Consumer borrowing (CICRTOT) in the U.S. surged in November by the most in 10 years, showing households are optimistic enough to take on debt and banks are willing to lend.
Credit increased by $20.4 billion, the biggest jump since November 2001, to $2.48 trillion, Federal Reserve figures showed today in Washington. The advance was almost twice as big as the highest forecast of 31 economists surveyed by Bloomberg News.
That's a pretty big move. Let's look at the rate-of-change graphs:
So on a rate-of-change basis revolving is back to the zero line, while non-revolving remains moving "nicely." Ex-student-loans the rate of change is improving, but still negative -- barely.
How about on an outstanding basis?
Ah. Nice divergence there. Yes, there was an uptick in the revolving and non-revolving ex-fed-gov basis, but the big mover -- again -- is student loans. Their volume grew by 1.58% in one month, a compounded annualized rate of change of nearly 21% (!!) To put this in perspective the monthly change on all non-revolving credit was 0.89% on the month (11.2% annualized) while revolving credit increased at 0.71% monthly (8.8% annualized.)
In gross amount terms $5.6 billion went on spastic plastic in what looks like either Christmas shopping or (and it better not be this) desperate consumers charging their groceries.
The total non-revolving increased $14.8 billion but of that $6.5 billion was student loans -- nearly a majority -- continuing the financial******of our youth. Our youth continue to be the "next bubble attempt" victims, larding up the debt upon their shoulders with obligations growing at roughly double the rate of all non-revolving debt and more than double that of credit card obligations.
If you're a parent and a part of this you deserve to have the door slammed in your face and bolted by your now-adult kids when, not if, Medicare collapses, your job is lost, and you look to your progeny for a way to avoid living under a freeway overpass.
Incidentally, that day is coming sooner than you think.
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never fear there is a "plan" for the student loan isue too-
"President Obama will propose a plan to cut the student loan payments of millions of Americans during his State of the Union address, the White House announced Monday. The president’s plan would cap payments on federal loans at 10% of a borrower’s income above a set minimum, defined as 150% of the poverty level for the borrower’s family, and allow loans to be forgiven after 20 years instead of 25."
funny how they can devise everything but ways to stop the looting and prevent it from getting worse or continuing
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Since it costs a lot to win, and even more to lose, You and me bound to spend some time wonder'n what to choose. Goes to show, you don't ever know, watch each card you play and play it slow...Wait until that deal come round, don't you let that deal go down, no no. Garcia/Hunter.
I was talking to a friend recently whose daughter is attending some sort of 'training' to work in a doctor's office as something or another. It's a year long training program from some private school. She told him that when the class started it was full of ghetto girls who were clearly uninterested in the content of the courses and were disruptive. She wondered why they were attending and asked a few. They said they received some sort of government-supplied monthly 'living stipend' to attend if they took out a loan for the tuition.
The course was two-semesters long. As soon as they started their second semester, they stopped attending entirely.
There are way more welfare scams out there than we know about.
"Assuming a total debt of $150,000 (the amount currently carried by several thousand law graduates), the total monthly payment is $1,743.46 a month for 10 years. The median starting salary for a lawyer who graduated from law school in 2010 is $63,000 (Debt=40% of take home pay)."
Keep getting those debt degrees kids. You'll be fine.
lookit all them green shoots!
I KNOW that the Administration Media Machine is waiting breathlessly to trumpet a seven-handle unemployment rate, but I'm beginning to wonder if they're going to shoot for the high sixes? I mean, with roll-offs and what-not, all you have to do is lie for 9 months...
Musicandnature wrote..
"President Obama will propose a plan to cut the student loan payments of millions of Americans during his State of the Union address, the White House announced Monday. The president’s plan would cap payments on federal loans at 10% of a borrower’s income above a set minimum, defined as 150% of the poverty level for the borrower’s family, and allow loans to be forgiven after 20 years instead of 25."
LOL! Barack "Lucy van Pelt" Obama!!!
Got to get the kiddies on board the White House Express till the first week of November, then it'll be back to sucking that SWEET Bankster Schwanz...
"Sorry, kiddies - my commitment to my Bankster friends is right here in the fine print."
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==== If it's true that "assault weapons" are "weapons of war" and don't belong on the streets of America, why do the police need them? Who are the police at war with?
And people wonder why the cost of education has been blowing through the roof?
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"Let China sleep, for when she wakes, she will shake the world." - Napoleon Bonaparte
"Circulation ceases first at the outer edges [Europe and Japan]. It will take a while yet for the decay to reach the heart [America]." - Foundation & Empire by Isaac Asimov
Templar223
Posts: 779
Incept: 2008-04-28
Champaign, IL
Not-so-bright people are apparently saying to themselves, "Well, I'll just go to school because I can't find a job. A student loan from Uncle Sugar will pay for it."
Little do they know...
It's just a case of nothing thinking things through and a lack of education about compound interest.
State investigating for-profit colleges Posted: Nov 11, 2011 10:41 AM EST By Andy Pierrotti, NBC2 Investigator
One lawmaker calls it the next subprime loan crisis. It involves students attending for-profit colleges who default on their loans; and leaving taxpayers to clean up the mess. NBC2 Investigator Andy Pierrotti digs deeper and uncovering some colleges operates without a license. It's all legal too.
They can stop paying in as little as 10 years, and guess who gets stuck with the bill. It's not just the kids who are getting screwed...it's all of us.
Quote:
Through the College Cost Reduction and Access Act of 2007, Congress created the Public Service Loan Forgiveness Program to encourage individuals to enter and continue to work full-time in public service jobs. Under this program, borrowers may qualify for forgiveness of the remaining balance due on their eligible federal student loans after they have made 120 payments on those loans under certain repayment plans while employed full time by certain public service employers.
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Once you admit that the individual is merely a means to serve the ends of the higher entity called society or the nation, most of those features of totalitarian regimes which horrify us follow of necessity. --F.A. Hayek
I don't think you can annualize these results, since lots of people take out extra loan money when registration is going on, just before the last semester ends, so its one of two annual peaks.
I can speak from the experience of having completed an undergrad degree just 5 years ago, which is recently enough to have it be expensive due to the constant tuition increases. Your class registration is nullified if you cant pay within a short amount of time, but a stroll down to the registrar office gets you the money from a bank with no hassle, which gets it from Sallie Mae. No interest builds until 6 months after graduation, it just sits there.
When you're against a wall and facing the possibility of missing the spring semester entirely, which is actually like missing an entire year due to the way that schedules and prerequisites are laid out, its an easy choice. Its also not great in the job market if you’re showing that you were in/out of school for 6-7 years.
Of course I'm not defending crazy borrowing for stupid degrees, I didn't borrow much, it was at 4%, and I got a degree in a technical/science field which allowed me to be a productive citizen.
surged in November by the most in 10 years, showing households are optimistic enough to take on debt and banks are willing to lend.
Yeah, sure, because consumers are so optimistic they charged. What a bunch of BS. People have splurged on Christmas and spoiled their kids year after year and are not strong enough to say, "no, you don't need a $500 Ipad and we can't afford it." Whether they are charging groceries or toys is irrelevant - they are charging because they are short - just like the gov they are taking in less than they are spending, period. I think this is a symptom - people dialed it way back in the last year or two and that is GOOD. But, they may now be to the point where even dialing it all back is not enough - time for REAL pain.
A young women attending college with a $100k line of credit and she "won't need it all"...LOL...her dad is an F'n idiot.
Caught a recent episode of Judge Judy, young girl with a line of credit for college co-signed by step-dad...she bought a $35K car with it...lol..."graduated" with no job and immediately stopped paying the loans...bank came after dumbass dad...
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A Leader, or an Opportunist? "A leader has the capacity of vision, the ability to see where things are headed before people in general see those things." Mitt Romney --- DebtPie's definition: a leader decides where "things" should head and "leads" us there.
Our local banks and credit unions have turned on the taps. People are getting home equity loans "for the things you deserve in life," that's a quote of a radio ad. One of my acquaintances just opened a HELOC for a downpayment on a shiny new Toyota. I see skip-a-payment and pick-a-payment loans offered by a couple of CUs. It's yesterday once more.
The good times are rolling. Who needs learnin' when you can borrow for a debt degree?
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Stand up and be counted or line up and be numbered.
Aztrader
Posts: 6648
Incept: 2007-09-10
Scottsdale, AZ
This may be the last shot for a lot of people. Bankruptcy attorneys teach people how to run up their debt before they file. They can max out their credit cards and if they are unemployed, the judge will typically let it slide. If they are employed, then the judge wants to see 90 days of no CC use.
The whole system is teaching people how to be leeches.
The for profit colleges are what caused this. and after talking to my PE buddy, they are all too happy to climb on the debt bandwagon. A rising tide lifts all boats and as soon as non profits see what the for profits are charging, they get the green light to raise the tuition to the same level. It's ridiculous.
Sent this ticker to my son, whose girl friend just got some terrible news. She finished two years of CC with a GPA of 3.75 and got a big scholarship to a very prestigious (expensive) four-year school. Grandpa promised to pick up what the scholarship didn't.
First quarter GPA was 3.67, with a 4.0 in statistics. Grandpa died, and Grandma isn't paying. Her Dad is out of work and can't step in.
She's deciding right now how to manage the next five quarters. Hope like hell she decides to work and save, going to school every other quarter. We'll see how smart she really is...
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"...But people better realize that the worst-case scenario could actually happen.9/11 happened. This can happen. An economic 9/11, the likes of which we've never seen." Gerald Celente
The ways how colleges waste money on things that are not related to education are mind-boggling. Plush dorms, recreation centers, etc etc. Example: http://www.realclearsports.com/articles/....
Since 1985 college tuition has increased nationally by 498 precent compared with 115 percent for prices overall – an unsustainable bubble. Higher education commentators Andrew Hacker and Claudia Dreifus have commented that a large portion of this additional college tuition revenue is being funneled into athletics and not towards education. Over the same time the average compensation of public college football coaches has increased 750 percent compared with 32 percent for professors. The two colleges that will play for the BCS championship this season spend $1,320 per every member of the student body ($204,919 per player) to support the football programs.
Truth, an alternative would be to try and find an employer that would pay. I know it's difficult, but it would definitely be worth it. I always pushed co-workers with associate degrees to take advantage of the company tuition program. It takes longer, but at least in the end, you aren't shouldering a mountain of debt. I looked into taking some CNC machine courses because metal working is a hobby and I like to invent things, schools are charging 5K per class!!! When I went to school it was 3K per semester!
