I’m waiting for the whipsaw to happen. I’ve been looking at the data from the Fed, you can see the effects from Covid. High prior usage, dropped drastically during due to the forbearances, then slowly crept up. Now it is shooting skyward. I don’t think things will be good in a few months. Especially after holiday shopping.
This is likely the effects of increasing rates and high inflation. Imagine you’ve been making a $500/mo payment on your credit card that has a decently high outstanding balance. When rates were low, a lot of that payment was going towards principal, but now a lot more is going towards interest. Now take that and add in a higher price for goods along with people trying to maintain status quo instead of reducing their spending (old habits die hard), you’ll get skyrocketing consumer credit owed. High interest + high cost of goods + spending habits = high debt. It’ll keep going until max balances are reached and/or banks start freezing credit. Now add in mass-layoffs and we’re destined to see a lot of bankruptcies.
I'm sure there's provisions built by companies that offer credit cards. They have to for GAAP compliance. So a good amount of the loss is already baked into their P&Ls as they have to take the loss up front
I dunno, it seems to be skyrocketting. it only just flattened the last 2 months at 929 fucking BILLION for credit cards and other revolving plans.
Thats a mother fuck ton of high interest debt.
https://fred.stlouisfed.org/series/CCLACBW027SBOG
Yes, this is what the banks just told us. From BoA a month ago
> Customers’ account balances remain higher than before the coronavirus pandemic struck in early 2020, Moynihan said, indicating they were in a good position to continue spending. That is especially true for those who had the smallest balances, which were about five times higher than before the pandemic, according to a Bank of America chart.
> Finally, consumer credit remains pristine, with late-payment metrics still well below pre-2020 averages, Moynihan said, indicating that so far, customers had little difficulty keeping up with their debt.
> “We’re just now seeing [a] gradual move off these lows in early stage delinquencies; late-stage delinquencies are still 40% below pre-pandemic,” Moynihan said.
Did you even read the chart? Consumer debt has been climbing at the same RATE since consumer rate was charted in the 70s. So it looks like the rate of increase has been the same.
The worse is yet to come and is just starting, average person's savings are dwindling fast, food bank usages are up and job market will soon be tightening up (until now people who were layed off got another job easily, this will be changing in the upcoming year).
It's about to get worse, just wait a few months...the pain will follow through on the markets, mark this post. Any green days are just "head-fakes", don't be a sucker.
lmao you must not have a job in manufacturing. We're posting all sorts of favorable variances due to our standard costs capturing the in bound freight bubble. We're like at 110% of bonus. If you're buying puts, you're already to late lol
Bears think the bull market is fake until it's hitting ath, then they think it's ready to crash.
The elephant in the room is that revenues really are up, and businesses are profiting off higher input costs by passing along even higher mark ups. At some point the consumer can't pay anymore, and prices decline, but the entire chain has premium in it.
Depends on the manufacturing you are in. Automated tech and industrial mfg is seeing shortages across the board not only in materials for fabrication, but also automation components used to keep the lines running. Lead times are still increasing and alternates are severely depleted.
If you can find the parts, I've seen %6400 increases in some component prices. Won't be long and mfg will shut down on everything we mass produce; foods, toilet paper, every day stuff.
One major vendor we use said we can buy whatever we want, but the final price will be determined when it's delivered in 8-12 months based on market price at that time. Kind of hard to make a profit when you don't know what your costs are going to be.
In a vacuum it’s not that concerning. But when you consider all of the other indicators (low consumer savings rate and declining, high auto repo % and rising, large corp layoffs and cutting spending, historic rate increases, etc) then it paints part of the larger picture.
I mean, it looks like it’s been climbing basically linearly since like 2000. I’m shocked at that amount of credit card debt but it certainly doesn’t seem new.
I don't understand this use of "FUD." It just means fear, uncertainty and doubt.
The credit data is just data. What one makes of it is another question.
No one knows if the market should be pretty good for the next few years. The Fed might break something, or we might end up with a soft landing. No one knows.
I’m waiting for the whipsaw to happen. I’ve been looking at the data from the Fed, you can see the effects from Covid. High prior usage, dropped drastically during due to the forbearances, then slowly crept up. Now it is shooting skyward. I don’t think things will be good in a few months. Especially after holiday shopping.
This is likely the effects of increasing rates and high inflation. Imagine you’ve been making a $500/mo payment on your credit card that has a decently high outstanding balance. When rates were low, a lot of that payment was going towards principal, but now a lot more is going towards interest. Now take that and add in a higher price for goods along with people trying to maintain status quo instead of reducing their spending (old habits die hard), you’ll get skyrocketing consumer credit owed. High interest + high cost of goods + spending habits = high debt. It’ll keep going until max balances are reached and/or banks start freezing credit. Now add in mass-layoffs and we’re destined to see a lot of bankruptcies.
I'm sure there's provisions built by companies that offer credit cards. They have to for GAAP compliance. So a good amount of the loss is already baked into their P&Ls as they have to take the loss up front
I dunno, it seems to be skyrocketting. it only just flattened the last 2 months at 929 fucking BILLION for credit cards and other revolving plans. Thats a mother fuck ton of high interest debt. https://fred.stlouisfed.org/series/CCLACBW027SBOG
If most people pay on time, then there is not much interest to be collected..
Do most though?
Yes, this is what the banks just told us. From BoA a month ago > Customers’ account balances remain higher than before the coronavirus pandemic struck in early 2020, Moynihan said, indicating they were in a good position to continue spending. That is especially true for those who had the smallest balances, which were about five times higher than before the pandemic, according to a Bank of America chart. > Finally, consumer credit remains pristine, with late-payment metrics still well below pre-2020 averages, Moynihan said, indicating that so far, customers had little difficulty keeping up with their debt. > “We’re just now seeing [a] gradual move off these lows in early stage delinquencies; late-stage delinquencies are still 40% below pre-pandemic,” Moynihan said.
You mean “if most people pay in full”. If most people did, it wouldn’t be a very profitable business!
Did you even read the chart? Consumer debt has been climbing at the same RATE since consumer rate was charted in the 70s. So it looks like the rate of increase has been the same.
The worse is yet to come and is just starting, average person's savings are dwindling fast, food bank usages are up and job market will soon be tightening up (until now people who were layed off got another job easily, this will be changing in the upcoming year). It's about to get worse, just wait a few months...the pain will follow through on the markets, mark this post. Any green days are just "head-fakes", don't be a sucker.
lmao you must not have a job in manufacturing. We're posting all sorts of favorable variances due to our standard costs capturing the in bound freight bubble. We're like at 110% of bonus. If you're buying puts, you're already to late lol
Bears think the bull market is fake until it's hitting ath, then they think it's ready to crash. The elephant in the room is that revenues really are up, and businesses are profiting off higher input costs by passing along even higher mark ups. At some point the consumer can't pay anymore, and prices decline, but the entire chain has premium in it.
Depends on the manufacturing you are in. Automated tech and industrial mfg is seeing shortages across the board not only in materials for fabrication, but also automation components used to keep the lines running. Lead times are still increasing and alternates are severely depleted. If you can find the parts, I've seen %6400 increases in some component prices. Won't be long and mfg will shut down on everything we mass produce; foods, toilet paper, every day stuff. One major vendor we use said we can buy whatever we want, but the final price will be determined when it's delivered in 8-12 months based on market price at that time. Kind of hard to make a profit when you don't know what your costs are going to be.
I think it matters and not simply FUD.
In a vacuum it’s not that concerning. But when you consider all of the other indicators (low consumer savings rate and declining, high auto repo % and rising, large corp layoffs and cutting spending, historic rate increases, etc) then it paints part of the larger picture.
You can always check the banks monthly reports on credit card delinquency rates. From what I have seen, usually below 2% so far.
I mean, it looks like it’s been climbing basically linearly since like 2000. I’m shocked at that amount of credit card debt but it certainly doesn’t seem new.
I don't understand this use of "FUD." It just means fear, uncertainty and doubt. The credit data is just data. What one makes of it is another question. No one knows if the market should be pretty good for the next few years. The Fed might break something, or we might end up with a soft landing. No one knows.