We might as well put on every post, Americans are flat busted!
The Federal Reserve released today the consumer credit numbers.
Consumer credit decreased at an annual rate of 5-1/4 percent in the second quarter.
Revolving credit decreased at an annual rate of 8-1/4 percent, and nonrevolving credit decreased at an annual rate of 3-1/2 percent. In June, consumer credit decreased at an annual rate of 5 percent.
At least Bloomberg is finally getting it's about the jobs man:
A jobless rate near the highest in 26 years, stagnant wages and falling home values mean consumer spending, about 70 percent of the economy, will take time to recover even as the recession eases. Incomes fell the most in four years in June as one-time transfer payments from the Obama administration’s stimulus plan dried up, and unemployment is forecast to exceed 10 percent next year before retreating.
Credit card charge offs:
Credit-card defaults climbed to a record in June as more consumers fell behind on payments because of rising unemployment and bankruptcies, according to Fitch Ratings statistics released on July 31. Charge-offs, the cost of loans that card issuers have given up on collecting, rose to 10.79 percent last month, 64 percent higher than the same period last year, the Fitch Prime Credit Card Index showed.
That's an astounding number, over 10% just stop paying on their credit card balances.
Also other loans now have a 4.31% 60 days can't pay which is a slight improvement from last month, of 4.45%. But is it that great of an improvement when even getting a loan has dropped 5%?
This is another reason why we need a new paradigm
The Great De-Leveraging continues. This is needed but it has consequences - less consumption. And since we are depended on debt instead of wage growth and consumer spending we will languish in this 'new normal'.
We need a new economic growth model!
RebelCapitalist.com - Financial Information for the Rest of Us.
RebelCapitalist.com - Financial Information for the Rest of Us.
goes unchallenged
we see over and over 70% of the economy is consumer spending...
ok, well, how about that's really out of balance and can we have policy to grow a production economy then?
It's like somehow, the idea that 70% of the economy is consumer spending is ok and we should just continue that...
I don't get why we cannot get these policy makers to focus in on expansion of a production economy.
Because it requires upsetting some pretty powerful interests.
The necessary changes for a new economic growth model require courageous leadership which we just don't have. Maybe when unemployment stays at 9% for five years or more than they will wake up or maybe if there was rioting in the streets.
RebelCapitalist.com - Financial Information for the Rest of Us.
RebelCapitalist.com - Financial Information for the Rest of Us.
but they can make huge $$$$
This is the thing I do not get. I mean if they paid attention, manufacturing, advanced manufacturing, fostering innovation have the potential to make some people absurdly rich. It's not like you're sitting here asking to increase the welfare rolls or something...
it's a matter of smart national economic strategy and one would think some of these "special interests" would get that without a strong U.S. middle class, you don't have much of an economy anyway...so...why not?
Why would they not want to make a buttload of profits long term?
The system is not set up to worry about long term.
Politicians are worried about the next election cycle in two years. Wall Street and MNC are incentivized by short term profits and gains.
But the problem for us is that this system is not sustainable. Unfortunately, we will be ones hurt the most.
RebelCapitalist.com - Financial Information for the Rest of Us.
RebelCapitalist.com - Financial Information for the Rest of Us.
they need to limit election campaign times
Seriously. I also believe the MSM is absurd, including many blogs. The issues are specific yet the coverage is always vague. It's not "no health care reform vs. reform " or "that's socialism" it's in the details and this is what people are upset over. It's not "taxes" it's what kind of taxes....the list goes on and on.
Well, the fact is America wants massive support for a production economy, you can hear about this from the left to the far right....
Right.
But you know that the minute someone talks about the need for stronger U.S. manufacturing sector they are labeled a 'protectionist'.
RebelCapitalist.com - Financial Information for the Rest of Us.
RebelCapitalist.com - Financial Information for the Rest of Us.
Americans do not buy that
The voters, Americans, they know that whole "protectionist" crap is just that. That phrase, well, I don't know who they think they are affecting because it sure isn't your typical voter.
Comparative advantage?
We seem to do debt I mean financial innovation better than anything else (or anyone else). Change that and all sorts of things become possible. While we're at it, change what we mean by economic performance.