I’m afraid we are getting ready to see the real recession that’s been hidden by credit cards and government assistance. Who will “save the day” this time ?
Thank you Peter for these GREAT insights, data, charts, etc. We are boomers who have a house that is paid for and no credit card debt. Savings for retirement holding strong. Hopefully our golden eggs will be enough for our golden years into retirement.
Only those completely separated from regular Americans can keep claiming for the past two years that stimi money, "pandemic savings," is running out. It has been years since checks were sent out and this "free" money (bribe) was not so generous to have lasted this long.
It has been annoying, irritating, to hear the disingenuous statement repeatedly on Fox Business tv channel even just yesterday.
Peter St Onge, I like to read your posts but you must know that Americans have no savings so there was never any savings to run out of. Inflation is impoverishing this country so cruelly through the insane trillions spent in the plandemic rescue bills, Bidenomics and the Fed historic rate increases. This has been war on regular folk, and it is amazing how this financial abuse added to the mental and physical tyranny for the past several years hasn't made the whole country alert and more proactive against the indignities of the mismanagement of everything and impoverishment of the majority.
The mega rich got more mega rich and the mid to poor got even poorer.
I was reading Ed Yardeni mention credit card debt is equivalent to only 6.3% of disposable income currently. And most is paid in full on a monthly basis.
I wonder if this credit card data that bearish analysts constantly site as evidence of a weak economy takes into account balances that are paid off each month? My retired elderly mother for example who is well off financially with no debt, puts everything she buys on her credit card to get the generous cash back rewards the credit card company offers. But she pays the balance in full every month. So she pays no % on this.
"In effect, the Fed's interest rate yo-yo is making America into a two-tier economy, where anybody lucky enough to own financial assets or even a house are sitting pretty, while the young and working class are wrecked. So Boomers are fine, everybody else is screwed." Pretty well sums it up. This past week in Jackson Hole confirmed the Fed will continue to turn the screws until something breaks. BRICS conference in South Africa gained new multinational alignments. Uniparty Congress still unwilling to follow regular order in budgeting. National debt and spending continues to be a ticking time bomb. Probably nothing that a "boots on the ground' war in Eurasia nor a "groundhog day" scamdemic can't handle.
If you look at mortgage defaults on a long term chart they are still at or near all time record lows as long as the data has been kept. Even lower than the lows in pre-GFC. I've been waiting for this greatly hyped and promised foreclosure boom for about 13 years now!!
-While the national delinquency rate edged up 9 basis points in July to 3.21%, it was down 12 basis points year over year and remains within 12 basis points of March’s *record* low
-Meanwhile, serious delinquencies (90+ days past due) continued to improve, falling to 468K – the lowest level seen since the pre-Great Financial Crisis housing market peak and down 161K (-26%) from July 2022
-Loans in active foreclosure fell to 220K – the fewest since just after the end of federal foreclosure moratoria – and remain down 63K (-22%) from February 2020, prior to the pandemic
-July’s 26.3K foreclosure starts were 4% below the average number of such actions over the preceding 12 months and remain 39% below pre-pandemic levels
-Foreclosure starts equated to 5.6% of 90+ day delinquencies – still more than three percentage points below pre-pandemic foreclosure referral rates – while July’s 6.1K foreclosure sales (completions) nationally were down 11% from June
-The number of delinquent properties, but not in foreclosure, is down 39,000 properties year-over-year, and the number of properties in the foreclosure process is down 4,000 properties year-over-year.
Don’t worry, I’m sure the Biden Administration will promise credit card debt forgiveness in the run up to the election… and the 18-25 yr olds will swallow it hook, line and sinker.
I might add that the banks are never going to allow the full $3.5 trillion of debt potential to be realized. As when the delinquency rates start heading above 3 to 5 percent, the banks will start reducing credit lines for everyone across the board. Since they started this mishigas, and will get ahead of it by cutting the consumer off. In fact, they already have ! ( side note: this may be back stopped once again by the federal government with QE, or the like, to allow the crash to happen when they are all safely out of the way of the run away freight train ) !
The American Consumer is About to Run out of Money
I’m afraid we are getting ready to see the real recession that’s been hidden by credit cards and government assistance. Who will “save the day” this time ?
Thank you Peter for these GREAT insights, data, charts, etc. We are boomers who have a house that is paid for and no credit card debt. Savings for retirement holding strong. Hopefully our golden eggs will be enough for our golden years into retirement.
Only those completely separated from regular Americans can keep claiming for the past two years that stimi money, "pandemic savings," is running out. It has been years since checks were sent out and this "free" money (bribe) was not so generous to have lasted this long.
It has been annoying, irritating, to hear the disingenuous statement repeatedly on Fox Business tv channel even just yesterday.
Peter St Onge, I like to read your posts but you must know that Americans have no savings so there was never any savings to run out of. Inflation is impoverishing this country so cruelly through the insane trillions spent in the plandemic rescue bills, Bidenomics and the Fed historic rate increases. This has been war on regular folk, and it is amazing how this financial abuse added to the mental and physical tyranny for the past several years hasn't made the whole country alert and more proactive against the indignities of the mismanagement of everything and impoverishment of the majority.
The mega rich got more mega rich and the mid to poor got even poorer.
I was reading Ed Yardeni mention credit card debt is equivalent to only 6.3% of disposable income currently. And most is paid in full on a monthly basis.
I wonder if this credit card data that bearish analysts constantly site as evidence of a weak economy takes into account balances that are paid off each month? My retired elderly mother for example who is well off financially with no debt, puts everything she buys on her credit card to get the generous cash back rewards the credit card company offers. But she pays the balance in full every month. So she pays no % on this.
Mortgage delinquencies are not soaring. They are at a 25 year low. You posted a chart from 3 months into the pandemic.
"In effect, the Fed's interest rate yo-yo is making America into a two-tier economy, where anybody lucky enough to own financial assets or even a house are sitting pretty, while the young and working class are wrecked. So Boomers are fine, everybody else is screwed." Pretty well sums it up. This past week in Jackson Hole confirmed the Fed will continue to turn the screws until something breaks. BRICS conference in South Africa gained new multinational alignments. Uniparty Congress still unwilling to follow regular order in budgeting. National debt and spending continues to be a ticking time bomb. Probably nothing that a "boots on the ground' war in Eurasia nor a "groundhog day" scamdemic can't handle.
If you look at mortgage defaults on a long term chart they are still at or near all time record lows as long as the data has been kept. Even lower than the lows in pre-GFC. I've been waiting for this greatly hyped and promised foreclosure boom for about 13 years now!!
-While the national delinquency rate edged up 9 basis points in July to 3.21%, it was down 12 basis points year over year and remains within 12 basis points of March’s *record* low
-Meanwhile, serious delinquencies (90+ days past due) continued to improve, falling to 468K – the lowest level seen since the pre-Great Financial Crisis housing market peak and down 161K (-26%) from July 2022
-Loans in active foreclosure fell to 220K – the fewest since just after the end of federal foreclosure moratoria – and remain down 63K (-22%) from February 2020, prior to the pandemic
-July’s 26.3K foreclosure starts were 4% below the average number of such actions over the preceding 12 months and remain 39% below pre-pandemic levels
-Foreclosure starts equated to 5.6% of 90+ day delinquencies – still more than three percentage points below pre-pandemic foreclosure referral rates – while July’s 6.1K foreclosure sales (completions) nationally were down 11% from June
-The number of delinquent properties, but not in foreclosure, is down 39,000 properties year-over-year, and the number of properties in the foreclosure process is down 4,000 properties year-over-year.
🎶Keep rollin', rollin', rollin' 🎶
Thank you for all of your work.
Don’t worry, I’m sure the Biden Administration will promise credit card debt forgiveness in the run up to the election… and the 18-25 yr olds will swallow it hook, line and sinker.
I might add that the banks are never going to allow the full $3.5 trillion of debt potential to be realized. As when the delinquency rates start heading above 3 to 5 percent, the banks will start reducing credit lines for everyone across the board. Since they started this mishigas, and will get ahead of it by cutting the consumer off. In fact, they already have ! ( side note: this may be back stopped once again by the federal government with QE, or the like, to allow the crash to happen when they are all safely out of the way of the run away freight train ) !
Thanks
It's quite simple:
Both free money and cheap money spigots have been turned off for the Consumer.
Inflation will prevent turning them back on.
Student Loans will need to be paid.
Solid analysis, though mortgages are not in trouble this time around.
It's the growth in delinquencies that is concerning. They're not in serious troubel - yet.