consumer debt

Consumer Credit Increases 5.0% on Student Debt for September 2012

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The Federal Reserve's consumer credit report for September 2012 shows a 5.0% annualized monthly increase in consumer credit, once again driven by student loans. Revolving credit declined, -4.1%, and non-revolving credit increased 9.2 %. For Q3, consumer credit increased 4.0% annualized, with revolving credit declining -1.5% and non-revolving increasing 6.5% for the third quarter.

 

The rebirth of debtor prisons

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I haven't decided what to do with this story yet, so I'm just going to post it for now. But I know that eventually its going to be part of a moral outrage rant.

It's not a crime to owe money, and debtors' prisons were abolished in the United States in the 19th century. But people are routinely being thrown in jail for failing to pay debts. In Minnesota, which has some of the most creditor-friendly laws in the country, the use of arrest warrants against debtors has jumped 60 percent over the past four years, with 845 cases in 2009, a Star Tribune analysis of state court data has found.
Not every warrant results in an arrest, but in Minnesota many debtors spend up to 48 hours in cells with criminals. Consumer attorneys say such arrests are increasing in many states, including Arkansas, Arizona and Washington, driven by a bad economy, high consumer debt and a growing industry that buys bad debts and employs every means available to collect.
Whether a debtor is locked up depends largely on where the person lives, because enforcement is inconsistent from state to state, and even county to county.
In Illinois and southwest Indiana, some judges jail debtors for missing court-ordered debt payments. In extreme cases, people stay in jail until they raise a minimum payment. In January, a judge sentenced a Kenney, Ill., man "to indefinite incarceration" until he came up with $300 toward a lumber yard debt.
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Consumer Loans March 2010

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Surfing around I came across this little noticed post over at the Wall Street Pit. Consumer lending hit an all time high in March . Literally I couldn't believe their graphs posted. But, it's true! Firstly, here is the Federal Reserve data release, H8: Selected Assets and Liabilities of Commercial Banks in the United States. Secondly, here are the graphs on Consumer Lending by Commercial Banks.

 

Credit Card defaults increase, BoA has a 14.54% charge off rate

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The credit card charge off rates are astounding. A charge off is when the company believes they the card holder has abandoned the debt and won't pay it off.

Bloomberg:

Bank of America said write-offs rose to 14.54 percent, the highest among the six U.S. lenders reporting today. That compares with 13.81 percent in July, according to a federal filing by the Charlotte, North Carolina-based company.

Citigroup’s soured loans rose to 12.14 percent last month, from 10.03 percent, while JPMorgan said write-offs advanced to 8.73 percent from 7.92 percent in July.

Americans Reduce Personal Debt Load by $21.6 Billion in July 2009

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Americans just reduced their debt load by $21.6 Billion or 10.5% in one month. This monthly drop is a record, going back to 1943.

The Federal Reserve current consumer credit release has last month's consumer credit at $2.4936 trillion and July consumer credit total was $2.4721 trillion.

That's still an astounding figure for consumer debt, $2.5 trillion and about the same total market as 2006. Of course the U.S. population has increased from that time.

Unfortunately the credit card companies didn't get as whacked, with only a 8% drop.

These numbers do not include mortgages, home loans.

My question is how much of this is by choice and how much is limiting consumers access to credit, charge offs and bankruptcy?

August credit card charge offs were at 10.55%...

Consumer Economy Will Lead to Big Woes According to Comstock Partners

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We don't believe that the U.S. massive stimulus programs and money printing can solve a problem of excess debt generation that resulted from greed and living way beyond our means. If this were the answer Argentina would be one of the most prosperous countries in the world.

Comstock Partners Latest article is titled, Deleveraging the U.S. Economy.

I should note Comstock seems to validate what midtowng wrote about the stock market rally being for suckers.

This seems to us to be a "mini bubble" of stocks reacting to an abundance of "money printing" by governments all over the world since stocks are rising worldwide

Decline in Consumer Spending creating Dead Malls

 Having been in the Retail sector for my entire professional career, I am on the front line of the driving force of our (until now) consumer driven economy. This story  from the WSJ hit close to home: Recession Turns Malls Into Ghost Towns

If retail sales continue to decline at current rates, the dead-mall roster could exceed 100 properties by the end of this year, according to Green Street. That's up from an estimated 40 failing malls in 2006, before the recession began.