US Household Debt Climbs by Most Since 2007

The New York Fed has published a report that don't look so good for the average American.

Debt is WAY up mostly due to mortgage debt (even though new mortgages dropped), auto debt and student loan debt.

They say total consumer debt stands at .... $11.5 Trillion as of December 31st.

Add that to the government national debt of over $17 Trillion and maybe we see why everybody is running around like chickens with their heads cut off.

At least foreclosures are down and at a low since 2005 and mortgage delinquencies are down a little.

And good news for education; student loan debt is way up.

If this gets any worse, who will keep paying the government benefits?

What's wrong with this picture?

Aggregate consumer debt increased in the fourth quarter by $241 billion, the largest quarter to quarter increase seen since the third quarter of 2007. As of December 31, 2013, total consumer indebtedness was $11. 52 trillion, up by 2.1% from its level in the third quarter of 2013. The four quarters ending on December 31, 2013 were the first since late 2008 to register an increase ($180 billion or 1.6%) in total debt outstanding. Nonetheless, overall consumer debt remains 9.1 % below its 2008Q3 peak of $12.68 trillion.

Mortgages, the largest component of household debt, increased 1.9% during the fourth quarter of 2013. Mortgage balances shown on consumer credit reports stand at $8.05 trillion, up by $152 billion from their level in the third quarter. Furthermore, calendar year 2013 saw a net increase of $16 billion in mortgage balances, ending the four year streak of year over year declines. Balances on home equity lines of credit (HELOC) dropped by $6 billion (1.1%) and now stand at $529 billion. Non-housing debt balances increased by 3.3 %, with gains of $ 18 billion in auto loan balances, $53 billion in student loan balances, and $11 billion in credit card balances.

Delinquency rates improved for most loan types in 2013 Q4. As of December 31, 7.1% of outstanding debt was in some stage of delinquency, compared with 7.4% in 2013 Q3. About $820 billion of debt is delinquent, with $580 billion seriously delinquent (at least 90 days late or “severely derogatory”).

read the article for some more confusion along with illegible charts and graphs


US Household Debt Climbs by Most Since 2007


New York Fed quarterly report on Household Debt and Credit

reply to post by xuenchen


Just another Confirmation that the U.S. Goverment is Waging a War on the Middleclass . Mass Debt Slavery as their Final Goal for the Marxist Nanny State .

reply to post by xuenchen

Don't buy into that stat on foreclosures being down. I have reason to suspect it's just the banks backing off for the good of the country's credit rating. I know a couple of folks whose houses were removed from foreclosure with no given reason. The banks just wanted them to start 'paying what they could' to avoid the label. Doesn't make what they owe go away, nor does it mean they'll be able to make full payments in the future. The banks are just biding their time.

Zanti Misfit
reply to post by xuenchen

 

Just another Confirmation that the U.S. Goverment is Waging a War on the Middleclass . Mass Debt Slavery as their Final Goal for the Marxist Nanny State .

edit on 18-2-2014 by Zanti Misfit because: (no reason given)

I don't think you need a "final goal" when your pulling in this much cake. The "goal" is being squeezed for all it's worth right now. Don't believe these goofs could orchestrate ANYTHING stable, not even a Marxist nanny state.

Snarl
reply to post by xuenchen

 

Don't buy into that stat on foreclosures being down.

I think they have off the record foreclosures.
In my neck of the woods I know of 5 houses that have been abandoned by the owners 3-6 years ago and to this day they are not listed on the market. No MLS , no signs and the houses are not being taken care of despite they were once in great shape.

Me think they are cooking the books and are controlling the market by not over saturating it with the real inventory. They are keeping those properties of the books to not flood the market and drive prices even lower. I'm thinking eventually the money to hide those properties will run out and the real crash will come.

Zanti Misfit
reply to post by xuenchen

 

Just another Confirmation that the U.S. Goverment is Waging a War on the Middleclass . Mass Debt Slavery as their Final Goal for the Marxist Nanny State .

edit on 18-2-2014 by Zanti Misfit because: (no reason given)

I don't understand your statement here. I'm confused because I don't know of a single person the government forced to go into debt by taking a mortgage, buying a car or limiting-out a credit card. Debt is a behavioral choice. If you want to look at the source of the debt problems, look to the person who signed on the dotted line for the credit. Heaven knows, I can blame the government for a lot of things but my debt problems are my fault. (I actually don't have any debt, thus no debt problems but I got my first mortgage and credit cards during the Jimmy Carter administration---learned my lessons.)
Are some people duped by the people loaning them the money? I'm sure there are some cases of that, but overall, it's a case of "I want it and I want now..." rather than some government plot to make us slaves to the bankers. I've heard all the whining, some of it by family members, about how the bankers are just a pack of rascals preying on poor folks. But each and every time, that "poor" guy went into that bank asking for the money and signed on the dotted line. Most of the time, that "poor" guy got told by one or two bankers and possibly some older, wiser family members that he didn't need to borrow any more money. But he persisted until he found someone to finance that vehicle that is worth (on paper) more than his home.

On the other hand, I wouldn't be at all surprised to see the next quarter reflect the same trend. As long as these storms keep hitting, people are going to be facing unusually high heating bills. There were a lot of households in our county that needed a lot of help with heating bills, a lot of people who can usually pay their $200 bill got one that was double that or more this past month. This comes on top of the added health insurance costs incurred by the recent debacle. Since that plague was visited on us there are far more families in the "living from paycheck to paycheck" category. I've seen rumblings that a lot of school systems are canceling their Spring Break. I've also heard a lot of folks who won't be traveling on Spring Break because they'll still be paying off their heating costs for two/three exceptionally cold months. That is bound to impact the economy in the coastal areas.

You know what these dummies running around this country need to stop drinking fluoride.

Drink more water your dehydrated. Gets some good green fresh greens and fruits in your system. Go for a run and get your adrenaline pumping and get that mind and body working again.

diggindirt

Zanti Misfit
reply to post by xuenchen

 

Just another Confirmation that the U.S. Goverment is Waging a War on the Middleclass . Mass Debt Slavery as their Final Goal for the Marxist Nanny State .

edit on 18-2-2014 by Zanti Misfit because: (no reason given)

I don't understand your statement here. I'm confused because I don't know of a single person the government forced to go into debt by taking a mortgage, buying a car or limiting-out a credit card. Debt is a behavioral choice. If you want to look at the source of the debt problems, look to the person who signed on the dotted line for the credit. Heaven knows, I can blame the government for a lot of things but my debt problems are my fault. ….

While I agree with you that the OP tends to shout Marxist at every news story he reads… The debt incurred by Americans in the last 50 years is systematic. It could only exist in the regulatory conditions created by government and big business lobbying. So no, it's not entirely the person's fault who took the loan.

It's kinda like saying it's a slaves fault they had give up their food for them books theys wanted to read. Student loan debt is a good example of how backwards the credit system has become…

blogs.marketwatch.com...

Part of the problem is asking people to take BS courses for a BA to do a job that can be done by a adept 16 year old. Or pre-apprenticeship programs, or no apprenticeship programs. Literally hundreds of factors that have evolved over time…

That's just one example.

Another one would be artificially inflating assets and then offering up bunk credit to everyone who asked, telling them the market would stay like that a long time (advising them to take the loan) meanwhile colluding behind their backs, leveraging those asset backed securities knowing full well they would tank after the jig is up, and then asking for a bailout meanwhile foreclosing on the bum loans.

Hmm… Not like that would ever happen though…

reply to post by boncho


While I agree wholeheartedly with most of what you say, I simply can't come to the same conclusion in regard to who is responsible for signing on the line and accepting responsibility for the debt. How did the government entice them into buying that house or car or plasma-screen?
I'll freely grant you that the mega-multinational corporate banking cartel has written and re-written most of the banking laws for the past century. But they haven't made borrowing money a requirement for life in the US. If there is blame to brushed on with a wide brush, I would wield mine at the media, not government. Point to ad agencies and I'll say they played their part in making the use of credit quite appealing.
Student loans---one of the biggest scams I've ever encountered. I'm ever thankful that our immediate family members have been able to get through college without loans. It can still be done if you are lucky enough to have a support system and are willing to work very hard at it. The ones who have been willing to do that are now doing well. The ones who took the easier way, signing huge loans, are now struggling in most cases. They're looking at living like grad students for the next 15 years to pay back loans for 4 years. How crazy is that?

reply to post by diggindirt

While I agree wholeheartedly with most of what you say, I simply can't come to the same conclusion in regard to who is responsible for signing on the line and accepting responsibility for the debt. How did the government entice them into buying that house or car or plasma-screen?
I'll freely grant you that the mega-multinational corporate banking cartel has written and re-written most of the banking laws for the past century. But they haven't made borrowing money a requirement for life in the US. If there is blame to brushed on with a wide brush, I would wield mine at the media, not government. Point to ad agencies and I'll say they played their part in making the use of credit quite appealing.

While I appreciate your opinion. I have to still highlight the fact that these lendings schemes and the inflation of the money supply can be at least moderately blamed on government and business influence.

One can argue that without everything enacted/repealed, the country may have seen different woes. But that's not the same, so it's not a detraction to the point.

Government housing policies, over-regulation, failed regulation and deregulation have all been claimed as causes of the crisis, along with many others. While the modern financial system evolved, regulation did not keep pace and became mismatched with the risks building in the economy. The Financial Crisis Inquiry Commission (FCIC) tasked with investigating the causes of the crisis reported in January 2011 that: "We had a 21st-century financial system with 19th-century safeguards."[1]
Increasing home ownership has been the goal of several presidents including Roosevelt, Reagan, Clinton and George W. Bush.[2] However, the FCIC wrote that Fannie Mae and Freddie Mac, government affordable housing policies, and the Community Reinvestment Act were not primary causes of the crisis.[1][3]
Failure to regulate the non-depository banking system (also called the shadow banking system) has also been blamed.[1][4] The non-depository system grew to exceed the size of the regulated depository banking system,[5] but the investment banks, insurers, hedge funds, and money market funds were not subject to the same regulations. Many of these institutions suffered the equivalent of a bank run,[6] with the notable collapses of Lehman Brothers and AIG during September 2008 precipitating a financial crisis and subsequent recession.[7]
The government also repealed or implemented several laws that limited the regulation of the banking industry, such as the repeal of the Glass-Steagall Act and implementation of the Commodity Futures Modernization Act of 2000. The former allowed depository and investment banks to merge while the latter limited the regulation of financial derivatives.

en.wikipedia.org...

What we have is complete lack of responsibility and even acknowledging past events so long as it indicts government/banks. Instead the blame is pushed on to people taking loans. Well, people take loans today because the majority cannot make a purchase without them. Which suggests a major problem.

I hold 88% of the worlds wealth. I produce all the goods you can buy. You have to buy from me. You don't have enough so I'll give you a loan. By the way, keep paying me interest on that loan until I go up to 89%. Thanks.

Capitalism in its earliest form was actually bred out of fighting this kind of servitude.

If the banks new the loans were crap, and they were manipulating the market, it's fraud. Simple as that. If I lend you something that has a value, but my actions bring that value down to 20%, only so I can take back the asset because your credit is no longer sufficient, it's fraud. It's credit under false pretences.

I do hear what you are saying, people trying to live beyond their means. But I believe that is a larger symptom of the system, rather than the people living under it.

reply to post by boncho


As hard as I think about it, I can't make the connection...yes, I know that the banksters were frauds in many cases. But what I've witnessed in my own family and friends tells me that the problems come from "Want-itis" as in "I want that gizmo, house, car---never mind that I don't have the resources to purchase it." It all boils down to self-discipline. Of course, the loan sharks will loan money but they don't go out and round up people and hold a gun to their head until they sign on the dotted line. Blaming someone else for one's own inability to make good financial decisions is just whining to the wind, especially when one learns nothing from past mistakes.
Yes, I can see that people were lulled into the "enjoy now, pay later" mentality exhibited by the government but when the chips are down, it is the person who took the loan who is responsible for the action---not the banker or the government.
We had family members who were house shopping in '08. They were not prepared to buy a house, had almost no down payment but suddenly decided that they needed a tax deduction. They came to us to ask advice. We advised them to wait, find a livable, affordable apartment, save more for a down-payment while paying rent and wait for the housing real estate bubble to burst. We pointed out that paying a bank $10k in interest to get a $3k tax deduction just didn't make sense. But then, they talked to a banker and before you could say "this is the house that jack built" they were the proud owners of a house and had paid about $150k more than it was worth. It was true that at the time they could make the payments if both continued to be employed full time. Then came the crash, the value of the house came tumbling down and a baby was added to the household.... Then the whining started....couldn't re-finance the house because they were upside down on it. Now, had they been willing to reduce their standard of living and take some drastic financial cuts in the form of cutting off the $100/month cable tv, fire the housekeeper, and cut back on vacations, they could have made the house payments. But they didn't, saying that they "deserved" better, after all they had put a lot of time into college and felt they shouldn't have to live like "poor" people. So they kept borrowing money....and began drowning their sorrows with alcohol---blaming everyone but themselves for their mistakes. Now they are separated and both parties are living way below their "standard" in crummy apartments, working extra shifts just to try and get their lives sorted out. Further, they look at us and tell us that we've never "understood" because we've never been in this situation. It's perfectly true that we never (after the kids came along) lived beyond our means, never bought a house that was overvalued just so we would have a tax deduction...and they know perfectly well that we never had any luxuries during the years we were raising kids and saving to get them through school. But for some strange reason, they seem to have the idea that they are really special and "someone" should step up and wipe out their debt because ....well, because it's too hard to pay for the foolish mistakes of youth. They are not fresh out of college, they are in their 40s, they were babies during the Carter era when we were struggling so of course, they don't remember or weren't aware of our financial struggles and apparently, because we didn't spend any time bemoaning our plight, they don't believe that it happened.
This is just one example of many I could cite. I can't cite a single one that involves a government agent or banker forcing someone to take a loan. As I stated earlier, I have a lot of criticism to offer the government, but the I can't see that it is the fault of the government that foolish people make foolish choices---other than the foolish people following the lead of the foolish government.

reply to post by diggindirt


Valid points. Although I think we are looking at the issue from two different standpoints, I don't really want to continue in opposite directions.

So I will leave it at that for the readers.

Cheers.