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Non-Revolving Credit Rises By $7 Billion As Revolving Credit Dips Yet Again
The January G.19 statement is out, and confirms that consumers are buying ever more cars on credit, as if we didn't know this. Non-revolving credit, which is basically comprised of car loans increased by about $7 billion to $1.592 trillion, even as revolving credit continued declining, hitting $864 billion, down from $866 billion. Obviously, the market, which the last time the G.19 was released bounced, regardless that credit then declined by $4 billion is now bouncing again, not really sure why, but just tagging along with the computers. And the computers may very well be right: with the government soon expected to foot all consumer credit card losses in addition to GSE and financial firm toxic asset losses, why not just max it all out, after all mortgage payments are now about 6 months in arrears and nobody from the lender bank gives a rat's ass. Out of sight is out of balance sheet impairments. Credit is back, baby. And not like anyone will ever ask you to repay it.
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Credit extended to anyone who can fog a mirror? Sweet...
I've seen that movie.
Cool, I'll be able to get that golden torch and pitchfork set I've been eyeing...
Austerity in Europe and credit expansion in the US? I wonder who will turn out to be the winner when all is said and done.
2009 Carrera w/ PDK + Sport Chrono, $67,500 (20% off sticker).
$5k dwn 1.5% for 60 mos Porsche financing.
No unintended acceleration problems.
"Revolving credit declined by $1.7 bln while nonrevolving credit increased by $6.6 bln. It is still too early to say consumer demand has stabilized from one month of positive growth in consumer credit, but it is very encouraging to see consumers willing to take on more debt. However, the data is a little misleading. Auto financing companies increased the interest rate levels for auto loans from 3.26% to 3.94%. The increase in credit may not be due to more expenditures but from car loans becoming more expensive. Unfortunately, the data is not detailed enough to determine where the credit increase is derived from."
To your point, January SAAR was down M/M so maybe you have something there: http://www.bloomberg.com/apps/quote?ticker=SAARTOTL%3AIND
"it is very encouraging to see consumers willing to take on more debt."
I think that line bothered me as much as the one you highlighted, Oso.
Why would an increase in interest rates for new car loans affect the total amount of nonrevolving credit? It seems to me that such a conclusion assumes that interest is added to the outstanding loan.
Great, we're going back to where we came from. We haven't learned anything. More stupidity - it's going to be one hell of a fire!
Remember: Rome wasn't built in a day, but it sure did Burn in one.
"Revolving credit declined by $1.7 bln while nonrevolving credit increased by $6.6 bln. It is still too early to say consumer demand has stabilized from one month of positive growth in consumer credit, but it is very encouraging to see consumers willing to take on more debt. However, the data is a little misleading. Auto financing companies increased the interest rate levels for auto loans from 3.26% to 3.94%. The increase in credit may not be due to more expenditures but from car loans becoming more expensive. Unfortunately, the data is not detailed enough to determine where the credit increase is derived from."
And Lo, What Obama Giveth, GM Taketh away
Dammit! I am so stupid. I thought there were consequences with risk...so I always kept credit low and powder dry. Shoulda been all-in on a credit line and livin the american dream with my escalades and mcmansions...seems like the rappers had it right all along!
LOL what are you waiting for, go get a credit line and use those money since this fiat money establishment will eventually fall apat anyway.
absolutely. now you know that you don't have to pay the mortgage and the cars are cheaper.
none of any of anything matters
nothing except the GS-JPM-FED script
THEY SIMPLY RAPE UNTIL ARMAGEDDON
Peter Atwater at Minyanville:
Just read on a respected website a comment that " Credit is back baby."
But if that were true.
Credit is back only if you believe that seasonally adjusted figures make sense in a secular debt declining world.
The headline - seasonally adjusted- figure this afternoon announced that revolving credit fell by $1.7 billion in January.
The unadjusted -real world - figure shows a drop of $18.1 billion - a tenfold difference!
Thank you.
The people who flock to this site seem too quick to embrace the conclusions drawn from SAAR numbers. The only thing that matters is the raw notional YoY change. There is where the conclusions can come from.
Only one category of lender increased its consumer exposure last month. No, not commercial banks. Their exposure shrunk. As did finance companies, securitzations, savings institutions, credit unions, and non-financial institutions. So where did the renewed thirst for credit among the american consumer find its pusher? You guessed it, the Federal Government.
Oh and while we are on the topic, the turn in the spx on feb 5th was driven by the first of many greece bailout rumors, and a "better than expected" consumer credit number. Well with the revisions in, last months number does not look that spectacular. Here are the details.
December expected at -$10 billion comes in at -$1.7 billion.
but novemer was revised down an additional 4.3 billion.
so, december's original report, actually was 6% lower than expected going into the number.
today we learn that December's initial -$1.7 billion estimate was revised to -$4.6 billion.
So on final read, December comes in down -$9 billion from the original set of estimates. They don't do this math on cnbc.
Oh, and last thing. Zero percent 6-7 year car loans do wonders for spiking auto financing. but as i thought we learned after the last round of low interest financing, pulling forward demand has a downside to it.
A smartypants on an island once told me that THEY would keep the bulls and bears off-balanced as THEY played for time and went from room to room putting out whatever fires came up...
Truth that.
Only one category of lender increased its consumer exposure last month. No, not commercial banks. Their exposure shrunk. As did finance companies, securitzations, savings institutions, credit unions, and non-financial institutions. So where did the renewed thirst for credit among the american consumer find its pusher? You guessed it, the Federal Government.
Oh and while we are on the topic, the turn in the spx on feb 5th was driven by the first of many greece bailout rumors, and a "better than expected" consumer credit number. Well with the revisions in, last months number does not look that spectacular. Here are the details.
December expected at -$10 billion comes in at -$1.7 billion.
but novemer was revised down an additional 4.3 billion.
so, december's original report, actually was 6% lower than expected going into the number.
today we learn that December's initial -$1.7 billion estimate was revised to -$4.6 billion.
So on final read, December comes in down -$9 billion from the original set of estimates. They don't do this math on cnbc.
Oh, and last thing. Zero percent 6-7 year car loans do wonders for spiking auto financing. but as i thought we learned after the last round of low interest financing, pulling forward demand has a downside to it.
Actually, looking at non-seasonally adjusted data, credit from commercial banks expanded m/m from 492.9 to 503.2. However, the Federal Government stood for a large part. I'm thinking student loans, given the high unemployment. Haven't found any statistics yet which would confirm that hypothesis.
Parabolic blowoff on the news.
Hope y'all shorted it.
Thought we got rid of those bogus CAPTCHA ?s.?
(-58) plus 45 equals -13 Right. Im thinking of buying a new car although nothing is wrong with my old one, I just like that new car aroma plus it helps the economy and i think I will sleep much better in a new car until I find a job.
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