The Federal Reserve reported consumer credit outstanding as of the end of May. Great news. Consumers added $17.1 billion of new debt to their balance sheets and now owe a record $2.573 Trillion. Whatever happened to that deleveraging storyline being pushed by the MSM? It was a load of crap from the get go. Here is the link to the Fed report:
Here are my observations:
- It seems non-revolving credit for autos and student loans jumped $9.1 billion in one month. It seems 70% of this increase was directly from the Federal government, meaning YOU made the loans to subprime students and subprime auto buyers in West Philly. Based on my observations, they are leaning towards Cadillac Escalades with your money. When the student loan bubble and subprime auto loan bubble burst you’ll be on the hook – AGAIN.
- The really interesting data point was credit card debt surging by $8 billion to the highest level since 2010. This debt is 70% attributable to the Wall Street criminal cabal. Something doesn’t really add up. Gasoline prices were plunging in May. The consumer should have had more disposable income. But we know for a fact that retail sales sucked in May and June. So, why would credit card debt surge? Here is why:
- 1.2 million people have fallen off the 99 week unemployment rolls and are now trying to survive on their credit cards.
- The few jobs that have been added are part-time crap jobs with no benefits and people are using credit cards to try and make up the lost income.
- The 8 million people that have “voluntarily” left the workforce may have left too soon and are enjoying their leisure time on their credit cards.
We have entered a recession, food prices are rising, real wages are dropping, and job losses are mounting. Surging credit card, student loan, and auto loan debt at the outset of recession is surely a good sign. The Wall Street banks sure look smart having reduced their loan loss reserves for the last two years. No bad debt on the horizon – right Jaime?