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Consumer Credit Soars As US Government Encourages Student, Car Loan Bubbles

Tyler Durden's picture




 

That US consumer credit soared by $21.4 billion in March on expectations of $9.8 billion rise, or the fastest monthly expansion since March 2001 would have been commendable and memorable if one did not dig through the actual components. Which sadly are atrocious: of the entire surge, a modest $5.1 billion was from real credit, or revolving, credit-card type debt. This brought the total revolving debt to $804 billion or to a level first crossed in January 2005. The balance, or $16.2 billion, was non-revolving debt, or the type of debt used to fund GM car purchases by subprime borrowers and push the student loan bubble well into its $1+ trillion record territory. The total non-revolving debt is now $1.739 trillion: an all time record. As for the source of such debt? why the US government of course, in what is the supreme ponzi scheme, whereby the US government allows US consumers to purchase Government Motors products and to keep the Higher Learning status quo in power. In other words, the US government has become the final enabler of the consumer spending bubble with proceeds used to keep the US auto unions happy (as channel stuffing is already at record high levels), and of course, to fund such ancillary student purchases as iPads. As for whether any of this debt will ever be paid off? Don't be silly.

Monthly change in revolving and non-revolving credit:

Indexed change in these two series:

The various sources of consumer credit - one stands out:

And just government sourced credit vs all others, courtesy of John Lohman.

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Mon, 05/07/2012 - 15:34 | 2404417 redpill
redpill's picture

That's the spirit, let's blow this fucker up sooner instead of later!

Mon, 05/07/2012 - 15:38 | 2404429 Dr. Richard Head
Dr. Richard Head's picture

Blowing it up in style.....behind the wheel of a Cadillac.  NICE!!!!

Mon, 05/07/2012 - 15:41 | 2404452 redpill
redpill's picture

Introducing Apple iDubs, the 23", $8,000 chrome rims for your Cadillac Escalade that automatically notify your Facebook page when they need polishing and sets up an appointment with your local detailer using your Chase(tm) card (extra fees apply, 24,99% APR) so you ALWAYS stay ballin'!

Mon, 05/07/2012 - 15:52 | 2404487 Ahmeexnal
Ahmeexnal's picture

Daniel Suelo is an example to follow:

http://www.dailymail.co.uk/news/article-2138738/Daniel-Suelo-voluntarily...

Footage has revealed the sparse and yet contented life of Daniel Suelo - the man who has chosen to live without money for the past 12 years. Suelo, now 51, renounced money in 2000, left his last $30 dollars in a phone booth and walked into the desert to start a new life in Moab, Utah.

'The fact is, if everyone lived like the average American, the world would actually collapse more quickly than if everyone lived like Suelo.'

Mon, 05/07/2012 - 16:05 | 2404538 redpill
redpill's picture

Living in squalor eating roadkill?  I hardly think that's the only option.

Mon, 05/07/2012 - 16:13 | 2404560 economics9698
economics9698's picture

I prefer squirrel meat.

Mon, 05/07/2012 - 16:36 | 2404630 francis_sawyer
francis_sawyer's picture

This week I'm buying a Cadillac Escalade so I can drive to the University of Phoenix in my pajamas...

Mon, 05/07/2012 - 18:25 | 2404928 Slewburger
Slewburger's picture

I'd rather wear my Ed Hardy shirt and drive my Hummer on dubs, I'm almost done with my RE license BTW.

Mon, 05/07/2012 - 18:44 | 2404985 Skip
Skip's picture

Now that's just funny.

Mon, 05/07/2012 - 16:59 | 2404718 GOSPLAN HERO
GOSPLAN HERO's picture

In Africa, it's called bush meat.

Mon, 05/07/2012 - 18:46 | 2404989 Skip
Skip's picture

It is also called that in London and the Bronx and Brooklyn. Tons of "bush meat" including gorilla paws, sold in both of those NYC boroughs each year.

Mon, 05/07/2012 - 23:35 | 2405489 GMadScientist
GMadScientist's picture

I find Protestants too stringy.

 

Mon, 05/07/2012 - 16:37 | 2404631 A Nanny Moose
Mon, 05/07/2012 - 21:47 | 2405323 Bicycle Repairman
Bicycle Repairman's picture

Suelo is a cop out.  Somebody's car is making that roadkill.

Mon, 05/07/2012 - 23:14 | 2405455 smb12321
smb12321's picture

Why would anyone is their right mind want to regress to feudal times?  Money is one of the greatest inventions of history and as such, can be manipulated and put to bad use.  I can't see much for humanity if we're scrounging for grub worms half the day and staring at our naval the other half.

Mon, 05/07/2012 - 23:34 | 2405486 GMadScientist
GMadScientist's picture

"if everyone lived like the average American, the world would actually collapse more quickly than if everyone lived like Suelo"

If everyone lived like Suelo, Suelo couldn't live like Suelo.

Mon, 05/07/2012 - 15:41 | 2404453 battle axe
battle axe's picture

You might get your wish, look at the Student Loan numbers, that fucker is ready to blow apart big time, very soon. 

Mon, 05/07/2012 - 16:03 | 2404531 duo
duo's picture

It will blow when the interest on student load debt exceeds the total of all tuition paid in the US.  I think we're at about 60% now. 

 

Mon, 05/07/2012 - 16:12 | 2404554 economics9698
economics9698's picture

It will blow when the public realizes the inflation rate is higher than the interest rate on their government bonds.

Mon, 05/07/2012 - 16:49 | 2404687 Shizzmoney
Shizzmoney's picture

It will blow when the majority of the public knows what "inflation" and "interest rates" actually are.

Mon, 05/07/2012 - 17:07 | 2404734 max2205
max2205's picture

Well, it just blows. Period

Mon, 05/07/2012 - 16:18 | 2404568 Omen IV
Omen IV's picture

many kids / people  are living off the student loans / credit cards- education be damned - the disability applications for SS are soaring as Unemployment benefits run out - parallel tracks necessary for survival of many many people  - as they pull the availability of these programs and unemployment Insurance simultaneously there will extreme response   - one / ten / 100 / 1000 people will freak out and go postal

too many guns too many desperate people

Mon, 05/07/2012 - 16:22 | 2404582 redpill
redpill's picture

That's right, this is AMERICA!  People will not stand by idly and see the streaming Netflix video on their iPhone throttled by their carrier, they will not tolerate their $145 cable TV budget curtailed, and by god if you even think of touching our $4 mocha latte cappucino we will fucking riot, do you hear?!?!!

Mon, 05/07/2012 - 16:24 | 2404586 12ToothAssassin
12ToothAssassin's picture

Earth can realistically sustain about 1 Billion people. Something has to give and Im pretty sure it wont be reality or the physical world around us.

Mon, 05/07/2012 - 16:35 | 2404626 redpill
redpill's picture

Nonsense, we haven't even begun to explore the theoretical limits of sustainable population.  The problem is that we've (and primarily our governments that think they are smarter than everyone else and can centrally plan these things) not expanded or behaved in a sustainable fashion.  There will be countless problems as long as we continue to make stupid choices.

Mon, 05/07/2012 - 17:39 | 2404806 12ToothAssassin
12ToothAssassin's picture

"...behaved in a sustainable fashion.  There will be countless problems as long as we continue to make stupid choices."

 

Exactly how I arrived at my number - come to think of it Im revising down to 500B.

Mon, 05/07/2012 - 23:18 | 2405461 smb12321
smb12321's picture

No, the powers that wannabe are creative in one sense - they can ALWAYS find a way to obfuscate, ignore, bypass, modify or alter debt in all its glorious forms.  We'll have new laws, yet more DC programs, lots of Sunday morning gabfests and of course nothing will change.

Remember that State control of education debt was a prime goal for the Prez.

Mon, 05/07/2012 - 15:44 | 2404462 orangedrinkandchips
orangedrinkandchips's picture

Reminds me of Booger on Revenge of the Nerds....

 

"I say we blow the fuckers up"......

 

this is how democracy becomes socialism then communism then back into democracy...repeat if necessary.....

 

right in front of your eyes....

Mon, 05/07/2012 - 15:57 | 2404508 redpill
redpill's picture

the tree of liberty...

 

Mon, 05/07/2012 - 17:35 | 2404800 Virginian
Virginian's picture

...is getting pissed on.

Mon, 05/07/2012 - 15:37 | 2404418 RacerX
RacerX's picture

Wow. And here I am looking at getting a new[er] car. Guess that makes me a Muppet too.

I like #1 comment. Just like in Goodfellas.. They buy as much sh* as possible, then burn the joint down.

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

Mon, 05/07/2012 - 15:39 | 2404438 LawsofPhysics
LawsofPhysics's picture

Same as it ever was.  The governement will pretend to make some loans so that these kids can pretend to get educated and pretend to pay it all back.

All the while, what you know remains secondary to who you know.

I love the smell of napalm in the morning.

Mon, 05/07/2012 - 15:47 | 2404474 battle axe
battle axe's picture

Also if these  poor kids with huge debt try to declare bankruptcy because of their student loans, they can not, by law, let the bankruptcy effect their student loans. The loans must be paid back with interest in full, the only debt that can not be modified by a bankruptcy court. So with unemployment running at 50+% for new graduates, we have a whole new class of serfs in America, "The land of the free", (unless you have a student loan). 

Mon, 05/07/2012 - 15:54 | 2404497 Chupacabra-322
Chupacabra-322's picture

@ battle axe, That's what those re education FEMA camps are for.  New grads won't be unemployed for very long. 

We have now exhaustively proven in a series of articles that the U.S. Army is training its personnel, through the policies outlined in a manual entitled FM 3-39.40 Internment and Resettlement Operations (PDF), to “indoctrinate” “political activists” incarcerated in detention camps into developing an “understanding and appreciation of U.S. policies and actions.”

On page 281 of the manual we even see the use of the term itself when we learn that the role of camp personnel is focused around, “reorienting or reeducating the I/R facility population or setting the stage for acceptance of future operations.”

These camp prisoners are to include “civilian internees” detained “within U.S. territory” as part of “civil support operations” in the aftermath of “man-made disasters, accidents, terrorist attacks and incidents in the U.S. and its territories” involving FEMA and the Department of Homeland Security.

The manual also directs such prisoners to be used for slave labor “In work that is needed to construct, manage, perform administrative functions for, and maintain the internment facility,” in other words building and maintaining their own detention camp.

The manual also directs that political activists be confined to isolation and that prisoners be silenced using by “muffling them with a soft, clean cloth tied around their mouths and fastened at the backs of their heads.”

http://www.infowars.com/would-the-media-be-interested-if-bashar-al-assad-set-up-re-education-labor-camps-for-political-dissidents/

Mon, 05/07/2012 - 16:34 | 2404619 resurger
resurger's picture

When you cant borrow another buck from the bank & cant buy a booze

"You bust the joint out, you light a match"

 

 

Fuck, so why not ... they print this money ne way and they borrow at negative interest rates, we might as well get a cut ...

Lets party, party, party

Mon, 05/07/2012 - 15:34 | 2404421 Boilermaker
Boilermaker's picture

LEVERAGE THE BASTARDS!

Mon, 05/07/2012 - 15:57 | 2404506 GeneMarchbanks
GeneMarchbanks's picture

"If we all join hands and go buy a new SUV, everything will be all right," - Bob McTeer, Dallas Fed governor

Mon, 05/07/2012 - 16:19 | 2404574 Iwanttoknow
Iwanttoknow's picture

10,000 up arrows.

Mon, 05/07/2012 - 16:11 | 2404551 chunga
chunga's picture

"LEVERAGE THE BASTARDS!"

Exactly, OCC, SEC, DOJ, can't figure any of this out but a carpenter from MA sure can.

Borrowers are NOT Parties to Asset Backed Securities. WRONG. Bob the Builder explains why.

"If there was no timely assignment to the Trustee within the proscribed period as set forth above, there can never be one."

Another awesome Amicus Curiae filed by a Pro Se in the MA SJC.

He'll be making oral arguments in re: HSBC, et al [plaintiff-appellee] vs. Jodi Matt [defendant - appellant) to the high court.

 

Mon, 05/07/2012 - 16:37 | 2404634 12ToothAssassin
12ToothAssassin's picture

When is his accidental death scheduled?

Mon, 05/07/2012 - 16:55 | 2404660 Boilermaker
Boilermaker's picture

Swimming pools generally open for the summer season on Memorial Day.  I'm guessing sometime shortly thereafter.  Then again, I've heard of people drowing in a bath tub also and / or making toast while bathing.  So, hell, you never know for sure.

Mon, 05/07/2012 - 15:36 | 2404425 carbonmutant
carbonmutant's picture

Bailouts for everybody, just in time for the Elections...

Mon, 05/07/2012 - 15:37 | 2404426 lizzy36
lizzy36's picture

And all we got for borrowing a record amount from the future is 2% GDP growth.

BRILLIANT.

Bernanke must be happy. After all going back to the exact same behavior that put Yanks into this crises, can only be considered a success by the Central Planners.

Mon, 05/07/2012 - 15:45 | 2404447 Sam Clemons
Sam Clemons's picture

* -6% real GDP growth.  And GDP/GNP measures are mostly useless for determining quality of life.  For example, building something and then destroying it makes GDP look good.  I am not a huge fan of the Kennedies, but..

"The Gross National Product includes air pollution and advertising for cigarettes, and ambulance to clear our highways of carnage.  It counts special locks for our doors, and jails for the people who break them. GNP includes the destruction of the redwoods and the death of Lake Superior.  It grows with the production of napalm and missiles and nuclear warheads... And if GNP includes all this, there is much that it does not comprehend.  It does not allow for the health of our families, the quality of their education, or the joy of their play. It is indifferent to the decency of our factories and the safety of our streets alike.  It does not include the beauty of our poetry or the strength of our marriages, or the intelligence of our public debate or the integrity of our public officials... GNP measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country.  It measures everything, in short, except that which makes life worthwhile; and it can tell us everything about America - except whether we are proud to be Americans."  Robert Kennedy


Mon, 05/07/2012 - 15:44 | 2404463 Henry Chinaski
Henry Chinaski's picture

+1

All that debt shoulda goosed the economy.  It's worse than I thought.

Mon, 05/07/2012 - 15:50 | 2404427 fuu
fuu's picture

I've got no debts
To hold me down
To make me fret, or make me frown
I had debts
But now I'm free
There are no debts on me

Mon, 05/07/2012 - 15:38 | 2404435 debtor of last ...
debtor of last resort's picture

I just bought a Ford Ponzi from my Greek bond earnings. Needed just a bit money from my comexcard.

Mon, 05/07/2012 - 15:39 | 2404441 DavidC
DavidC's picture

I wish I could say 'Unbelievable' but it's no longer necessary. Sheesh.

DavidC

Mon, 05/07/2012 - 15:40 | 2404448 BigMike
BigMike's picture

This make me question the breakout in consumer discretionary + staple and technology stocks. What happens when current students cannot find adequate work to pay off their debt?

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