NY Fed Reports Q3 Declines in Consumer Debt, Delinquency Rates, Foreclosures and Bankruptcies
Some highlights from the NY Fed's quarterly report on "Household Debt and Credit," released today with third quarter updates:
1. Aggregate consumer debt continued to decline in the third quarter, continuing its trend of the previous seven quarters. As of September 30, total consumer indebtedness was $11.6 trillion, a reduction of $922 billion (7.4%, and almost $1 trillion) from its peak level at the close of 2008Q3.
2. Total household delinquency rates declined for the second consecutive quarter in 2010Q3. As of September 30, 11.1% of outstanding debt was in some stage of delinquency, compared to 11.4% on June 30, and 11.6% a year ago. Compared to a year ago, delinquent balances are down 8.2%, and serious delinquencies have fallen 4.6%.
3. About 457,000 individuals received home foreclosure notices on their credit reports between July 1 and September 30, 2010, a 5.5 percent decrease from the second quarter and a 6.4 percent drop from a year earlier.
4. The number of new bankruptcies noted on credit reports fell 16 percent from the previous quarter (from 621,000 to 522,000), but is 1 percent higher from a year earlier.
5. The proportion of current mortgage balances that transitioned into delinquency rose slightly from 2.6 percent to 2.7 percent, after about a year of decline. Given the similar pattern observed in the third quarter of 2009, one might suggest this is a seasonal effect.
MP: Except for the slight, seasonal uptick in mortgage delinquencies, there are a number of positive trends reported for household debt and credit in Q3 that provide further evidence of an economy that is gradually recovering.
MP: Except for the slight, seasonal uptick in mortgage delinquencies, there are a number of positive trends reported for household debt and credit in Q3 that provide further evidence of an economy that is gradually recovering.
9 Comments:
Would Krugman do better?
Instead of giving Americans unemployment checks, the NeoKeynesians may prefer hard hats.
Giving 15 million unemployment Americans $50,000 a year hard hat jobs cost $750 billion a year.
The government would save on unemployment spending, collect more taxes, and produce value to society, along with promote a higher level of economic growth.
However, one problem is the $50,000 hard hat workers may produce only $20,000 of value to society, unlike the private sector where $50,000 workers produce more than $50,000 of value to society.
The word "gradually" might be changed to "glacially."
Bring on QE2 squared--we need a real shot in thre arm.
May produce only 20,000 dollars....where in the private sector they produce more than 50 k..............
Not necessarily. For either case.
Where is all the value Enron and worldcomm produced?
Hydra, in spite of some firms, e.g. Enron, WorldCom, and GM, the private sector creates a lot more capital than it destroys.
The public (or state) sector doesn't create much, if any, capital, but destroys lots of it. Yet, the U.S. economy creates an enormous amount of capital.
Paying workers $50,000 to produce $20,000 of output is common in the public sector, and perhaps at firms like Enron, WorldCom, and GM.
However, in the private sector, it doesn't make sense, for most firms, to pay workers more than the value they produce.
In the public sector, it would make more sense to destroy less capital than more.
Hydra, in spite of some firms, e.g. Enron, WorldCom, and GM, the private sector creates a lot more capital than it destroys.
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I don't deny that, but it is far from perfect, which was the general tenor of your comment.
Neither is all government spending wasteful. It is only that government gets stuck doing the jobs that PE cannot do for a profit. I believe it is wrong to assume that just because something cannot be done for a profit means it should not be done.
We can work to make government more efficient, but we don't get thee by baldly proclaiming that everything it does is corrupt and inefficient.
Yes, the US economy creates lots of capital, largely because other nations recognize the strength of our government and institutions. A lot of what we create, we are able to create because of protection and services the government provides (sometimes at a loss).
I don't think we have ana accurate view of what government creates and destroys vs what PE creates and destroys.
Hydra, my example above is just another example of the tremendous magnitude of government waste.
I gave two choices above (which can be measured) and the government picked the most inefficient and costly choice.
Also, 20 months ago, I provided another choice, i.e. a $5,000 tax refund for the 150 million workers at the time, which would've created a V-shaped economic recovery.
At this point, the best thing government can do for society is downsize at a rapid rate.
A $5,000 tax refund for each worker, i.e. $750 billion, would've been effective to spur growth by clearing the market of excess (private) assets and goods. It worked under Kennedy in '61, Reagan in '81, and Bush in '01.
"It is only that government gets stuck doing the jobs that PE cannot do for a profit. I believe it is wrong to assume that just because something cannot be done for a profit means it should not be done."
Hydra, please listen carefully to this: When something is profitable, it is because it is something people want, and are willing to spend their money on. If it isn't something people want and are willing to spend their money on, the firm will not make a profit, and will soon go out of business. That's as it should be. Wasteful use of scarce resources restricts itself.
Government, on the other hand, can and does waste resources without end, as there is no equivalent measure of success as profit provides to the private sector.
Why do you believe people should be willing to pay for something done by government at a loss, that they aren't willing to spend their money on in the private sector?
I get the impression that you believe there are things people should be forced to spend their money on whether they want to or not, just because YOU think they're important. Who gets to decide what things are important?
In the private sector, people voting with their dollars determine what's important.
You're right, that some things are worth doing without hope of profit, but they're things we choose to do using our own money, without forcing others to help pay for them.
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