Fed Magically Creates $180 Billion In Student And Car Loans Out Of Thin Air

Tyler Durden's picture

Normally, we would report the change in total consumer debt (revolving and non-revolving) in this space, but today we will pass, for the simple reason that the number is the merely the latest entrant in a long series of absolutely made up garbage. It appears that in the "quiet period" of data releases, when the BLS realized its "non-critical", pre-update 8MHz 8086-based machines are unable to boot up the random number generator spreadsheets known as "economic data", Ben Bernanke decided to quietly slip a modest revision to the monthly consumer credit data. A modest revision, which amounts to a whopping $180 billion cumulative increase in non-revolving credit beginning in January 2006.

So add that to the GDP, to Personal Income, to Household Net Worth, to the BLS' JOLTS "data", and of course, to last year's repeat revision of consumer credit data, as a data set, which while present, is absolutely meaningless following recent arbitrary revisions which meant all prior data contained therein was just as irrelevant.

To summarize: for whatever reason, the Fed decided to recast its entire non-revolving credit data series starting in January 2006, and has magically created $188 billion in student loan and car debt that previously "did not exist."

Old vs Revised series shown below.

For those who still opt to live in the Matrix and be treated like mushrooms, demanding to know just what the "new" fabricated, made up series implies, here it is: total consumer credit rose by$13.6 billion driven entirely by non-revolving credit, or $14.5 billion of the total, while revolving credit has now dripped for three months in a row as households continue to pay down their credit cards, better known as deleverage. In other words: using Uncle Sam as a charge card for cars and university courses, for everything else there is paying down debt.

Finally, perhaps the most amusing implication of today's revision, is the longer term chart of non-revolving credit. As the St Louis Fed chart below shows, we are about to go beyond exponential and purely asymptotic.

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Number 156's picture

Fed dollars are just like frosted lucky charms, they're magically delicious.

max2205's picture

Chart looks moar better that way


I see the data series finally arrived from Madrid

FL_Conservative's picture

That's how they financed the goodwill and intangibles that were added to the GDP calc.

CheapBastard's picture


I think that's the word my Procto-opthomologist used when he had that thick scope up my Butt.

He shook his head in dismal fashion  ... "you need more fiber," he mumbled, "lots more."

monad's picture

I didn't want to be a proctologist, you know. I wanted to be an accountant. Accountancy is a respectable practice. Or it use to be, before all the positions were all filled by this lot of insiders and now look where we are. But the State quota for accountants was already filled, so I had to take this job they assigned me. Do you really think I enjoy examining people's anuses all day? Its not all its cracked up to be, you know. If you'd seen some of the things I have, you'd have a different perspective about things.

FL_Conservative's picture

Momma says that life is like a butt of chocolate.....

EscapeKey's picture

>> 8MHz 8086-based machines


The original IBM PC XT was running an 8088, clocked @ 4.77MHz. It was the Model AT, which was running at 8MHz. And that was with an 80286 CPU.

Obviously, there were clones back then. But none anywhere nearly as successful as the XT.

TwoShortPlanks's picture

Whatever it takes to present the illusion that organic expansion is back, all is ok, or at least business as usual....until the last Hurrah!

This will be the fate of the United States of Delusion.


jonjon831983's picture

Mine had a turbo button... so it beat everything.

cynicalskeptic's picture

And they say Americans lack math skills..... 

We're better at fudging statistics than Stalinist Russians trying to porve they made their 5 year plan goals.  And don't think it's easy finding ways to manipulate all those numbers (at least in a remotely plausible way).   The Fed is really, really good at it - I know; I spent a good part of my career there making numbers fit predetermined results (and this was for operations - I can't imagine what the policy guys are doing).   I'm convinced that nobody at Maiden Lane (Liberty St - employees enter on Maiden Lane) has any idea of what they're doing.  The ambitious planned on leaving for higher paying stints on the private side while the medopcre careerists stayed secure in knowing they had job security despite their lack of accomplishments.

JLee2027's picture

Until you stuff your mouth full and start to gag.

Long-John-Silver's picture

All I've ever seen kids do with them is pluck them out one at a time while spilling ~ ten on the floor at the same time.

McMolotov's picture

"Hey Rocky! Watch me pull $180 billion out of my ass!" —Benwinkle

Long-John-Silver's picture

I just want to know what he's been eating so he could do that.

oddjob's picture

and past, being a revision and all.

jo6pac's picture

And are better then the cool acid they have been drinking 

malikai's picture

These guys are pros.

Translational Lift's picture

These guys are pros.

Pros as in pros-titutes............

Arius's picture

yes, someone made a comment about the Modern Advanced macro tools ...


for a moment i was confused what he meant, but now i understand now what he was talking about ...

Rainman's picture

Fabian socialists are a patient bunch, huh ?

ebworthen's picture

$180 Billion here, $180 Billion there...

It's less than three months of QE, so $180 Billion since 2006 is nothing to Ben.

Figured out why Maria Bartiromo has nugget nipples sticking out of her green blouse today; she had Hank Greenburg, former CEO of AIG on, saying that the Government should "lay off" of Jamie Dimon.  Schping!

JLee2027's picture

Since the FED can conjure money, why should anyone be required to pay taxes or repay debt? Let the FED do it all.

ebworthen's picture

Exactly.  Agree with you 100%.  Which is why FED QE, money printing, and the bailouts are so obscene and perverse.

The malfeasant elites would ask:  "But who will scrub the toilets, insert the catheters, and make our Lobster Bisque?"

The Pharaohs built the pyramids with slaves, not equals.

onewayticket2's picture


dont forget, this administration is filled with disciples of 60s radicals (and domestic terrorists)....these guys BELIEVE Nirvana is only a matter of the right people being able to lead the way....


cynicalskeptic's picture

Jamie, Hank - all of them are America's 'Nomenklature' - members of 'The Party' whose ONLY real qualifications are their slavish loyalty to 'The Party'.   Communism is alive and well in the US where the elite few exploit the workers and accumulate wealth and riches (while the rest starve).   No real talent or ability is needed to be a member of the ruling class - just an immoral ability to lie cheat and steal - and support the others in the Nomenklatura who are doing the same.

In REAL Capitalism you have competition and survival of the fittest - those that provide better products at s better price.  Under our current form of 'Communism' it's all about using government to give yourself an unfair advantage.  You suppress any real competition and loot all you can from the market and from government (the latter is far more profitable).

the not so mighty maximiza's picture

so much effort that will amount for nothing

LawsofPhysics's picture

Well, that's a "shocker".  Gee, when I played monopoly I always wanted to be the banker too...

bnbdnb's picture

Now thats a boehner.

Cdad's picture

...all of this revealing, once again, just what/who is at the heart of the US economic problem...namely the criminal syndicate known as Wall Street, and most directly, its leadership via the Federal Reserve Bank.

All are welcome to this wasteland, as Ben Bernanke and his merry henchmen, and all the little Wall Street toadies scuttling about, appearing on The BlowHorn [CNBC]...to an audience of virtually no one, it must be said...scrape every last possible dollar from the collapsing mess they have made...government closure, opening entirely aside.

Thank you, Ben Bernanke, for the wasteland, the joblessness, the inflation, the unsustainable debt, the 1%, and for destroying our capital markets.  We really appreciate it.

Scribbles's picture

How dis affect AAPL?

NOTaREALmerican's picture

Re: How dis affect AAPL?

I'd think student loans would be great for AAPL.  

You can't expect to make contacts with the future rulers of the planet if you have some old lame-phone.

FeralSerf's picture

What makes you think those are REAL student and car loans? Somebody "needs" (or wants) $180 billion. Benny creates the $180B for them, but he needs $180B in debt to put on his magical balance sheet. Pull out the magic wand and poof: $180B in new debt on the balance sheet. He doesn't plan on collecting anything on his bogus new "asset", so what's the problem?

It's so easy to steal when you're the banker and the regulator as well. There's a reason the Fed doesn't like audits.

cynicalskeptic's picture

BTW - what ever happened to the $2.7 TRILLION missing from the Pentagon that Rumy was talking about just before 9/11?

 Oh yeah... ONI and all the offices looking into that got vaporized.  Not to mention the companies responsible for clearing a few hundred billion in T-Bills that weren't supposed to exist.   9/11 was VERY convenient for some people.  



Follow the money.  Oops... can't have an audit when there aren't any records.

Number 156's picture

I really hope they weren't thinking that they could actually sneak that by. The MSM would ignore it for them anyway regardless.

NOTaREALmerican's picture

You've got to live in an upscale (top 10%) College Town to truely appreciate the "wealth" generated by Student loans and auto loans.

The restaurants are packed, the bling mobiles are cruisin' `round,  nice cloths,  nice teeth,  it's amazing.  

Life is grand if you're close to one of the "Keynesian" debt spigots of happiness.

Gonna be hell to pay if the Big-Gov crony-socialist debt scams end.   

vxpatel's picture

it'll be interesting to see how much fun everyone's having when the bills come due.

22winmag's picture

You just described greater Northern Virginia and Boston to a T.


Add in the poison pill companies and bomb making companies and you have more contrived wealth that you can shake a stick at.

DCFusor's picture

And in SW VA, VA Tech.  Amazing to behold kids driving (and crashing) new, expensive cars while tossing expensive booze bottles out the window.

Drive 5-10 miles from tech and everything is dead - yet prices are far less just a bit away from the school.

NihilistZero's picture

These Keynesian Paradises will turn into pits of depression and despair during the next downturn.  See beautiful Orange County CA in the mid 90's...

Rainman's picture

I remember a centurion lady saying the best invention of the last 100 years was the microwave....the worst, the credit card.

Inthemix96's picture

Whats the fucking odds on that then?

Can it be rehypothicated into amounts that make us here wince??

Can it fuck.   These fuckers should be hanging from lamp-posts.


vxpatel's picture

Careful...NSA is taking notes and names...making a list...checking it twice....and when the inevitable happens....gues who they'll target first?

Inthemix96's picture

I couldnt give two fucks mate.

Let the NSA and GCHQ corellate and postipulate, go fuck themselves with a broken blunt wood saw.  And if they want to come knocking, as you must be aware, they know exactly who I am, come and get some you fucks.

250 ft pd per second, 1", in silence.  I may only get one, perhaps two??  Who knows.


vxpatel's picture

It will be funny when they come knocking and people refuse to cooperate, well armed, well trained, fearless, normally domecile people...activated silence is a rage unto its own.

OpTwoMistic's picture

Hitler moving invisible armies.

Kirk2NCC1701's picture

Cool!  But don't tell China or the rest of the world that they are subsidizing this with every Dollar they buy.


ultimate warrior's picture

Those charts just confirm that we are truly exceptional.

LouisHill's picture

That looks like the kind of chart that Deder Sornette might do power log analysis on. :)

yogibear's picture

China and the middle east is full of fools for holding US debt.  The US will default through monetizing by the Fed.

The US fed is making the Chinese and the mideast will look like dummies soon.