Consumer Bankruptcy Filings Hit 4 Year High 28 comments
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The facts as reported by the American Bankruptcy Institute: consumer bankruptcy filings reached 126,434 in July, a 34.3% increase year over year, and an 8.7% increase sequentially (116,365 in June). July's number is the highest monthly bankruptcy total since the October 2005 bankruptcy reform aka the Bankruptcy Abuse Prevention and Consumer Protection Act.
Today's bankruptcy filing number reflects the sustained and growing financial stress on U.S. households," said ABI Executive Director Samuel J. Gerdano. "Rising unemployment on top of high pre-existing debt burdens is a formula for higher bankruptcies through the end of this year.
In short, the main driver of US GDP, the consumer, has yet to experience any of the fringe benefits that have driven the S&P up by 50% in the last 4 months. Un-recasted unemployment numbers are in line with an almost straight line decline (still) while consumer bankruptcies continue accelerating. But why should this matter - the US is now at a point where inventory pick up and continued government flows into the economy will singlehandedly propel America as the spearhead of efficient capitalism well into the 22nd century. The only question is whether historians will use a "quadr" or "quint" prefix to the -illion when they describe U.S. indebtedness on December 31, 2099.
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> I think historians will use a 'mo' prefix to the -ron used to describe
> you.
>
> Relative public debt to most economic indicators are at higher levels
> but within normal ranges. And the consumer has seen benefits of
> a 50% increase in the SPX - spell it with me f-e-e-d-b-a-c-k...c-y-...
> Unemployment is l-a-g-g-i-n-g.
I would have to ask:
How Would You Define "Normal" When So Many "Metrics" Have Changed. ("Mark To Myth" and so many other "Acronyms" Created By Government Within The Last Year Pertaining To "Saving The Economy"?)
In My Opinion - Employment is a "Factor" that is indicative of "The System". Refer To Phase All You Want. The Greater The "Unemployment", The Greater The Effect On Prosperity And Social Discord. It is "Magnitude - Not Phase" That Should Be Considered "Dangerous".
Homeless And Hungry Do Not Make Compliant Citizens.
Please, Personal Attacks Add Nothing To The Discourse And Add Nothing To Possible Solution.
The Only Way To "Fix Something" That Is Broken Is To Understand The Mechanisms By Which It Operates.
> >>Wed Jul 15, 5:26 pm ET
> NEW YORK – Two major credit card providers reported more improvements
> in delinquency rates in June on Wednesday, an encouraging sign that
> borrowers are not in as bad shape as many had feared.
>
> American Express Co. said in a regulatory filing that accounts at
> least 30 days past due shrunk to 4.4 percent of total loans during
> the month ended June 30, after falling to 4.7 percent in May and
> 4.9 percent in April.
>
> Capital One Financial Corp., a major credit card issuer based in
> McLean, Va., said its delinquency rate among U.S. cards improved
> for a fourth straight month, falling to 4.77 percent from 4.9 percent
> in May.<<
>
>
> If you look at the wrong data, you draw the wrong conclusions. Defaults
> are the end-stage events of credit failure and reflect the culmination
> of past events, not the current trend. Delinquency rates, on the
> other hand, indicate how debtors are performing now.
There is a "60 day and a 90 day" metric as well. Did You Consider These In Your "Conclusion"?
"If you look at the wrong data, you draw the wrong conclusions." - Tack
Very True Statement. Also True => One Can Come To ANY Conclusion If One "Limits The Data" To Only That Which Supports The Desired Paradigm.
The More You Know The Less Certain You Will Be.
The World Is Not Black And White - It Is The Interplay Or Gray.
As for the level of public debt, I've seen discussions on this site explaining how it can be made to look not so bad through certain lenses, but that these don't include things like unfunded liabilities for Social Security, nor as-yet unactivated backstop / guarantees for trillions of sure-to-default "agency" debt (Fannie Mae etc.), nor the Fed's liabilities. (I may have the details wrong.)
the fact is, america can not live without credit and deleveraging is not an option as per helicopter ben.
On Aug 10 04:43 PM PainfullyAware wrote:
> This Metric Will "Impress" In The Months To Come.
>
> The wave may get so big that it forces banks to actually "Account
> Default" instead of "Stalling". Could be the "Snowflake That Causes
> The Avalanche".
>
> Bankruptcy and Credit Card Default Rates are the "Tipping Point"
> foreshadowing "Events" that are much more difficult to "Paper Over".
As the liabilities go *POOF* so go the equity and asset values. Accounting 101. Keep in mind, this time it's global in scale.
Long: put options on Sept TLT
I'm waiting for a clear signal to short the SPY
Do these people have jobs to generate cash flow?
And this one for the guy with the moron comment. So if I lose 50% of my wealth and then gain 50% I break even?
Mmmmm, could there be a correlation?
Nah, a bank firing paying customers is surely the recipe for success.
It better be, because it is happening in every town in this country.
On Aug 10 04:50 PM CautiousInvestor wrote:
> JP Morgan reported today there credit card business would not be
> proftiable this year or next and that in the coming quarters the
> charge-off rate would hit 10%.
>
> The stress test adverse scenario was 18% to 20% charge-offs over
> a two year period or 9% to 10% annually. Welcome to the adverse recovery.
Those small businesses used to employ people.
Wonder if the laid off and not working are making their 40% interest rate payments still?
On Aug 10 10:11 PM Roger Knights wrote:
> Tack: I've read that certain credit card companies have been proactive
> in clamping down on credit lines and getting risky accounts to settle.
> American Express even offered a premium of some sort a few months
> ago to card holders who would settle and terminate their accounts.
> So it's quite possible these two companies aren't representative.
> Certainly JPM isn't doing as well as they are in this area.
>
> As for the level of public debt, I've seen discussions on this site
> explaining how it can be made to look not so bad through certain
> lenses, but that these don't include things like unfunded liabilities
> for Social Security, nor as-yet unactivated backstop / guarantees
> for trillions of sure-to-default "agency" debt (Fannie Mae etc.),
> nor the Fed's liabilities. (I may have the details wrong.)
On Aug 10 05:21 PM Jack FghtClb wrote:
> I think historians will use a 'mo' prefix to the -ron used to describe
> you.
>
> Relative public debt to most economic indicators are at higher levels
> but within normal ranges. And the consumer has seen benefits of
> a 50% increase in the SPX - spell it with me f-e-e-d-b-a-c-k...c-y-...
> Unemployment is l-a-g-g-i-n-g.
Wonderful sarcasm Tyler. Keep em coming. ;)
On Aug 10 05:21 PM Jack FghtClb wrote:
> I think historians will use a 'mo' prefix to the -ron used to describe
> you.
>
> Relative public debt to most economic indicators are at higher levels
> but within normal ranges. And the consumer has seen benefits of a
> 50% increase in the SPX - spell it with me f-e-e-d-b-a-c-k...c-y-...
> Unemployment is l-a-g-g-i-n-g.
I'll give him that he is a half decent writer and likes to mix it up which makes him an entertaining read for comatose 3PM workers with internet filters on their work computers.
However, there is a vast divide between those that simply understand the rules and those who can succeed in risk models.
On Aug 11 08:56 AM Donkey Kong wrote:
> Is this your CNBC casting call?
The best solution for the present economic crisis would be a REBOOT or restart of the entire debt system for the ENTIRE WORLD.
1. A data base listing ALL DEBT, government, business and personal needs to be created. The list would need to list the debt and debt holder with a bank that could make an accounting of the debt. Included would be all national debt of all nations, all mortgages car notes and credit cards for individuals. All outstanding bond and other debt for corporations, The idea is to list ALL DEBT of any kind owed.
2. Every government on the planet would need to call a special session of its legislature.
Using the same authority that governments have to use or create FIAT CURRENCY the legislatures and Central Banks need to authorize the creation of ACCOUNT CREDIT in an amount equal to all the listed debts in the world.
3. The Various governments and Central Banking Systems then need to make an accounting change equal to the debt in the form of an ACCOUNT CREDIT or CREDIT zeroing out ALL THE DEBT in the entire world, and crediting all debt-holders in the world.
The following day the economy of the entire world would restart and the Stock Markets of the world would react to the new renewed capital in the banking systems, the Capital now available to restart all business and the disposable income to the individual people would restart and grow the retail sectors and the manufacturing sectors of the entire world.
Some have commented that if this was done in a very short time the exact problem would be repeated. My answer to this idea is history does recycle and repeat itself but some do learn and avoid making the same mistake. Europe learned after WWII and has avoided a major repeat for more than sixty years.
The other objection has been the possible inflation that would result would weaken the dollar. My answer to the weakened dollar is it may be a GOOD thing to help our ability to export manufactured products and also make our manufactured products more competitive in our own country. Jobs are needed for our own citizens especially the bottom forty percent.
Allen Charles Report
allencharlesreport.blo.../