Total consumer credit, revolving credit, and credit card interest rates all hit new record highs in November.
Adjusted for inflation, revolving credit is approaching the record high hit during the Great Recession.
Revolving Consumer Credit in Billions of Dollars Nominal and Real
In real, inflation-adjusted terms revolving credit is approaching the peak hit during the great recession.
Credit Card Rates Record High
For most of 2000-2020 credit card rates were between 12 percent and 14 percent.
The average rate is now 21.47 percent.
Records Galore
On January 4, I wrote Debt Jumps Past $34 Trillion, $1 Trillion Interest
A bipartisan majority wants more of this and more of that. So that is what you should expect.
The fallback position is not less of anything. Rather, it’s another clean continuing resolution.
Sure enough
Spending Deal Reached, the Republican Freedom Caucus Condemns It
On January 7, I noted Spending Deal Reached, the Republican Freedom Caucus Condemns It
The deal does not address the border at all!
To get any border funding (that Biden will try to find a way to not honor), Republicans will have to further cave in on both Ukraine and Israel.
The total funding will be well in excess of the deal that Kevin McCarthy once had on the table.
Party on dudes.
Neither a borrower nor a lender be.
What percentage of debt is repaid each month? In other words, what percentage of of borrowing is really just a glorified debit card to earn discounts, travel miles, etc?
“The deal does not address the border at all!”
I guess it is not a concern to the County Club politicians.
Ending scene of the movie “Re-Animator” -overdose!
Lenin to general Nikolai Yudenich soldiers who fought the Ottoman empire in 1917 :
dump your weapon serfs. The land of the aristocrats will be divided, is waiting for u if u join us. How many serfs died for the tsar, fighting Turkey…Nikolai Yudenich, the white army best general, died in France at age 71. The serfs die young. Stalin starved the serfs, bc it’s all about power.
I’m not so sure what the high credit card debt means. I used to often pay with cash and now I almost never due. My credit card amounts are much higher. I can invest my cash and get interest and the credit card balances are interest free for 30 days. I’m also see quite a few offers for no interest cards for many months.
The stated interest rates on cards are very high but if you pay it off each in month, it doesn’t matter.
I do the exact same to earn airline miles and hotel points, but I’ll bet the vast majority of morons overspend and carry a balance. The whole reason credit card issuers justify the 50-100k point bonus offers for opening a new account is because people will get overextended in attempting to meet the multi-thousand dollar minimum spend to unlock the bonus. If every cardholder paid in full each month like you and I, the issuers would lose money.
We also charge almost everything and then pay the balances monthly. You get a free month before having to pay it off and we get great rewards.
Biden might declare 2Y/3Y c/c debt at zero rate and rent deferral, before the Nov election. Trump might authorize a debt jubilee for the poor, the elderly and shingle mums. Both Biden and Trump might transfer wealth from the upper Pareto top to the poor and the middle class to reduce inequality and people’s rage that is threatening
congress and US gov.
I have never seen an “eat the rich” scheme help an economy
Wait until the trumpies and the real lefties figure out they have the same enemies.
They did in 2011, long before Trump came along. Took my office breaks around Chicago La Salle Street (Federal Reserve, Bank Of America, CBOT, etc.) observed that protesters were infested with Glowies even back then, including hot chic organizers with fake arm tattoos. Rahm the tiny dancer was the mayor. The real protesters later became Bernie Bros.
In the early 2016 D primary days Bernie had a rally at Argo High School just west of Midway and the line to get in, after the place was filled, wrapped around the large campus and down the block.
True, but when things get really lopsided, things like what happened in 1932 occur.
The Fed transferred wealth from the rich to the poor and the middle class
in 2020. Trump was supposed to be re-elected, but he didn’t.
I have never seen an “eat the poor” scheme help an economy
The criminal cabal, known as the US Congress, continues its attack on the American middle class: more money for senseless war to make enemies, then passing legislation to restrict our freedoms while opening our borders to illegal immigration to bring in cheap labor to drive down wages and exhaust the social safety net. This bunch of clowns need to be lined up against the wall.
“This bunch of clowns need to be lined up against the wall.”
And then; and this is the real important part; be replaced by NOTHING. Or, at most, The Taliban. Not just another bunch of same-clown-different-hairdo “we”-must-saaaaaave-the-syyyyystem backmarkers.
To be sure, a large portion of this increase is folks just trying to survive, but the rest is due to folks buying shit they simply do not need. Ironically, alot of the useless crap bought on credit will end up in a storage unit paid for with credit.
Does anyone else think there is a nonzero chance that there will need to be massive levels of consumer credit forgiveness at some point? Surely there are tens/hundreds of thousands of people now who will literally never be able to pay off their cards.
It’s called chapter 11
Or being a debt slave for life
“… debt slave for life.” // Isn’t that what most all are, in reality? 🔦✝️
The loans don’t get forgiven – they just don’t get paid back, and the lender takes a loss.
When the Fed starts cutting rates in a couple months, real estate prices will do a moonshot again and the sheeple will be able to cash out refi and settle their credit card balances that way.
I don’t think the majority of banks will do that. They need to hoard their cash for all the defaults on loans. Banks may lend to people with FICO scores over 720 but the average person with credit card debts don’t have high FICO scores.
A lot of them will file bankruptcy. They may get out of debt but the next 7 to 10 years they’ll have to rely on cash. They’ll have a hard time getting approval to rent, buy a car or house.
It might also be useful to show real debt per capita (or total debt adjusted for population) in the graph. There are now almost 10% more people in the US than in 2008.
That’s a fair point, but if you are trying to compare the impact of debt levels it’s the servicing costs that matter. Current interest rates cancel out population differences.
AMZN announced layoffs. Googl cut hundreds of hardware engineers on Wed. $2/$5 million houses for sale or rent, including those with 3%/4% mortgages.
Those are the boys/girls who spent before their severance pay.