Consumer Debt - Still A Long Way To Go

I have seen numerous articles as of late discussing how the average American family has finally delevered their household balance sheet at last. This would be good news as lower debt levels means more personal savings which would lead to productive investment. It would also mean more consumption that would provide stronger end demand to businesses. Both of these outcomes are necessary for sustained economic growth. The chart below has been used repeatedly to argue the deleveraging case for the economy.

At first glance the case of such deleveraging is clear. Households have develeraged, however, household debt to GDP is a bit misleading because GDP includes all activity of the economy including corporations and government. What we really want to know is how has the average American family has fared in this process. This is important to know considering that Personal Consumption currently makes up more than 70% of the economy as shown in the first chart below.

I have also included the household debt to GDP analysis as well as the 10-year rolling change in GDP. The important point to this discussion is the breaking point of economic growth as noted by the dashed black vertical line. As shown, the rate of economic growth began its decline as personal consumption became fueled by expanding levels of debt. Since debt by its very nature is destructive to economic prosperity, as it reduces savings and productive investment, it is only logical that in order to start restoring economic growth rates to higher levels - debt must return to levels that support higher personal savings rates and productive investment.

The importance of savings rates, as shown above, is crucially important to long term economic prosperity. When individuals save money they have more to spend on discretionary items which bolsters end demand and encourages businesses to increase employment and expand production. Personal savings are also used by financial institutions to loan to businesses to increase production, plant expansion or make other investments. Without savings the ability to expand economic growth becomes constrained.

With this in mind we now return to the discussion of consumer deleveraging. It is true that the consumer has deleveraged its balance sheet since the end of the last financial crisis. This should be considered a positive event except for two primary issues. First, according to the most recent quarterly update on household debt balances the only deleveraging that has really occurred is within mortgages (as shown in quote below). The problem is that this has been achieved primarily through forced write downs, foreclosures, refinancing and shortsells. This is obviously not the healthy kind of balance sheet repair accomplished through rising wages and payment of debt. Secondly, if consumer debt was being worked off in a productive manner then personal savings rates should be rising. That is not the case which tells you that something else is occurring.

"Mortgages, the largest component of household debt, continue to drive the decline in overall indebtedness. Mortgage balances shown on consumer credit reports continued to drop, and now stand at $8.03 trillion, a 1.5% decrease from the level in 2012Q2. Home equity lines of credit (HELOC) balances dropped by $16 billion (2.7%). Non-mortgage household debt balances jumped by 2.3% in the third quarter to $2.7 trillion, boosted by increases of $18 billion in auto loans, $42 billion in student loans, and $2 billion in credit card balances."

The problem is that even with reduced mortgage debt levels consumers are still carrying debt will in excess of what their incomes can healthily support and allow for increased savings. Furthermore, they are now adding to those balances in order to maintain their current standard of living as real incomes have come under pressure and remain at the same level as they were in 2008. Rather than household debt to GDP - a better measure of household balance sheet strength is debt to income per capita.

The chart below shows real (inflation adjusted) total household debt as compared with real incomes. The dashed red line running below real incomes is the normalized growth rate of debt at levels that were previously supportive of higher savings rates. That level, between 1959 and 1980 was 89% of real debt to income. This lower level of debt allowed for higher savings rates and stronger economic growth.

The immediate argument is that lower interest rates can allow for greater leverage within the household and still foster savings and productive investment. While I would agree with the premise of that argument there is no historical evidence showing this to be true. The following chart shows the decelerating rate of economic growth, and falling savings rate, even as interest rates have been pushed lower. There have been arguments made that the Federal Reserve should promote higher rates in order to restore economic growth as it would lead to reduced debt levels and higher savings rates. This chart would be supportive of that statement.

Deleveraging To Continue?

This begs the question of how much further does the consumer need to deleverage in order to restore a healthy balance between debt and incomes? The chart below shows the deviation between the current real debt/income ratio and the median of the normalized trend which was shown in the previous chart above.

It is important to remember that reversions to the mean typically return an equal and opposite distance beyond the mean. Therefore, with debt still 80% above normalized debt levels, and consumer debt to income ratios still at a lofty 170%, the reversion back to levels that are constructive to economic growth still has a very long way to go. The problem is that apart from mortgage debt, whose decline has been facilitated by massive central bank and governmental intervention, other debt is still being piled on. The chart below shows the monthly change in consumer credit versus personal consumption. Whatever deleveraging there might have been post the financial crisis - it is now over.

These other debts are at substantially higher rates than mortgages and negatively impacts the consumer's ability to save. This is why savings rates continue to fall. As full-time employment remains elusive, the average American continues to resort to debt, and governmental support, to fill the gap between waning real incomes and their expected standard of living. This is a game that has a finite end.

The diversion of income from savings to support debt service requirements will continue to impede economic growth until such time as either debt returns to levels that are conducive for higher levels of personal savings or incomes rise. The problem for the latter is that the excessively large, and available, labor pool continues to increase competition for employment which suppresses wages. This leaves consumers trapped between the need to payoff of debts in order to free up cash flow but needing increased levels of debt to sustain their standard of living. In the end the consumer will delever, either by choice or by force, the only difference between the two outcomes is the length of time that the current economic malaise lasts.

Source: Street Talk Live

Source: http://feedproxy.google.com/~r/fso/~3/IjAj3WE2FEI/consumer-debt-still-a-long-way-to-go

Jovan Belcher Charlie Batch Rita Ora Miguel Calero Bret Bielema bruno mars bob costas

Predator becomes prey:Google-funded drones to hunt poachers

6 hrs.

Devin Coldewey , NBC News

Google has awarded a $5 million grant to the World Wildlife Fund?to use and adapt?new technologies to combat animal?poaching around the world. The group has grand plans for the money, which will be used for everything from camera-equipped drones to next-generation animal tags that send?text messages with critical information to?rangers.

"We needed?to find other ways where we could detect and deter poachers," Crawford Allan, head of wildlife trade organization TRAFFIC North America and one of the WWF's?on-call experts,?told NBC News. "It's been fairly rudimentary in places where there are very precious species to protect."?

Poacher operations have grown in scale and sophistication, despite efforts to curb?them. Rhinos used to be poached at a rate of 15 or 20 per year in Africa?? but now, because of high demand for rhino horn coming primarily from Asia, over 600 have been killed this?year alone.?Statistics for elephants and tigers are equally disturbing.

Enter Google, which awarded the Washington, D.C.-based WWF the grant as part of Google's?Global Impact Awards:?a larger, $23 million effort to fund tech uptake in areas like preservation and humanitarian endeavors. Allan describes the grant?as an incredible opportunity.

"We could have just gone on business as usual, making small steps," he said. "But now that we have a major partner in Google, we can finally take some big steps."

Part of the money has to go to such logistical concerns as updating laptops, buying gas for patrols, and making sure people on the ground are safe and well-supplied. But such a large grant also means the WWF can finally deploy technologies it's been waiting on for years.?

For instance:?Drones. Not fully autonomous ones, but human-piloted platforms that can relay information like acoustic signals and infrared imaging in real time to their operators and patrols on the ground.

"With the aerial vehicles,?we have not selected any particular system, and we may be looking to tailor one to our needs," Allan said. "But we're not going to be using a $200 hobby-shop device.?We're probably looking in the tens thousands of dollars range."

Such a platform would need to strike a balance between cost, capacity, noise, portability and many other factors. The WWF is doing initial aerial platform testing at sites in Namibia and Nepal, and is?hoping to partner with interested local governments.

Another big advance the WWF is excited about is a new system of animal tags. Existing ones are clunky,?use antiquated software,?and have a fairly limited battery life.?

A new type of tag is in the works that would work on a similar system to a GSM cellphone, and would not only be lighter and stronger,?but would?last longer (up to two years) and be able to collect and transmit far more data.

Animals' tags could text park rangers?with the animals' location and status, or retain and transmit other rich data. And they should only cost around $250 each ? peanuts compared with the tags the WWF uses now, each which can cost as much as $4,500,?with extra fees for satellite coverage.

But perhaps what the organization is looking forward to the most is a new, overarching system for integrating all the data created by satellites, aerial vehicles, patrols on the ground?and government reports. The methods for handling all this data aren't nearly good enough right now, said Allan.

He also said?that authorities aren't always willing to put this kind of infrastructure in place on their own, whether because of cost or corruption. The poaching business is very lucrative and officials in developing countries can be convinced to turn a blind eye for a price.

With the integrated system and better data for everyone involved, the WWF can work with international police and other non-governmental organizations?to track poached animals and parts using DNA analysis, law enforcement records?and other resources.

The process is just beginning. Allan cautions that?while the grant is going to make many things possible, it's not going to revolutionize the anti-poaching world overnight.?The WWF expects the testing and rollout of the new technologies to?take a couple years at least.

In the meantime,?Allan and others hope that just the idea of such powerful tools being put into the field will act as a deterrent.

Poachers may be confident when all they have to worry about is rangers with radios and jeeps. But when there's an army of networked drones, smart sensors?and high-tech surveillance watching every animal for miles, they may think twice before sneaking onto the Savannah.

Devin Coldewey is a contributing writer for NBC?News Digital. His personal website is?coldewey.cc.

Source: http://www.nbcnews.com/technology/technolog/predator-becomes-prey-google-funded-drones-hunt-poachers-africa-1C7456194

miguel cabrera Karrueche Tran dodd frank Lark Voorhies Jennifer Livingston Orlando Cruz MLB Playoff Schedule

Clinton to testify on Benghazi attack report: U.S. lawmaker

WASHINGTON (Reuters) - U.S. Secretary of State Hillary Clinton will testify on a report expected to be released next week on the deadly attack on the U.S. diplomatic post in Benghazi, Libya, a top Republican lawmaker said on Friday.

"I have just received confirmation from Secretary Clinton's office that the secretary of state will appear before the House Committee on Foreign Affairs to discuss, in an open hearing, the findings and the recommendations in the report," Representative Ileana Ros-Lehtinen said in a statement.

Ros-Lehtinen is chair of the House of Representatives Foreign Relations Committee, which has already held several hearings and classified briefings on the attack.

The attack killed U.S. Ambassador Christopher Stevens and three other Americans, and raised questions about the adequacy of security in far-flung posts.

Republicans have criticized the Obama administration for its flawed early public explanations of the attack, and then for shifting explanations of why talking points given to U.S. Ambassador to the United Nations Susan Rice were changed to delete a reference to al Qaeda.

Ros-Lehtinen said she expected an accountability review board convened by the State Department to release a report on the attack sometime next week.

The review board, led by veteran diplomatic heavyweight Thomas Pickering, is expected to consider whether enough attention was given to potential threats and how Washington responded to security requests from U.S. diplomats in Libya.

Ros-Lehtinen said she wanted to hear from Clinton about steps the State Department has taken to deal with problems in the "security of our posts, threat assessments, host government responsibilities and coordination with other U.S. security agencies."

The committee's press release did not give a date for the hearing with Clinton, but said it expected it to happen "soon after" the review board's report is released.

(Reporting by Doug Palmer; Editing by Lisa Shumaker)

Source: http://news.yahoo.com/clinton-testify-benghazi-attack-report-u-lawmaker-020139133.html

pregnant jessica simpson international womens day joe the plumber lra lra eric johnson eric johnson

The Hill: Sanders: GOP Senate obstructionism 'undemocratic' and 'unAmerican'

Sen. Bernie Sanders (I-Vt.) slammed Republican obstructionism in the Senate as ?undemocratic? and ?unAmerican? and urged filibuster reform after Senate Minority Leader Mitch McConnell (R-Ky.) blocked his own bill earlier this week.

?In a time of disfunctionality in the Senate, and all kinds of absurdity, this probably takes the cake when you filibuster your own? bill, the self-described "democratic socialist" lawmaker told MSNBC's Ed Schultz Friday evening. ?The American people want action and it is undemocratic, it is unAmerican when a small minority can deny the majority from going forward.?

Sanders made the remarks after McConnell on Thursday called for a vote on legislation giving President Obama unilateral power to increase the nation?s borrowing limit, the so-called debt ceiling. McConnell had hoped to demonstrate that Republicans and Democrats alike oppose what he described as a ?power grab? by the president, but he was forced to object to a simple majority vote after Democrats agreed to move forward.

Democrats said it may have been the first time that the minority in the Senate blocked one of its own bills from moving forward. The Senate did not end up voting on the measure, which would have required 60 votes to move forward after McConnell objected.

?I certainly hope we will succeed with very serious filibuster reform, because if we don't, we're going to continue to be tied up in knots,? Sanders said. ?Look, the Senate is not the House, and we want to create a situation where the minority, whether it`s Republican, Democrat, whatever, has the right to explain to the American people why they feel the way they feel. That is ... important.

?On the other hand, the majority in this country has the right to rule, has the right to make decisions. Obama won a huge victory. We won 25 out of 33 elections in the Senate. We won seats in the House.?

---

Source: http://thehill.com/homenews/senate/271801-sanders-gop-senate-obstructionism-undemocratic-and-unamerican

ncaa march madness mario williams vcu unlv sam young ncaa bracket ramon sessions

Short Sales Increase As Debt Relief Tax Time Bomb Nears | FDL ...

I?ve had more than a few assurances that Congress would get its act together and pass an extension of the Mortgage Forgiveness Debt Relief Act, so that underwater homeowners who get some debt relief won?t have a big tax bill staring them in the face to make their financial situation even worse. But if that?s the case, you have to wonder why lenders are packing in so many short sales as we near the expiration date.

Homeowners and banks are accelerating sales of properties for less than the amount owed as a U.S. law that gives them a tax break expires at the end of the year.

The transactions, known as short sales, increased by 35 percent in the third quarter from a year earlier, while sales of bank-owned homes dropped 20 percent, according to a report today by mortgage data seller Renwood RealtyTrac LLC. Together, they accounted for 41.5 percent of home purchases in the quarter.

Short sales have accounted for as many as 1.1 million transactions since 2009, helping to reduce the inventory of homes owned by banks that can blight neighborhoods and flood the market. Barring a last-minute extension of the 2007 Mortgage Forgiveness Debt Relief Act, homeowners will be taxed on the forgiven principal. With Congress focused on the so-called fiscal cliff, federal spending cuts and tax-rate hikes set to kick in on Jan. 1, the law may not be extended, leading to a drop in short sales and a rise in foreclosures.

I?m particularly interested in how this will completely screw up the foreclosure fraud settlement. The entire thing was predicated on providing meaningful relief to borrowers who were actually wronged by the manipulation and fraud in the lending process. So here they receive their reward, but they?ll have to agree to pay taxes on it, money they don?t have stashed somewhere, otherwise they wouldn?t be a ?troubled borrower.? As a result, nobody will accept debt relief under the settlement.

How those who put together the settlement couldn?t have seen this coming is a total mystery. Or maybe it?s not. At one level, they could have built into the settlement the idea that the relief served as compensatory damages, and therefore not eligible for taxation. However, this would have meant that banks could not write it off as a business expense, as I wrote previously:

The authors of the settlement never made it explicit that the awards were compensatory in nature, which would have accomplished two things. One, it would have made the awards tax-exempt. Two, it would have disallowed banks from deducting the awards on THEIR taxes. Without that language, it?s unknown how the IRS will react. So that?s just another little backdoor bailout.

In other words, the settlement authors never contemplated making the damages compensatory because they wanted to give banks the benefit of tax exemption rather than homeowners. That?s just another little way you can see how the settlement was structured more to the benefit of banks than the people they harmed.

Presumably, if banks do not cover the total relief in the settlement after three years, they have to pay a cash award for the balance. This would hurt their balance sheets more, because rather than just taking air our of mortgage balances they would have to give up real money. This is one part of the reason you see the Financial Services Roundtable pushing to extend the MFDRA (the others include the fact that short sales are more lucrative than foreclosures, and that they have helped prop up a recovering housing market). But governments would then get hard dollars rather than seeing it go to homeowners (I?d have to go back and check to see how that penalty would get distributed).

Short sales account for an incredibly large percentage of all US home sales. This is going to be a disaster in the first quarter without an extension:

Sales of homes in some stage of foreclosure accounted for 20 percent of all U.S. homes sales, the report said. The share was highest in Georgia, at 38 percent, followed by California, at 36 percent; Arizona, at 34 percent; and Nevada, at 31 percent.

Short sales of homes that weren?t in foreclosure rose 17 percent in the third quarter, the data company said, without providing a number because the figure is based on a sampling of the market. Those sales accounted for 22 percent of all U.S. sales, and were the highest in Rhode Island, at 58 percent; Connecticut, at 47 percent; and Massachusetts, at 44 percent, according to the report.

There?s probably no housing analyst even conceiving of the fact that their precious ?recovery? is a mirage caused by an expiring tax break, just like the last pseudo-recovery with the first time homebuyer?s tax credit. They should think it over more.

Photo by Images_of_Money under Creative Commons license.

Source: http://news.firedoglake.com/2012/12/06/short-sales-increase-as-debt-relief-tax-time-bomb-nears/

ipad 3 release date apple store down apple live blog ohio primary cell phone jammer g8 summit netanyahu

Personal computer Training with IT Computer Training Courses

ABCO Technology specializes in providing Computer Coaching and Consulting for the Information Technologies Business. Computer Instruction is presented by experienced, certified sector specialists that have years of seasoning in their respective field of Data Technology. All instructors use the official vendor curriculums for their courses, along with using reside firm projects to enhance the usability of the training material. It is by means of this method of education that our students have been in a position to move on to high-level professions inside the IT market.

ABCO Technology is your 1 quit IT Answer Firm, along with instruction we also offer IT consulting services to firms including net site design and style, corporate network setup, repair and upkeep, database design and development, Application development, Project Management. Regardless of whether you or your business require training on applications as effectively as computer use or want to update, migrate or repair your existing company setup ABCO can present a remedy that will fit your needs. On internet, the folks mostly come to search for the data. Most of the information is text based. If a fancy page has no info or substance, it delivers no worth. With these issues and your study in thoughts, here are handful of other essential points that you must take into account even though planning your site design and style. Also we supplies Search Engine Advertising Consulting service delivers classy keyword analysis, link building, Search engine marketing optimization and advertising and marketing suggestions, internet site promotion internet marketing and advertising utilizing organic Search engine marketing methods. leadership training website
per your request
ABCO Technologies is committed to helping organizations uncover the right computer education and consulting services for their business. We strive to be the finest resource available, permitting our consumers to attain the very best practical hands-on instruction or IT solutions Consumers want technologies to operate efficiently and simply. ABCO helps your business move in the proper direction with the proper answer. We provide Specialized programming classes developed for clients who have unique IT requirements. We make a particular promise to all of our customers that all classes at ABCO will be simulated according to the job atmosphere. We can offer instruction at our location or at the client?s site. Students can ask particular questions, get time sensitive hands-on training and ask the crucial questions which can lead to enhance their performance at operate right after training from ABCO.

ABCO Technology Computer Education Schools offer simple IT Personal computer Education Certifications in certain operating systems like Linux or basic networking technologies. Associate certification course are also offered and tend to take a single year to comprehensive and prepare for jobs as systems analysts, database administrators, or middle level design positions. ABCO Technologies personal computer coaching institute prepare people for higher-level computing and engineering jobs. management training

Source: http://www.jomcode.com/jeruy/lfnaeurnm/personal-computer-training-with-it-computer-training-courses-personal-computer-courses/

new york jets etch a sketch romney sean payton saints bounty program toulouse france ny jets ny jets

'New Girl': Nick's Fear Of Halloween Leads Him To Punch Jess In The Face (VIDEO)

Halloween turned into a big night for the gang on "New Girl." Nick faced his fears -- though it seems unlikely the experience will do anything to help them conquer them. But as we've seen in the past, he's willing to do a lot to try and protect Jess, though in this case things backfired pretty badly.

Jess had revealed to Nick that she'd developed real feelings for her regular fling Sam, only Sam later revealed that he's keeping it casual with at least one other girl as well. So Nick braved his greatest fears to go tell Jess what he'd found out. Jess was working at the haunted house, and Nick going in there turned out to be a very bad idea. Terrified, he started lashing out at anything that accosted him, including Jess in her "Woody Allen" zombie costume.

So rather than give Jess a heads up, he punched her in the face. And then all of her monster friends came to her aid, surrounding and beating Nick bringing his "worst nightmare" to life. Jess, then, was left to feel the real emotions of heartache when she opened up to Sam and he shut her down. At least he was and had been honest from the beginning about what he wanted in their relationship.

She did get to work out some of her emotions back at the apartment, at least. Nick agreed to let the guys hold him so that Jess could get a revenge punch in. He may not have thought she'd go through with it, but it certainly sounded like she got a good one in at the end there.

Keep up with "New Girl" every Tuesday at 8 p.m. ET on Fox.

TV Replay scours the vast television landscape to find the most interesting, amusing, and, on a good day, amazing moments, and delivers them right to your browser.

Related on HuffPost:

"; var coords = [-5, -72]; // display fb-bubble FloatingPrompt.embed(this, html, undefined, 'top', {fp_intersects:1, timeout_remove:2000,ignore_arrow: true, width:236, add_xy:coords, class_name: 'clear-overlay'}); });

Source: http://www.huffingtonpost.com/2012/10/31/new-girl-nicks-fear-of-ha_n_2047966.html

cab calloway melissa gilbert deadliest catch dwts sean hannity bobby petrino fired buffett rule