend on credit unless they felt strongly about their future job, income and overall wealth prospects. In simple terms, rising credit card debt was synonymous with confidence and prosperity. In recent years, however, this metric has quietly fallen out of favor with the punditry, for one simple reason: that reason is shown on the chart below, which very likely also shows where the S&P would trade if it weren't for $11 trillion in central bank liquidity injections.
Sure enough, moments ago the Fed reported household consumer credit for the month of November and it is there we learned that not only did overall consumer credit miss expectations for the 4th month in a row...
... but that in November revolving credit, aka credit cards, not only declined for the first month since August, but it had its biggest collapse since November of 2013, which not only explains why this year's Thanksgiving spending season was a complete disaster but also shows that contrary to the S&P hitting record highs at roughly this time, the bulk of America is still actively deleveraging.
The only piece of household debt which did grow in November? Student and to a lesser extend, Auto (primarily subprime) loans. But while we know the demand side of the equation, the just as big question is who is providing all this subprime auto and student debt to Americans - debt which will certainly never be repaid.
The answer... instead of telling you, here is a chart courtesy of @Not_Jim_Cramer.
- 14803 reads
- Printer-friendly version
- Send to friend
- advertisements -






DOW 20,000.
....hmmmmmmmmmmmmm. Wonder what happened in 2008 and after..... could it be due the pathological liar in chief fudgepacker? Nah...
Credit card debt is pretty stupid. Maybe a few peeps are starting to get it?
I use my cap one card for everything and went to cozumel and they paid for the room, all inclusive. have not paid CC interest in over 10 years. Even my dog would think that is not a good idea. Coco knows....
Households are "deleveraging"? LMFAO!!!!!!
What is the total debt outstanding again? Total fucking stupid to look a a tiny change on top of a debt saturated society.
Treasury debt, housing debt, college debt, car debt, appliance debt....
....yeah right, deleveraging.
add to that a decreasing average wage ....
fucking stupid.
At this point a better "fix" is to simply give every single taxpayer $100,000 and let them pay down any debt they have first. After that, they can spend it how they want.
Boom, help the debt problem and stimulate some inflation (cause we keep hearing how it's so "low").
<<At this point a better "fix" is to simply give every single taxpayer $100,000>>
heh, I think that was recommended by the Council for Foreign Relations late last year.
Something tells me, though, the fucking end will be breathing down our necks before our govvy Pigmasters hand out free money to anyone who's not a sociopath running a TBTJ. And by then our 'money' won't be worth the time it takes to withdraw before the bank steals it.
It's a not-so-big cartel, and we ain't in it. We just vote for them every few years.
Robert McHugh who sells a ta service based on elliot wave said that in 2008--that the govt should just give everybody a proportionate share of 12 trillion then with a proviso they have to pay down debt incl mortgages--that would help the banks with underwater loans and allow the people to spend more--but he also said we would drop endless money into the bottomless pit.
At this point a better "fix" is to simply give every single taxpayer $100,000 and let them pay down any debt they have first. After that, they can spend it how they want.
That's actually the ECB's plan for their QE, the famed helicopter drop. Wish it would have happened here instead of the bank jubilee. If you add up all the QE's, zirps, clunkers, etc of the last 8 years I can't imagine it would be much less. And I could have used the 100K.
Give everyone $100K and it will be instant Feudalism.
Suddenly inflation WILL spike and everyone will be in poverty except the Multi-millionaires and Billionaires.
DEBT REPUDIATION AKA JUBILEE IS THE WAY OUT.
"DEBT REPUDIATION AKA JUBILEE IS THE WAY OUT." -- Bullshit. Some of us have no debt asshat!!!
More importantly if there is suddenly no debt to service, that's when you get massive hyperinflation.
Moral hazard is a real bitch you stupid motherfucker, that is why everyone must get the same benefit. Give everyone 100k. If they have debt, they must pay it the fuck down. If you don't have debt, good for you, you can do what you want with it, some may even save it you stupid fuck.
I am also in favour of giving every person $100k on their 18th or 21st birthday. Or maybe when they are 30 so they don't go nuts.
Yes, it's called a trust fund. Set one up for your children before the government makes that illegal too or taxes the fuck out of it.
The best trust fund at this point may be a hole in the ground with gold coins in it.
jeez, take it easy
So if 200,000,000 adults in the US received $100,000 - that's $20Tr. in M2 - cash equivalents and checking. If say 2/3 had to use the entire amount to pay down debt, that still leaves 6 or 7 Tr. $$s over an existing M2 money supply of 11.5 Tr. That'll send inflation skyrocketing when everyone descends on the malls at once..
Better yet. give every person on Earth $100k.
Dont forget IRS debt and state debt. How could you forget those shakedown masters?
I have two brothers that are in child support debt and borrowed against their 401K plan. Both out of work, out of state. I am the lender of last resort. It sucks because I am out over 7K.
Ours is. We've gone from about $12,000 in "bad debt" as I put it to about half of that in the past year.
Those of us who are smart, able, and willing know what we need to do in order to survive - or at the least, subsist - in the future.
"Those of us who are smart, able, and willing" -- Unfortunately, half the population is below average. In america's case, way below... ....please, look around.
Look around? That's all I ever do. I look around so much, I put my head on a swivel years ago.
<<Unfortunately, half the population is below average>>
The sad thing isn't being below average. The sad thing is how low the average has fallen.
I swear people are STUPIDER now than they were 3 generations back. Who could have foreseen that govvy protection of the stupidest and weakest would lead to this?
Glad to see you, it's been a long time. We think the following generations are stupider too. Government schools where they're taught by the previous generation, bad SAD diet, parents who might not be over-bright themselves, too much TV and picture phones... and on and on, how could they be otherwise? Those who might have been my grandkids are in school now; we don't have any contact with kids. They look cute but most are going to be tax fodder or cannon fodder. Sad future.
Hey, dizzy, who knew it was reunion day on the Hedge. Now and then some of us old-timers show up here to bark the moon. Most of the time I guess we have to move over for the crowd of newbs howling outrage over many threads of financial scandal. Ah, it's good for the soul.
Aaaand after a few years here, suddenly we realise we're one of those bitter old farts who's settled down to a seething silence and a wornout liver, huh? Still wondering which one of us old-timers turns out to be Doug Stanhope.
Me, I just came out today to yell at some of these damn kids on my lawn. Hope life's treating you well.
throw the darn TV's away and paretns and kids sit around the dinner table and discuss various issues. Teach and learn. Might as well limit tablet and pc use to things other than FB and things that are real educations. once upon a time cell phones were used for emergencies. If you can program a game you are higher in the pecking prder-a fucking game. Better if you can program algos for banks and hedge funds. even better if you can hit a curve ball and have a good clean cut appearance and personality--your salary becomes a fraction of endorsements.
that's my point, devolution bitches...
By definition half the population is below the mean...L of P !
But when the bestest is Ben Bernanke, that says it !
Ya, that and this.
"American consumers would not go out and spend on credit unless they felt strongly about their future job, income and overall wealth prospects."
Are you fkn kidding me?
.Gov gave the generational credit card to Wall Street and they are on a bender.
Everyone has to do what they have to do. "Total fucking stupid" is thinking something good can't or isn't happening. Wait and see.
Anything short of a hockey stick straight up is deleveraging.
Jack-up 'script costs. We can get those CC’s booming again.
Some generic drugs have gone up 2,000% since the passage of the A.C.A.
http://www.philly.com/philly/health/HealthDay693679_20141112_U_S__Prices_Soaring_for_Some_Generic_Drugs__Experts_Say.html
Off topic but the site I use to access GOFO rates seems to be stuck in 2014 as it hasn't updated since 12/31/14. Anyone have any ideas or another site I can use? Thanks,
https://www.quandl.com/OFDP/GOLD_3-LBMA-Gold-Forward-Offered-Rates-GOFO
I check KITCO for metal quotes. They update on a daily basis.
Something strange is going on. Went to Gainsville coins to buy more Silver Eagles and the price is higher than I bought the last time. Spot Silver is down today, yet...........prices are higher? What's up with that?
Years ago I remember Economists talking about 'prices' being dependent on this thing called 'supply and demand'. I know it no longer figures into 'prices', but it was an interesting idea.
Higher premiums when the paper price gets unrealistic. You've seen it before when prices drop drastically. The price of PHYSICAL - actually delivered - is higher than the price of the manipulated paper stuff. You can sell all the paper stuff you want (if you're one of the big boys) but actual metal is a bit harder to obtain.
Did you check other sources? I checked into about five places, that are well known, been around, and are reliable. They weren't that much different than each other. A couple were high. Gold coin premiums were maybe $35 to $95 a coin at that time. Silver is a bit different than gold, the premium on gold, as least to this point, is more stable and varies less than silver. When everybody was buying silver, the premium went up, but not a whole lot. Instead of about couple of bucks, maybe $2.40 a coin. So if silver jumped up just a couple of dollars, you wipe off the premium. Also, you might see some sellers offer a better deal on 15K worth of silver than $500. worth of silver. I'm sure a lot of other posters here have found better or worse deals when they looked.
Must be because of cheaper gas prices. People don't need credit now. Escape velocity here we come!
To the Moon.
Ever tried cancelling a credit card? Not easy - ended up cutting it to pieces in front of the bank clerk after paying it off. They promptly sent a new one - which I returned and did the same until the bank got the message.
Still get reminders monthly that I can have another. Fuck credit.
Our problem is raising limits. Or $5000 card popped up magically to $10k. We forced them to lower it. They tried for 15k next. Once again put a stop to this. Constant phone calls to induce us to take out loans ( which now just go to junk email).
.It was nice to have a three year old once, you could hand her the phone as the sales pitch droned on. Funny, she turned out to be a salesman.
Miffed
Aw, c'mon. Wouldn't you keep chasing an 11 to 18% return, protected by laws signed by Congress that that the borrower can't walk away from the debt in bankruptcy?
Paid off the mortgage early. They want us to refinance.
They wouldn't do it before when rates dropped - though they were willing to take the application fee. Same damn house, actually IMPROVED but noooo.... they found excuse after excuse not to write a lower rate mortgage. So - paid it off early and cut what we hold in their bank. Pay off the credit card every month - but collect all their points and incentives.
Either get out of the system - owe nothing
OR borrow so damn much (and convert it into untraceable assets) that they'll bend over backwards NOT to have you default.
I have been selling soap, made from medical waste, to Saks Fifth Ave... It helps me afford anti-depression meds...so I can read your blog...Durden
I'll still be laughing about this tomorrow! Thanks.
I just deleveraged another $10,000 in credit cards ;)
i "delevered" some debt coupon Federal Reserve Notes yesterday in exchange for some Silver Libertads...
doing my part.
DEATH TO THE MONEYCHANGERS.
I gots no debt.
I have -0- credit card debt, paid off a $3,500 Visa card a few years ago and haven't used it since. Zero, fishes.
Gotta love this type of journalism, whenever creditcard debt is rising it's bad, whenever creditcard debt is "tumbling" it's bad.
Yea but autoloan debt is at record highs..... Total consumer debt continues to expand.
the best kind of debt is margin debt. guaranteed by the fed to make an obscene profit each and every year.
Proof, people aren't stupid. They know exactly what loans to take...
G-d damn it! I forgot to pay my credit card bill and now I will owe them 30% interest on 200 bucks. Five bucks for nothing, there goes my budget.
boy-I learned all about that 44 years ago out of school. I did not have all the money in my checking account so rather than going to bank and making a transfer (computers then took up entire rooms and internet was something like a net within a net.
my bill was 700 and I paid 500 and the next month I learned a lesson when the bill came in-now if I do not pay its my memory to initiate a transfer.
Auto loans have gone sub-prime crazy, zero down $99.00 a month for a little shit box of a car. That will be worth what the down payment was in a few years.
Of course the dimwit that signed the paper work, that they did not read will be upside down bigtime. Won't even be able to get a title loan at Title Max.
To dress up your new debt slave mobile you can rent wheels and tires. Get a set of 22's on your Cavalier and be the hit of the hood!
I finished paying off over $50,000 in credit card debt in November. It's my fault.
It would be interesting to know how much credit card debt was zeroed by transferring it to the lower cost home loan.
The US citizens paying down debt....I call Bullshit......Maybe bankruptcy to eliminate debt.....The ones I know were too timid to leverage on the way up didn't have debt, and the ones who did leverage by now have waved b'by to thier debt...payed it down? don't make me fuck'n laugh.
On the surface, paying down debt seems like the responsible thing to do. What isn't well-understood is that spending money to destroy debt removes money from the general economy - money needed for production. The next step in the debt destruction process is default. It's justa matter of time.
http://www.globaldeflationnews.com/anatomy-of-a-bubble-how-the-federal-r...
Me thinks you are confusing debt for consumption versus debt for capital investment. They are the polar opposites on the debt seesaw.
Me thinks you are confusing debt for consumption versus debt for capital investment. They are the polar opposites on the debt seesaw.
I have no debt and pay cash for anything else.
Only in the retard bizarro world of ZH would paying off debt be bad. And naturally, if it's bad, it's the black guy Obama 's fault.
Oh heck let's talk the side business of credit cards, data selling and nobody do it better to strip consumers of their dignity and scrape and sell every bit of data they can than Master Card. They make up the losses with money from selling your data. So let's talk the side business of all of this if we can...I told people what they were doing when they started building their ecommece centers...it's all about the side product..selling your data. Look at this nonsense, now tell me a hospital would call up Master Card and want to get copies of all their patient transaction data..no way..they were sold by a Master Card marketing rep on this. I have a lot of links at the post that gives the history of this.
http://ducknetweb.blogspot.com/2014/06/oh-crap-now-hospitals-are-now-buying.html
Look at TD Bank now, using the data broker Acxiom to issue credit cards with all their flawed data they sell about us..it's bullshit. Flawed data sells as good as good data and they don't care. Data work is sloppy as well. I just got a call the other day from a company that wanted me for a clinical trial, saying they saw where I had taken blood thinners in the past...have I? No is the crap that comes out of data brokers like Acxiom. Medical data...well guys last there an IPO on a huge medical data broker IMS, remember that...if you don't here it is..they have 85% of the world's prescriptions in their data base.
http://ducknetweb.blogspot.com/2014/06/ims-health-buys-cegedim-information.html
The credit card business has a very profitable side business that hurts consumers with flawed data and denies access to something so yeah ditch those things as much as you can. I have a campaign to license all data sellers as could you imagine stock brokers being self regulated? Well same goes for data sellers and there's no regulation there as it's the wild west. The haunt of the Killer Algorithms continues...all to make money and get your dignity at the same time.
In 2007 I maxed out all my CC and bought silver and gold. F them all the negatives roll off my credit report this year LOL
"American consumers would not go out and spend on credit unless they felt strongly about their future job, income and overall wealth prospects."
Alternatively they're broke and are resorting to the 'lender of last resort' to get by month by month.