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Consumer Credit Plunges $10.5 Billion, Expectation Was $0.5 Billion, Consumer Credit Back To June 2007 Levels
So much for that "consumer is now releveraging" inflection point. Both revolving and non-revolving credit slides.Total credit down from 2,459.4 billion to 2,447.9 billion. Revolving credit down from $867.6 billion to $858.1 billion. We are now at June 2007 levels.
And the only increase in lending by source? Why the US government of course!
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Market started tanking well before the release. Surprise, surprise.
AP News. Blah blah blah ...unexpectedly... blah blah blah.
Dow down 120 and falling...
I wonder who's gonna get nailed for releasing this news.
Who needs credit when Uncle Sugar is GIVING money away?
Long Live to Mr. Ben "Green Shoot" Bernanke!
Long live to Central Committee of the Democratic Party of The United Socialist States of America!
If America really was Socialist, at least we'd have free medical care.
Interesting day. In normal times you would expect a limit down market with news like this. Let's sum it up:
1) Most important metric for asset prices plunges at record level (consumer credit)
2) Fed threatens rate hike
3) Greek banks collapse - state only a few days away as it's cashflow has just been massively thrown off (not sure many analysts were adding the pressure from that state support facility)
4) Revolution in Thailand (it's not that small an economy)
5) Revolution in Kyrgistan (camel milk futures beware)
6) Reassesment of jobs data
7) More lying from GS
You're right, busy day.
8) VAT trial balloon sent up
...although I question the news value of 7)
Obama is going to have to dig into his stash again. Spread some more wealth. The consumer does not need to borrow when they are spending the gift checks.
I must have missed my check. In fact, I don't know anyone, other than Wall Street banks, that is getting free money from Obama.
Facebook will give you some credits you can trade in 3.......2..........1........
Most curious, given the early reports have been showing the STRONG consumer spending trends on flat or falling income growth.
but it's AK, cause we ve got the Chinese demand that will bail us out, uber buy buy buy rating !
eventually you have to buy things. consumers eating into savings after not buying. the increase can't be sustained.
"Wall of Worry" getting pretty tall!
Gotta tip your hat. They did a masterful job of holding things together as well as they have with smoke and mirrors.
I believe it was Hitler who said, "The greater the lie, the more people will believe it."
What's the big deal, everybody is just paying cash...HAHAHA!
Every credit card cut up is a victory.
News flash, banks are not lending. Money is made at prop desk. Consumer credit will continue to deteriorate, but the number one reason is banks not lending, closely followed by consumers not borrowing.
Way to go peoples keep going.
Death to Pharaoh.
Ben's building another printing press for food stamps.
Another reason to buy MRE's and freeze dried food: I don't think food stamps are any more edible than other forms of squid paper.
I have a feeling that if things continue this way, squid paper will be considered a delicacy.
What's the definition of tanking? The markets are not even off 1%. Mind you I certainly feel a sell off of more than 1% is well overdue.
Because a pullback of >1% would be considered damaging to confidence and since day one they have viewed our current malaise as an issue of "confidence", I do not expect them to be willing to allow a >1% drop in a day.
This gives me a chance to load up on some SPY calls for Mutual Fund Monday!
Well you just go right ahead oh wise one.
Personal BKs way up.
Expectation Was $0.5 Billion
Who's expectation was that?! Why don't we call it what it was intended to be...Propaganda Was Intended To Be $0.5 Billion (but the jello squeezed out between our rotting fingers)
Kudos to Nic Lenoir for calling the SPX correction yesterday...charting the VIX touching the lower Bollinger Band range.
why is the squid squrming highher..
Its all built on consumer credit ladies and gents. Fk Greece. Fk TBTF. Fk the dollar.
All second fiddle to consumer credit. Systems beyond repair.
Reset time.
Its the fed land of make believe. Where anything is possible, Price is whatever you think it to be.
The fed has frozen the markets, noone knows what anything is worth. SO noone buys anything.
Except gold of course ha ha.
Bearish signals everywhere except for the small fact stocks are at 18month highs. Those things that could be interpreted as selling signals instead are met w/ "buyers". Regardless of who, how...doesn't matter (to traders). Bottom line is we'll likely see new highs tomorrow and/or Monday. Pattern is very clear and traders have all been trained to forget the fundementals and buy on down days (or at least not to sell) and you will be rewarded. Pavlov's traders.
Until we see evidence of a real sell off (actual fear of real loss of profits) going short is a fools game. Forget what you "know", just go long and keep a 5% stop loss and you will win until something fundamental changes.
Something fundamental such as consumer credit thats never contracted like this since the ponzi was kick started in the 70s? Gotchya.
When she blows , you wont see 5%. You'll awaken to limit down and "computer malfunction" and your ass will really twitch then.
EVERYONE thinks theyre Jason Bourne and can get to the exits in time. Going to be fun to watch that clusterfk unfold.
Yeah, yeah. "Market can remain irrational longer than I can remain solvent." Damned if you go short, damned if you go long? My message is coming from a guy that went short and lost pretty good. I still can't make myself go long but for those willing to hold their nose, the upside looks mighty nice.
Hell, I took a short position early in the day for the first time in a couple months and (looked like good fortune would shine on me as it turned into a pretty dark day...didn't get far from my stop losses. I've a sneaking suspicion I'll get stopped out again in the next days once again, I'll be wrong, wrong, wrong. I got a sneaking suspicion I'm the fool.
I hear you. Just keep some powder dry. Buy some deep OTM puts. Vol is the wrong price. Just avoid the leveraged ETF crap.
The vast majority of us have very little downside protection. We are naturally long the economy through housing , employment , 401ks etcetc.
Look at ways to get downside exposure without short term trading.
Yup, yup, yup. I've learned my lesson and keep stops tight now. As you say, we've got so much long in housing, rental properties, 401k - hard to not have much downside protection...keeping dry powder but getting harder to explain to the wife although we missed much of the carnage on the way down why we are not only not participating but losing on the way up. Hard to explain that somehow "I know better" than all those folks making tons of money. My track record since March seems to be saying quite the opposite.
Explain its simply an insurance premium.
Look at it this way - those without ANY short exposure to capital markets are going to be caught out in a big way WHEN the market turns. Nothing lasts forever , this is no different to every other Fed created bubble.
If you are losing option premium each month , then so beit , hopefully youre holding down a job and some property and some retirement funds.
And forget what everyone else is going , as soon as one copy-cat trades its game_over. Find a style that suits , just dont bet the ranch and try to hit homeruns every day.
Very few make enough money on the way up to compensate for the way down - look at it as "lifestyle hedging"
Join the club. But to hit the "buy" button for reasons you know are pure bullshit is hard to do. And it is crazy to short this madness. I fully expect today's dip to be bought back up by next week, at the latest, the way Bloomberg and CNBC are touting the recovery.
Grayson said "Recovery" for Xs sake! Bleh.
It was the snow.
Well at this rate of credit depletion the US should begin to grow again in say 15 years.
I was thinking about that.
A lot of that debt is going to die when its owner dies,
and only when its owner dies...
I don't think ZH posted the great news released yesterday saying that deliquencies actually fell (more people are paying their bills on time).
Whats good for the goose isnt necessarily good for the gander.
DELEVERAGING. Main st are focusing on paying down debt and making ends meet. Leaves precious little room for the economy to grow without Heli Beni forcing money DIRECTLY into consumers hands. Thats not happening. At least not on a scale enough to warrant inflation concerns.
I believe, you believe, ZH probably believes we are seeing deleveraging. However, the hardest thing to quantify is the multiplier effect of all the free money leaving the fed and finding it's way into the world...perhaps not as new lending but still entering the market. Couple that with the Fed's MBS freeing up over a trillion of private capitol, trillions in T's being directly repurchased and that leaves private capitol to go hunting for risk returns...too easy to see the natural deleverage but I'm being forced to try to quantify the multiplier effect of money entering the market (velocity is low but sheer volume highly directed at equities, certain commodities can do wonders). Couple that w/ a real or perceived PPT and you have the potential for a back stop to avoid any rain on this parade until there is no longer free money (see AIG short squeeze today for no apparent reason).
The Fed's free money is going to Wall St. not Main St. The average consumer is seeing none of it and the banks are back to taking investment risks instead of lending risks...or just sitting on the money because their funny accounting is hiding debt.
Delinquencies have been falling due to the increase in bankruptcies and foreclosures. I'm sure 2-3 generations in one house helps keep credit payments timely also.
Don't get me wrong, I'd love to hear some good news - but all we've heard for 2 years is, "things are beginning to turn around" and all that slowing second derivative crap.. When the economy does turn around, they won't have to cram it down our throats, and hopefully it'll be Main Street that breaks the news.
Falling off the wall of stupidity.
Solid B+. Rock Solid.
Half way there. When we get back to early 2004 levels, things will begin to move again.
You bunch of sorry contrairians! Bernanke rules! didnt you see he was man of the year!?
(damittt quit throwing rocks!!!!)
My spy puts are for dec....expensive but worth it,.... when it goes, its going to go fast. Lack of CONfidence will bring more shorts than an mtv spring break video, jmho....worthless of course.
I do not know.
"Bear Pundits" Are saying Rally is like 8 months overdone (so far they have been plain wrong on the timing at least), at this slow pace maybe you have to consider Dec '11 puts!
Yes, is the most hated rally in history, and could be even more hated if exteded.
No credit? But I want to go shopping!
Don't you remember?- It snowed in February.
Seriously,I think this is reflective of the consumer recoiling in responce to the the late Jan.-early Feb. market decline. Which illustrates how strongly the consumer's willingness to spend is effected by the market. "Pent up demand" began to surface in Jan., was suppressed in Feb., began to reemerge in late Mar. and is in now going strong. Probably not in time to boost 1Q earnings all that much though. Like a sailor on liberty, the consumer will have "blown his wad" by mid May.
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