Posts Tagged ‘loan’

“As the Financial Times reported yesterday, more than 1 million U.S. consumers are ‘at least two months behind on car loan repayments,’ noting that the delinquency rate in the $1.1 trillion market hit its highest level since 2009. And that’s not just limited to subprime borrowers. That figure includes everyone with a U.S. car loan….

The financial Times also cites, ‘Delinquencies on credit cards also rose by about the same amount over the period to 1.79% – the highest since 2011. The rise in bad loans comes despite persistently low borrowing costs and unemployment levels – suggesting lenders may be letting consumers take on bigger debt burdens than they can handle.

Lending to consumers with weak credit scores has been one of the fastest-growing parts of the industry. Still, the increased delinquency levels follow a period of rapid expansion and could be a natural consequence of that growth. Separate figures published on Thursday by the New York Federal Reserve showed the total amount of debt held by American households rose last year at the fastest clip since 2007.'” -Porter Stansberry

“At more than $1.4 trillion in loans outstanding, student loan debt is nearly four times bigger than all the debts of Greece.  And it’s still growing at nearly 20% a year… multiple times faster than the official rate of inflation.  Worse, the government’s own data has showed as much as 30% of this debt – nearly one out of every three loans – isn’t being paid or is already in default….

At more than 1,000 schools – representing about one-quarter of all U.S. colleges and trade schools – more than half of students have already defaulted or failed to pay even one dollar toward these loans within seven years of leaving school.  Across all schools, the data show as many as 40% of borrowers haven’t paid a single dollar toward these loans within seven years.  Looking at just the past three years, this number jumps to more than half – 54% – suggesting this problem is only getting worse, not better.

In other words, according to the government’s own data, at least 40% of this debt – representing more than $500 BILLION that has been packaged up, ‘securitized’, and sold to investors as ‘money good’ – will likely never be paid back at all.” -Porter Stansberry

When J.P. Morgan (the man) was called to testify before Congress about the ‘money trust’ and asked to explain why some firms received credit and some firms didn’t, he famously explained that the first test of any loan was the character of the man borrowing the money.” -Porter Stansberry

Banks are the growth engine of an economy. They make loans to fund new businesses, construction, and consumer spending. And they collect the ‘spread’ between what the short-term rates pay to borrow and the long-term rates they earn when they lend.” -Porter Stansberry

Debt Level

Posted: May 26, 2016 in Money Matters
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“Student debt, car loan debt, credit card debt… they’re all at their highest levels in history.” -Porter Stansberry

Money Storage

Posted: February 23, 2016 in Money Matters
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“A borrower takes your money and uses it.  He doesn’t just store it for you; that is what safe deposit boxes are for.  When you deposit your money in a bank, it’s the same thing.  You are making a loan to the bank.  The bank doesn’t store your money in a safe on your behalf; it uses it to balance its books.” -Bill Bonner