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September Consumer Credit Lower By $14.8 Billion, Worse Than ($10) Billion Estimate; Consumers Refuse To Borrow
Total consumer credit has dropped for the 8th straight month as consumers refuse to buy stocks while maxing out their credit cards, contrary to what GE, Bernstein and Bernanke want them to do. 4 more months and the US consumer will have given the administration the reflation finger for one straight year. Excess reserves to hit $2 trillion shortly.
Total credit came in at $2.456 trillion, consisting of $889 billion ($10 billion lower than August) and $1,5667billion ($5 billion lower than August). The later category is primarily related to auto purchases thus so much for the Cash for Clunkers attempt at releveraging.
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And the market goes up. We're living in bizarro world.
Agreed, with many (many) years in the market nothing in making sense. Seems to me the PPT and other manipulation is now running wild on Wall Street. When the bottom finally drops there may be no one to support it.
Of course DEBT = SLAVERY
Yeah the 30%-79% interest rates hike can do that to borrowing. Kiss Christmas shopping goodby.
one would think that kiss christmas goodbye would be a good prognosis. how many times lately have we seen a talking head on cnbc speculating that christmas will be better than expected..?
I saw three today! CNBC is impossible to watch without want to punch every one of those stupid bitches in the face. If you are a contrarian you are to be interrupted or ridiculed and told for teh 4000th time that unemployment is a lagging indicator. B.S. it won't be lagging when xmas sales are 30-40% less than last year.
I used to think this xmas would be bad, but now I am not so sure. I am getting the idea that there are so many people now paying 0 (or very little) for housing (either by shacking up with the boy/girlfriend, move back in with parents, simply stop paying mortgage, etc.
Housing is the biggest expense for 99% of people. Take that expense away and you have some money to shop with (if you are one of the 80% or so with a job.
If that's not an excuse for Keynesians to push for Stimulus 2.0, I don't know what is. Their whole philosophy is predicated on constant spending whether by consumers or via government to subsitute lack of private consumption.
Proud of the little guy. Only bright spot
this whole year has been this series. The
rise of MicroEconomics and the death of
MacroEconomics.
The game has changed. Consumers now get 200 Billion more bucks from the Feds, and pay 200 Billion less in taxes, and Uncle Sam borrows the 400 Billion.
Who would not love to spend? I find 29.99% interest plus new basic card fees an absolute bargain!! (sarcasm off)
Glad Walmart and Amazon are competing on DVD prices of Harry Potter and the Magic Dollar to offset my interest expense increases for Xmas!
Not too many consumers left that have any choice!
But we will force them to buy homes and appliances to fill them with.
Is there some reason why we are no longer a world leader?
I really figured the market would be up 200 by this time. I was fully expecting the Stimulus 2.0 chatter to be in full effect by now. Come on WhiteHouse. Your slipping on the leaks.
Who needs to borrow when one can (a) live rent free (or live well below market in a lease-for-deed residence); and/or (b) collect unemployment? I would imagine that a significant number of people are actually enjoying higher levels of disposable income now that they no longer have to pay taxes and/or housing costs.
In fact, who needs a stimulus package when we can spend $250B/yr keeping 10m primary family wage earners busy watching TV all day and then taking their families out to dinner each night? (And people wonder why restuarants are opening up everywhere.) Even better, add another $250B/yr to cover Fannie's MBS cash-flow shortfalls so that 40m people (ie 10m families) can live rent free.
Shear genius - think of the impressive increase in taxpayer financed DI - Keynesianism at its finest. Benny, please order another round of FRNs for the house. Go ahead, just run a tab on our account.
sheer
At what point does the federal government abandon the whole antiquated idea of taxation and simply move to 100% financing by fiat printing?
Umm, about 8 months ago? What, you didn't get the memo? Why do you think the market keeps moving up - on fundamentals? LOL
Surprised that it's really a rigged market and all of one's theories regarding FA/TA were trumped by crime?
Once this essential truth is fully digested, how long will space monkeys keep coming here to complain & snark? Or do we move on to the next stage of the war?
Hooray!
Just wait until the concept of radical default takes root on a broad sense within the American society. If policy makers wanna give it to us without protection or lube then we should respond in kind.
Actually, I registered that domain a while back (radicaldefault.com). I really would like to get something going as a resource to p*ssed off Americans. My contribution to the future of this fine country.
If you or someone else would care to assist in content I would love to set up a drupal site with some blog entries and forums. I'm a web dev so this is no problem but I don't have the time to do research and add content.
If anyone is interested in this not for profit venture, lemme know. Not sure if this site give my email addy but you can Google Shamrock Software. There's a contact form on my website.
HE - I am tied up at the moment.. Perhaps later this weekend... try mileskendig1 on AIM... an online messaging program...
I was recently flipping through the business channels (hating bloomberg's new chyron) and noticed what seemed to be a concerned tone about the destruction of the dollar and the negative implications of government intervention on CNBC. WTF?
Disclosure: I have been drinking for two days. Saki bombs are the only thing keeping me from toe wrestling with the trigger of a twelve gauge and painting the ceiling in my bathroom.
I find that drinking improves the CNBC experience.
Smoke some weed, dude.
Dude, hopefully you are just joking, but in all seriousness it's just money.
Ya it's just a joke, and I was referring to the constant mind sodomizing living in crazytown USA.
i don't watch cnbc but another blog said they simply did not report the consumer credit number.
it was not on their website, at least thru 3:20.
The U.S. Equity market is dead. It is rigged. It is a joke. It consists of a few computers funded by the Federal Reserve Bank.
See my #122737. So what are you/we gonna do about it?
Wouldn't you like to know
The question was rhetorical - my strategy is identical to your's. The next stage is to take it viral - teach Americans how to bring the system down. Blogs like ZH served a useful purpose in exposing the truth, but now that we know for certain beyond any doubt, it's time to rectify matters.
The whole rotten system needs to come down. And there ain't any way easier than to use the very tools of our oppression as a means to destruct the beast. Radical default is one tool; the others simply employ the same technique of incentivizing everyone to jump on board the entitlement wagon.
The expoitation model has always been dependent on a minority of capitalistic soldiers to keep bearing the weight. When they not only shrug, but jump on the gravy train, there is no longer any there, there.
Bringing the system down has been their intent all along. The asset bubble and leverage was just a means to the end.
Check
They ran one of those green newsflash bars on the bottom. I didn't hear them talk about it at all.
From my experience, they like to report good news, but "forget" to report on the bad. That's ok, I don't depend on them, and do my own DD anyway. I only tune in for the laughs and random Santelli/Liesman smackdowns.
the choice between the freedom and the credit, while could be tough at times will become more obvious in the future.
I submit the Fed should allow working stiffs to borrow money at .25% with the Fed backstopping any non-performers. Everyone can pay off their credit cards and enjoy a big, fat increase in their disposable income. That would put an end to this nonsense.
Wait until they see the numbers after Christmas.
The big FUCK YOU is moving along pretty well.
There is no need to borrow. They should be flush with cash since they stopped paying their mortgage and credit card payments.
There is no need to borrow. They should be flush with cash since they stopped paying their mortgage and credit card payments.
Is that you Fat Larry Summers? Or your owners Lloyd and Jamie?
Only anonymous knows for sure...
I have to amortize thousands in zero interest credit card borrowings before the rates hit over Q1 and Q2 next year. I'll bet a lot of this drop in credit is from the inability of consumers to rollover this free money that they've had for years.
Partly
Of course, as soon as I pay off that debt, my FICO will jump back to the 750 range and I'll just get more free money when the offers start filling up my mailbox again.
The flip side of that most obnoxious of statistics, the "worker productivity" index, or "percentage of blood squeezed from stone" index, or "how we got more work for less pay" index. With wages frozen tight, and essentials rising as fiat dollars decline, maybe Joe Sixpack is doing the only thing he can do in the face of all this: stop increasing his debt, which means cutting back on all discretionary purchases and tightening up on the mandatory ones. No Mad Max, no revolt, no rebellion, just a simple consumer boycott en masse. The evidence is pretty clear that this is what is going on, and it does not appear to be a temporary phenomenon. A reset of the entire U.S. economy has occurred - final demand has dropped, and will not resume an upward slant for quite a while. It's like the whole country went to consumer counseling and the service took their credit cards away, chopped them in half, and said, "no mas." And Joe is fine with that. But look to higher unemployment still with such daunting drops in "consumer productivity."
The peasants are broke or they would be out there spending. The American public still wants their house prices to inflate, their 401k's to go up and their house as ATM machine back.
Same as it ever was, same as it ever was...
They don't care about the details...they want SUVs, happy motoring, sleazy easy credit and McMansions back...
That baffles Mad Max... but the sheeple are easy to understand if you have to trip over them long enough.
Looks like the NRF is going to have to revise Christmas retail sales projections down again so they can report "Better-Than-Expected" same store sales.
The consumer "won't" borrow...
Or TBTF won't lend?
So far Citi, JPM and BofA to name a few wouldn't toss a consumer a credit line if they got pushed off of the deck of the Titanic and had gold left in their cabin...
So far the TBTF crowd has thrown the consumer a 29.9% credit card with decreasing credit limits... an anvil credit line while the consumer is in the water after Uncle Jamie and Aunt Lloyd shoved the consumer off of the deck of the Titanic...
Consumer's can't borrow when your owners on Wall Street are kicking them in the balls, Mr. Change...
Keep dancing to Uncle Jamie and Aunt Lloyd's tune, Mr. Change...
Just looking over the numbers , one thing sticks out. Consumer credit has only dropped 4% from it's all time high. With the stories of card companies raising rates by 30%, plus the cash for clunkers which helps with the large part of the the total, I'm guessing that they have no room to borrow even if they wanted to.
The fact is their plan to re-inflate that bubble doesn't have anywhere to go. I'm sure someone better than numbers than I am can come up with a more accurate read, but if you look at that report and check 1945 you see a total of 6 billion in consumer credit. Adjusting for the population increase from then to now and inflation, my back of the napkin estimate takes that to 125 Billion or 5% of what consumers are up to their necks in.
Given that, who had the bright idea that enlarging that number would do any good even if credit was flowing and consumers weren't being beaten, rolled and and turned upside down to shake change loose by everyone including Banks, Health Care Providers and grocery stores?
With the productivity increases ( work these 4 jobs or I shoot your dog) that pretty much does it for any hope of wage increases. Corporations are sitting on tons of cash. They aren't buying their stock ( 480 billion in 2007) or investing in their business unless it's a productivity enhancer that guarantees permanent elimination of jobs now and when or if the economy comes back. Those who are working are seeing wages cut, bonuses eliminated , contributions to 401ks eliminated , high stress, no security and a attitude by their masters that consists of "Your lucky you have a job, it can be outsourced you know"
No wage increases, unemployment stacking up, credit tight while credit levels are only 4% off the all time high makes the prospect of economic recovery only look good to people who pulled out last recessions work book on tools to use to technically bring a recession to a stop so people feel it's their fault they are doing so poorly.
As impossible and improbable as it sounds, they have thoroughly managed to politicize the tools and yardsticks use to measure a recession so that all tools are used bear only a direct relationsship to electoral prospects.
I'll bet that extension of unemployment was a bitch to pass. Think of what 1 .5 Million people dropping off the the radar would have done to the unemployment number.
This is becoming absurd...
On CNBC.com top headline, "Consumers Haven't Changed-They've Become Pickier"
So CNBC thesis is, instead of not being able to afford Abercrombie, TGIF, WMT or whatever else the general public spends on, get this, they've decided to shop exclusively at SBUX,SACKS, Nordstroms!!!!
ARE YOU OUT OF YOUR MIND!!!????
Does ANYONE TAKE CNBC seriously anymore!!???
come on you guys. do your fair share. max out your cards and walk....its the least we can do to show our love.....
Its not a bad Idea. transfer the house to your Mum and she rents it for you.
Take up the offer of $50,000 credit limit on 20 cards. Take 20x $50,000 cash advance @ 29%. withdraw all savings in cash.
Buy nice big ocean going sailing boat on 5% down load up the stash and sail off to some sunny climate and retire a Millionaire.
Hey its an unsecured loan and with a million plus cashflow from Mum to boot, a lot of ocean to disappear into- life could be good.
Nah! Id get sick of the Tanned, naked Busty Blondes that seem to be attracted to big Yachts. Back to the boring Hampster wheel for me singing I owe I owe ,its off to work I go ;))