This page has been archived and commenting is disabled.

Consumer Credit Misses, As Fed Magically Creates $1.5 Trillion In Net Worth Out Of Thin Air

Tyler Durden's picture


That the just released consumer credit update for April missed expectations of a $11 billion increase is not much of a surprise. As noted earlier, the US consumer has once again resumed deleveraging: April merely saw this trend continue with revolving credit declining by $3.4 billion, offset by the now traditional increase in student and subprime government motors car loans, which increased by $10 billion. In other words, following a modest increase in revolving consumer credit in March, we have another downtick, and a YTD revolving credit number which is now negative. Obviously the government-funded student loan bubble still has a ways to go.

No: all of this was expected. What was very surprising is that as noted in the earlier breakdown of the Z1, the entire consumer credit series was revised, with the cumulative impact resulting in a major divergence from the original data series. Why did the Fed feel compelled to revise consumer credit lower? Simple: as debt goes down, net worth goes up, assuming assets stay flat. Which in the Fed's bizarro world they did! Sure enough, if one compares the pre-revision Household Net Worth data (which can still be found at the St. Louis Fed but probably not for long) with that just released Z.1, one notices something quite, for lack of a better word, magical. Ignoring the March 31 datapoint which does not exist for the pre-revision data set, at December 31, household net worth magically grew from $58.5 trillion in the original data set to $60.0 trillion in the revised one!

And that, ladies and gentlemen, is how you "create" $1.5 trillion in net worth in this wonderfully wacky fiat world, with the wave of a magic wand, or the push of a revision button.

We hope all of you feel $1.5 trillion wealthier as of this post.


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Thu, 06/07/2012 - 15:47 | 2505104 CClarity
CClarity's picture

Smoke and mirrors - the people want to be fooled, told everything is fine.  Politicians, statisticians, and market movers are happy to oblige.

Thu, 06/07/2012 - 15:48 | 2505111 Clueless Economist
Clueless Economist's picture

This is Bearish for stocks!

Thu, 06/07/2012 - 15:56 | 2505152 economics9698
economics9698's picture

Pretty funny shit ZH digs up.

Thu, 06/07/2012 - 15:57 | 2505165 ihedgemyhedges
ihedgemyhedges's picture

Dear Customer:

I am writing to let you know that contrary to recent reports on various websites, YOUR debt did NOT get revised down.  Have a great life.

Sincerely, J. Dimon

Thu, 06/07/2012 - 16:06 | 2505202 Ahmeexnal
Thu, 06/07/2012 - 16:42 | 2505320 Winston Churchill
Winston Churchill's picture

Had to go clean out my eyes with battery acid.

Thu, 06/07/2012 - 16:51 | 2505347 ndotken
ndotken's picture

woohooo .... I'm off to buy me a new Obama thingamajig!!!

Thu, 06/07/2012 - 18:38 | 2505590 Nobody For President
Nobody For President's picture

Photo Caption Contest!

Thu, 06/07/2012 - 16:04 | 2505188 eclectic syncretist
eclectic syncretist's picture

Does this mean we can get back to tank-o-rama and then have another little squeeze before the Fed meeting in two weeks?

Thu, 06/07/2012 - 16:07 | 2505195 Bunga Bunga
Bunga Bunga's picture

But but but Ben can create inflation whenever he wants to.

Thu, 06/07/2012 - 16:25 | 2505272 jus_lite_reading
jus_lite_reading's picture



Thu, 06/07/2012 - 15:48 | 2505109 battle axe
battle axe's picture

We have the best Government.....Honest/Hard Working/Caring about the little guy..../sarc

Thu, 06/07/2012 - 15:57 | 2505161 economics9698
economics9698's picture

Yep the pond scum took over around 65 or so.

Thu, 06/07/2012 - 16:04 | 2505192 TheGameIsRigged
TheGameIsRigged's picture

for the people by the people (in power that is...)

Thu, 06/07/2012 - 17:39 | 2505442 LasVegasDave
LasVegasDave's picture

“Our government teaches people by example. If the government becomes the lawbreaker, it breeds contempt for law; it invites every man to become a law unto himself; it invites anarchy."

-Louis Brandeis

Thu, 06/07/2012 - 15:48 | 2505112 pods
pods's picture

Well I think I am going to run right out to Best Buy and get me something.


Thu, 06/07/2012 - 15:51 | 2505132 urbanelf
urbanelf's picture

They have a special on iThingamajig.

Thu, 06/07/2012 - 16:03 | 2505182 urbanelf
urbanelf's picture

iThingamajig is only 1/2 oz of gold.

Thu, 06/07/2012 - 16:04 | 2505189 urbanelf
urbanelf's picture

I MEAN $800!!!  $800!!!  I SWEAR, I MEANT $800!

We're cool, right?

Thu, 06/07/2012 - 18:55 | 2505623 stocktivity
stocktivity's picture

at least you'l have the store to yourself..and a few sales people standing around.

Thu, 06/07/2012 - 15:49 | 2505117 bigdumbnugly
bigdumbnugly's picture

well, i don't feel 1.5 trillion wealthier right now but i do have an urge to stay at a holiday inn express tonight.

Thu, 06/07/2012 - 16:10 | 2505217 eclectic syncretist
eclectic syncretist's picture

In the bizarro world of "baffle you with bullshit terminology" of the Fed they always graph credit/debt as if it's an asset.  Then they tell you complex it all is, and not to bother yourself worrying about it, since they are taking care of everything for you.  Sweet dreams!

Thu, 06/07/2012 - 19:07 | 2505643 CPL
CPL's picture

...guests of the central bank stay at the luxurious maytag fridge box near the Wall Street holiday inn.

Thu, 06/07/2012 - 15:50 | 2505124 catacl1sm
catacl1sm's picture

Credit Cards, bitchez!

Thu, 06/07/2012 - 15:56 | 2505125 Cognitive Dissonance
Cognitive Dissonance's picture

Ben - "Watch me pull a rabbit out of my hat. Nothing under my sleeve. Presto.

Whoops. Better get me a new (fiat) hat."

All four Rocky and Bullwinkle versions just in case you want to watch the cartoon referrence.

Thu, 06/07/2012 - 15:56 | 2505160 krispkritter
krispkritter's picture

'Hey Krugman! Watch me pull an Economy outta my ass!'

The Magical Fed said it could raise the Dead,

Economy as it has been for years. 

Ben waved his wand and confirmed our fears,

We'll soon be living on water and bread.

Thu, 06/07/2012 - 16:09 | 2505209 cougar_w
cougar_w's picture

'Hey Krugman! Watch me pull an Economy outta my ass!'

Instant ZH classic.

Thu, 06/07/2012 - 17:03 | 2505377 I Am The Unknow...
I Am The Unknown Comic's picture

I didn't know that Bearnanke did his undergrad at Wossamotta U.

Thu, 06/07/2012 - 15:50 | 2505127 booboo
booboo's picture

Ok then, tell me I'm a handsome devil.

Thu, 06/07/2012 - 15:51 | 2505130 Gringo Viejo
Gringo Viejo's picture

Just a quick, off topic observation. I'm intrigued by the number of socialist, nanny state advocates that frequent ZH. It's a "free country" but it's a bit like my spending the day on the nation of islam's website.

Thu, 06/07/2012 - 15:59 | 2505173 Whoa Black Barry
Whoa Black Barry's picture

You called?

Thu, 06/07/2012 - 16:02 | 2505181 Gringo Viejo
Gringo Viejo's picture

5 Snaps Whoa....lmao


Thu, 06/07/2012 - 16:02 | 2505178 Global Hunter
Global Hunter's picture

spice of life and all that besides unless you're a Sheik from Dubai, a European aristocrat or part of the Rockefeller family etc. you probably have more in common with the average run of the mill socialists, nanny state advocate or nation of Islam members than you do Jamie Dimon, Barry Obie-One, Leon Panetta etc.

Thu, 06/07/2012 - 16:05 | 2505194 cougar_w
cougar_w's picture

Ha! That is so true. Let's see who can handle it.

Thu, 06/07/2012 - 16:08 | 2505206 BeetleBailey
BeetleBailey's picture

I concur. However, instead of "intrigued", I would put the word "nauseated".

I got junked on another post as to my utter disgust for the big government nanny staters.

Socialists simply blow. Government ALREADY fucks up and spends more money than they have, ALWAYS over-spends, fucks up in general - and these cretins want MORE government?

It defies logic, any form of sense, and it disgusts me that their so-called "leaders" (Obama, Clinton, Kerry, etc.) go on and on and lie straight to their faces and get away with it.

I am NOT "for" big business, corporate lobbying, and a fucked UP tax structure. I am for a government FOR the people - which it is NOT.

Thu, 06/07/2012 - 16:51 | 2505349 infinity8
infinity8's picture

Maybe this will cheer you up:


"KABUL, Afghanistan – The U.S. has terminated funding for a $20 million project to develop a Pakistani version of Sesame Street, the U.S. Embassy said Tuesday. The decision came as a Pakistani newspaper reported allegations of corruption by the local puppet theater working on the initiative."

Thu, 06/07/2012 - 17:05 | 2505386 I Am The Unknow...
I Am The Unknown Comic's picture

Well, the TBTF banks do need more muppets....

Thu, 06/07/2012 - 18:57 | 2505632 stocktivity
stocktivity's picture

There goes another one of those "shovel - ready" projects.

Thu, 06/07/2012 - 18:00 | 2505498 bobnoxy
bobnoxy's picture

Yeah! What we really need are those wonder boys from the Bush administration that left the country in such fine shape with all their free market ideas.

Tax cuts, two trillion dollar, losing wars managed so badly they'll be teaching how not to do that at West Point for another 100 years, Medicare Part D which is now a bigger unfunded liability than Social Security, the first trillion dollar deficit, a doubling of the debt, a big expansion in government with the Homeland Security scam, and the worst economic collapse since the Depression.

Oh, and we got hit under their watch on 9/11 too after they were explicitly warned. Now, what is it you like so much more about them?

Isn't there a nice Tea Party Dumb Ass site for you instead?


Thu, 06/07/2012 - 18:22 | 2505556 Saro
Saro's picture

If you're using the words "Bush" and "free market" in the same sentence, you'd better be talking about prostitutes . . .

Thu, 06/07/2012 - 16:12 | 2505220 TheCanadianAustrian
TheCanadianAustrian's picture

I say good graces. The more uninformed people there are exposed to sites like this, the better chance our world has.

Thu, 06/07/2012 - 16:45 | 2505327 Sweet Chicken
Sweet Chicken's picture




Thu, 06/07/2012 - 15:51 | 2505136 lizzy36
lizzy36's picture

Photoshop for Fed data series.....what could be better.

Thu, 06/07/2012 - 15:52 | 2505137 tabasco71
tabasco71's picture

A rounding error...

Trillion here, trillion there, pretty soon you're talking about real money...

Thu, 06/07/2012 - 16:33 | 2505296 fuu
fuu's picture

What do you call that thing at the bottom of the urinal?


Thu, 06/07/2012 - 16:06 | 2505148 Dr. Engali
Dr. Engali's picture

I'm feeling wealthier already. I think I'll take a second mortgage out and buy a boat.

Thu, 06/07/2012 - 15:58 | 2505156 percyklein
percyklein's picture

Sure did knock the crap out of the SPY.

Thu, 06/07/2012 - 15:55 | 2505157 ParkAveFlasher
ParkAveFlasher's picture

In fact I too am inflating right now, myself.

Thu, 06/07/2012 - 15:56 | 2505159 Cursive
Cursive's picture

Rule by fiat.  Whatever they say it is.  The BLS has already famously revised U3 to the point that it does not represent what it did 30 years ago.  I believe none of these numbers, but Bob Brusca and his "economics" brethern will happily swallow them whole and beg for more of this bullshit.

Thu, 06/07/2012 - 15:58 | 2505168 HD
HD's picture

 I can't tell you how many times I've found a trillion or two in the couch cushions...

Thu, 06/07/2012 - 16:52 | 2505352 Poetic injustice
Poetic injustice's picture

While cleaning my garbage, I found 2 trillions which were accidentally put in throwaway bag.
People do tend to forget small things.

Thu, 06/07/2012 - 17:19 | 2505406 cougar_w
cougar_w's picture

I found a trillion once, in the pocket of a jacket I pulled off the rack at the thrift store. I asked the lady at the counter what I should do with it, and she said I should donate it to the store. I sorta did that; used it to buy the coat. It was a great coat, best trillion I ever spent, and it wasn't even my money. That's sorta like Jon Corzine though, so I feel kinda bad about that part. Maybe I should have just donated it like she said.

Thu, 06/07/2012 - 16:06 | 2505179 cougar_w
cougar_w's picture

You know, this kind of thing used to be fiction:

I wrote that last year. They've already caught up with me. I guess I need to move further up field.

Well way up field is still this one:

Let's hope they can control themselves. So what's left in between "we are teh liarz" and "we are wantz ur goldz now"? I mean not much right?

Okay that's it. I'm only writing about rainbow ponies and puppies now. Seriously. I'm not taking the blame for any of this shyte.

Thu, 06/07/2012 - 16:25 | 2505253 cougar_w
cougar_w's picture

"Rainbow Pony!" cried Puppy, Tsar of the People's Economy. "There are Gold-mongers and Austrians at the gate! And the Fiatsco storm troops are already enroute to Belgium!"

Rainbow Pony swished her long, rainbow-colored tail and shat another skittle in agitation. "It is become more than I can stand. Release the ultimate weapon of monetary destruction!"

Puppy froze in terror. "No!" he wimpered, his tail between his legs. "Not that ... not the terrible ..."

"Release the Chopper!" Rainbow Pony shrieked in defiant defiance. "Let the Benjamins rain down on the enemies of our great and purposeful economic recovery!"

The chopper was loaded with bails of fiat toilet paper and ...

Geh. Fuckit. I can't stand it. Yo Bernanke go figure this out the fuck yourself. I ain't writing your scripts anymore, mo'fo'. Got myself a real job doing standup at Persephone's House of Blood and Biscuits. See you Tuesdays and Thursdays during happy hour, bitch.

Thu, 06/07/2012 - 19:15 | 2505656 CPL
CPL's picture


Thu, 06/07/2012 - 16:05 | 2505196 financial apoca...
financial apocalyptic contagion's picture

if only the fed was smart enough to do "reverse" QE.

They wanna stimulate demand? thats the one thing Americans are good for, if they gave us money we would've bought everything, who gives a rat's ass abt hyperinflation

its still better than giving the money to TBTF and they just lock it away

what a waste of billions and time oh yes the clock's ticking away Bernanke you faggot

Thu, 06/07/2012 - 16:34 | 2505295 LongSoupLine
LongSoupLine's picture

They wanna stimulate demand?

That's what they say.  However, they really want to stimulate banker bonus pools and banker balance sheets.

One only needs to look at facts:

What is the origin of the Fed? (to support banks)

Who is on the board? (hint: TBTF bankers and corporations)

Who is an "advisory" member? (hint: see hint 1)

Who is a former Fed member and advisor? (hint: see hint 1)

Thu, 06/07/2012 - 16:07 | 2505203 junkyardjack
junkyardjack's picture

Good things consumers can leverage phone companies for iPhones...

Thu, 06/07/2012 - 16:08 | 2505208 GolfHatesMe
GolfHatesMe's picture

They're Magicly delicious!

Thu, 06/07/2012 - 16:10 | 2505215 Conman
Conman's picture

Going out to buy my thingamajigs now, didn't know i was richer!

Thu, 06/07/2012 - 16:14 | 2505223 Temporalist
Temporalist's picture

It's A Kind Of Magic

"One dream one soul, one prize
One goal, one golden glance of what should be"

Thu, 06/07/2012 - 16:13 | 2505230 LawsofPhysics
LawsofPhysics's picture

Hey, as long as no-one tries to actually take delivery of that "wealth" its all good.

Thu, 06/07/2012 - 16:45 | 2505331 cougar_w
cougar_w's picture

The bankers will somehow manage to take delivery.

Don't ask me how. It defies all logic. But somehow they will manage it. They'll force their blood funnel into that imaginary space and siphon up the loot, and the invoice payable to the future will be 100% genuine and everyone else in the world will have already signed the contract.

Thu, 06/07/2012 - 16:12 | 2505231 Bansters-in-my-...
Bansters-in-my- feces's picture

Money out of "thin air"....

Well I'll be dammed.

Next they will be thinking of taxing our air.....

Oh,wait a minute....


Thu, 06/07/2012 - 16:16 | 2505242 sbenard
sbenard's picture

There is no reality any more in the "magically" Federalized world of money creation. We're all magicians now! We have PRINTED prosperity now! It's economic alchemy! Magic!

May I suggest another word? DELUSION!

Thu, 06/07/2012 - 16:23 | 2505266 Snakeeyes
Snakeeyes's picture

I saw that in the data too. I am going on TV tomorrow to discuss the housing market and they asked in the pre-interview about this index.

Ben Bernanke is David Copperfied.

Thu, 06/07/2012 - 16:29 | 2505283 LMAO
LMAO's picture

The cooks doing the books have lost control of the ingredients altogether....they have stopped giving a fuck a long time ago.

They couldn't care less if we can't see the soup for the flies; it's not them who are doing the eating.


Thu, 06/07/2012 - 16:41 | 2505317 LULZBank
LULZBank's picture

Just like the first paper dollar that was created out of this air.

"Its a tradition."

Thu, 06/07/2012 - 16:57 | 2505364 Snakeeyes
Snakeeyes's picture

2.9% contraction in mortgage credit. Great for the housing recovery ,,, NOT!

Thu, 06/07/2012 - 17:34 | 2505435 slewie the pi-rat
slewie the pi-rat's picture

stay debt-free and go back to schoolTM with tyler, BiCheZ!

Thu, 06/07/2012 - 17:42 | 2505451 SwingForce
SwingForce's picture

The Fed is a Criminal Enterprize...

Thu, 06/07/2012 - 17:44 | 2505460 Winston Smith 2009
Winston Smith 2009's picture

$1.5 trillion / 310 million people = $4838.71 per person in the US.

That would be $17,554.84 for a family of four.

Yeah, right...

Thu, 06/07/2012 - 19:18 | 2505662 CPL
CPL's picture

Same day milk, bread and gas costs go up 1000%.

Thu, 06/07/2012 - 18:03 | 2505509 web bot
web bot's picture

Hey - look what the UK did to inflation! Now you see it, now you don't.


Thu, 06/07/2012 - 18:18 | 2505548 Vince Clortho
Vince Clortho's picture

Fed name change:  Free-$Trillions-R-Us

Thu, 06/07/2012 - 19:02 | 2505639 Nobody For President
Nobody For President's picture

I think spouse and myself will donate our $9,677.42 to the Untied Way (tm) charity...

Thu, 06/07/2012 - 19:44 | 2505712 Cole Younger
Cole Younger's picture

It is rather clever....

Thu, 06/07/2012 - 20:34 | 2505828 technicalanarchy
technicalanarchy's picture

Sweet thanks for the heads up. I just checked my bank account and I got it. Balance of a cool $1,500.000,000,682.37. So I'm off to buy that decomissioned missle silo I've been dreaming about.

Thu, 06/07/2012 - 21:57 | 2505967 Oldyeller
Oldyeller's picture

What's duh Big Deal here? We're talken bout du Fed here, sees? A lousie $1.5 billion heist is good fur under bosses like dat Corswine dude, but dis is da Fed! What du ya think? Da Feds gonna look cheap here? A Trilly and a half? jus anudder white chip for doze guys. Naw,ders noting to see here folks, jus move along,....Yeah, dats right. An if yu does says someting smart, we'll know whose ya are an we'll send du IRS boys round ta see yu......Yeah an day nose hows tu shake U down.

Oh, an have a nice day.

Do NOT follow this link or you will be banned from the site!