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Q2 Flow Of Funds Report: Consumer Still Levered Even After Market Rally Adds $2 Trillion In "Net Worth" Paper Profits
Summary:
Debt of the domestic nonfinancial sectors is estimated to have expanded at a seasonally adjusted
annual rate of 5 percent in the second quarter of 2009, about ¾ percentage point faster than in the previous
quarter. Private debt contracted in the second quarter while government debt expanded.
Household debt contracted at an annual rate of 1¾ percent in the second quarter, marking the fourth
consecutive quarter of contraction. In the second quarter, home mortgage debt decreased at an annual
rate of 1½ percent, while consumer credit decreased at an annual rate of 6½ percent.
Nonfinancial business debt contracted at an annual rate of 1¾ percent in the second quarter, the
largest quarterly decline since 1993. The decline was concentrated in commercial paper, loans, and
commercial mortgage borrowing.
State and local government debt expanded at an annual rate of 8¼ percent in the second quarter, 3½
percentage points faster than in the previous quarter.
Federal government debt increased at an annual rate of 28¼ percent in the second quarter, up a bit from the
first-quarter pace but still lower than the nearly 40 percent pace of growth posted in the second half of
2008.
At the end of the second quarter of 2009, the level of domestic nonfinancial debt outstanding was
$34.4 trillion; household debt was $13.7 trillion, nonfinancial business debt was $11.2 trillion, and total
government debt was $9.5 trillion.
Household net worth—the difference between the value of assets and liabilities—was an estimated
$53.1 trillion at the end of the second quarter of 2009, $2.0 trillion dollars more than in the preceding quarter and the first increase since 2007:Q3.
Below is the chart comparing total household mortgage and consumer debt:
And here is the reason why a historic and unprecedented market squeeze can be read as adding $2 trillion dollars in Household Net Worth. The question, however, of what happens when paper profits are converted into actual ones, will be answered eventually, hopefully with the valuable liquidity providers present at the table.
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The US credit system is collapsing... new data from the fed Z1 just released. It's over folks.
Review from Q2 numbers just released
http://goldismoney.info/forums/showpost.php?p=1926143&postcount=8
Review of history of the numbers
http://goldismoney.info/forums/showpost.php?p=1496323&postcount=4
Full thread
http://goldismoney.info/forums/showthread.php?p=1926164#post1926164
I hear that if you even mention the word 'deleveraging' around Bernanke a furious gremlin pops out of his dome and kills you on on sight by throwing hundred dollar bills right at you with ungodly, printing press like speeds. You have been warned.
Not if you have a Golden Deflector Shield.
Anything beginning with "D" is spiked.
Deflation
Deleveraging
Dollar
Default
From just released Flow of funds data by Federal Reserve
During second Quarter of 2009,
Household debt: Contraction by $233 B
Business debt : Contraction by $202 B
Financial Sector debt: Contraction by $2079 B
Federal Govt: Increase by $1900 B
State and Local Govt: Increase by $190 B
-$111B for the quarter, it's called game over
After the most absurd rally in human history aggregate debt in economy continued to grow and household real estate (measure via footnote at "market" value) was up sequentially. Fed = garbage in. CNBulls&^T touting the unreal gains in consumer wealth. yeah check out the prices paid component of the Philly survey - oh yeah and that little tidbit that the manufacturers are reporting higher price in and lower prices received. That should be good for a 10 pt move in CAT/F
Amero anyone? Debt to zilcho, foreign pissedoffedness to maxo.
That's the plan. But the plan also was for everyone to fall in love with Obama and for him to restore our relationships with the foreignors and this would get taken to the next global consolidation phase. Guess they should have wrote new speaches for him instead of recycling the ones they gave to Bush. Would have been more convincing.
Monetary union will occur when $1 US = 1 Peso
The Treasury has come up with yet another idea to prolong the CRE ponzi scheme:
Bloomberg:
Commercial-Mortgage Bond Risk Plummets on Treasury Tax Rules
http://www.bloomberg.com/apps/news?pid=20601087&sid=aK6KoBasCDZo
From The Idaho Statesman:
'The rules would allow commercial loans that are part of investment pools known as Real Estate Mortgage Investment Conduits, or REMICs, to be refinanced without triggering tax penalties for investors.'
http://www.idahostatesman.com/nationalpolitics/story/901167.html