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Authored by Lance Roberts via RealInvestmentAdvice.com,

A viral stat claims credit card delinquencies just hit their worst level since 2008. However, the New York Fed’s own data shows the opposite, and the real consumer credit stress is hiding exactly where the headlines aren’t looking.

A number has been making the rounds all year, and it’s misleading. The claim: roughly 13% of credit card balances are 90 days or more past due, the worst since 2008. Here’s the twist. That number is real, and it comes straight from the New York Fed. It just doesn’t mean what the scary charts say it means.

Sorting the real signal from the viral one matters because one of them belongs in your portfolio decisions and the other belongs in the trash.

Where The Scary Number Comes From

Let’s start with the Q2 2026 Household Debt and Credit Report, released August 11. Total household debt actually fell $13 billion on the quarter, a rounding error of 0.1%, to $18.8 trillion. Credit card balances rose $21 billion to $1.26 trillion, up 1.7%. So far, nothing that looks like a crisis.

However, this is the point where you are hit with the delinquency rate that everyone screenshots. The share of card balances 90 days or more past due has climbed from 7.6% in late 2022 to 12.8%. That is a real figure from the Fed’s data, and it’s the source the viral posts were reaching for without knowing it. Here’s the problem with reading it as a crisis. The Fed published a companion piece the same day, and its own economists took the number apart.

Crucially, they draw a very clear distinction between a “stock” measure and a “flow” measure. The stock measure simply counts every delinquent dollar remaining on a credit report, including old charged-off debts that lenders keep reporting for years. The flow measure counts how much debt newly goes bad each quarter. The flow indicates how households are actually doing, and it has been roughly flat since 2024. It rose from 6.93% to 6.97% year over year. That’s not an acceleration. That’s noise.

The obvious question is: “Then why is the stock number climbing?”

The answer is that lenders now report charged-off debt to the bureaus far longer than they used to. From 2004 through 2012, only about 40% of charged-off balances were still reported a year later. By 2024, that figure had doubled to 80%. Strip those stale balances out, and the stock delinquency rate falls right back in line with the flow. As usual, when everyone agrees on something, something else is usually going on. In this case, the crowd agreed on a chart that the people who built it were quietly warning you not to trust. I’ve made the same point before about the gap between what the data says and what the tape feels like, in the consumer sentiment disconnect.

(The “stock” delinquency measure that went viral reads 12.8%, but it counts years of stale charged-off debt. The “flow” of new delinquencies, the honest read on current stress, sits at 6.97% and has been flat since 2024. Source: New York Fed, Q2 2026)

“When the question is ‘how are households doing right now?’ the flow delinquency rates provide a more accurate view of current consumer repayment behavior. By those measures, the pace of credit card delinquency is elevated but has been largely stable since 2024.” – Lee, Mangrum, Scally, Sinha and van der Klaauw, New York Fed Liberty Street Economics

The Consumer Credit Stress That’s Actually Real

Dismissing the meme doesn’t mean the consumer is fine. Parts of the consumer are cracking. The stress is REAL. It just isn’t spread evenly across the system, and the aggregate delinquency chart hides that. Dig below the surface, and you find a household sector splitting in two, with the top half spending comfortably and the bottom half running on fumes.

The savings data gives us the clearest read into what is actually happening. In July, the personal saving rate fell to 3.0% of disposable income, with total personal saving of $712.0 billion, according to the Bureau of Economic Analysis. Put that in context. For most of the decade before the pandemic, households saved 7% to 8% of income. The rate spiked above 16% in 2020 when stimulus landed, and there was nowhere to spend it. It has bled lower ever since. A 3.0% print is near the lowest reading in 20 years.

Notably, a thin savings rate isn’t a crisis on its own. There are plenty of households that carry very little cash and never miss a payment. However, it does change the math on resilience. When the family car breaks down or a parent’s work hours get reduced, a family saving 8% of its income can absorb the hit. Conversely, a family that only saves 3% of its income reaches for a credit card more quickly. That’s the mechanism, and it’s why the delinquency increases we have seen are showing up first among subprime and lower-income borrowers, while prime credit performance has barely moved.

The Two-Speed Consumer, In One Table

The cleanest way to see the gap is to line up the viral claim against what the primary sources report. Almost every week, someone sends me a chart or a screenshot from somewhere, showing the consumer on the edge of collapse. The data, however, continues to tell a more specific story.

That split is the whole story, and it shows up in spending, too. The top 10% of earners now drive 49.2% of all consumer spending, the highest share since Moody’s began collecting data in 1989, up from about 36% three decades ago. Meanwhile, spending by households earning under $175,000 has barely grown in real terms since the pandemic. One consumer is fine. The other is the one filling up the subprime delinquency buckets.

The top decile drives 49.2% of all consumer spending, the highest share since 1989 and up from about 36% three decades ago. The bottom 80% has barely grown their spending in real terms. That’s the two-speed consumer in one picture.- Source: Moody’s Analytics, 2025

“Consumer credit stress is real. It’s just wearing a name tag that says subprime, and the headline chart keeps reading it as systemic.”

Where The Bears Are Right

I readily admit that the bearish case has a valid point. They state that aggregate data lags current realities. Therefore, by the time the Fed’s quarterly report confirms a broad deterioration, the damage is already done. Furthermore, a 3.0% savings rate means the marginal household has no shock absorber left.

If you then layer on a labor market that ran soft through the summer, with June and July payrolls revised down to 31,000 and 21,000 before August rebounded to 162,000, you have the setup for spending to roll over faster than the smoothed data will admit.

Those are all valid points. However, here’s the problem with treating it as today’s reality. It’s a forecast about tomorrow, not a reading of the current tape. The same case was made in 2023 and again in 2024. Each time, behavior beat feelings and spending held firm. I’m reasonably confident the low-end consumer market will continue to deteriorate from here. I’m far less confident it will drag down the aggregate over the next two quarters, because the prime borrower, who does most of the spending, is still in good shape.

What Consumer Credit Stress Means For Investors

So what do you actually do with this information?

1. Stop trading off the scary screenshot. A K-shaped consumer calls for a scalpel, not a sledgehammer. The businesses exposed to the bottom third of the income distribution, dollar stores, subprime lenders, buy-now-pay-later names, and lower-end restaurants, are where the stress shows up first and hits margins hardest. That’s a real and specific risk you can underwrite.
2. Respect the split rather than betting the whole book on one side. Higher-end consumer names and companies serving households with intact balance sheets are a different animal. Positioning for a total consumer collapse has been a losing trade for three years running. So has assuming everything is fine. The trade is the divergence itself.
3. Lastly, keep the real watchlist in front of you. Not the meme number. Watch the savings rate, the subprime delinquency trend, the quarterly New York Fed report, and retailer margin guidance through earnings season. We covered the deeper split between what households say and what they do in our look at the consumer sentiment disconnect, and in the piece on record retail inflows. The through line is consistent. Behavior beats feelings, and primary data beats viral charts.

The bottom line is this. The consumer credit stress story deserves your attention, but only the true version. A 3% savings rate indicates the cushion is thin, and the low end is exposed. The New York Fed data tells you this is a distribution problem, not a solvency crisis, at least for now. The moment the prime borrower starts slipping in the quarterly print, the calculus changes, and that’s the number that will tell you when to lean out.

If this raises questions about how your own portfolio is positioned for a two-speed consumer and a softening labor market, that’s the conversation we have with investors every day. Our process starts with your complete financial picture, not just your investment account. Schedule a complimentary portfolio review, and let’s pressure-test your exposure together.

Questions This Article Answers

Are credit card delinquencies really the worst since 2008? Only by one measure. The New York Fed’s “stock” delinquency rate, which counts all reported balances 90+ days past due, hit 12.8% in Q2 2026. That measure is inflated by old charged-off debt that lenders now report for far longer. The “flow” of new delinquencies, a better read on current stress, has been roughly flat since 2024 at just under 7%.

What’s the difference between stock and flow delinquency? The stock measure is the share of all outstanding balances currently marked delinquent, including stale charged-off debt. The flow measure is the amount of debt that goes bad each quarter. The flow tells you how households are doing right now, and the Fed’s own economists say it’s the more accurate gauge of current repayment behavior.

Is the U.S. consumer actually in trouble? Part of it. The stress is concentrated in subprime and lower-income households, where the 3.0% saving rate leaves no cushion. Prime borrowers, who account for most spending, are still in good shape. It’s a K-shaped consumer, not a system-wide credit event.

What should investors watch instead of the viral chart? The flow delinquency rate, the subprime delinquency trend, the quarterly New York Fed report, the personal saving rate, and retailer margin guidance. Those tell you when the stress is spreading from the low end into the prime borrower, which is the turn that actually matters for portfolios.

All this "green" technology embedded in vehicles over the last two decades, such as automatic stop-start, cylinder deactivation, turbocharging, advanced transmissions, hybrid systems, and other forms of electric assistance designed to reduce fuel consumption and improve miles per gallon, has made the upfront cost of purchasing a new vehicle unaffordable. 

The average price of a new car has exploded to $50,000, making it unaffordable for many working-class folks. Automakers have to abide by Obama-era and Biden-era "green" climate rules because these climate alarmists supposedly sought to heavily regulate the industry under the guise of saving the planet. In fact, overregulation has driven the cost of driving and maintaining these complex machines to unaffordable levels.

The DEF systems for diesel engines pushed during the Obama era have also added repair costs, maintenance requirements, and costly downtime. Many diesel owners have been infuriated by overregulation of these engines. Talk to any Ford Powerstroke or Dodge Cummins owners; they are no fans of DEF. 

To fix the mess of overregulation and what can only be described as an increase in the upfront cost of new vehicle ownership, as well as thousands of dollars in maintenance bills and headaches, President Trump announced on Saturday that his administration plans to release new fuel-efficiency mandates that roll back costly green mandates.

Trump wrote on Truth Social:

BIG DAY FOR AMERICAN AUTO WORKERS AND CAR BUYERS! I have just approved new Fuel Economy Standards that TERMINATE Sleepy Joe Biden and Pete Boot-EDGE-EDGE's ridiculous EV Mandate. The Dumocrats cost our Great Auto Manufacturers $Billions, forced Americans into cars they never wanted, and wasted Billions on Chargers that were never built.

These new Standards will take the waste out of building cars in America. That means LOWER PRICES, saving families thousands on a new, beautiful, and safe car — Far better than the Environmental Monsters that we were building heretofore. Every Manufacturer, from General Motors to Ford to Stellantis, has called me wanting to build here, and now they can!

Under my Administration, over $ 100 billion is being invested in American Autos, and that's just the beginning.

Transportation Secretary Sean Duffy quoted Trump's Truth Social post on X and responded, "A major victory for America's auto workers is COMING MONDAY."

A major victory for America’s auto workers is COMING MONDAY ?? pic.twitter.com/JB79NVufds

— Secretary Sean Duffy (@SecDuffy) September 26, 2026

Bloomberg noted, "If the final rule follows December's proposal, the projected fleetwide fuel-economy average for 2031 would fall to 34.5 miles per gallon from approximately 50.4 mpg under the Biden standards. The final requirements have yet to be released."

An NHTSA report from last December estimated that the proposed rule could lower upfront vehicle costs by $930, assuming manufacturers pass along the savings. 

British counterterrorism police declared a major incident near RAF Fairford, an airbase used by the US Air Force, after several men were arrested on suspicion of explosives offenses. RAF Fairford was reportedly placed on "Delta," the highest threat level, according to the national news agency Press Association, now known as PA Media.

?? RAF FAIRFORD ALERT DEEPENS — COUNTER-TERROR POLICE, EXPLOSIVES ARRESTS, EVACUATIONS AND HEIGHTENED BASE SECURITY

The security operation near RAF Fairford has moved into a more serious phase.

Several men are under arrest on suspicion of offences under the Explosives Act.…

— Jim Ferguson (@JimFergusonUK) September 27, 2026

PA Media reports that military bomb disposal specialists were examining vehicles in Whelford, Gloucestershire, where authorities declared a major incident and evacuated residents from the area.

Villagers have been evacuated from their homes near RAF Fairford, which is used by the United States Air Force (USAF), and the Army's explosives experts are examining vehicles, police said.

According to the agency, counter-terror police had no advance knowledge of a potential plot.

However, the incident was serious enough for RAF Fairford to block major entrances to the airbase with massive front-end loaders, suggesting concern about a possible vehicle-borne improvised explosive device.

Image per Sky News: 

Why could RAF Fairford have been a target? The US Air Force's 501st Combat Support Wing operates out of the airbase. It supports B-52, B-1, and B-2 bomber operations that have been crucial in the Gulf conflict against Iran.

Visegrád 24: First image of the suspected terror cell arrested near RAF Fairford from where U.S. strategic bombers B-52 & B-1B hit Iran The men arrested under the Explosives Act had their clothes taken off to see whether they wore suicide vests. 

BREAKING

First image of the suspected terror cell arrested near RAF Fairford from where U.S. strategic bombers B-52 & B-1B hit Iran

The men arrested under the Explosives Act had their clothes taken off to see whether they wore suicide vests pic.twitter.com/dgdNgQc6j1

— Visegrád 24 (@visegrad24) September 27, 2026

Visegrád 24: These are the vans that the bomb squad is have a closer look at near RAF Fairford in the UK. RAF Fairford is the base from where the U.S. strategic bombers B-52 and B-1B have been taking off from for striking missions against Iran.

BREAKING:

These are the vans that the bomb squad is have a closer look at near RAF Fairford in the UK.

RAF Fairford is the base from where the U.S. strategic bombers B-52 and B-1B have been taking off from for striking missions against Iran. pic.twitter.com/XCXBYxLERH

— Visegrád 24 (@visegrad24) September 27, 2026

Speculation builds... 

BREAKING: The five individuals arrested earlier this morning over an alleged plot to bomb RAF Fairford and destroy U.S. Air Force B-1B bombers are reportedly British nationals not immigrants arriving by boats or submarines.

There is speculation that they belong to Palestine… pic.twitter.com/iVHjH0B5gj

— Babak Taghvaee - The Crisis Watch (@BabakTaghvaee1) September 27, 2026

The Independent noted, "The arrests come amid heightened concerns around the threat from hostile states to the UK, with Russia and Iran among those that have used proxies to commit crimes on their behalf on British soil."

A classified US intelligence assessment's conclusions have been reported in The Washington Post at the end of this week, and the report says that Saudi Arabia has not ruled out developing nuclear weapons.

The report comes as Congress is scrutinizing President Trump's controversial nuclear cooperation agreement with Riyadh, which was signed by Energy Secretary Chris Wright in July. The classified intel has not been released by the Post - but the publication says the assessment was presented to Congress as part of the nuclear deal review.

The landmark (what is supposed to be) civil 30-year nuclear cooperation agreement with Saudi Arabia could be worth tens of billions of dollars and put American companies at the center of the kingdom's nuclear buildout

A Section 123 agreement creates a legal framework for peaceful use, safeguards, and nonproliferation. The admin's reasoning goes that American involvement also gives Washington more influence over Riyadh's program than it would have if Saudi Arabia turned to China or Russia.

However, according to the Washington Post, Congressional leaders are alarmed at lack of appropriate safeguards and significant departure from precedent.

A group of Democratic senators led by Ed Markey of Massachusetts and Jeff Merkley of Oregon have made their deep unease known in a letter submitted to Secretary of State Marco Rubio on Friday.

They are raising the alarm over a process "that is all but certain to allow Riyadh to acquire the means to enrich uranium and possibly develop nuclear weapons."

Sen. Markey has been most outspoken, calling the arrangement "bogus as hell" - as he sees Washington as acquiescing to Saudi demands which point to a secret intentions to keeping open a path to a nuke. He also alleges some insider quid pro quo involving unelected officials close to Trump.

"If they’ve given up the intent to develop a nuclear weapon, then they’d give up domestic enrichment and reprocessing power, right? They'd accept massive inspections from the IAEA," the lawmaker from Massachusetts said.

The senators are also worried that this will only affirm Iran's defiance, especially if they decide to covertly develop a nuclear weapon. Tehran will feel more justified amid a potential Middle East atomic arms race.

"It is very clear that as this war in Iran continues to unfold, that the Iranians are going to fiercely defend their ability to develop a nuclear weapons program, and as a result, any action that we take in Saudi Arabia will only further accelerate a fallout nuclear arms race in the region," Markey said additionally.

As for the letter from the Democratic senators, it hit out hard at shady dealings with the Saudis by Trump's family and inner-circle.

If the Saudi Arabian dictatorship does try to develop nuclear weapons, as US intelligence reports suggest, does that mean the US should start a war against them and try to regime-change them based on the view that "Saudi Arabia must not be allowed to have a nuclear weapon"? https://t.co/NtaxaEZU1H

— Glenn Greenwald (@ggreenwald) September 25, 2026

"Jared Kushner, for example, accepted a $2 billion investment from a Saudi sovereign wealth fund after leaving the White House at the end of the first Trump Administration," the letter says.

"Westinghouse Electric, meanwhile, stands to make tens of billions of dollars if this agreement moves forward. Westinghouse’s majority owner is closely associated with Newmark, the real estate firm run and owned in part by the sons of Commerce Secretary Howard Lutnick," it also says.

Authored by Larry Johnson via Sonar21.com

Yves Smith of Naked Capitalism has flagged a recent interview that Professor Robert Pape did with Mario Nawfal. During the interview, Pape argued that Vladimir Putin is caught in an "escalation trap." In his telling, Russia launched a preventive war in February 2022 to seize Kyiv and roughly 60 percent of Ukraine. That plan collapsed, and the fallback, betting that NATO would break, is now producing the European counterbalancing coalition Moscow most feared. It is a tidy theory. It also rests on a premise about Russian intentions that the record does not support, and once that premise goes, the trap goes with it.

What the force tells you about the objective

Start with arithmetic, the kind any planner of military operations does before anything else. Russia invaded with roughly 150,000 to 190,000 troops, including separatist forces. The standard rule of thumb for occupying a hostile population, from James Quinlivan’s RAND work, is about 20 troops per 1,000 inhabitants. For a country of more than 40 million, even occupying 60 percent of the territory would require several hundred thousand troops, several times what Russia sent. Moscow’s General Staff can do this arithmetic. A force that size is a coercive instrument, not an occupation army.

The pattern of the operation fits coercion. Russian forces approached Kyiv from the north but never attempted to assault or encircle a city of three million. The pressure was aimed at the government, not at taking the capital block by block. Talks began within days, in Belarus on February 28, and moved to Istanbul in March. Pape's supporters point to the airborne assault on Hostomel as proof of a plan to seize the capital. But a failed coup de main against an airfield is not evidence of an intent to occupy 60 percent of a country.

Istanbul: the objective was achieved

The strongest evidence against Pape is that the coercion worked. By the end of March 2022, meetings in Belarus and Turkey, together with video conferences, had produced the Istanbul Communiqué, a framework for a settlement. Ukraine accepted permanent neutrality in exchange for security guarantees from the United States and its allies, with Russia also as a guarantor. Russia, for its part, agreed to a process to settle the Crimea dispute diplomatically.

That was the core of what Moscow wanted, and the Ukrainian side confirmed it. David Arakhamia, who led Ukraine’s delegation, later said Russia was prepared to end the war if Ukraine accepted Finland-style neutrality and committed not to join NATO. Russian Foreign Minister Sergei Lavrov confirmed to me, Judge Napolitano and Mario Nawfal directly that the talks produced a tentative agreement, and that its terms were brought to the table by the Ukrainian delegation, not imposed by Moscow.

As a gesture of goodwill, Moscow withdrew its forces from north of Kyiv. Western commentary treats that as a retreat forced by battlefield failure. It is at least as consistent with the claim that the pressure had served its purpose.

How the deal died

Then the politics changed. Boris Johnson arrived unannounced in Kyiv on April 9, 2022, and according to Arakhamia told the Ukrainians not to sign anything with Russia and to “just fight.” Two days earlier, Lavrov had already complained publicly that Ukraine’s new draft departed sharply from the key provisions agreed at Istanbul on March 29. Washington and London had decided Russia was weaker than they had thought and that it could be bled. Ukraine walked away.

This is the point Pape’s framework cannot absorb. If Russia’s goal was a neutral Ukraine obtained through negotiation, the war did not go on because Moscow’s plan failed. It went on because Russia’s adversaries rejected the settlement.

No plan B, but a fast pivot and a new army

With hindsight, Russia clearly had not prepared a plan B for Ukraine walking away. That was a real planning failure. But the Russian military adjusted quickly. It concentrated on the Donbas and the land bridge to Crimea, and the fall of Mariupol in May gave it the first major result of that phase.

The bigger adjustment came in September 2022. After a large number of contract soldiers left the army in August and the Kharkiv counteroffensive exposed how thin Russian lines were, Putin ordered the mobilization of 300,000 reservists. That was the start, not the end, of Russia’s response. From that point Moscow set about building a much larger army, as the Russian officers I have interviewed have described in detail, including Gen. Apti Alaudinov, Gen. Evgeny Buzhinsky, Gen. Andrei Gurulev and Col. Eduard Basurin.

The mobilization was followed by a sustained recruitment campaign and an expanded annual draft. By Medvedev’s count, more than 452,000 men signed military contracts in 2023. Roughly 450,000 followed in 2024, and more than 422,000 in 2025. Year after year, Russia has added at least 350,000 new soldiers. Putin’s decrees tell the same story: authorized military strength rose from about 1.15 million in 2022 to 1.32 million in December 2023, then to 1.5 million effective December 2024. By 2026, according to my sources, Russia’s army had reached that 1.5 million active-duty figure.

That is not the behavior of a state that expected a quick war and is now improvising its way out of a trap. It is the behavior of a state that decided in the autumn of 2022 to fight a long war, and built the force to do it.

Why the timeline matters

The goals never changed. Putin announced them on February 24, 2022: the demilitarization and “denazification” of Ukraine. What changed after Istanbul was the method, from coercion toward a negotiated settlement to attrition. Moscow has never attached a timeline to that effort.

Pape’s trap depends on the assumption that Russia needed a quick victory and is now stuck with worse and worse options. An attrition strategy with no deadline, backed by an army that has grown every year since 2022, is not a trap. It is a choice. Moscow's theory of victory since late 2022 has been to exhaust Ukraine’s manpower and the West’s willingness to supply it, not to break NATO by a specific date. Four and a half years later, Russian forces are still advancing, and Ukraine’s reserve and mobilization problems are structural, not temporary.

Pape’s answer is European counterbalancing, backed by an EU economy he puts at about eight times Russia’s. That ratio only holds at market exchange rates, which badly understate what Russia’s economy can actually produce. On purchasing power parity, the measure that matters in a war of production, Russia is the fourth largest economy in the world: about $6.9 trillion in 2024 by the World Bank’s count, behind only China, the United States and India, and ahead of Japan and Germany. The EU as a bloc is still larger, but on that basis the gap is roughly half of Pape’s figure.

GDP understates Russia’s position in another way. Russia has a resource base that Europe cannot match, from oil, gas and coal to metals and fertilizer, and a defense-industrial base that Europe has let wither for thirty years.

Artillery shells, the basic currency of this war, show what that means in practice. Russia produced an estimated 400,000 122mm and 152mm artillery rounds in 2022. By 2025, estimates put its annual output at about 4.2 million. A 2026 Estonian intelligence report goes further, estimating that Russian factories produced about seven million artillery, mortar, tank and rocket rounds in 2025. On top of that, Russia has received millions of rounds from North Korea.

Europe started from almost nothing. At the beginning of 2024, according to Rheinmetall’s own internal estimate, all Western European manufacturers together could produce about 550,000 shells a year. NATO's own assessment was that Russia produced as much ammunition in the first three months of 2024 as the entire alliance did in a year. The EU pledged to reach a capacity of two million 155mm shells a year by the end of 2025, a target, not proven output. Even adding US production, which is aiming for about 100,000 rounds a month in 2026, allied programs might yield about three million shells this year, still less than Russia’s estimated output in 2025.

That is the real measure of the balance Pape is counting on. A bloc whose economy is several times Russia’s is still being outproduced in the one commodity that decides an attrition war. Balance-of-power theory may be right that Europe will eventually arm itself. It says nothing about whether that happens in time to change the outcome in Ukraine.

Russia sent a force too small to occupy most of Ukraine, negotiated within days, and reached a framework agreement within five weeks. When the West persuaded Kyiv to walk away, Russia shifted to an open-ended war of attrition and spent four years building an army to fight it. That is not a state trapped by the failure of a plan to conquer 60 percent of a country. It is a state that tried coercion first, adapted when it failed, and is fighting on its own timeline.