quote:
It does when you look at Consumer Debt. With credit card rates ranging from 17.6% to 29.24% (currently), that looks like a consumer credit bubble (especially with wages continuing to be well outpaced by inflation).

Last earnings call I saw from Visa reported average balances are up since Covid, but almost every bank claims that average bank deposit balances are still 50% higher than they were pre-covid. The flaws in the economy right now doesn’t appear to be a consumer credit bubble.

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Posted by Bard

Definitely NOT an admin

Member since Oct 2008

58583 posts

Posted on 4/14/23 at 9:42 am to Motownsix

quote:
Last earnings call I saw from Visa reported average balances are up since Covid, but almost every bank claims that average bank deposit balances are still 50% higher than they were pre-covid.

Tha's an interesting statistic (see: Households; Checkable Deposits and Currency; Asset, Level), but all I can find are quarterly numbers and Q1 2023 doesn't seem to be out yet. Still, maybe this means people are keeping more cash in their checking than savings? Personal Savings are roughly 50% of what they were pre-COVID (although it has increased slightly since last Fall).

While the Fed may pause in May, they aren't likely to pivot anytime soon (meaning rates remain high). The question is: how do those higher credit card rates continue to get paid off while inflation is still running fairly hot and continues to well outpace wage growth? (and that's before we factor the expected increase in Unemployment)

quote:
The flaws in the economy right now doesn’t appear to be a consumer credit bubble.

Retail sales drop for second month in a row.

MoM retail sales sank 1% last month (which is well above the expected .4% drop), this follows the downwardly revised 0.2% drop in February. The largest declines were in sales at gasoline stations (-5.5%), general merchandise stores (-3%), building materials and garden equipment (-2.1%), electronics and appliances (-2.1%), clothing (-1.7%), motor vehicle dealers (-1.6%) and, finally, furniture (-1.2%).

Maybe the US consumer has finally realized they'll need to readjust their lifestyles if they don't want to end up filing for bankruptcy?

After the last year of increasing credit card dependency, I'm still skeptical (which is why I think we may see a credit bubble).

This post was edited on 4/14/23 at 4:04 pm

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Posted by kywildcatfanone

Wildcat Country!

Member since Oct 2012

138107 posts

Posted on 4/14/23 at 12:31 pm to Blutarsky

Delta flights are bursting at the seams.

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Posted by Blutarsky

112th Congress

Member since Jan 2004

11726 posts

Posted on 4/18/23 at 10:15 am to Blutarsky

United releases after the bell today at 3.

Southwest took a dump with a short duration, self-inflicted grounding of all flights today.

Someone mentioned an outage in Dallas that took down data centers that had just been restored within the last hour. So, poor emergency backup could be the culprit if they lost their data center.

This post was edited on 4/18/23 at 10:16 am

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