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Consumer Credit Unexpectedly Fell In August By Most In Over A Year

Tyler Durden's picture


The consumer credit number just released and was dreadfully bad. Little revision to last month's number, it printed -$9.5bn against an expectation of +$8bn and prior over $12bn.  This is the biggest drop MoM since April 2010. More surprising is that we just saw the first drop in non-revolving credit in a year: since this is credit that goes out for car purchases and school loans, is either of these two bubbles (student loans and GM subprime loans) about to pop?

This is the biggest swing in the MoM contraction (or momentum deceleration) since May 1998! This shift in momentum, akin to the 'credit impulse' that has started to gather some following, has proved very useful in forewarning credit compression (as opposed to simply MoM changes) and is most recently discussed here by economist Steve Keen.

This is a six standard-deviation deceleration (based on the last 60 years of history).

The full breakdown between revolving and non-revolving can be seen below. The momentum swing is the biggest since 1998.

And courtesy of John Lohman, here is what credit looks like with and without Government loans.


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Fri, 10/07/2011 - 15:06 | 1750632 lizzy36
lizzy36's picture

Brown shoots!

Fri, 10/07/2011 - 15:09 | 1750648 stirners_ghost
stirners_ghost's picture

and green shorts...

Fri, 10/07/2011 - 15:19 | 1750679 idea_hamster
idea_hamster's picture


...but UNlike the 1998 event, we didn't have a blow-out expansion month just before.

If you look at the month prior in 1998, it was huge -- like everone got a new credit card.  Last month?  No such explosive event to pendulum back from -- just good, old-fashioned deflation stagflation.

I suspect that if somone with the data set ran a scatter plot on (t, t-1) then we would see just how outrageous an outlier this point is.


Fri, 10/07/2011 - 15:20 | 1750697 Pladizow
Pladizow's picture

With a drop in consumer credit and thus fewer imaginary dollars being brought to life, the FED will claim this is additional proof of deflation and bring on QE3.

Every day there is another reason to buy Gold and Silver!

Fri, 10/07/2011 - 15:55 | 1750857 idea_hamster
idea_hamster's picture

<format fail -- if "deflation" doesn't show as struck through, that was the intent.  ben will never let the $ up off the mat.>

Fri, 10/07/2011 - 15:59 | 1750888 Stax Edwards
Stax Edwards's picture

Agreed.  This is not good.  Sold into this late day rally, moving back closer to net neutral.  Was impressed with the retail figures this week though.  Europe still rules the day...sigh..

Fri, 10/07/2011 - 16:13 | 1750968 legal eagle
legal eagle's picture

I have decided to help expand the credit markets by not paying any of my debt.  There, fixed. 

Fri, 10/07/2011 - 15:11 | 1750656 Cassandra Syndrome
Cassandra Syndrome's picture

Brown Sharts, Bitchez

Fri, 10/07/2011 - 19:47 | 1751512 zelator
zelator's picture

brown shite

Fri, 10/07/2011 - 15:06 | 1750634 LookingWithAmazement
LookingWithAmazement's picture

Finally: crisis?

Fri, 10/07/2011 - 15:13 | 1750665 tmosley
tmosley's picture

lol, THAT'S what makes you think a crisis is coming?

You are tremendously inept.

Fri, 10/07/2011 - 15:22 | 1750714 Pladizow
Pladizow's picture

Pay attention to the details - notice the use of a question mark!

Fri, 10/07/2011 - 15:23 | 1750717 Libertarians fo...
Libertarians for Prosperity's picture



With having made quarterly predictions of an imminent COMEX implosion for the past two years, perhaps you shouldn't comment on other's competence.


Fri, 10/07/2011 - 15:29 | 1750740 tmosley
tmosley's picture

Perhhaps you should learn the difference between "suggesting a thing might happen once in 2008, then give 75% odds that it would happen by the end of 2011" and "quarterly" before you make any comments at all?

Fri, 10/07/2011 - 15:37 | 1750784 Libertarians fo...
Libertarians for Prosperity's picture




WHAT?  !!!

Every three months you CLEARLY warn everyone that the COMEX is about to implode, and that an industrial panic will subsequently ensue, sending silver toward parity with gold. This idiocy can be traced back to 2008 with you.

Not only that, but when silver was crashing last Spring, you predicted it wouldn't trade under $35 ever again.  In fact, you said you'd permanently leave ZH if it traded under $35 for more than 24 hours.  You were wrong only 1 week later, and now again 6 months later.... yet here you are, denying all of it...




Fri, 10/07/2011 - 15:49 | 1750830 tmosley
tmosley's picture

Perhaps you should learn the difference between "suggesting a thing might happen once in 2008, then give 75% odds that it would happen by the end of 2011" and "quarterly" before you make any comments at all?

Fri, 10/07/2011 - 15:55 | 1750864 tmosley
tmosley's picture

And to address your second paragraph, you are again lying.  I said PHYSICAL silver.  ASE's have never been available for less than $35 for a 24 hour period, though they have gotten close.

And further, that contract was recended when that faggot called my work to try to get me fired, something that you did as well (or claimed to have done, where you dropped the name of a professor who no longer worked with our lab group), under the screen name "Red Neck Repugnicant".  You then went on to deny that you ever posted under that name, even though you have encyclopedic knowledge of every discussion I ever had with him.

Fri, 10/07/2011 - 15:37 | 1750786 tarsubil
tarsubil's picture

Whatever, Apple lover!

Fri, 10/07/2011 - 15:20 | 1750699 Id fight Gandhi
Id fight Gandhi's picture

It's a sign that the banks have no confidence and ate cutting lines of credit. Rates for credit cards are rising too. Ppl have been using credit to supplement income.

Not a good sign, but the algos are buying the market in e last hour so what else is news?

Fri, 10/07/2011 - 15:49 | 1750834 kito
kito's picture

did it ever occur to anybody that the country needs this. the country needs to have its citizens pay down debt, and...gasp...ohhh....SAVE!?!?!? people are paying down their debt, not defaulting on their balances. deleveraging is necessary if we are ever going to return to a normal state of per bloomberg:


"Americans are making progress mending their balance sheets.

David Nelms, chairman and chief executive officer at Discover Financial Services, said on a Sept. 22 conference call that there is “continuing improvement in credit, as our delinquency rate in card reached a 25-year low at 2.43 percent. And for the first time since 2007, our card net charge-off rate dropped below 4 percent.”

Fri, 10/07/2011 - 15:57 | 1750871 SheepDog-One
SheepDog-One's picture

Save at 0%...YIPEE!

'Credit'...the entire problem of the western world summed up in 1 word.

Fri, 10/07/2011 - 16:03 | 1750924 kito
kito's picture

sheepie-- hear ya, zero percent is a bitch. but better that they are paying down the debts in a timely fashion than if we saw another upsurge in defaults on revolving credit. 

Fri, 10/07/2011 - 16:40 | 1751065 adr
adr's picture

people are paying down their debts until they lose their job and default. I'm fighting a battle to stay in business every day. The demand is there but buyers are scared of inventory. What is going on now makes 2008 look like a cakewalk 2008 through 2009 was my corporation's best year ever.

If I lose my job I won't be paying back any debts. I won't be able to.

Sat, 10/08/2011 - 03:13 | 1752337 BadKiTTy
BadKiTTy's picture

With you on the everyday battle bit but I have a different take. My customers love the stuff we do but the fact that they are worried means that there is no demand. I think 'demand' is actually being able and willing to spend, not liking the idea of spending.

Good luck with the battle - I wish you well


Fri, 10/07/2011 - 16:42 | 1751076 macholatte
macholatte's picture

 the country needs to have its citizens pay down debt, and...gasp...ohhh....SAVE!?!?!?


That's what I thought too. The constant negative mantra about US citizens being the scum of the earth because they spend and not save has been going on for years. Now it appears they are working out of debt and that's supposed to be bad. Confusing.


A system of capitalism presumes sound money, not fiat money manipulated by a central bank. Capitalism cherishes voluntary contracts and interest rates that are determined by savings, not credit creation by a central bank.
Ron Paul

Anything that we can do to raise personal savings is very much in the interest of this country.
Alan Greenspan

Don't gamble; take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don't go up, don't buy it.
Will Rogers

In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value.
Alan Greenspan


Fri, 10/07/2011 - 15:06 | 1750635 Timmay
Timmay's picture

Bring it ALL down.

Fri, 10/07/2011 - 15:07 | 1750638 Linus2011
Linus2011's picture

what is that? never took any credit.

Fri, 10/07/2011 - 15:28 | 1750735 Black Forest
Black Forest's picture

what is that? never took any credit.

Me neither. Welcome!

Fri, 10/07/2011 - 15:07 | 1750641 Robert-Paulson
Robert-Paulson's picture

Credit, bitchez?

Fri, 10/07/2011 - 15:09 | 1750651 Belarus
Belarus's picture

With no offset, in other words no QE3, to Shawdow Banking credit contraction, consumer contraction, does the economy grow?

Answer: It can't. 

Fri, 10/07/2011 - 15:13 | 1750664 Aguadulce
Aguadulce's picture

Yep.  The economic viagra is gone, and we can finally return to a relaxing flacid state of truth.

Fri, 10/07/2011 - 15:09 | 1750652 vote_libertaria...
vote_libertarian_party's picture

Maybe some consumers started cranking up their own printing need for credit.


Voila!  Fixed!

Fri, 10/07/2011 - 15:42 | 1750795 Clorox Cowboy
Clorox Cowboy's picture

That's coming eventually.  Need a bit more desperation first.

Fri, 10/07/2011 - 15:52 | 1750849 kito
kito's picture

dream on if you think ben will print. printing is over. for christs sake, ben just decreased his balance sheet yesterday. england took one for the team yesterday, printed some pounds at the behest of ben. thats the best you will see for a lonnnnnngggggg time. get used to it. deflation is the soup de jour.....

Fri, 10/07/2011 - 15:10 | 1750653 rlouis
rlouis's picture

ooooh - dat gonna hurt the banks bottom lines

Fri, 10/07/2011 - 15:10 | 1750654 Belarus
Belarus's picture

Oh....but no worries, the algo's and short covering will start soon.

Fri, 10/07/2011 - 15:10 | 1750655 Racer
Racer's picture

Oh look 'market' goes up... what a suprise

Fri, 10/07/2011 - 15:12 | 1750660 JR
JR's picture

What’s central in triggering the massive landslide of the American economy? Radical manipulation of interest rates!

“Forcing change to the interest rate,” says Ron Paul, “has a more profound effect on the economy than any law Congress has ever passed.”

And in Monday’s address to Congress (entitled Audit Bernanke) Paul pounded the Federal Reserve on its excessive misuse of interest rate policy and its tragic consequences as never before.

“Congress has abdicated its oversight over these ‘expert’ economists at the Federal Reserve, to the detriment of the economic well-being of the American people. Despite overwhelming grassroots support behind auditing the Fed, only incremental progress has been made toward unmasking the Federal Reserve's activities. Full transparency of the Fed's operations remains an elusive goal, but one towards which I intend to devote my remaining time in Congress…

While the Federal Reserve is not fully transparent, what is transparent are the effects the Fed's policy actions have on everyday people. A young couple is thrilled that interest rates are at historic lows so they take out a mortgage in order to buy the house they had always wanted. But as the Fed continues to print money in order to suppress interest rates, the price of food and heating begins to rise. Expenses rise faster than their paycheck, and they find themselves falling behind on their mortgage and eventually face foreclosure. Or imagine the elderly retiree dependent on Social Security and a small amount of savings. She has not received a cost of living increase to her Social Security in years, despite the ever-increasing cost of food and health care. Extended low interest rates mean that her savings account earns almost no interest each year, so her savings are rapidly depleting. She fears that within a couple of years she may be left with no money and no way to support herself. And then there is the single mother who has been laid off from work for the past 18 months because the rising prices of production inputs caused by the Fed's inflationary monetary policy forced her employer to downsize the company in order to reduce costs. And with prices for the company's finished goods continuing to rise as the Fed continues pumping new money into the economy, consumer demand has dropped, making it all the more likely that her company will never be able to rehire her…

 “Instead of recognizing the futility of trying to inflate our way to prosperity with artificially low interest rates, and allowing the interest rates to reset to a true, market-determined rate, and allowing prices to fall so as to allow malinvested resources to be put to better use, the Fed repeated the mistakes of the past by pumping more money into the economy. With an official inflation rate of nearly four percent, interest rates on savings accounts of well less than one percent, and a stock market that has stagnated over the past three years, there is no incentive whatsoever for consumers to save or invest. Money sitting in the bank a year ago would have lost nearly four percent of its value by now, money invested in the stock market just as much, and money invested in Treasury bonds over one and a quarter percent. Is it any wonder that people have decided to consume rather than to save?...

But rest assured, the Fed tells us, as long as the bankers are doing all right, everything will be fine Bailouts of the financial sector are the new normal, only now they are conducted covertly through the Fed rather than through Congressional action so as not to arouse public ire as in 2008.”

Fri, 10/07/2011 - 15:20 | 1750700 Troll Magnet
Troll Magnet's picture

hmm..this guy should run for office or something.

Fri, 10/07/2011 - 17:47 | 1751241 MachoMan
MachoMan's picture

Just throwing this one out there...  materially speaking, what's the difference between renting and having a mortgage if you're behind on payments?  Your ass is on the street either way (in an academic vacuum theoretical sense).  For those that have little to no assets for a deficiency or where deficiency judgments are prohibited, then who cares?  Why not go out and get a mortgage if the monthly payments are cheaper net of nets?

Now, if you have a net worth that is touchable (not SS, retirement, etc.), the best method might be a bit different and you might think twice about a mortgage...  of course, if things get that bad, then the holders of your wealth are probably to be second guessed...  (presuming that you are the kind of person that doesn't stuff everything under the mattress).

In short, margin compression on J6P happens any which way you choose.

Fri, 10/07/2011 - 17:55 | 1751263 JR
JR's picture

Exactly. And I think J6P has figured it out.

Fri, 10/07/2011 - 15:12 | 1750662 r101958
r101958's picture

...and so far market keeps melting up. Need any more evidence of manipulation?

Fri, 10/07/2011 - 15:17 | 1750688 Belarus
Belarus's picture

And I always wonder why PM's never melt-up this time of day. You know, someday someone is going to question to absurdity that the market has 5% moves in the last 45 mintues every single day.

Fri, 10/07/2011 - 15:13 | 1750663 buzzsaw99
buzzsaw99's picture

offers of consumer credit from fascist pricks go directly into the shredder at my house.

Fri, 10/07/2011 - 15:17 | 1750685 tarsubil
tarsubil's picture

I think I'm going to accept the next one I get. Going to buy a crap load of PMs and then take the 12 months of 0%.

Fri, 10/07/2011 - 15:23 | 1750703 buzzsaw99
buzzsaw99's picture

you aren't the first here to think of that

Fri, 10/07/2011 - 15:32 | 1750757 tarsubil
tarsubil's picture

Love those videos. But did walstreetpro2 pay the bill? I'm just going to pay the minimum then close the account to screw the bank. Did that to Wells Fargo with a 0% 12 month loan where I made all the min payments and then called a lot to tie up their lines and lower their workers morale by telling them they work for an evil POS bank.

Fri, 10/07/2011 - 16:01 | 1750902 buzzsaw99
buzzsaw99's picture

But did walstreetpro2 pay the bill?


Both wsp2 and cheeky bastard said they absolutely would not be paying the money back. has anyone seen cheeky? Deep underground?

Fri, 10/07/2011 - 15:32 | 1750755 humblepie
humblepie's picture

Don't forget the 3% transaction fee most cards charge these days. Gone are the 0% no fee offers in 2002-2004.

Fri, 10/07/2011 - 15:34 | 1750772 tarsubil
tarsubil's picture

Yeah, there will be a mark up but I'm guessing that will be washed out by the rise in PMs over the next 12 months. I'm playing catch up with my stack.

Fri, 10/07/2011 - 15:49 | 1750828 SheepDog-One
SheepDog-One's picture

I ust got 3 fancy credit card offers in the mail yesterday....right into the shredder.

Fri, 10/07/2011 - 16:04 | 1750931 buzzsaw99
buzzsaw99's picture

the next best thing to running a bankster through the wood chippa imo.


Fri, 10/07/2011 - 15:13 | 1750666 richard in norway
richard in norway's picture

is this bad?

Fri, 10/07/2011 - 15:14 | 1750671 richard in norway
richard in norway's picture

i forgot the 




Fri, 10/07/2011 - 15:25 | 1750727 Troll Magnet
Troll Magnet's picture

it's never bad. now move along. everything is under control.

Fri, 10/07/2011 - 15:14 | 1750667 RSloane
RSloane's picture

That is a very serious bellwether. Of all of the data mined in the last couple of days, this one sets my teeth on edge.

Fri, 10/07/2011 - 16:15 | 1750971 piceridu
piceridu's picture

You're so right...No Credit = No Money. Do they know the Money creation machine is broken?

Fri, 10/07/2011 - 15:15 | 1750668 idea_hamster
idea_hamster's picture


Fri, 10/07/2011 - 15:17 | 1750669 DormRoom
DormRoom's picture

falling credit implies more deleveraging, and a sharp change in consumer behaviour, likely from a pessimistic macro environment.

consumer confidence is at near all time lows.  Not an ideal environment for big spending.

For the consumer a recession is already here.


Fri, 10/07/2011 - 15:14 | 1750672 sabra1
sabra1's picture

christmas is what, 75 odd days away, plenty of time! 

Fri, 10/07/2011 - 15:16 | 1750675 bugs_
bugs_'s picture

and consistent with what Dr. Copper has been blabbing about lately.

PS: way to go peoples!  death to pharaoh

Fri, 10/07/2011 - 15:16 | 1750680 Hulk
Hulk's picture

Paying off the House as fast as I can Bitchez. No fucking idea if I'll have a job in 6 months so its a race to get that son of a bitch paid off ASAP...And I will not be participating in the debt game ever again...

Fri, 10/07/2011 - 15:31 | 1750706 Threeggg
Threeggg's picture

You are helping the banks deleverage their depreciating balance sheet. Why would you carry a depreciating asset on yours ?

Housing values are starting to mimic auto values. As soon as you drive them off the lot (pay them off) they depreciate 25%

Fri, 10/07/2011 - 15:25 | 1750726 nedwardkelly
nedwardkelly's picture

Hopefully you wont have it paid off before the next round of 'housing aid' is announced and they forgive a bunch of peoples mortgages (again)

Fri, 10/07/2011 - 15:28 | 1750738 Troll Magnet
Troll Magnet's picture

no kidding. give it a few weeks. free houses for everybody! hell, why not? banks get free money, people should get free houses. welcome to the great USSA!

Fri, 10/07/2011 - 16:22 | 1751003 J 457
J 457's picture

Have you thought instead about just taking that mortgage money and buying cartons of canned goods, water purifiers, blankets, hammers and nails, and seeds?  Would you rather eat or pay the bank? 

Fri, 10/07/2011 - 15:16 | 1750681 NEOSERF
NEOSERF's picture

The last 25 years have been a 30 year bond and house equity illusion funded party by a profligate Congress which has no spending constraints and never bothered to measure ROI...likely the 3% growth we got was achieved at a 30 cents on the dollar ROI but it was so massive, no one cared, we were with scarce dollars we don't know what creates growth and how much and there likely are not enough of those projects to get 16M people back to work so welcome to the real world...we all just took the red pill

Fri, 10/07/2011 - 15:17 | 1750687 Threeggg
Threeggg's picture

Look at the market "full throttle up" on this news !

Fri, 10/07/2011 - 15:17 | 1750691 Overpowered By Funk
Overpowered By Funk's picture

3:30pm ramp job?

Fri, 10/07/2011 - 15:20 | 1750704 Iam Rich
Iam Rich's picture

Nah...the 3:30p ramp now starts promptly at 3:15p.  Guess you didn't get the memo.

Fri, 10/07/2011 - 15:18 | 1750692 TradingJoe
TradingJoe's picture

Rampy Friday :)))

Fri, 10/07/2011 - 15:33 | 1750694 baby_BLYTHE
baby_BLYTHE's picture

credit= the devil's semen.

Fri, 10/07/2011 - 15:33 | 1750763 Vic Vinegar
Vic Vinegar's picture

Link, please

Fri, 10/07/2011 - 15:59 | 1750863 baby_BLYTHE
baby_BLYTHE's picture

type 'Melissa Debling' into the google text field, hit 'Enter'... click on 'images'.

Fri, 10/07/2011 - 16:00 | 1750894 the not so migh...
the not so mighty maximiza's picture

i dont get why blondes dye their roots brown.

Fri, 10/07/2011 - 20:51 | 1751701 TheFourthStooge-ing
TheFourthStooge-ing's picture

type 'Melissa Debling' into the google text field, hit 'Enter'... click on 'images'.

Hahahaha!!!  --> Related searches: jessica w nuts



Fri, 10/07/2011 - 15:20 | 1750702 anynonmous
anynonmous's picture

and with that news I would say today is rabidly becoming "A victory for the bulls",

Fri, 10/07/2011 - 15:22 | 1750710 Silverhog
Silverhog's picture

Market not reflecting this important news is beyond bizarre.

Fri, 10/07/2011 - 15:42 | 1750798 SheepDog-One
SheepDog-One's picture

Totaly broken fraud of a market, so blatant now everyone can whats next?

Fri, 10/07/2011 - 15:22 | 1750711 LoneStarHog
LoneStarHog's picture

So who needs CREDIT anymore when the JOBS situation is so POSITIVE and everyone is paying in CASH.

Thank you: Obama 2012

In a word:  BARF!

Fri, 10/07/2011 - 15:24 | 1750713 devo
devo's picture

I don't think any numbers matter at this point.

1. There are more bulls willing to speculate on the European (bailout) pop than bears willing to short. Bulls have zero risk since the government will print money and bail them out if they're wrong.

2. All reports are unreliable. The Fed is telling me core inflation is 2%, when it is more like 20%, and they are telling us unemployment is 9%, when it's actually 18-20%. With each passing report I realize just how brilliant George Orwell was.

If it were legal to short and/or trade puts on pension funds, we'd see the massive bear market we all expect. Since it's illegal, there's much more for bears to lose, especially those who write naked puts or sell short. The forces that have been put in place naturally gravitate toward a higher price equilibrium. Markets were oversold (short-term) on Monday. Granted. But that depends on scale. Fair value is probably around 8500 on the Dow. We're being coddled to that point with the hope that something positive happens before we get there. Europe is going to be a real hinderance to that. They will leverage and print, and the Dow will spike to 12,500+ and take half a year to sell down. Probably two or three poor earnings seasons. I am a bear because I am reasonable and see things, but I am almost forced to be bullish because of the manufactured environment.

Europe will not fail because it is bad politics, despite being good (long-term) economics. I think China's slowdown is going to be much harder to prop up.

One more point: I am confinced the U.S. Government is helping aid these foreign country bailouts. No real reason other than they're determined not to let the system fail. I'd love for someone, whether from ZeroHedge or another source, to do investigative journalism into that. Tax payers might prefer the collapse if they knew where their money was going.





Fri, 10/07/2011 - 15:32 | 1750754 JR
JR's picture

A good read is How the Federal Reserve Bailed Out the World by Tyler Durden ZH 10/19/2009.  And that was just the beginning…

And, as Nate at Nathan Martin’s Economic Edge mentions today, “John Williams at tracks the numbers and isn’t fooled. His Unemployment numbers are still rising and still pushing 23%.”

Fri, 10/07/2011 - 15:49 | 1750831 tarsubil
tarsubil's picture

The disturbing new trend in the unemployment numbers is that while previously the real number paralleled the government number now they are headed in different directions. They'll do this with inflation too to silently screw all pensioners.

Fri, 10/07/2011 - 15:33 | 1750759 TradingJoe
TradingJoe's picture

Very Well Put! I still do believe though that Germany, being the biggest contributor to the EU machine, will eventually say NEIN! Being bad/good politics/economics and all, they still remeber the last hyperinflation and will not accept a re run of that! Eventually it will let the "not worth(well connected) to rescue" fail, bail out the remaining ones and move on, with whatever political(but repairable) damage they have to deal with!

At home, for sure a different picture! But with pretty much the same outcome, only time will tell!

Fri, 10/07/2011 - 15:51 | 1750844 devo
devo's picture

I used to have faith that Germany swould stand strong and do the right thing, but when Juergen Stark resigned I lost that faith in that outcome. I think Stark saw where things were going and couldn't be a part of it. Couple that with Geithner running around like a decapitated chicken telling them to print and the media outlets portraying Germany as the prude who's ruining the party, and I think the writing is on the wall.

What we're going to get is a complex TARP-like plan where xyz bails out abc and then abc gets "paid back" at some future date. I feel like this plan has been in place for a while, and they're buying time to figure out how to leverage their banks' toxic assets/CDSs, etc.

Then again, maybe I give these people too much credit (pun unintended).

In the meantime, I will twiddle my thumbs, remain in cash, fire up a bag of popcorn, and watch the five computers trade with themselves.

Fri, 10/07/2011 - 18:16 | 1751319 JR
JR's picture

The fly in Germany’s ointment I fear is Josef Ackermann, the chief executive of Europe’s large bank, Deutsche Bank, with his ties to Trichet and Bernanke. Ackermann’s been designated as “the most powerful banker in Europe and, depending on whom you ask, possibly the most dangerous one, too.” He’s the man who has helped ECB’s Jean-Claude Trichet “shape Europe’s economic and financial future.”

In a recent NY Times article,  Deutsche Bank’s Chief Casts Long Shadow in Europe,  the authors observe that is it no secret where the Jewish financial banker’s allegiance lie: “with the banks.”

Ackermann, whose office in Frankfurt is just a few blocks from Trichet’s at the European Central Bank, says the biggest challenge is to “convince people of any country to help Greece even more,” i.e., the banks.  That means Germans, of course.

That’s what the German people are up against, along with the banker-controlled financial media's constant charge of anti-Semitism if the German people don't ante up.

Fri, 10/07/2011 - 15:48 | 1750824 NEOSERF
NEOSERF's picture

Yes, the governments across the world realize that policy doesn't work so they have reverted to the only thing that keeps the most visible gauge of economic future health from falling to Depression lows and that is cheerleading and misinformation...really not a strategy, just as hope on the consumer side should not be a strategy.

Fri, 10/07/2011 - 16:21 | 1750996 piceridu
piceridu's picture

Google IMF....= US of A

Fri, 10/07/2011 - 16:30 | 1751035 pazmaker
pazmaker's picture

I have disagree with the statement "Europe won't fail"  bad politics or not TPTB are not omnipotent.. and the downfall will come.

Fri, 10/07/2011 - 15:23 | 1750719 s2man
s2man's picture

"The consumer credit number just released and was dreadfully bad"

I thought reducing my debt was a good thing; been busting my hump to pay off the mortgage.  Sorry guys, I'll go charge something as soon as I get off work.

Fri, 10/07/2011 - 15:26 | 1750730 Poetic injustice
Poetic injustice's picture

I totally like the French colors in the last chart.

Fri, 10/07/2011 - 15:27 | 1750732 jarboejl
jarboejl's picture

It's the last hour of trading on Wall Street, do you know where your government is??  

Oh, they're going for a high score!!

Fri, 10/07/2011 - 15:27 | 1750733 johnnyblade
johnnyblade's picture

somebodies watch is off.  a bit early today.

Fri, 10/07/2011 - 15:31 | 1750745 Tsar Pointless
Tsar Pointless's picture

Not if you're in Nova Scotia or Newfoundland.

Fri, 10/07/2011 - 15:33 | 1750747 anynonmous
anynonmous's picture

I'm no fan of slaveboy Steve Jobs but I know a bunch here are so you may find this 1996 interview to be of interest


Full 9-minute segment, including video introduction and interview with Louis Rukeyser.

Fri, 10/07/2011 - 15:37 | 1750749 centerline
centerline's picture

Tyler - how about a correlation to the monthly mortgage rate resets? (edit: based on seq. revolving and non-revolving).


Option adjustable and Alt-A's coming about sim. to the wave of subprime that rolled over in 08.

Fri, 10/07/2011 - 15:36 | 1750751 devo
devo's picture

I'm not sure if GM subprime loans are an issue. These are at the dealer/consumer level, correct? They can just reposses the cars and make money off the xyz months of payments and interest. Once GM sells them it's not skin off their back. I see the auto subprimes as being another nickel and dime assualt on the middle class. The aveage joe lose out by paying for a car for a year only to have it repossessed with nothing to show for it. Much like mortgage subprimes, the buyer should beware.They are somewhat at fault if they buy beyond their means or fail to research properly.

I'd highly advise buying used cars and getting them looked over by a reliable mechanic. I did this with my Volvo 4 years ago and have not put a cent into it other than standard maintanance. It's also wise to learn how to repair your own car as much as possible.

Am I misunderstanding the auto subprimes? Correct me if I'm wrong.





Fri, 10/07/2011 - 15:34 | 1750770 papaswamp
papaswamp's picture

guess the algos are going risk on into the weekend...ballsy 

Fri, 10/07/2011 - 15:36 | 1750780 totem
totem's picture

Still holding out on the possibility for a double-top here.  very exciting!

Fri, 10/07/2011 - 16:02 | 1750909 totem
totem's picture

And it's gone...

Today's chart is like a reverse of Tuesday's (when the rally started).

Didja ever get the feeling that this entire market is run by algos yapping with each other and we humans are just along for the ride?

Fri, 10/07/2011 - 15:36 | 1750781 Tsar Pointless
Tsar Pointless's picture

Leave Ballsy out of this. I love him on ABC's hit reality/competition show "Wipeout".

It's just the same old criminal behaviour we all should be quite familiar and accustomed with by now.

Fri, 10/07/2011 - 15:44 | 1750808 jarboejl
jarboejl's picture

I think the algos just scanned your post and realized how fucking stupid holding long into the weekend would be.  lol

Fri, 10/07/2011 - 15:34 | 1750776 FoieGras
FoieGras's picture

Of course this credit deceleration is hugely deflationary. Both for assets and for employment. Good reference to Keen here TD, his work ties in nicely to this.

Fri, 10/07/2011 - 15:35 | 1750777 jarboejl
jarboejl's picture

Try with all your might, you shant break the 50 dma bitchez!!!

Fri, 10/07/2011 - 15:38 | 1750779 TradingJoe
TradingJoe's picture

Bloomtard shills alleging "late day" ETF "rebalancing" for the ramp! WTF, do they really think we are that retarded!? Anything to be rebalanced always happens on the CLOSE at CLOSING PRICES!!! Unless "rules" changed again! Heheheh just hillarious!

Fri, 10/07/2011 - 15:42 | 1750792 Iam Rich
Iam Rich's picture

Maybe they're retarded and actually don't really think at all?

Edit:  Well Joe...looks like the RUT "rebalance" went a little too far by 3:40p and they are now "rebalancing the rebalance".  We'll see how this rebalance works out into the close.

Fri, 10/07/2011 - 15:43 | 1750805 SheepDog-One
SheepDog-One's picture

What rules? The Pirates Code?

Fri, 10/07/2011 - 15:42 | 1750797 LawsofPhysics
LawsofPhysics's picture

Wow, more evidence that equities are disconnecting from credit -  shocking, just shocking.

Fri, 10/07/2011 - 15:46 | 1750816 SheepDog-One
SheepDog-One's picture

Equities are now totaly disconnected from any reality, now simply a crowd control mechanism and something for the media to be all euphoric about. All is well....nothing to see here....move along just go home and turn on those TV's.

Fri, 10/07/2011 - 15:42 | 1750799 kito
kito's picture

the great deleveraging has begun!!! kiss your gold, silver, oil, copper, anything not nailed down, and everything that is, GOOOOOOOODBYYYEEEEEEEE!!!!!!!!!!!!!!!!!! put your swimsuits on becuase this deflationary tsunami is going to be FUNNNNNNN!!!! 


Fri, 10/07/2011 - 15:45 | 1750809 SheepDog-One
SheepDog-One's picture

Yea let them have their little 100 DOW points, this shitheap is all going down, probably very soon in a spectacular false flag event.

Fri, 10/07/2011 - 15:45 | 1750807 dwdollar
dwdollar's picture

They forgot to pad the data on this one...

Fri, 10/07/2011 - 15:50 | 1750837 NEOSERF
NEOSERF's picture

With all these late day ramps keeping the markets above 11K, when the bankruptcies, earnings misses, bank runs and riots occur all at once, the down moves are going to be epic..

Fri, 10/07/2011 - 15:50 | 1750840 economists_do_i...
economists_do_it_with_models's picture

What a crazy day...

-USO outperforming BNO.

-IWM down more %-wise than the Dow is up.

-UUP up, but TLT/GLD/VXX all down.

So much for stabilizing the markets.  Things are more out of whack now than EVER.

I have to laugh about the Fed trying to lower interest rates.  Current yield on 1MON Treasuries compared to 30YR ones is trading at 2% of what it's 200-day moving avg was in early 2009 (.0034 to .1700).  So if rates are so low...but no one is borrowing...then what does it matter???  0% on $0 is ZERO.

Fri, 10/07/2011 - 15:55 | 1750865 SheepDog-One
SheepDog-One's picture

Exactly, what does any of it matter when its all totaly broken? Youve got to go thru the wringer to get a loan today even if your FICO and credit are perfect, banks are terrified of lending, but the BONDS are low so at least thats good... HOW SO?? ..I really dont know what kind of psychotic medications everyone is on today but this is all just bizarre!

Fri, 10/07/2011 - 15:56 | 1750861 HD
HD's picture

 Ridiculous. I just opened a WAMU credit card at Circuit City to buy a new Polaroid camera. Everything is fine.

Fri, 10/07/2011 - 15:57 | 1750872 surf0766
surf0766's picture

What is up with that swing? What's the no news that cause the drop from +90 to -25

Fri, 10/07/2011 - 16:00 | 1750898 Instant Wealth
Instant Wealth's picture

lack of dumb money ?

Fri, 10/07/2011 - 15:58 | 1750879 Threeggg
Threeggg's picture

Look at that market flux !

What a Joke/Scam !

Fri, 10/07/2011 - 16:02 | 1750906 the not so migh...
the not so mighty maximiza's picture

she is starting too shimee

Fri, 10/07/2011 - 16:15 | 1750974 Silverhog
Silverhog's picture

If you feed your baby blueberries, you'll get a diaper load of green shit. (trust me on this) That's what the market had today. Anybody got some diaper wipes?

Fri, 10/07/2011 - 16:25 | 1751014 HD
HD's picture

That's a known issue in babies. Download the latest drivers and firmware update. Reboot.

Fri, 10/07/2011 - 16:17 | 1750979 unununium
unununium's picture

Tylerz, THANK YOU for linking to the chart from the story abstract.

Fri, 10/07/2011 - 16:23 | 1751005 topcallingtroll
topcallingtroll's picture

The biggest aggregate credit bubble the world has ever seen Ten to twenty years of consumer demand pulled forward. We have too much furniture, too much cutlery, too much clothing. We could satisfy twenty years of consumer demand by what is piled in our closets and self storage units. We should sell fifty year treasurys and run two trillion dollar deficits for the next ten years, and expropriate the wealth from the citizens of mercantilist economies. That is the easy way out for the hegemon. Paul Krugman says it in a more diplomatic way but he is correct on this. Too bad we cant get the tea party to understand we can steal from the mercantilists and make this kondratiev winter warmer for us.

Fri, 10/07/2011 - 16:27 | 1751024 SDRII
SDRII's picture

non seasonal adj debt up q/q - somone is lying

Fri, 10/07/2011 - 18:43 | 1751376 Snakeeyes
Snakeeyes's picture

Zero Hedge beat me to the story!

My concern is DEFLATION. And I am looking at how fear of Dodd-Frank is leading to credit tightening.

Stay tuned!

Fri, 10/07/2011 - 19:30 | 1751481 Stax Edwards
Stax Edwards's picture

I like your blog SE, bookmarked.  Good stuff re: Macro RE.  Thanks for sharing.


Fri, 10/07/2011 - 21:15 | 1751778 Element
Element's picture

Interesting isn't it, that credit plunges and yet CMI's online consumption (i.e. that is paid for via credit) is going through the roof like you would not believe ... ... so I don't believe ... the situation is too contradictory.



Sat, 10/08/2011 - 01:55 | 1752285 Capitalist Sooner
Capitalist Sooner's picture

I am paying down debt - some credit cards, and a student loan, plus the mortgage. Every penny I can spare goes to get debt free, minus a tiny bit each month for gold and silver.

Sat, 10/08/2011 - 07:36 | 1752474 Moe Howard
Moe Howard's picture

Don't listen to anyone who knocks you, keep it up. Debt free is LIBERTY.

Sat, 10/08/2011 - 06:26 | 1752432 Snakeeyes
Snakeeyes's picture

Bear in mind that the drop in consumer credit was SEASONALLY ADJUSTED. If you look at the same data NON SEASONALLY ADJUSTED, consumer credit acutally increased 6% in August.

So, pick you poison: NSA or SA.

Mon, 10/10/2011 - 04:09 | 1756669 yabs
yabs's picture


how can one be concerned of DEFLATION?

what utter noinsense

Deflation is what is needed

what do you prefer?

high or low prices?

do you prfer your currency to be worth something or would you prefer it to be worth less than toilte paper?

Wed, 11/09/2011 - 12:18 | 1861077 karmete
karmete's picture

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