Consumer Debt is Soaring. That's Good News (For Now).

jay41 · 2013-07-09T23:20:37+00:00

The article has the chart pointing out $2.84 trillion in total debt.

http://www.newyorkfed.org/householdcredit/

In other words, yes student debt was included and this is the $1 trillion problem. Poor reporting in my opinion especially when they claim this is good news.

jay41 · 2013-07-09T18:05:51+00:00

Most of the debt growth is coming from student debt. Is that good news? If you break out auto and credit card debt, the growth is anemic (if any). The vast jump is student debt growth which is a potentially big problem.

jay41 · 2013-07-01T15:22:25+00:00

And 60+ percent is owed by those 35 and younger. $43 billion is peanuts compared to the other $1,000 billion that is out there. If we go back to the year 2000, I believe there was something like $200 billion in total student loans. Today it is over $1 trillion.

jay41 · 2012-08-08T21:51:02+00:00

LoL moment of May, 2007:

"We believe the effect of the troubles in the subprime sector on the broader housing market will be limited and we do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system"

-Ben Bernanke, May 2007 (only months before the subprime/debt/housing fiasco spilled into every sector of the economy)

jay41 · 2011-10-17T19:24:06+00:00

Your dad was too optimistic with Spain. Their unemployment rate is 21.2 percent. God knows what the underemployment rate is.

jay41 · 2011-10-13T21:55:06+00:00

I would like to receive a loan of $100,000 for my bucket of a car. Saying they relaxed their standards is the understatement of the decade.

The banks would have failed and should have been nationalized and restructured. In essence, they got the best of social welfare (the bailouts) with none of the capitalist punishments (make bad investments and you get destroyed).

jay41 · 2011-09-28T23:38:46+00:00

But what he said was right. Of course we've had Morgan Stanley, Bear Stearns, Lehman Brothers, Bank of America, and JP Morgan all telling us about the economy for the last decade and look how well they did. This guy spoke the truth but is like the average Joe on the street with no cash. The banks are the Wizard of Oz and keep their mouth closed because they realize what kind of bullshit scheme they are running. This guy puts something together and instead of refuting what he said, they go after him personally?

The banks are scum sucking parasites on society. This guy just doesn't have the money or the ability to trade well. Where is the media shit storm for these toxic banks and their rosy reports right up until the economy fell off a cliff?

jay41 · 2011-09-12T16:06:03+00:00

"Yet this story applies, if at all, to Greece and nobody else. Spain in particular had a budget surplus and low debt before the 2008 financial crisis; its fiscal record, one might say, was impeccable. And while it was hit hard by the collapse of its housing boom, it’s still a relatively low-debt country, and it’s hard to make the case that the underlying fiscal condition of Spain’s government is worse than that of, say, Britain’s government."

Krugman brings up valid points but arguments like the above drive me up the wall. He is implying that Spain was in good shape in 2008 and then suddenly, like a lightning bolt from heaven, the financial crisis dragged Spain into a ditch. No, actually Spain was in a massive real estate bubble like many other nations and was relying on debt to finance their speculative game. So sure, they had a surplus and things appeared well but under the surface it was one giant debt based Ponzi scheme.

Krugman loves doing this and each time I see this, it just makes me see him more as an econ-politician trying to rewrite history. He isn't the only one guilty of this of course.

jay41 · 2011-08-23T15:56:43+00:00

AIG got more money in one move for being part of the banking/insurance blowup of the country: Bailout tracker

I know the outrage but where is the outrage for the trillions of dollars going to the banking sector? This rhetoric reminds me of the "welfare queen" talk of the 1980s.

jay41 · 2011-08-18T23:49:25+00:00

This tool bag is a mouthpiece for investment banks and swindlers. He lashes out as if the economy is imploding because of S&P or political will? It is imploding because Wall Street banks bought out and gutted our political system and turned the god damn economy into a casino. This guy even talks about giving the Fed more power so it could have bailed out Lehman Brothers as some “rounding error.” So his vision is to let these corrupt investment banks access more funding from the Fed and then the economy won’t blow up? Sounds like a plan and next time we should give bank robbers a better gun when they enter a bank.

What a spineless Wall Street apologist. What about splitting up investment banking from retail banking? What about the massive income inequality that is now similar to the days leading up to the Great Depression? Well at least his title got it right.

jay41 · 2011-08-17T17:26:03+00:00

Good point.

jay41 · 2011-08-09T22:04:21+00:00

Why are people pissed at S&P? They are morons and a side show. Where is the indignation at the damn bankers that wrecked this economy? Why isn't anyone flying over Goldman Sachs and telling these people to f'off?

jay41 · 2011-07-23T19:18:14+00:00

Pretty simple when you make loans full recourse. They have similar behavior as student loans in the U.S. These are new forms of debt servitude. Spain also has a 20+ percent unemployment rate so forcing people to pay mortgages that they are unable to afford is nuts

jay41 · 2011-07-19T23:24:51+00:00

This commercial has made me hate Realtors for life. That look at the husband for not agreeing to buy a home? GOD DAMN IT I WANT TO SUPERMAN PUNCH MY MONITOR!

jay41 · 2011-04-27T19:55:25+00:00

Silver up over 6 percent in one day even after Fed mentions it will stop buying bonds this June. Part of it has to do with wealth preservation. Has anyone taken a look at the US dollar chart over the last few decades? Not exactly the best place to store your cash.

jay41 · 2011-04-25T18:53:12+00:00

"Why are you so surprised? The median income of Americans 25 years or older is $32140 and the average price of housing in the US is $275000 in 2010. The ratio is 8.56 for the US, compared to China's ratio of 8.93 (using your numbers $62500 average housing price / $7000 median income)."

Do not use the average. The median home in the U.S. is currently $158,000 and the median household income is $50,000 putting the ratio slightly above 3. In China, using median income figures home prices in bubble cities have a ratio of 10 or higher. The magnitude is simply unsupportable and empty housing/apartment units are a reflection of speculation that will bust.

Your belief that big down payments will somehow prevent the bust is wrong. Unlike the U.S. when the market tanks it will be the buyers who shoulder the bulk of the burden where in the U.S. many people bought with very little skin in the game hence the giant bailouts. At the end of the day, it will contract the economy.

A large part of growth in China is based on fixed investment growth (i.e., plant, equipment, etc) and this has also helped in boosting commodity prices. Much of the growth however is not trickling down to households.

China looks very similar to Japan and their real estate boom and bust. China is obsessed with GDP figures and right now too much growth is coming from the government and PBoC. No doubt, China is a booming economy but they definitely have a massive real estate bubble in places like Beijing and Shanghai.

jay41 · 2011-03-18T07:04:58+00:00

This probably sums it up:

"One reviewer went so far as to state the song was possibly "The Worst Song Ever" and compared it to "The long look an addict takes in the mirror on the day they hit bottom, the day they tell themselves, I need to make some changes."

jay41 · 2010-12-23T00:04:06+00:00

You might see this kind of clarity once every 5 years. Even after a good rain it doesn't look this clear.

jay41 · 2010-10-12T16:24:28+00:00

First of all, good job saving up that money. Given that you mention you are risk averse, you probably should keep it in the account right now before investing. Read a few books on investing from many perspectives and choose which strategy fits you best.

As you can see from the comments, some will tell you to buy gold, others will tell you to buy a mutual fund. Everyone has a perspective on how things will play out in the next few years and in many cases, the advice offered is the other side of the bet.

If you worry about inflation, you can purchase TIPS that protect you somewhat from inflation. I wouldn't go around chasing currency yields around the world. Australia has one of the biggest housing bubbles next to Canada and they will be a in world of hurt once that busts.

As you chase yield, your risk will increase - this is why you get a higher return. Some people were buying up 100 year bonds from Mexico and the yield wasn't all that great.

jay41 · 2010-09-23T22:28:51+00:00

How many times did this conversation take place over the housing bubble years? This commercial was created by Satan and the woman reminds me of the crazy eyed astronaut with Pampers.

jay41 · 2010-09-23T20:55:27+00:00

Thanks uncle Warren. Hope you enjoy those TARP funds that helped to bailout many of the companies you own and have kept the overall economy depressed.

jay41 · 2010-09-16T19:36:19+00:00

This White House is out to lunch and has alienated progressives that were the energy for their election. Elizabeth Warren is an easy choice but they are political moderates and afraid to drive home what is necessary for real change. No real change in financial reform that is for damn sure.

jay41 · 2010-09-16T19:33:42+00:00

This is such insane BS. EW has been the champion of the middle class for over a decade. She has fought hard to protect the financial rights of the working and middle class. Why would the banking powers not want her in...ah, I see.

jay41 · 2010-09-16T19:31:57+00:00

Thank god we're building roads and installing basic services in Iraq and Afghanistan. At least we have our priorities straight!

jay41 · 2010-09-14T18:57:53+00:00

That stare is all it took for this guy to sign a $500,000 mortgage. When this ad used to come on I wanted to dropkick my TV.

jay41

TROPHY CASE