Rick Santelli: We are all bragging about the lot of numbers we receive on the economy, but the real issue is that many surveys continue to point that many people don’t feel as though, you know, the economy is doing that well, so it really is how the pie is sliced. We’ll continue to make progress, but I think we need to concentrate on how to make faster progress, and to that end, maybe one of the issues is credit, so I’d like to welcome our guest, Chip Dickson, thank you for taking the time this Monday morning, Chip.

Chip Dickson: Thanks Rick, it’s good to see you.

Rick Santelli: Alright. Listen, pursuant to what’s going on in the consumer sector, let’s look at areas that normally contribute to GDP and go through them one by one. How’s housing doing from a credit perspective?

Chip Dickson: Housing is doing okay. If you look at the mortgage applications, (there’s) slow growth there. The prices are going up, but it seems to be more at the upper end so I’d say okay on housing. Home equity loans, though, continue to decline.

Rick Santelli: Alright, now autos. Phil “Four on the Floor” LeBeau has had some atmospheric numbers from that area of late. Does it remind you of another sector pre-crisis, maybe housing and teaser rates? Can you tell me if we’re looking at the right detail there?

Chip Dickson: I think you have to look at a couple of things on autos. First of all, the age of the auto fleet is still very old. Cars are getting more efficient, there’s more technology and consumers have more choices. It does look like some financials are beginning to stretch their standards more in the auto finance space than the bank space according to NY Fed, so I don’t think you have a bubble here, but it’s something to be watched.   

Rick Santelli: Alright, student loans...you’ve written an awful lot on student loans. What always captures my eyes, of course, is government involvement associated with the notion that it has the highest delinquency rates. Can you go into it a little more deeply?

Chip Dickson: I think student loans are a longer-term to intermediate-term kind of risk for the economy. It’s one of those things that’s not going to be a problem until it’s a problem and then it’s going to be a big one if we don’t address it sooner. I think it’s about 10% of personal disposable income now. It’s probably the fastest growing part of consumer credit and it’s a real headwind for the younger age people, those under 40. I think they hold over 800 billion and its stopping them from forming households as fast as they might; it’s stopping them from buying homes and other things so it’s kind of an economic headwind too. But longer term it’s a risk because of just what it represents.

Rick Santelli: Alright, let’s stick with that one because younger people are the key to everything. They’re the key to the country’s future. They’re in many ways - as you pointed out - the key to housing. Can we learn anything by looking at their credit card usage, for example? Are there any clues there as to...are we going to get that segment of the population kicking in more, purchasing more, and helping the economy more?

Chip Dickson: I think they are selective...where they’re buying things and I think their behavior has changed. There are a lot of stories about how fewer are getting drivers licenses and driving cars - they’re more of a rental economy - so they’re changing their consumption behavior and I think they’re not using credit cards as aggressively, either.