U.S. Household Debt Reaches New Record as Some Delinquency Rates.

[Tom Wilson]

You can spin the increasing debt as "consumer confidence," alongside manipulated statistics such as "lowest unemployment rate" (look around you, do you really think we don't have an employment problem when all the headlines are about the fight against outsourced labor and technology taking human jobs?)

The article points out the sharp rise in delinquency for auto loans made to subprime borrowers by auto-finance companies, usually through auto makers or dealers. Student loans rose by $13 billion to $1.357 trillion as the fall semester got under way at colleges and university across the nation. Credit-card debt was up by $24 billion to $808 billion.

The good news is that many new loans last quarter went to households with healthy credit. The median credit score for auto loans originated in the third quarter was 705, and the median credit score for new mortgage borrowers was 760. Increased loan requirements are great for reducing default, but also boots many savvy investors out of the game.

It's so important to handle your debt responsibly and strategically. There's good debt, which is used to buy income-producing assets, and bad debt which can get you into serious trouble.

Stay educated and aware of what's going on in the economy, and always be looking for the underlying messages in mainstream news.

Best to you and your investing,

- Tom

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