There is a lot of talk in the financial media about the strength of the consumer. Pundits will tell us to never count the consumer out. The holiday season was strong, iPad sales are strong, the high end consumer is spending. In a word, nonsense.
The number of people in some form of default on their mortgage continues to rise. The average time from the first missed payment to REO is in excess of fourteen months and higher depending on who is reporting. Imagine not making a mortgage payment for fourteen months. What do you do with that money? You don't save it all. You spend it on things you are "entitled" to because the sad truth right now is our society for the most part feels entitled.
Consumers guard their credit card and HELOCs because it is their only form of credit and yet the banks spin this as a positive about their assets, their credit quality. Again, I say nonsense. I came across two charts that really support this view.
For the first time in over sixty years, Americans had a net withdrawal of financial assets, whether it be savings, 401K plans, etc. Americans are suffering hard right now. One in five are employed part time. Part time work is necessary and there is nothing wrong with that form of employment but the reality is you cannot grow an economy with limited wages and reduced benefits.
The number of people in some form of default on their mortgage continues to rise. The average time from the first missed payment to REO is in excess of fourteen months and higher depending on who is reporting. Imagine not making a mortgage payment for fourteen months. What do you do with that money? You don't save it all. You spend it on things you are "entitled" to because the sad truth right now is our society for the most part feels entitled.
Consumers guard their credit card and HELOCs because it is their only form of credit and yet the banks spin this as a positive about their assets, their credit quality. Again, I say nonsense. I came across two charts that really support this view.
For the first time in over sixty years, Americans had a net withdrawal of financial assets, whether it be savings, 401K plans, etc. Americans are suffering hard right now. One in five are employed part time. Part time work is necessary and there is nothing wrong with that form of employment but the reality is you cannot grow an economy with limited wages and reduced benefits.
Now this one was the scary report from FINRA. The simple question, how many Americans have available funds to cover three months of normal expenses. 35.3% do while 60.4% do not. GOD forbid someone loses a job, for every three that lose work today, two need immediate government aid. One in seven Americans are on food stamps. There are many people hurting right now and for the media and financial system to spin it as all is well is very sad.
Very nice post. Thanks
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