The Federal Reserve Bank of New York is reporting that (horrors) U.S. households increased total credit card debt 0.6 percent in 2013, to $683 billion.
The same institution reported that small businesses had — joy! — an easier time getting loans — but: only “experienced and profitable firms” had good access to the credit markets.
Firms that wanted less than $100,000 — the kinds of firms that respectable baby boomers who’ve lost salaried jobs might try to start — had a much harder time getting loans. The loan approval rate was just 46 percent for firms that tried to borrow less than $100,000, compared with 60 percent for firms that tried to borrow more than $100,000.
TransUnion says the overall credit card delinquency rate has dropped to 1.48 percent, which is low by historic standards.
Meanwhile, the insurers that issue private long-term care insurance (LTCI) are still famished for returns. The Federal Reserve Board is keeping interest rates low partly to encourage investor to “move out” along the risk curve and take a chance on somewhat riskier risks, but state and federal insurance company investment rules and traditions, and the wagging finger of the media, lock LTCI carriers into plain farmers’ market vanilla investments created by pasture-fed organic investment cows. If the portfolio managers ask for a sprinkle of investment cinnamon, heaven help them.
So, on the one hand, the LTCI carriers can’t make much on their investments.
On the other hand, they can’t even increase their yield by investing in the credit card debt, small business loans, or, in many cases, the mortgage loans of respectable 40-something and 50-something workers — workers who, really, are just trying to go beyond working to pay today’s bills and earn enough to save for retirement, insure their income, put something aside for their children’s education, and, possibly, buy private LTCI coverage.