Consumer Borrowing Drops Record Amount

[charrison]

linkage

Keeping a watchful eye on their debt, consumers cut back on their borrowing in November by the largest amount on record, the Federal Reserve reported Friday.

Consumer credit dropped by $8.7 billion in November from the previous month, marking the largest over-the-month decrease since the Fed began keeping records in 1943. The cutback represented a 5 percent decline at a seasonally adjusted annual rate.

The last time consumers trimmed their borrowing was in November 2003.

Economists, surprised by the magnitude of the cutback, cited a number of possible reasons for the more cautious approach to borrowing.

 

[Engineer]

:thumbsup:

Now if the government would attempt the same....

 

[yllus]

Is this in effect a comment on spending trends for the Christmas season?

Granted I'm a poor university student to begin with, but as someone who traditionally never took part in exchanging presents I was shocked at how bloody expensive it is. WTF do people do, save up three or four months prior so they can blow it all by the 25th? From my perspective it seems a little out of control.

 

[Engineer]

Originally posted by: yllus
Is this in effect a comment on spending trends for the Christmas season?

Granted I'm a poor university student to begin with, but as someone who traditionally never took part in exchanging presents I was shocked at how bloody expensive it is. WTF do people do, save up three or four months prior so they can blow it all by the 25th? From my perspective it seems a little out of control.

You should visit the Hot Deals forum. You can start in January and end before December....and you can actually purchase nice gifts (at just the right time) for very little money. May even get paid to take a few home (after coupons, rebates, etc). My wife and I have done this for years now! 🙂

Oh, and for the original question, I wouldn't think that would mean anything to the Christmas shopping season. It was reported earlier that consumers typically slow down in November to wait for December sales for purchases. It may have been just a temporary lapse in spending in anticipation of the Black Friday sales (day after Thanksgiving) or clearance sales later.

 

[CADsortaGUY]

Originally posted by: Engineer

Originally posted by: yllus
Is this in effect a comment on spending trends for the Christmas season?

Granted I'm a poor university student to begin with, but as someone who traditionally never took part in exchanging presents I was shocked at how bloody expensive it is. WTF do people do, save up three or four months prior so they can blow it all by the 25th? From my perspective it seems a little out of control.

You should visit the Hot Deals forum. You can start in January and end before December....and you can actually purchase nice gifts (at just the right time) for very little money. May even get paid to take a few home (after coupons, rebates, etc). My wife and I have done this for years now! 🙂

Cheap-ass 😉 Shoulda known a PLC direct guy would do that! 😀

<- elbows Engineer in the ribs.

CsG

 

[Engineer]

Originally posted by: CADsortaGUY

Originally posted by: Engineer

Originally posted by: yllus
Is this in effect a comment on spending trends for the Christmas season?

Granted I'm a poor university student to begin with, but as someone who traditionally never took part in exchanging presents I was shocked at how bloody expensive it is. WTF do people do, save up three or four months prior so they can blow it all by the 25th? From my perspective it seems a little out of control.

You should visit the Hot Deals forum. You can start in January and end before December....and you can actually purchase nice gifts (at just the right time) for very little money. May even get paid to take a few home (after coupons, rebates, etc). My wife and I have done this for years now! 🙂

Cheap-ass 😉 Shoulda known a PLC direct guy would do that! 😀

<- elbows Engineer in the ribs.

CsG

Hey, what can I say. I'm not nearly has hardcore as some of those people at F@twallet or Bargain$hare. I've gotten paid to take quite a bit of stuff, but I've not made a living off of it....and I mean some of those people get paid big money to take the stuff and then sale it on e-bay for huge profits. 😀

<-- Me slaps CsG with a FREE wet trout! :Q

 

[SuperTool]

Housing bubble bursting can't be far behind 🙂 I can dream, can't I? 😉

 

[Engineer]

Originally posted by: SuperTool
Housing bubble bursting can't be far behind 🙂 I can dream, can't I? 😉

Actually, New Home sales fell 13% in November. (thread in here somewhere). The largest drop in a quite a while. Not a busting of a bubble (yet), but interesting.

Cheap mortage/Home Equity rates do fuel much money into the economy. As rates edge up, we'll see.

 

[SuperTool]

Originally posted by: Engineer

Originally posted by: SuperTool
Housing bubble bursting can't be far behind 🙂 I can dream, can't I? 😉

Actually, New Home sales fell 13% in November. (thread in here somewhere). The largest drop in a quite a while. Not a busting of a bubble (yet), but interesting.

Cheap mortage/Home Equity rates do fuel much money into the economy. As rates edge up, we'll see.

I think it's coming. I think it's gonna be dramatic here in CA. Could be wishful thinking, but high interest rates could be just what the doctor ordered.

 

[charrison]

Originally posted by: Engineer

Originally posted by: SuperTool
Housing bubble bursting can't be far behind 🙂 I can dream, can't I? 😉

Actually, New Home sales fell 13% in November. (thread in here somewhere). The largest drop in a quite a while. Not a busting of a bubble (yet), but interesting.

Cheap mortage/Home Equity rates do fuel much money into the economy. As rates edge up, we'll see.

But even with the 13% drop, there was still a considerable amount of building happening.

 

[SuperTool]

Originally posted by: charrison

Originally posted by: Engineer

Originally posted by: SuperTool
Housing bubble bursting can't be far behind 🙂 I can dream, can't I? 😉

Actually, New Home sales fell 13% in November. (thread in here somewhere). The largest drop in a quite a while. Not a busting of a bubble (yet), but interesting.

Cheap mortage/Home Equity rates do fuel much money into the economy. As rates edge up, we'll see.

But even with the 13% drop, there was still a considerable amount of building happening.

That's good. More supply, the better 🙂

 

[DealMonkey]

Originally posted by: SuperTool

Originally posted by: charrison

Originally posted by: Engineer

Originally posted by: SuperTool
Housing bubble bursting can't be far behind 🙂 I can dream, can't I? 😉

Actually, New Home sales fell 13% in November. (thread in here somewhere). The largest drop in a quite a while. Not a busting of a bubble (yet), but interesting.

Cheap mortage/Home Equity rates do fuel much money into the economy. As rates edge up, we'll see.

But even with the 13% drop, there was still a considerable amount of building happening.

That's good. More supply, the better 🙂

I take it you're currently looking to buy your 1st house? I can't imagine why else you would wish for such a thing? 😉 Personally, I'm keeping fingers crossed that the SoCal housing market stays relatively warm until at least May '05. That'll be the 2-year mark and time to sell, rake in the equity and trade up.

Although with an eye to a potential near-term drop in home values, I'm going to find something I can be happy in for a good, long time. I get the feeling I may be "stuck" there, potentially upside-down, for a number of years...