I posted an article on consumer debt on the Allectus LLC website that identifies disturbing debt trends among consumers.
For example, U.S. consumer debt rose $15.4 billion in the month of November ’07 bringing the total debt toÂ an alarming $2.51 trillion YTD ’07.Â According to this report, these figurs do not include consumer borrowing secured by real estate, such as home equity loans.
What does that mean?Â It means that U.S. consumers spend and spend and spend and most have not tapped into their home equity lines of credit to do so.
It doesn’t take a rocket surgeon (Bushism) to see that we spend allot of money on allot of things like cars and credit cards.
The reality is that most of us, if not all of us are actually using our equity lines of credit to buy these things and pay for one credit card by using another.
Obviously these are very bad spending habits that we should not have gotten ourselves into, but of course looking back, would have, could have, shouldÂ have.
Last Year personal bankruptcy filings rose 40%.
Should we have seen this coming?Â Even Alan Greenspan admitteed in a CBS, 60 Minutes episode that he didn’t even see this coming.
Sure, now that we are having to manage our personal cash flow, everyone is Monday morning quarterbacking the implosion of the sub-prime housing market, but could anyone really have seen this coming?
Probably not.Â Even though, as the old saying goes, “you should not rob Peter, to pay Paul”.Â In other words, if you don’t have the cash to buy something, you probably don’t need it anyway.Â Wise words to live by now a days.Social tagging: Economic News