Depression movies coming to a theatre near you:
It's A Wonderful Life II
Mr. Smith Goes to Washington II
The Phantom President
Gold Diggers of 2009
Flying Down to Paraguay
Hallelujah, I'm a Bum
The Thin Man
My Man Paulson
Reckless
It's A Wonderful Life II
Mr. Smith Goes to Washington II
The Phantom President
Gold Diggers of 2009
Flying Down to Paraguay
Hallelujah, I'm a Bum
The Thin Man
My Man Paulson
Reckless
HendrixFan
Diamond Member
- Oct 18, 2001
- 4,646
- 0
- 71
http://www.creditlawnetwork.co...es-1-trillion-dollars/
"Just 12 short years ago in 1996, Americans were only in 500 billion dollars worth of credit card debt. Now, only 12 years later, we have doubled that number with an additional 500 billion dollars in debt."
This was back in June, I know I read articles at the start of November talking about the explosion in Aug, Sep, and Oct in credit card debt, so that number is getting worse. That is why there is an industry wide choppage in existing credit lines, and a drastic reduction in new credit extended.
Now most Americans aren't in bad debt, but the amount of bad debt is increasing, spiking here these past few months.
Engineer
Elite Member
- Oct 9, 1999
- 39,230
- 701
- 126
LOL. Just saw on "Lou Dobbs" that the country's mass transit's played with billions of tax payer dollars and tax loopholes from the 90's through mid 2000. The main player was AIG. Now the mass transits need to come up with 100's of billions of dollars because of the playing and will go under without a bailout. LOL ^ 100.
HendrixFan
Diamond Member
- Oct 18, 2001
- 4,646
- 0
- 71
Some more numbers on bad debt:
The average American with a credit file is responsible for $16,635 in debt, excluding mortages, according to Experian. (Source: U.S. News and World Report, "The End of Credit Card Consumerism," August 2008)
The average credit card indebted young adult household now spends nearly 24 percent of its income on debt payments, four percentage points more, on average, than young adults did in 1992. (Source: "Generation Broke: Growth of Debt Among Young Americans")
Total U.S. consumer debt (which includes credit-card debt and non-credit-card debt but not mortgage debt) reached $2.55 trillion at the end of 2007, up from $2.42 trillion at the end of 2006. (Source: The Nilson Report)
Total U.S. consumer revolving debt reached $962 billion in May 2008, up from $879 billion at the end of 2006. About 98 percent of that debt was credit card debt. (Source: Federal Reserve)
The majority of U.S. households have no credit card debt. (Source: Federal Reserve Board survey of consumer finances, 2004)
"In September of 2008, the Federal Reserve released its latest set of statistics on consumer credit and debt. That report tells us that as of June 2008, Americans held 2.6 trillion dollars in consumer debt. This is a pretty large number considering it does not include loans secured by real estate - such as a mortgage.
Now to some 2.6 trillion dollars sound like a lot of money, but others might dismiss this number by thinking that many Americans make a lot of money and that much debt is really not a big deal. Let's look at this number relative to disposable income - which is the amount left over from your paycheck after you've paid all your monthly bills.
Back in the 1980's consumer debt stood at roughly 65% of disposable income. In the 1990, consumer debt stood at roughly 85% of disposable income. Today, this kind of debt stands at 110% of disposable income."
The average American with a credit file is responsible for $16,635 in debt, excluding mortages, according to Experian. (Source: U.S. News and World Report, "The End of Credit Card Consumerism," August 2008)
The average credit card indebted young adult household now spends nearly 24 percent of its income on debt payments, four percentage points more, on average, than young adults did in 1992. (Source: "Generation Broke: Growth of Debt Among Young Americans")
Total U.S. consumer debt (which includes credit-card debt and non-credit-card debt but not mortgage debt) reached $2.55 trillion at the end of 2007, up from $2.42 trillion at the end of 2006. (Source: The Nilson Report)
Total U.S. consumer revolving debt reached $962 billion in May 2008, up from $879 billion at the end of 2006. About 98 percent of that debt was credit card debt. (Source: Federal Reserve)
The majority of U.S. households have no credit card debt. (Source: Federal Reserve Board survey of consumer finances, 2004)
"In September of 2008, the Federal Reserve released its latest set of statistics on consumer credit and debt. That report tells us that as of June 2008, Americans held 2.6 trillion dollars in consumer debt. This is a pretty large number considering it does not include loans secured by real estate - such as a mortgage.
Now to some 2.6 trillion dollars sound like a lot of money, but others might dismiss this number by thinking that many Americans make a lot of money and that much debt is really not a big deal. Let's look at this number relative to disposable income - which is the amount left over from your paycheck after you've paid all your monthly bills.
Back in the 1980's consumer debt stood at roughly 65% of disposable income. In the 1990, consumer debt stood at roughly 85% of disposable income. Today, this kind of debt stands at 110% of disposable income."
StageLeft
No Lifer
- Sep 29, 2000
- 70,150
- 5
- 0
Yep, HendrixFan, it's time for a reckoning.
Thank God I read The Millionaire Next Door back in 2000, the same year I got my first job. I believe it has been one of the most important books I've come across and is the reason I'm merely worried about the economy instead of absolutely panicked, because if a person has a whack of debt and knows that losing their job will mean defaulting within a month or so, they should definitely be panicked.
Thank God I read The Millionaire Next Door back in 2000, the same year I got my first job. I believe it has been one of the most important books I've come across and is the reason I'm merely worried about the economy instead of absolutely panicked, because if a person has a whack of debt and knows that losing their job will mean defaulting within a month or so, they should definitely be panicked.
Thump553
Lifer
- Jun 2, 2000
- 12,837
- 2,620
- 136
Those consumer debt figures make me sick. I'm in my mid-50s, paid myself through college and graduate degree and have put 2.5 kids through college. I doubt in my entire life my nonmortgage debt ever approached even 20% of my disposable income, outside of a brief early period when I had a car loan. I've also survived multiple years of greatly reduced income.
There were times when my mortgage payment approached 50% of my disposable income (for several years) but with some budgeting and good luck, it was doable.
I guess it all depends on your priorities. No Lexus in my driveway-new or used.
There were times when my mortgage payment approached 50% of my disposable income (for several years) but with some budgeting and good luck, it was doable.
I guess it all depends on your priorities. No Lexus in my driveway-new or used.
First
Lifer
- Jun 3, 2002
- 10,518
- 271
- 136
Bad consumer debt is definitely increasing, but I wouldn't say it's the cause of the current downturn. Poor risk management by firms who buy and sell securities, mostly banks floating and then chopping up what are in actuality high-risk securities and selling them to unsuspecting firms. Getting them AAA rated despite being worthless paper (ultimately). CDS being highly unregulated and out of control. These are things you can point to. Consumer debt not so much, which has been increasing significantly for decades. We may see more boom and bust though, that instability could be a by-product of too much leverage. We'll see if that's the case.
HendrixFan
Diamond Member
- Oct 18, 2001
- 4,646
- 0
- 71
I don't think its the cause of this downturn either. More fuel on the fire though.
My concerns in regard to consumer debt are twofold. If consumer debt was growing so rapidly, then alot of the "growth" we have had still has yet to be paid for. If and when consumers start to pay down their debt to more manageable levels, it will cause demand for goods and services to drop.
I don't think we have seen, nor can we accurately predict, what all this consumer and government debt will do during this downturn. Just how much worse will things be just from debt alone?
First
Lifer
- Jun 3, 2002
- 10,518
- 271
- 136
Very difficult to predict, I agree. In terms of consumer spending, however, historically younger Americans have always been in far more debt than older Americans. That gap has, as you aptly pointed out, increased significantly (for a while). However, I would argue that a balancing effect is more likely to take place; that is, as younger citizens pay off debt (and a little spend less) older Americans will retire and spend more (i.e. their retirement portfolios/savings). We have a huge Baby Boom population retiring within the next decade or so, and so I feel it will at least balance itself out.
I agree generally that better, smarter leverage is needed in increasing quantity. As always, it just depends on how reliable the person's employment is. And in the case of small business, financing cannot be underscored enough, it's the lifeblood of the industry pure and simple. So we certainly have to make loans available in increasing quantity, but not at the expense of jumping the shark by giving $100K loans to minimum wage earners with credit scores of 500 and no assets.
StageLeft
No Lifer
- Sep 29, 2000
- 70,150
- 5
- 0
Baby boomers are woefully underprepared, as a whole, for retirement. More of them will see a marked decrease in purchasing power and quality of life than an increase from those just waiting to start buying new sets of golf clubs the day they retire.A staggering half of households headed by 50-to-59-year-olds have $10,000 or less in their 401(k) accounts
So You Think You Can Borrow
Are You Smarter Than A Big 3 Exec
Joe Penniless
Let's Make a Bad Deal
Last Business Standing
My Life on the Blacklist
American Midol
Fear, Uncertainty and Doubt Factor
First
Lifer
- Jun 3, 2002
- 10,518
- 271
- 136
Why are you the least bit surprised, 401K's have a tax shelter limit of 15,500, at that point there isn't a ton of benefit versus simply diversifying your portfolio outside a 401K. Besides, we're in a horrid recession. Just 13 months ago this was nowhere near the case, so I'm not sure what your point is. You can make anything look bad in a recession and great in a boom. The average numbers say Baby Boomers are going to spend a lot more than they are now.
And most retiring Americans don't keep the bulk of their savings in 401K accounts to begin with. Homes are by far their #1 asset, which you can do a variety of things with (refinance, reverse mortgage, etc.) to consume.
EDIT: Btw, I'd like to see the study but your link is completely devoid of sources, FYI.
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