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Yes, yes, the sky is falling. The full picture gives hint to how banal this data is: Consumer revolving credit: https://fred.stlouisfed.org/series/CCLACBW027S
by mikeyouse 4y ago
Yes, yes, the sky is falling. The full picture gives hint to how banal this data is:
Consumer revolving credit: https://fred.stlouisfed.org/series/CCLACBW027SBOG https://fred.stlouisfed.org/series/CCLACBW027SBOG
Consumer delinquencies: https://fred.stlouisfed.org/series/DRCCLACBS https://fred.stlouisfed.org/series/DRCCLACBS
Both are ~on trend for post-GFC US, total debt isn't inflation adjusted either so of course the number is getting bigger as unemployment is low and inflation has been high. A more useful metric is probably household debt service ratios like:
https://fred.stlouisfed.org/series/TDSP https://fred.stlouisfed.org/series/TDSP
- joxel 4y agoDoes the TDSP data include the student loan pause?
- gorbachev 4y agoConsumer delinquencies link should be this one? https://fred.stlouisfed.org/series/DRCCLACBS https://fred.stlouisfed.org/series/DRCCLACBS Looks like a fairly low rate, but growing quite fast.
- mikeyouse 4y agoYep - thanks. Updated my post. So much of the current crop of indicators is fairly obviously just mean-reversion. Of course there's the risk of a hard landing, but when delinquency rates are lowered via the stimulus funds it doesn't seem very interesting that they've increased once the stimulus money ran out.
- xnx 4y agoRelevant, contextualizing, comments is a textbook example of why the web sorely needs a broadly used third-party comment system. How many readers of that article on cnbc.com will never get this perspective?
- kube-system 4y agoThe "broadly used" part would ruin the entire concept.
- xnx 4y agoThat's definitely a challenge, but I don't think the task of comment ranking is hopeless if using sufficient author reputation signals. That's especially true if ranking is personalized.
- commandlinefan 4y agoIt also doesn't (seem to) take into account how prevalent credit cards as a method of payment have become - for whatever reason, most of the companies I owe money to would rather I let them debit my credit card each month (and pay CC transaction fees) than send me a bill and let me pay them with online bill pay. My credit card bill is astronomical every month, but that's because all my bills are on it, and I just pay the balance every month.
- manigandham 4y agoOnline bill pay (initiated on your end) is usually just paper checks and occasionally ACH transfers, both of which take time and are annoying to deal with, so of course they don’t like it.
- mrguyorama 4y agoThey prefer auto-pay type setups because refunds are easier to prevent than squeezing a payment out of a non-payer.
- kube-system 4y agoWhat happened there in 2010?
- muzz 4y agoAn accounting change: https://economics.stackexchange.com/questions/15387/why-did-the-stock-of-consumer-loans-held-by-commercial-banks-jump-in-march-2010 https://economics.stackexchange.com/questions/15387/why-did-...
- zenmacro 4y ago> Yes, yes, the sky is falling I agree that we shouldn't buy into the media's perpetual gloom & doom machine but I also caution against the knee-jerk contrarian "everything is fine" impulse. The percentage rate of change is often the best signal in these kinds of indicators. We're around 20% YoY. The last two years (2004 & 2008) we hit that kind of level weren't strong economies. https://fred.stlouisfed.org/graph/fredgraph.png?g=ZAtQ https://fred.stlouisfed.org/graph/fredgraph.png?g=ZAtQ The Dec '22 FOMC Minutes also hinted that the FOMC is also watching credit card levels. Interest rates have exploded higher yet consumers are increasing their credit card debt.