State of the Union 2024

[[DHT]Osiris]

Our ability to service debt as a nation is essentially based on the sum total of the goods and services we produce. Higher GDP broadly means US citizens can handle more debt.

Right... but isn't the point of presenting a chart showing very high CC debt to show that we're taking on debt and not paying it off? Carrying more debt is generally bad for a household as everything costs more than it would without interest. Higher GDP should lead to more spending, but flatlining debt, because people are doing more with the same debt levels. Barring population increasing at the same rate, rising debt levels means people are spending more than they're making ... right?

EDIT Also, if higher wages led to higher debt levels, why did debt levels crater the second we all got stimmy payments? Why didn't we just spend it on consumer goods? Might be b/c everyone's carrying too much debt and was trying to pay some shit down for once?

 

[MrSquished]

Yes I think it's a stupid strategy to start crowing about 'best economy ever', which does not mean I want to harp on negatives, but to be realistic about what people are facing. To message like some people here say about the greatest economy and with wage increases lower class people are doing great, and ignoring the reality of what people are facing is just as dumb as saying 2020 is better than now.



Housing costs are far exceeding wage gains. Housing is HISTORICALLY THE MOST UNAFFORDABLE SINCE KEEPING RECORDS. BY FAR:

"As the interactive shows, home prices have soared relative to incomes in a growing number of metro areas. Indeed, among the 100 largest markets in the country, 48 had a price-to-income ratio exceeding 5.0 in 2022, including seven markets with a price-to-income ratio above 8.0. By comparison, 15 markets had price-to-income ratios above 5.0 as recently as 2019 and just five markets had ratios that high in 2000 (Figure 2). With the rapid rise in prices since the beginning of the pandemic, price-to-income ratios have reached all-time highs in 78 of the nation’s 100 largest markets. Only Syracuse had a price-to-income ratio under 3.0 among large markets in 2022. Price-to-income ratios that low were the norm across much of the country in prior decades. Indeed, fully two-thirds of large markets had price-to-income ratios below 3.0 as recently as 2000.

FIGURE 2: HOME PRICE-TO-INCOME RATIOS CONTINUED TO RISE NATIONALLY AND IN MANY LARGE METROS IN 2022​

View attachment 95245

https://www.jchs.harvard.edu/blog/home-price-income-ratio-reaches-record-high-0

and this reflects across polls, and backed up by data. if people want to keep saying oh this economy is best ever and so so great without integrating housing costs into the factor, you will lose this election. As someone in the business, I have seen it first hand in my area. Not every area is the same but most major metro areas are all in the same boat.

American dream of owning a home is dead, majority of renters say

Exclusive: most renters surveyed by Harris Poll say the areas they live in have become so unaffordable they are ‘barely livable’

www.theguardian.com

are these articles NYT pitchbot material? Because they make sense to me working in the industry. My childhood home I sold the year before covid could have gone for another 200K almost right now.

I also find it hilarious when people start calling VOX as NYT Pitchbot type. Jesus H Christ.

 

[Zorba]

If the "low density crap" was there before the transit station was built...as is often the case...

Then rezone it and whoever buys it next can build something dense in its place.

 

[fskimospy]

Right... but isn't the point of presenting a chart showing very high CC debt to show that we're taking on debt and not paying it off? Carrying more debt is generally bad for a household as everything costs more than it would without interest. Higher GDP should lead to more spending, but flatlining debt, because people are doing more with the same debt levels. Barring population increasing at the same rate, rising debt levels means people are spending more than they're making ... right?

Not really in a way that matters, no. What really matters is the share of debt as compared to income (GDP). To massively oversimplify if our amount of debt increases 25% and our income/GDP increases 25% then we're in the same spot as before. If you look here you'll just see CC debt steadily increasing almost without exception from the time we started collecting the data. (there seems to be some sort of significant methodology change in the middle there though, so be wary)

That's why if you apply for a loan or whatever generally speaking they use debt/income ratio and not your nominal amount of debt.

 

[K1052]

But the court is supposed to establish a fair market value, no? They don't just take the land or give you a sub-market valuation for it.

Sometimes the offer made by the agency or entity is fair and we accept. Sometimes it is not and then we go to court. In the second case a settlement is usually reached.

 

[manly]

I don't think it's a hit piece at all, although it does have a bit of the NYT Pitchbot vibe to me and I think using nominal CC debt was a mistake.

That's fine but your other comments all but accuse the writer of journalistic malfeasance, or at least economic ignorance. I don't know who this writer is, but the data speaks for itself.

The consumer CC debt chart might be the weakest part of the article, but it's really not that remarkable. The growth in this chart tracks pretty closely to aggregate inflation over a 5 year period. So the "record" nominal CC debt in and of itself doesn't prove a thing either way. Sure, perhaps some less informed readers will take this the wrong way.

Having said that, when Biden entered office the nominal consumer CC debt was $750B. Now it's $1040B-ish. That's a 40% increase in 38 months. So the writer asks whether consumer spending can continue to power the U.S. economy going forward?

 

[BoomerD]

There is still a house surrounded by Boeing at Boeing field in Seattle. They didn't want to sell and never have. Same with the Bonnet Creek Area around Disney World.

Demo Next for Dean Street Homes Seized for Atlantic Yards

Demolition permits have been approved for three of the last houses in the Atlantic Yards (Pacific Park) development at 491, 493 and 495 Dean Street in Prospect Heights.

www.brownstoner.com

 

[Zorba]

Sometimes the offer made by the agency or entity is fair and we accept. Sometimes it is not and then we go to court. In the second case a settlement is usually reached.

Which was my point, the property owner is made while.

 

[[DHT]Osiris]

Not really in a way that matters, no. What really matters is the share of debt as compared to income (GDP). To massively oversimplify if our amount of debt increases 25% and our income/GDP increases 25% then we're in the same spot as before. If you look here you'll just see CC debt steadily increasing almost without exception from the time we started collecting the data. (there seems to be some sort of significant methodology change in the middle there though, so be wary)

That's why if you apply for a loan or whatever generally speaking they use debt/income ratio and not your nominal amount of debt.

Okay, but if our cc debt increased from 750B to 1.1T over 3 years (yep, counting the stim payments, they still exist), that should mean that wages increased by the same 46% over the same timeframe. Else... that means we're collectively taking on more debt than we can afford through wages, right?

 

[Brainonska511]

There is still a house surrounded by Boeing at Boeing field in Seattle. They didn't want to sell and never have. Same with the Bonnet Creek Area around Disney World.

The old man in Up is the ultimate YIMBY. He only cared about his own house. In fact, he even took his house and left the land to be redeveloped.

 

[Pens1566]

Okay, but if our cc debt increased from 750B to 1.1T over 3 years (yep, counting the stim payments, they still exist), that should mean that wages increased by the same 46% over the same timeframe. Else... that means we're collectively taking on more debt than we can afford through wages, right?

Or people are just using CCs more.

I personally never use cash (unless it's necessary). And lots of places I've seen are going cashless.

 

[K1052]

Which was my point, the property owner is made while.

A settlement doesn't necessarily mean we think we've been made whole, just that we're not realistically going to do better.

 

[fskimospy]

Okay, but if our cc debt increased from 750B to 1.1T over 3 years (yep, counting the stim payments, they still exist), that should mean that wages increased by the same 46% over the same timeframe. Else... that means we're collectively taking on more debt than we can afford through wages, right?

Using the $750B figure would be highly misleading though because it would be using an artificially depressed baseline (savings shot through the roof at that time due to stimulus and lack of ability to spend). It would be better to use the pre-pandemic baseline as that’s ‘normal’.

So broadly speaking things are a bit better now than they were before the pandemic from a quick back of the envelope look.

 

[[DHT]Osiris]

Or people are just using CCs more.

I personally never use cash (unless it's necessary). And lots of places I've seen are going cashless.

But if you're paying it off, that's not carried debt. That chart is showing carried debt, right? Like US Americans have 1.1T worth of actual carried debt today, right?

 

[[DHT]Osiris]

Using the $750B figure would be highly misleading though because it would be using an artificially depressed baseline (savings shot through the roof at that time due to stimulus and lack of ability to spend). It would be better to use the pre-pandemic baseline as that’s ‘normal’.

So broadly speaking things are a bit better now than they were before the pandemic from a quick back of the envelope look.

But... how, if we're all carrying more CC debt? Me having money doesn't mean I should have more CC debt, else at every point in one's life that their career progresses, they should have more CC debt. That's insane, everyone's CC debt level should get lower as they make more money and can afford to pay that shit off.

Are all of you carrying the most CC debt of your life, intentionally?

 

[fskimospy]

Or people are just using CCs more.

I personally never use cash (unless it's necessary). And lots of places I've seen are going cashless.

Yes. I basically never use cash anymore. I haven’t confirmed this but I assume the data here is statement balances, not revolving debt. Ten years ago I would say my non-bill spending was about 50-50 cash/credit. Now it’s like 95% credit and each month I have a several thousand dollar balance that I pay off in full.

 

[Pens1566]

But if you're paying it off, that's not carried debt. That chart is showing carried debt, right? Like US Americans have 1.1T worth of actual carried debt today, right?

Not sure, I can never remember the distinction.

But it would still apply I would think. An increase in CC usage, an increase in debt.

The people paying off every month are in the definite minority I would think.

 

[repoman0]

I would also assume it’s statement balances. That’s what appears in credit reports as well. I’ve never paid a penny of CC interest in my life and yet my credit report has me at thousands of dollars of CC debt at any given time. Not even sure how they’d track people paying interest vs not.

 

[Pens1566]

I would also assume it’s statement balances. That’s what appears in credit reports as well. I’ve never paid a penny of CC interest in my life and yet my credit report has me at thousands of dollars of CC debt at any given time. Not even sure how they’d track people paying interest vs not.

Yeah, that's how they calculate utilization. I've never seen any way to differentiate carried vs total.

 

[[DHT]Osiris]

I would also assume it’s statement balances. That’s what appears in credit reports as well. I’ve never paid a penny of CC interest in my life and yet my credit report has me at thousands of dollars of CC debt at any given time. Not even sure how they’d track people paying interest vs not.

56 million Americans have been in credit card debt for at least a year. ‘We are seeing pockets of trouble,’ expert says

More Americans carry credit card debt from month to month as living expenses stay high, according to a new report by Bankrate.

www.cnbc.com

As of January this year, 49%, vs 46% last year.

 

[fskimospy]

That's fine but your other comments all but accuse the writer of journalistic malfeasance, or at least economic ignorance. I don't know who this writer is, but the data speaks for itself.

Yes, I think that part of the article is economically ignorant. The data most certainly does not speak for itself though as crucial context is left out as you mention below. That’s bad journalism.

The consumer CC debt chart might be the weakest part of the article, but it's really not that remarkable. The growth in this chart tracks pretty closely to aggregate inflation over a 5 year period. So the "record" nominal CC debt in and of itself doesn't prove a thing either way. Sure, perhaps some less informed readers will take this the wrong way.

Having said that, when Biden entered office the nominal consumer CC debt was $750B. Now it's $1040B-ish. That's a 40% increase in 38 months. So the writer asks whether consumer spending can continue to power the U.S. economy going forward?

That additional spending of pent up reserves also likely significantly contributed to inflation.

Where we are now is essentially back on track with the pre-pandemic trend. Maybe people think that trend is bad but it’s certainly not new.

 

[[DHT]Osiris]

Yeah, that's how they calculate utilization. I've never seen any way to differentiate carried vs total.

Well that's a fucking useless measurement, that's muddling actual debt and essentially 'cash' if you don't separate the two.

 

[Pens1566]

56 million Americans have been in credit card debt for at least a year. ‘We are seeing pockets of trouble,’ expert says

More Americans carry credit card debt from month to month as living expenses stay high, according to a new report by Bankrate.

www.cnbc.com

As of January this year, 49%, vs 46% last year.

Based on the article, those #s come from surveys. Not sure I'd put any more weight into that than in actual #s from the reporting agencies. Some would likely be stupid enough to not know the difference between what we've described in here as using every month and paying off vs accruing interest.

 

[Pens1566]

Well that's a fucking useless measurement, that's muddling actual debt and essentially 'cash' if you don't separate the two.

You just now figuring out how credit reports work?

 

[[DHT]Osiris]

Based on the article, those #s come from surveys. Not sure I'd put any more weight into that than in actual #s from the reporting agencies. Some would likely be stupid enough to not know the difference between what we've described in here as using every month and paying off vs accruing interest.

I guess, so is there really no way to determine carried debt outside surveys? That's kind of a big gap.