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CNN: Household debt is dangerously close to 2008 levels

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S

sphagnum

Banned
Americans are taking on a lot more debt.

Total household debt climbed to $12.58 trillion at the end of 2016, an increase of $266 billion from the third quarter, according to a report from the Federal Reserve Bank of New York.

For the year, household debt ballooned by $460 billion -- the largest increase in almost a decade.

That means the debt loads of Americans are flirting with 2008 levels, when total consumer debt reached a record high of $12.68 trillion.

Rising debt hints that banks are extending more credit.

Mortgage originations increased to the highest level since the Great Recession. Mortgage balances make up the bulk of household debt and ended the year at $8.48 trillion.

However, growth in non-housing debt -- which includes credit card debt and student and auto loans -- are key factors fueling the rebound in debt.

...

At these rates, the New York Fed expects household debt to reach its previous 2008 peak sometime this year.

But while that may sound alarming, there is one big difference between now and 2008, according to the Fed: Fewer delinquencies.

At the end of 2016, 4.8% of debts were delinquent, compared to 8.5% of total household debt in the third quarter of 2008.

There were also less bankruptcy filings -- a little more than 200,000 consumers had a bankruptcy added to their credit report in the final quarter of last year, a 4% drop from the same quarter in 2015.
Click to expand...

http://money.cnn.com/2017/02/16/pf/americans-more-debt-in-2016/index.html?iid=surge-story-summary

Are we, as a country, just doomed to repeat the same things over and over again?

Mod edit: Some additional context.

Randolph Freelander said:
Just for giggles....

US Inflation calculator has total inflation from 2008 to 2016 as 11.5%, which means an item bought for $1 in 2008 would cost $1.115 if bought in 2016, all things held equal. It also would mean that $12.68 trillion in debt in 2008 would be roughly $14.14 trillion.

I also took estimated population numbers for 2008, which is 304.1 million. The estimated population headed into 2016 was 322.76 million.

Using those numbers, household debt per capita, expressed in 2016 dollars, was roughly $46,500 in 2008, and $39,000 in 2016.

That is to say, we're not near as indebted now as we were then, even if the non-adjusted dollars only differ by what would be a rounding error.


http://www.usinflationcalculator.com/
https://www.google.com/webhp?source...28&ion=1&espv=2&ie=UTF-8#q=2008+population+us
http://www.usnews.com/opinion/blogs...016-according-to-census-estimates-322-762-018
Click to expand...
 
H

Heroman

Banned
It almost as If the people who were responsible for the 2008 housing collapse are still working and didn't get any jail time
 
T

truestatic

Member
But while that may sound alarming, there is one big difference between now and 2008, according to the Fed: Fewer delinquencies.

At the end of 2016, 4.8% of debts were delinquent, compared to 8.5% of total household debt in the third quarter of 2008.
Click to expand...

How much of a mitigating factor is this?
 
T

Timeaisis

Member
Mortgage debt now is not as risky as 2008. All this really means is more people have bought a house recently.

Responsible mortgage debt is not necessarily bad.
 
B

Breads

Banned
Luckily for some of us we remember vividly what happened in 08 and didn't make the same mistakes again.

Good luck to those who currently skirt the line or dwell past it. It's going to fucking suck.
 
L

Lord Frieza

Member
Amazing how we're repeating something that isn't even a decade old. Absolutely astounding how short-sighted this country has been.
 
M

mattiewheels

And then the LORD David Bowie saith to his Son, Jonny Depp: 'Go, and spread my image amongst the cosmos. For every living thing is in anguish and only the LIGHT shall give them reprieve.'
Heroman said:
It almost as If the people who were responsible for the 2008 housing collapse are still working and didn't get any jail time
Click to expand...
And gave themselves raises, and installed themselves in the executive branch!

Student loan debt seemed to be something that's gonna boil over some day, can't believe it didn't have a singularity like the 2008 crash yet.
 
D

Dr.Acula

Banned
mattiewheels said:
And gave themselves raises, and installed themselves in the executive branch!

Student loan debt seemed to be something that's gonna boil over some day, can't believe it didn't have a singularity like the 2008 crash yet.
Click to expand...

Student loan debt can't be forgiven, so it basically only counts as an asset no matter how toxic it gets.
 
G

GAF A60-Rim A

Banned
Heroman said:
It almost as If the people who were responsible for the 2008 housing collapse are still working and didn't get any jail time
Click to expand...

mattiewheels said:
And gave themselves raises, and installed themselves in the executive branch!
Click to expand...

Truly, literally, the most heinous corruption of all time.

So many of the 7 deadly sins involved:

7-deadly-sins-as-defined-in-dantes-inferno_52fc9b1cd321a_h750.jpg
 
S

Supast4r

Junior Member
Heroman said:
It almost as If the people who were responsible for the 2008 housing collapse are still working and didn't get any jail time
Click to expand...
And it's almost as if the current president is getting rid of all the regulations that were put on after the crisis as well.
 
R

Randolph Freelander

Member
In and of itself, that's not an alarming fact. We're into the 9th year beyond 2008, and household debt will increase into the future. Not linearly, of course, but the overall trajectory will be up. You're going to have inflation, population growth, etc.

I'd like to see the data expressed per capita and with fixed dollar values.
 
L

Lord_Byron28

Member
Given this is before the effects of Trump removing Dodd Frank and numerous other regulations, it will get substantially worse. While there are numerous differing factors between 2008 and now. It is still really worrisome especially when we start to feel the effects of Trump's policies.
 
G

GAF A60-Rim A

Banned
Lord_Byron28 said:
Given this is before the effects of Trump removing Dodd Frank and numerous other regulations, it will get substantially worse.
Click to expand...
This is the scariest thing.

These people SURELY know what they're doing is unsustainable... but... are they going to regulate themselves? Of course not.

So who or what is going to stop it?

Nothing. And they know they won't be held accountable. At worst, they'll get a massive severance package and retire in unquantifiable luxury.
 
R

Randolph Freelander

Member
Randolph Freelander said:
In and of itself, that's not an alarming fact. We're into the 9th year beyond 2008, and household debt will increase into the future. Not linearly, of course, but the overall trajectory will be up. You're going to have inflation, population growth, etc.

I'd like to see the data expressed per capita and with fixed dollar values.
Click to expand...

Just for giggles....

US Inflation calculator has total inflation from 2008 to 2016 as 11.5%, which means an item bought for $1 in 2008 would cost $1.115 if bought in 2016, all things held equal. It also would mean that $12.68 trillion in debt in 2008 would be roughly $14.14 trillion.

I also took estimated population numbers for 2008, which is 304.1 million. The estimated population headed into 2016 was 322.76 million.

Using those numbers, household debt per capita, expressed in 2016 dollars, was roughly $46,500 in 2008, and $39,000 in 2016.

That is to say, we're not near as indebted now as we were then, even if the non-adjusted dollars only differ by what would be a rounding error.


http://www.usinflationcalculator.com/
https://www.google.com/webhp?source...28&ion=1&espv=2&ie=UTF-8#q=2008+population+us
http://www.usnews.com/opinion/blogs...016-according-to-census-estimates-322-762-018
 
I

Izayoi

Banned
I'm tempted to wait another housing crash before making a purchase, but homes are appreciating faster than my investments in my area (Seattle) and I always am against timing the market...
 
M

Mully

Member
We may be at only 5% delinquencies right now, but should Dodd-Frank be repealed, we could see 2008 levels within 3-5 years.
 
U

Unknown Soldier

Member
Izayoi said:
I'm tempted to wait another housing crash before making a purchase, but homes are appreciating faster than my investments in my area (Seattle) and I always am against timing the market...
Click to expand...

If you are ready to buy a house, and you are buying the house to live in, and you're planning on staying there long term, it doesn't really matter.
 
M

Maniel

Banned
Randolph Freelander said:
Just for giggles....

US Inflation calculator has total inflation from 2008 to 2016 as 11.5%, which means an item bought for $1 in 2008 would cost $1.115 if bought in 2016, all things held equal. It also would mean that $12.68 trillion in debt in 2008 would be roughly $14.14 trillion.

I also took estimated population numbers for 2008, which is 304.1 million. The estimated population headed into 2016 was 322.76 million.

Using those numbers, household debt per capita, expressed in 2016 dollars, was roughly $46,500 in 2008, and $39,000 in 2016.

That is to say, we're not near as indebted now as we were then, even if the non-adjusted dollars only differ by what would be a rounding error.


http://www.usinflationcalculator.com/
https://www.google.com/webhp?source...28&ion=1&espv=2&ie=UTF-8#q=2008+population+us
http://www.usnews.com/opinion/blogs...016-according-to-census-estimates-322-762-018
Click to expand...
Thank you. This tells a lot more than just the flat figure.
 
C

Chichikov

Member
Supast4r said:
As a side note. Why does no one ever refer to the other parts of the divine comedy? They are all works of art not just the inferno.
Click to expand...
The 7 deadly sins are actually from Purgatorio, not Inferno.
But whatever, I personally think The Divine Comedy is some bullshit self-insertion fan fic which is interesting and important from historical perspective, but not terribly good on its own.
 
F

FuuRe

Member
The 2008 housing bubble burst is more about people not making their payments than people in actual debt.

There's a lot more to the 2008 collapse than this headline tries to imply.

Hell, even 9-11 was a factor in the collapse.

Please inform yourselves before making snappy statements about the current assholes in your government.
 
C

Chichikov

Member
FuuRe said:
The 2008 housing bubble burst is more about people not making their payments than people in actual debt.

There's a lot more to the 2008 collapse than this headline tries to imply.

Hell, even 9-11 was a factor in the collapse.

Please inform yourselves before making snappy statements about the current assholes in your government.
Click to expand...
Have you actually read the article?
Fuck, even the TLDR bolded part in the OP are calling out the differences between what's going on now and pre-2008.
 
H

hodayathink

Member
FuuRe said:
The 2008 housing bubble burst is more about people not making their payments than people in actual debt.

There's a lot more to the 2008 collapse than this headline tries to imply.

Hell, even 9-11 was a factor in the collapse.

Please inform yourselves before making snappy statements about the current assholes in your government.
Click to expand...

But that takes work and reading beyond the headline, and who has time to do that.
 
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