Consumer debt hits new record of $14.3 trillion

[iced]

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@Anonymous wrote:

Agreed. And it's never been about the average person's survival anyways, every single time something major like this happens. There is alwasy those few who walk away with sizeable chunk more than went in with, while the sheep were sacrificed and now have twice the debt as before. 

Not saying that it isn't their fault in the first place for carrying too much debt, but for some it is not always avoidable. 

Then again if nobody ever used credit, where would these Banks be today I wonder?

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A big part of the problem is that we don't say it is the fault of borrowers who run up debt they can't repay. This type of behavior is common, irresponsible, and deserves more public calling out and shaming. Instead, the general public response is to let them prance down the irresponsible path by perpetuating the false narrative that they're somehow the victims.

Let's be clear: the vast, vast majority of sheep were willing sacrifices. Like 95% of those in debt vast. When times are good, these are the first people to run out and spend all their money on creature comforts, so it also makes sense that when times are tough they're the first to feel the butcher's knife. Oh sure, they're saving a little bit now because they're scared they won't have a job tomorrow, but as soon as the clouds part and things turn up again, that saved money will burn a hole through their pocket and all the way to their favorite clothing store, retailer, or car dealership. I really struggle to have even the slightest sympathy for someone with a late-model car or any SUV, one or more smartphones and smart TVs, and eating out with any frequency complaining about how they're forced to live paycheck to paycheck.

If nobody used their credit, the banks would be obsolete, but there's always healthy ways to use credit that banks can operate around. A mortgage is a great example - you may have a payment every month, but it's backed up by an asset (the home) that's worth more than the debt on it. Unless you did a low/no down payment mortgage, in which case shame on the bank for letting you do that and shame on you for being dumb enough to take the loan, the home can be sold to satisfy the debt. This type of debt also frequently has a much lower and manageable interest rate because there is collateral.

[Anonymous]

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@iced wrote:

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Let's be clear: the vast, vast majority of sheep were willing sacrifices. Like 95% of those in debt vast. When times are good, these are the first people to run out and spend all their money on creature comforts, so it also makes sense that when times are tough they're the first to feel the butcher's knife. Oh sure, they're saving a little bit now because they're scared they won't have a job tomorrow, but as soon as the clouds part and things turn up again, that saved money will burn a hole through their pocket and all the way to their favorite clothing store, retailer, or car dealership. I really struggle to have even the slightest sympathy for someone with a late-model car or any SUV, one or more smartphones and smart TVs, and eating out with any frequency complaining about how they're forced to live paycheck to paycheck.

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Every single sentence of this is spot-on.

[Anonymous]

i remember back in the old days.....growing up...i was taught if i did have a credit card, only use it in case of emergencies.  Before the Y2K....i started seeing my friends and other people start to brag about how they bought this and bought that on credit and maxing out their cards on a monthly basis. 

You sow what you reap...hopefully going through this will change the mindset with the one whom uses their credit like forever running water.

[Anonymous]

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@iced wrote:

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@Anonymous wrote:

Agreed. And it's never been about the average person's survival anyways, every single time something major like this happens. There is alwasy those few who walk away with sizeable chunk more than went in with, while the sheep were sacrificed and now have twice the debt as before. 

Not saying that it isn't their fault in the first place for carrying too much debt, but for some it is not always avoidable. 

Then again if nobody ever used credit, where would these Banks be today I wonder?

---

A big part of the problem is that we don't say it is the fault of borrowers who run up debt they can't repay. This type of behavior is common, irresponsible, and deserves more public calling out and shaming. Instead, the general public response is to let them prance down the irresponsible path by perpetuating the false narrative that they're somehow the victims.

Let's be clear: the vast, vast majority of sheep were willing sacrifices. Like 95% of those in debt vast. When times are good, these are the first people to run out and spend all their money on creature comforts, so it also makes sense that when times are tough they're the first to feel the butcher's knife. Oh sure, they're saving a little bit now because they're scared they won't have a job tomorrow, but as soon as the clouds part and things turn up again, that saved money will burn a hole through their pocket and all the way to their favorite clothing store, retailer, or car dealership. I really struggle to have even the slightest sympathy for someone with a late-model car or any SUV, one or more smartphones and smart TVs, and eating out with any frequency complaining about how they're forced to live paycheck to paycheck.

If nobody used their credit, the banks would be obsolete, but there's always healthy ways to use credit that banks can operate around. A mortgage is a great example - you may have a payment every month, but it's backed up by an asset (the home) that's worth more than the debt on it. Unless you did a low/no down payment mortgage, in which case shame on the bank for letting you do that and shame on you for being dumb enough to take the loan, the home can be sold to satisfy the debt. This type of debt also frequently has a much lower and manageable interest rate because there is collateral.

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I love this post as well.

My office moved a few years ago to a location where parking spaces ran about $100 more a month. Instantly there is an employee who was running around belly aching about how she couldn't afford it and wouldn't be able to work there anymore. Meanwhile her and her husband just leased two new SUVs a few months prior.

My employer ended up covering the additional cost for a year. I was beyond annoyed. I can afford the extra parking cost on my car that's been paid for since 2013.

[Anonymous]

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@Anonymous wrote:

Hopefully going through this will change the mindset with the one whom uses their credit like forever running water.

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There'll always be a new generation to take their place - the greater fools 

[Revelate]

So small datapoints that some people, including yours truly, are thinking things are picking up.

Last week I got a project in Texas, wasn't surprised and even out of our enormous employee base I was one of the best choices for it and I'm sorta local and had availability.

Today that same big giant company put an offer on the table: expected salary, expected bonus, completely unexpected 10% signing bonus.  I know it was stuck on a SVP's desk, that didn't suddenly get signed without someone looking at our pipeline.

Then, in even another surprise, possible project in Kansas got dropped in my lap... and I am in one of the more awkward positions inside this big organization in that I do projects and the majority of my group does not they are dedicated to customers so I only get left overs in a large professional services arm where everyone is hungry for billable hours right now.

I work for state and local governments with some education clients too... there are budget shortfalls all over and yet, still, some are executing on projects and everyone is fat enough now that I get not one but two projects in addition to a different badge color.

Hard for me to think this isn't turning around somewhere.

[Anonymous]

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@Revelate wrote:

So small datapoints that some people, including yours truly, are thinking things are picking up.

Today was one of the best days since March for me. I got to talk to so many people at plants around the country that I hadn't talked to in what seems like forever. Restarts everywhere, with the big push next week. I've slept so very little the last 2 days in anticipation of today.

I'm still worried about what might happen with 10's of thousands of workers coming back to work next week. If this crashes, we're really in trouble.

You probably already know, but most people don't know Kansas City as 'New Silicon Valley'. They don't know that you can do a short hop to a 100G backbone from the middle of nowhere - like Dorothy's house in Liberal. (Not kidding.)

Also Tesla's, bbq, and guns....you won't miss much. haha

[Revelate]

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@Anonymous wrote:

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@Revelate wrote:

So small datapoints that some people, including yours truly, are thinking things are picking up.

Today was one of the best days since March for me. I got to talk to so many people at plants around the country that I hadn't talked to in what seems like forever. Restarts everywhere, with the big push next week. I've slept so very little the last 2 days in anticipation of today.

I'm still worried about what might happen with 10's of thousands of workers coming back to work next week. If this crashes, we're really in trouble.

You probably already know, but most people don't know Kansas City as 'New Silicon Valley'. They don't know that you can do a short hop to a 100G backbone from the middle of nowhere - like Dorothy's house in Liberal. (Not kidding.)

Also Tesla's, bbq, and guns....you won't miss much. haha

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Actually Kansas wasn't that far down my list of places to go when I bailed from Cali and Sprint was in Overland Park 20+ years ago and things haven't slowed down since then.

It's going to be interesting how the experiment of going back to work, as you suggest it'll be two+ weeks before we really see much information this in with how low our testing rate has been I don't know that it will be accurate even then.

[Anonymous]

I think it really just depends on industry. Things are booming at my company, as we signed a new client that is thriving, while we typically have almost no revenue at this time of year. 

Fall (our traditionally busiest season) is going to be interesting, but we are planning for all sorts of scenarios. Management is going on the offense. We are hiring aggressively and implementing so many initiatives that it's getting hard to keep up.

[Anonymous]

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@Anonymous wrote:

i remember back in the old days.....growing up...i was taught if i did have a credit card, only use it in case of emergencies.  

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Had the same thing said to me, and so i used them as such. Then realizing that emergencies don't happen every month, and finding out that they will close unused accounts. I decided to start usunig them for everything and just pay CCs. 

@Anonymous wrote:

My office moved a few years ago to a location where parking spaces ran about $100 more a month. Instantly there is an employee who was running around belly aching about how she couldn't afford it and wouldn't be able to work there anymore. Meanwhile her and her husband just leased two new SUVs a few months prior.

My employer ended up covering the additional cost for a year. I was beyond annoyed. I can afford the extra parking cost on my car that's been paid for since 2013.

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For this particular case though, it was not at the behest of the Employee. It was the Company that forced an increase in the cost of living onto their Employees, which in turn should be compensated. My Company covered any expenses incurred due to their actions. However, i agree that no one is forcing them to buy 2 new SUVs. And if someone is going to let $100 stop them from earning an annual salary then new priorities are indeed needed.

As for the turn around/reopeneing it's good to hear some positive info, I'm pretty sure that some Companies were using this down time to strategize their next move.