The Mess That Greenspan Made - Part 40

How Non-Housing Debt Has Changed

In this report from the New York Federal Reserve, the changing nature of non-housing debt in the U.S. over the last decade is captured in the graphic below.

Amazingly, credit card debt is basically unchanged from a decade ago while auto and other loan balances have risen about 30 percent, slightly faster than the combined effects of inflation and population growth.

Student loan balances, however, have risen a whopping 350 percent during that time to a stunning $1.16 trillion and they’re going bad at a rate of more than 10 percent.

How times (and debt) have changed…

 

Wednesday Morning Links

MUST READS
Why I have resigned from the Telegraph – Our Kingdom
Daily Telegraph commentator resigns over HSBC coverage – AP
UK Journalist Calls Out ‘Fraud on Readers’ in HSBC Coverage – Jesse’s Cafe
Greece faces resistance to extra emergency funds for banks – Reuters
Putin Points Muslim Rage at Cold War Foes – Bloomberg
US accuses Russia of breaching ceasefire after fighting at key town – Guardian
Bank of Japan Keeps Record Stimulus in Place – Bloomberg
Bank of England unanimous on keeping interest rates low – AP
The National Debt From The Founding Fathers To The Age Of Jackson – Forbes
GOP States Won’t Fix Obamacare If Coverage Is Lost – Fiscal Times
A Few More Arguments Against Obamacare – Bloomberg
When Volatility and Debt Collide – Capitalist Exploits

MARKETS/INVESTING
World stocks rise as Greek jitters ease in quiet trading – AP
Soros Shifts to Europe, Asia as Investors Cut U.S. Equities – Bloomberg
7 charts that suggest the rising stock market may be wrong – MarketWatch
If you want to make money on the markets you’ve got to tune out the noise – FP
Bears Who Called Treasuries Wrong Retreated Before Selloff – Bloomberg
Gold slips towards six-week low on hopes for Greece deal – Reuters
Geopolitical Tensions And Currency Debasement Will Help Gold – GoldSilverWorlds
Shanghai gold market winds down, Mumbai premiums recover – BullionDesk
Willem Middelkoop: A New Gold Standard In The Making – BullionStar
Global anxiety may be good for gold – Mineweb

ECONOMY/WORLD/HOUSING/BANKING
Enjoy Cheap Oil, Fear the Deflation – Bloomberg
For many, cash saved at gas pump is staying in pockets – AP
Venezuela Squanders Its Oil Wealth – Bloomberg
As Rivals Falter, India’s Economy Is Surging Ahead – NY Times
China’s Managed Markets: Steering Interest Rates Through a Slowdown – Bloomberg
High student loan debt keeping recent grads out of housing market – AZFamily
Southern California home sales down, prices flat – LA Times
Despite Recovery, Many Find Home Loans Still Hard To Get – NPR
Household Debt Continues to Climb, Student Loan Delinquencies Worsen – NY Fed
A lazy central banker’s guide to escaping liquidity traps – Moneyness

 

The Worrying Side Effects of BZIRP

The Financial Times takes a look at the blossoming of Below Zero Interest Rate Policy in Europe (aka BZIRP, where investors pay to lend money to borrowers) while wondering where it’s all headed in the short-term (e.g., currency wars) and long-term (maybe much worse).

The soothing British accents notwithstanding, this strikes me as another example of the relative calm that is experienced when venturing further out into uncharted territory (e.g., like when there was a commonly held belief that U.S. home prices never decline).

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Tuesday Morning Links

MUST READS
Chinese home prices fall for ninth month – BBC
Negative rates to shake up financial system, say experts – FT
EU hangs tough, waiting for Greece to bend as euro wilts – Reuters
Greek Euro Exit Risk Increases as EU Delivers Ultimatum – Bloomberg
“The Idea Was to Create a Modern Gold Standard” – Slack Wire
Ukraine cease-fire ignored around key railway hub – USA Today
Russia Creates Its Own Payment System – Ian Welsh
Line of waiting ships grows as ports shut down – LA Times
Earth Calling the Financial Sector – Project Syndicate
GOP Congress On The Verge Of A Meltdown – Forbes
Obama: The Vox Conversation – Vox
Get Ready for $10 Oil – Bloomberg

MARKETS/INVESTING
Stocks: 4 things to know before the open – CNN/Money
Physics in finance: Trading at the speed of light – Nature
Oil rises to $62, near 2015 high as Mideast risks support – Reuters
Chinese stocks keep up their winning streak ahead of holiday – MarketWatch
Treasuries Rise as Impasse Over Greek Debt Boosts Safety Demand – Bloomberg
Gold snaps 3-day rally after Greece talks collapse, low China demand – Reuters
CFTC: Gold Market Sees Biggest Decline In Spec Longs Since November – Kitco
Is China hiding its central bank gold in its commercial banks? – Mineweb
Koos Jansen vs WGC/GFMS/CPM Update – BullionStar
Gold on a Roll and It Could Go Higher – CNBC

ECONOMY/WORLD/HOUSING/BANKING
Measuring Underground Economy Can Be Done – St. Louis Fed
What’s next for Japan’s economy after the latest recession – AP
UK inflation rate falls to record low of 0.3% in January – BBC
German Investor Confidence Rises to One-Year High Before QE – Bloomberg
Hollande’s flagship economic reform law faces parliamentary test – Reuters
China’s economy to grow about 7 percent this year: central bank official – Reuters
Pets becoming victims of San Francisco housing crisis – ABC 7 News
The Second Time Around: Helping Americans Re-Enter the Housing Market – MReport
Rand Paul Draws Liberal Fire As The Left Discovers It Loves The Fed – Forbes
Cleveland Fed President Mester: June Rate Increase Is ‘Viable Option – WSJ

 
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