Mark Perry writes:
The Federal Reserve recently released data on delinquency and charge-off rates at U.S. commercial banks for the third quarter of 2011. For consumer credit cards, the delinquency rate fell for the 9th consecutive quarter to 3.47% during the July-September period this year, dropping to the lowest level since a 3.46% reading in the first quarter of 1995, more than 16 years ago (see blue line in chart). Compared to the 4.35% quarterly average since 1992, the delinquency rate on credit cards is now about a full percentage point below the long-run average.The recession is over except in the minds of Keynesian interventionists like Krugman, who call for more government intervention every chance they get.
For all consumer loans, the third quarter delinquency dropped to 3.15%, the lowest rate since the 2.99% rate in the second quarter of 2007 before the recession started (see red line in chart). The second quarter delinquency rate is also below the 3.34% historical quarterly average since 1992.
I would assume that bankruptcies and the CARD Act have something to do with this... it probably isn't as straight-forward as you propose.
ReplyDeleteAlso, you keep saying that Keynesians are confused about this. I agree that Keynesians are confused with life, in general, but the economy is doing exactly what they wanted it to do, which is "recover" due to all the massive money-printing and troubled asset purchases. Why do you keep acting like they had no idea? The problem isn't that they were right or wrong, its that they don't understand what happens when money velocity increases or what the long-term consequences of their policies are.
And as a side note BoA just doubled my credit limit last week.
ReplyDeleteLow as the credit card delinquency rate already is, there is some more room left for improvement, as indicated by the early-stage delinquency rate (30 - 59 days), which continues to fall and is now at 0.75 percent, the lowest rate ever. What's even more certain is that defaults will keep falling, as the charge-off rate is a trailing indicator for the delinquency one. For an analysis: Low as the credit card delinquency rate already is, there is some more room left for improvement, as indicated by the early-stage delinquency rate (30 - 59 days), which continues to fall and is now at 0.75 percent, the lowest rate ever. What's even more certain is that defaults will keep falling, as the charge-off rate is a trailing indicator for the delinquency one. For an analysis: http://blog.unibulmerchantserv.
ReplyDelete