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Surge In Non-Revolving Loans And Government Lending Pushes Consumer Credit Higher, Even As Revolving Loans Drop Most Since January 2010
A casual look at just the headline at total consumer credit, which increase on a SA basis for the first time since January 2010, could give on the impression that all is well in borrowing land, and that consumers have finally stopped deleveraging. Wrong. While the seasonally adjusted number indicated a rise of $1.1 in total credit the true story once again lies below the surface. To wit: revolving credit, or actual credit as represented by credit card borrowings, plunged by $8.3 billion, the most in 2010! What offset this was the surge in non-revolving credit, which increased by $10.4 billion in September: the biggest increase since August 2007, just before everything went to hell. Note the glaring move higher in September non-revolving credit (i.e., borrowing for car and school loans).
Regardless, revolving credit tells the story. Everything else is merely aimed at stimulating auto sales and pushing the SAAR to over 12 million. It's not like anyone expects any loans will ever be repaid anyway.
And looking at the sources of credit in September, and over the last 6 months, presented below, speaks for itself. Two words: Federal Government.
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11:59:55
Go figure...
Auto Loans = GM IPO = Bailout...take that Einstein...
.
dot dashed...
Maybe since the Government is the only place to get a student loan, and September is when school starts might also be a factor.
All consumer credit categories declined except the Federal Government. Without the FED's this economy is toast, zip, zero!! It's all smoke and mirrors and the FED's are doing nothing to fix the problems but they are/will make it much much worse. Hold on......the end game has now been fixed, the final effort of the FED and banksters to still the last remaining pool of savings (wealth) from the middle class.........and we are incapable of regenerating the pool....over!
http://www.federalreserve.gov/releases/g19/hist/cc_hist_mh.html
My consumer credit has been downgraded to DEFAULT ON THESE FUCKERS.
When you are dealing with economic, financial suicide bankers (thanks Mr. Keiser), then they only weapon I have in this war is default, PMs, and cash withdrawals every chance I get.
WHY ARE YOU GUYS SO NEGATIVE - "MR MARKET" SEZ PEACE AND PROSPERITY FOR OUR TIME HAS BEEN SAVED!!! BEN'S HEROIC, CREATIVE ACTIONS HAVE SAVED US ALL FROM A DEPRESSION. WHERES THE FED'S MISSION ACCOMPLISHED BANNER?
BUY YOU FUCKING IDIOTS AND IF YOU WON'T BUY, BEN WILL DO IT FOR YOU AND SEND YOU THE BILL.
Not quite..."Savings Institutions" increased from 81,685 to 82,604.
I would be interested to hear an informed view on this.
What else would the FED be loaning to consumers except for Student Loans. Unadjusted data shows increase of $27 B for non-revolving sourced from the FED
FHA loans perhaps? Isn't the FED the only company that makes home loans these days?
Have we been brainwashed into thinking the past few years (i.e. the collapse of the entire financial sector) were just an anomaly and good times are here again?
Yeah....ummmm.....I'm going to have to say.......yeah......ummm.....the recession everyone was talking about? Well.....yeah.......it's been over since June of 2009. So, I'm going to have to ask you to come in on Saturday and Sunday to help with the bank holiday. OK?
Looks like the daily survival spend is getting smaller than anytime in the past 3 years.
No Timmy we can afford to upsize!!!
http://3.bp.blogspot.com/_9ZzZquaXrR8/TMmXTwygphI/AAAAAAAAGe0/8S6b1TQnqMQ/s1600/GallupOverall.png
I wonder how much of this is down to the foreclosure freeze? If the courts are no longer foreclosing, then the loan note is no longer being closed or written down, so therefore still exists as a credit, even if it's not being paid..
The surge in government lending is due to student loans. The government now loans students directly rather than through SLM. That shifts credit from securities to government. Note the rise in government lending in August and September, just before the start of school. This should fade in next months data.
I remember that old fraud Student Loan Marketing (SLM). So now the fraud is being perpuated at the highest levels of government. Is the final inducement here to cut down the growth of the prison population?
I'm beginning to understand why Mako always employs such a gloomy and somewhat annoyed tone. The government HAD to take on debt since consumers stopped doing so in 2007. It's part of the mathematical equation. There is really no use complaining about this. The results would have been the same had a republican president been sitting in the white house, or a zebra for that matter... In a debt-based interest-bearing fractional reserve system like ours, the minute credit creation goes negative, you have some serious problems on your hands - i.e. there isn't enough "money" around to pay the old debt... It's just a classic ponzi scheme.
That's why all the governments of the world are acting like the sheriff from Blazing Saddles... The implosion of the credit-system is going to put some major strain on the just-in-time inventory system that this country has now perfected. Mako talks about "liquidation" because that's the way to get a nice reset. The game works better the next time around if there are a smaller number of players to feed the restarting exponential growth curve. Unfortunately for us, it also appears that the current monetary exponential growth curve has smacked right into the peak oil production curve. The coming mess is going to be nasty. I have no idea when we'll reach the floor for the next reset, but I do know that it won't be pretty once we get there. Oh, and going back to a gold standard wouldn't fix this either. This interest-bearing system broke through that ceiling a long time ago.
If I had to take a guess at what will transpire, I would have to go with sovereigns loading up on debt until the point of implosion, at which time debt is repudiated, sovereigns are made the scapegoat, and TPTB try to implement their NWO - supra the sovereigns. I just don't see how they can get that done given the constraints of peak oil, so I would think a return to a more local kind of living is more probable, but I'm sure they'll try to keep the reigns of power as long as they can.
Yes, if it kills us all.
http://www.moronail.net/img/7436_good-morning-to-you
In other news, revolver loans are up 200% from last quarter.
Lol
Im partial to auto loading myself
Actually auto loans are shrinking. The only kind of consumer credit that's growing is federal student loans.
Total non-revolving consumer credit was up $14.8b in September, $33b in 3q, while federal government consumer loans (ie the federal component of student loans) were up $27b in September, $57.7b in 3q.
Just to clarify, the data that this article is based on (Fed G.19) does not include mortgages or helocs.
Think best Amerika can do is stop these stupid
warspending and cut military buget by+/- 50%
This would relese a lot of (human)capital in to
the states and balance the buget and start
rebuilding your country economicly.
just dreaming............(..).......
I give up... I can't read this site anymore... Dow is going to 20K by end of next year and 40K by end of next... I'm maxing out my credit cards and my margin to buy equities...
Yours truly,
Throwing of the Towel
The ones in my upstairs bathroom are monogrammed "ZH"; downstairs powder room, "C" for Capitulation.
consumer debt has driven the illusion of weath for 20+ years while millions of good paying jobs have been outsourced to countries with slave labor and few envirnomental/property laws. The wealth deficit was covered up by the dot.com boom in the 90s and then the housing boom until 2008. Then TARP/stimulus programs. Now we are nearing the end with QEs that only end up increasing cost for food and energy and hurting the poorest or the poor.
As the money supply increases the velocity declines. Outsourcing jobs kills. If printing money was the solution to economic growth, there would be no recessions and every country in the world would do it. QE will be discredited winthin 6 months; Christmas sales will be weak and unemployment will climb in early 2011. The poop is about to hit the fan.
I have come to the inescapable conclusion that Everything Is Going Exactly As Planned.
Allow me to introduce you to The Clampdown.
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My long term indicators continue to warn of USD strength and EURO weakness.
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