Americans' debt shrinks: first time ever!

Americans' debt shrinks: first time ever!

money.cnn.com

NEW YORK (CNNMoney.com) -- In a sign that Americans' spending habits are shifting, their household debt fell for the first time ever, as their net worth declined by the largest amount on record based on data going back to 1951.

According to the Federal Reserve's flow of funds report released Thursday, consumer debt fell an annualized $30 billion, or 0.8% in the third quarter to $13.91 trillion.

Americans holding less debt may sound like a positive, but it also means consumers are spending less, as debt has become more expensive and harder to come by.

As the credit crunch intensified in the third quarter - and exploded late in the period with the bankruptcy of Lehman Brothers - Americans were increasingly unable to finance big purchases like homes, cars and big-ticket goods.

(visit the link for the full news article)

NEW YORK (CNNMoney.com) -- In a sign that Americans' spending habits are shifting, their household debt fell for the first time ever, as their net worth declined by the largest amount on record based on data going back to 1951.

According to the Federal Reserve's flow of funds report released Thursday, consumer debt fell an annualized $30 billion, or 0.8% in the third quarter to $13.91 trillion.

Americans holding less debt may sound like a positive, but it also means consumers are spending less, as debt has become more expensive and harder to come by.

As the credit crunch intensified in the third quarter - and exploded late in the period with the bankruptcy of Lehman Brothers - Americans were increasingly unable to finance big purchases like homes, cars and big-ticket goods.

Wow... well it took a while.. but maybe 50 years from now, we will be balanced.

money.cnn.com
(visit the link for the full news article)

I should expect that good news won't acquire any posts.

More Media LIES

Will it ever end?

"Stung by the loss of $2.81 trillion in their net wealth, U.S. households paid down their debts in the third quarter for the first time since at least 1952, the Federal Reserve reported Thursday. As of Sept. 30, households' total outstanding debt shrank at an annual rate of 0.8% from $13.94 trillion to $13.91 trillion, the Fed said in its quarterly flow of funds report"

No they didn't.

What really happened is that households defaulted on mortgages at an increasing rate, and in all other categories of debt they are attempting to stay ahead of (what are inevitable) defaults there too by adding to credit card exposure!

Further:

Total U.S. domestic nonfinancial debt increased at a 7.2% annual rate, boosted by a postwar record 39.2% increase in debt taken on by the federal government.

Right. The government is accelerating the train - and the mountain is clearly visible and getting closer at an increasing rate of speed.

What a load of crap.

PS: Most of this "new debt" being taken in an insane attempt to prevent the contraction in GDP that must occur will default as well. Have a look at the earlier Ticker from today; the math is what it is, whether people want it to be that way or not.

We have taken a 10% GDP drop in 2000 and turned it into a 20% one in August of 2007. Now, with the actions of the last year and change (especially the last six months) we've turned that into a thirty percent GDP correction that must occur (that is, an increase of 50% in SIX MONTHS!) and if we don't stop this crap it will nearly double again by next June.

You heard it here first.

Source

Read this one too

It's a deflection story. Consumer debt has become a moot point in the grand scheme of things considering federal debt is anihilating the scale of consumer debt purely to cover and pay for commercial debt. The government likes the article because it divert attention away from their debt and makes the consumer look like he's driving the train, the corporations like the article because it diverts attention away from the fact that their bad debt and poor decisions are what's driving up the federal debt as they stand with their hands out going "gimme gimme" to Uncle Sam.

So 30 Billion USD have been taken out of the economy.... Where's the good news?
...
...
...

EDIT to clarify: those 30 Billion consisted of wages for many people and taxes that still need paying.
That's the prob with economics.

[edit on 11-12-2008 by Aldolas]

Didn't the banks and credit card companies cut a bunch of credit card limits not to long ago?

I'm pretty sure they did and that is why it looks like the people hold less debt. More propaganda from the Communist News Network.

Hey! Just in time to lull you into a false sense of comfort so you'll spend like idiots during the holidays. Then anything you were holding back will be theirs too.

Suckers.

Originally posted by Hastobemoretolife
Didn't the banks and credit card companies cut a bunch of credit card limits not to long ago?

I'm pretty sure they did and that is why it looks like the people hold less debt. More propaganda from the Communist News Network.

I think you are right here.


This actually could be the culprit

Go America. We all have it in ourselves to spend less. After all, the corporations should be good for a while on that $700Billion dollar tab.

less debt means less money for the banks.

since the banks are in trouble now just wait till there income goes down more because less people have CC debt they will rip the people for more charges.

Originally posted by HunkaHunka
This actually could be the culprit

Straight from the linked article:

Debt also fell as more than a million Americans have lost their homes to foreclosure since the housing crisis hit in August 2007. When a home is foreclosed upon, the debt is transferred away from the homeowner to the bank.

That's your "culprit."

This isn't good news in the least.