If you are an X user, I highly recommend following Game of Trades. A few interesting posts from the last few days: First up: credit card delinquencies. When finances get tight, people prioritize what they are going to spend their money on. Oftentimes, things that aren’t tangible are the first to get a “skipped payment”. Credit cards are just that. It is “just a piece of plastic” in the wallet with no tangible impact in your daily life such as food and electricity, so punt the payment. Why are the credit cards at a high level that they cannot afford to pay them? Inflation. Living outside of their means. Emergency that required putting debt on a credit card. Loss of work and used credit cards to float a paycheck. Numerous reasons. We are seeing credit card delinquencies at an all time high which shows just how financially strapped and underwater that many people are. We are at a 50% delinquency rate, which is even higher than the financial crisis of 2008.
Speaking of bloated prices, there's a house for sale in our development for $325K. In 2016, it sold for $127,500 -- and now it's for sale at more than twice its sale price -- from seven years ago??? Looks like the same kitchen, very ordinary landscaping, no separate on-property storage (Florida, no basements, single floor homes). Two words: Good luck.
I bought a new home 3 years ago. It almost immediately doubled in value. Probably the best location in Reno. It is holding its value because the Bay Area is emptying out and moving to Reno, supply and demand. Everything is upside down.
In central TX we began shopping for a pickup truck last month and they are moving off the lot so quickly they won’t negotiate below MSRP. These are $80k+ out the door. Maybe it is the lack of supply contributing but I was surprised knowing how the economy is going. We also had some friends in Austin put a house up for sale at the end of August for 1.35 million they bought for 800k in 2021 and it sold immediately for full price. A lot of pressure on the middle/working class while higher incomes are still doing well. People will start looking for the government to help and all they will do is make it a lot worse.
We built our home in Michigan 4 years ago. Given the last 3.5 years, we were hoping to sell and move south (KY/TN). My husband retired in July. I could retire anytime. But now is not the time to buy or sell. I’ve told me husband that I think we are “stuck” for the next few years. I’ll probably work another three years now.
All too familiar story. Hey people, there are consequences for rigged elections. They know they are going to rig the next election, just like the last two. They can ruin you and your vote simply no longer counts or these crooks would be thrown out of office. This is not going to end well.
The economy is doing a Blues Mobile at an accelerated rate. (I know that dates me, but The Blues Brothers is a fun movie and the end of the Blues Mobile is a useful metaphor.) It isn't hard to pinpoint the policies that have lead to this predictable situation. Hint: Inflation is cause by printing money. I paid attention in Economics 101. Anyway, I wonder what the Democrats are going to do to try to forestall the worst effects until after the election? Maybe the idea is to plunge the country into utter chaos before next November to make the election irrelevant? At this point I wouldn't put anything past this group of Bolsheviks.
I just heard a news report on the Fed's refusal to increase interest rates today. The news report blamed the Fed for inflation. The willfully ignorant public are out there eating this Big Lie up with a spoon. No way it could possibly be printing the multiple trillion dollar unaccountable slush funds out of thin air (Gee thanks Democrats) that brought us this round of inflation.
Low interest rates are the root of all of this. People, companies, and investors took on more debt than they would otherwise as the cost of 'money' was so low. My son and his wife started looking in early 2021, as a 'no life' year of 2020 meant they had piled up enough cash for a down payment a year ahead of their plans. I initially advised them to wait a year or 2 as the market was going nuts in the winter/spring of 2021 and concerned they would overpay. But then they pre-qualified for 2.99%, which I knew wouldn't last. Ran an amortization schedule and noted that at 3.99% at the middle of their price range would cost them about $35K over 30 years if they didn't pay it off early. So I just told them not to pay more than $35k over offer. Lost bid after bid on move in ready. Last straw was a house they really loved, bid $35K over ask and still didn't get it. At that point they ditched move in ready and dropped 'must haves' to large yard (2 big dogs) and good school district. Found a very dated house with 'good bones' that had actually been on the market for 3 months. Peeling paint, weedy yard, shag carpet, yellow linoleum in the kitchen but a half acre lot, 1900 sq ft. Listed at $249, offered $245 and got it. Similar house fully renovated in the same neighborhood went for $325K. Owner had moved into memory care and the family just wanted to be done. They are cash flowing renovations and doing a lot of it themselves, his wife's parents have been doing fix and flips her whole life and her dad has a plumbing biz so she actually has more skills than my son. Wife's brother moved in and is paying rent, was going to be temporary, but they decided he might as well stay - he works 3PM-Midnight so they only see him on the weekends and they get extra cash to throw at more renovations. They may be the only ones who got a good deal in 2021. Only downside (to me) is they are 45 minutes from us but closer commutes to their jobs.
I am waiting for the shoe to drop on cars. Mine is 13 years old and hubby's is 10. Sticker shock has kept us on the sidelines. Given all the crap coming down from this administration, though, and we may have to just bite the bullet at some point.
I am looking for a homestead with acreage in a rural community where I can build a cooperative using the church as the anchor. We will create neighbors who are also separating. We will build parallel health, education, and social institutions. I'll buy during the crash.
Check out some homestead/land options out in central Kansas! There are some small towns that are offering free land to people who want to build and commit to 5 years in their community. I think they are still offering that, and I would guess other states might be as well! Small rural communities trying to keep population up so their little towns don’t sink.
Nov 2, 2023·edited Nov 3, 2023Liked by Jennifer Brown
The US government paints a rosy picture of the economy. The reality is the opposite, and the future outlook is downright scary.
In addition to increasing credit card and mortgage delinquencies you presented in this article, there have been massive layoffs in the tech, entertainment, service and retail industries over the past year or more.
Inflation is still high. "Official" rates are a joke; they don't include food, energy and housing - the 3 most important things for living! Nor do they include high interest rates.
The Fed pours gasoline on the fire with their "policies."
Congress engages in psychotic spending, with no slowdown in sight. The US national debit is 4-5X the "official" amount of $33 trillion; it's actually $120-150 trillion and growing every year.
The dollar is on the verge of being displaced as the world reserve currency. I predict the dollar will no longer be the reserve currency within 2-3 years. This is already happening, the process already started a few years ago. More and more nations are walking away from the dollar as their trade currency. This displacement of the dollar bodes ill for the US economy over the next few years.
The banking system is in trouble. The 3 regional banks that had to be bailed out earlier this year are just the tip of the iceberg. Their insolvency was huge, and the impact downplayed so as not to cause a panic and runs on the entire banking system.
Yes the delinquency rate has increased, but you are misinterpreting the chart. It is showing the “change” in the delinquency rate, not the actual rate of delinquent credit card accounts. 50% delinquency would be catastrophic. It’s been around 5% as of late.
Speaking of bloated prices, there's a house for sale in our development for $325K. In 2016, it sold for $127,500 -- and now it's for sale at more than twice its sale price -- from seven years ago??? Looks like the same kitchen, very ordinary landscaping, no separate on-property storage (Florida, no basements, single floor homes). Two words: Good luck.
I bought a new home 3 years ago. It almost immediately doubled in value. Probably the best location in Reno. It is holding its value because the Bay Area is emptying out and moving to Reno, supply and demand. Everything is upside down.
In central TX we began shopping for a pickup truck last month and they are moving off the lot so quickly they won’t negotiate below MSRP. These are $80k+ out the door. Maybe it is the lack of supply contributing but I was surprised knowing how the economy is going. We also had some friends in Austin put a house up for sale at the end of August for 1.35 million they bought for 800k in 2021 and it sold immediately for full price. A lot of pressure on the middle/working class while higher incomes are still doing well. People will start looking for the government to help and all they will do is make it a lot worse.
We built our home in Michigan 4 years ago. Given the last 3.5 years, we were hoping to sell and move south (KY/TN). My husband retired in July. I could retire anytime. But now is not the time to buy or sell. I’ve told me husband that I think we are “stuck” for the next few years. I’ll probably work another three years now.
All too familiar story. Hey people, there are consequences for rigged elections. They know they are going to rig the next election, just like the last two. They can ruin you and your vote simply no longer counts or these crooks would be thrown out of office. This is not going to end well.
The economy is doing a Blues Mobile at an accelerated rate. (I know that dates me, but The Blues Brothers is a fun movie and the end of the Blues Mobile is a useful metaphor.) It isn't hard to pinpoint the policies that have lead to this predictable situation. Hint: Inflation is cause by printing money. I paid attention in Economics 101. Anyway, I wonder what the Democrats are going to do to try to forestall the worst effects until after the election? Maybe the idea is to plunge the country into utter chaos before next November to make the election irrelevant? At this point I wouldn't put anything past this group of Bolsheviks.
I just heard a news report on the Fed's refusal to increase interest rates today. The news report blamed the Fed for inflation. The willfully ignorant public are out there eating this Big Lie up with a spoon. No way it could possibly be printing the multiple trillion dollar unaccountable slush funds out of thin air (Gee thanks Democrats) that brought us this round of inflation.
Low interest rates are the root of all of this. People, companies, and investors took on more debt than they would otherwise as the cost of 'money' was so low. My son and his wife started looking in early 2021, as a 'no life' year of 2020 meant they had piled up enough cash for a down payment a year ahead of their plans. I initially advised them to wait a year or 2 as the market was going nuts in the winter/spring of 2021 and concerned they would overpay. But then they pre-qualified for 2.99%, which I knew wouldn't last. Ran an amortization schedule and noted that at 3.99% at the middle of their price range would cost them about $35K over 30 years if they didn't pay it off early. So I just told them not to pay more than $35k over offer. Lost bid after bid on move in ready. Last straw was a house they really loved, bid $35K over ask and still didn't get it. At that point they ditched move in ready and dropped 'must haves' to large yard (2 big dogs) and good school district. Found a very dated house with 'good bones' that had actually been on the market for 3 months. Peeling paint, weedy yard, shag carpet, yellow linoleum in the kitchen but a half acre lot, 1900 sq ft. Listed at $249, offered $245 and got it. Similar house fully renovated in the same neighborhood went for $325K. Owner had moved into memory care and the family just wanted to be done. They are cash flowing renovations and doing a lot of it themselves, his wife's parents have been doing fix and flips her whole life and her dad has a plumbing biz so she actually has more skills than my son. Wife's brother moved in and is paying rent, was going to be temporary, but they decided he might as well stay - he works 3PM-Midnight so they only see him on the weekends and they get extra cash to throw at more renovations. They may be the only ones who got a good deal in 2021. Only downside (to me) is they are 45 minutes from us but closer commutes to their jobs.
I am waiting for the shoe to drop on cars. Mine is 13 years old and hubby's is 10. Sticker shock has kept us on the sidelines. Given all the crap coming down from this administration, though, and we may have to just bite the bullet at some point.
I am looking for a homestead with acreage in a rural community where I can build a cooperative using the church as the anchor. We will create neighbors who are also separating. We will build parallel health, education, and social institutions. I'll buy during the crash.
Check out some homestead/land options out in central Kansas! There are some small towns that are offering free land to people who want to build and commit to 5 years in their community. I think they are still offering that, and I would guess other states might be as well! Small rural communities trying to keep population up so their little towns don’t sink.
That is interesting. How might I find more information about that. Does Dorothy Gale come with the commitment?
The US government paints a rosy picture of the economy. The reality is the opposite, and the future outlook is downright scary.
In addition to increasing credit card and mortgage delinquencies you presented in this article, there have been massive layoffs in the tech, entertainment, service and retail industries over the past year or more.
Inflation is still high. "Official" rates are a joke; they don't include food, energy and housing - the 3 most important things for living! Nor do they include high interest rates.
The Fed pours gasoline on the fire with their "policies."
Congress engages in psychotic spending, with no slowdown in sight. The US national debit is 4-5X the "official" amount of $33 trillion; it's actually $120-150 trillion and growing every year.
The dollar is on the verge of being displaced as the world reserve currency. I predict the dollar will no longer be the reserve currency within 2-3 years. This is already happening, the process already started a few years ago. More and more nations are walking away from the dollar as their trade currency. This displacement of the dollar bodes ill for the US economy over the next few years.
The banking system is in trouble. The 3 regional banks that had to be bailed out earlier this year are just the tip of the iceberg. Their insolvency was huge, and the impact downplayed so as not to cause a panic and runs on the entire banking system.
But not to worry! Bidenomics will save the day!
Yes the delinquency rate has increased, but you are misinterpreting the chart. It is showing the “change” in the delinquency rate, not the actual rate of delinquent credit card accounts. 50% delinquency would be catastrophic. It’s been around 5% as of late.
Great charts, well done, please keep them coming!!
Odd, the FED graph does not show the same peak.
https://fred.stlouisfed.org/series/DRCCLACBS#
Wonder what kind of cover up they are into……