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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.

 


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Thu, 06/07/2012 - 15:47 | Link to Comment 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 | Link to Comment Clueless Economist
Clueless Economist's picture

This is Bearish for stocks!

Thu, 06/07/2012 - 15:56 | Link to Comment economics9698
economics9698's picture

Pretty funny shit ZH digs up.

Thu, 06/07/2012 - 15:57 | Link to Comment 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 | Link to Comment Ahmeexnal
Thu, 06/07/2012 - 16:42 | Link to Comment Winston Churchill
Winston Churchill's picture

Had to go clean out my eyes with battery acid.

Thu, 06/07/2012 - 16:51 | Link to Comment ndotken
ndotken's picture

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

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

Photo Caption Contest!

Thu, 06/07/2012 - 16:04 | Link to Comment 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 | Link to Comment Bunga Bunga
Bunga Bunga's picture

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

Thu, 06/07/2012 - 16:25 | Link to Comment jus_lite_reading
jus_lite_reading's picture

PONZI PONZI!!! 

GAME OVER

Thu, 06/07/2012 - 15:48 | Link to Comment 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 | Link to Comment economics9698
economics9698's picture

Yep the pond scum took over around 65 or so.

Thu, 06/07/2012 - 16:04 | Link to Comment TheGameIsRigged
TheGameIsRigged's picture

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

Thu, 06/07/2012 - 17:39 | Link to Comment 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 | Link to Comment pods
pods's picture

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

pods

Thu, 06/07/2012 - 15:51 | Link to Comment urbanelf
urbanelf's picture

They have a special on iThingamajig.

Thu, 06/07/2012 - 16:03 | Link to Comment urbanelf
urbanelf's picture

iThingamajig is only 1/2 oz of gold.

Thu, 06/07/2012 - 16:04 | Link to Comment urbanelf
urbanelf's picture

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

We're cool, right?

Thu, 06/07/2012 - 18:55 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment catacl1sm
catacl1sm's picture

Credit Cards, bitchez!

Thu, 06/07/2012 - 15:56 | Link to Comment 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.

http://www.youtube.com/watch?v=kRW7pITY5Cg

Thu, 06/07/2012 - 15:56 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment booboo
booboo's picture

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

Thu, 06/07/2012 - 15:51 | Link to Comment 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 | Link to Comment Whoa Black Barry
Whoa Black Barry's picture

You called?

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

5 Snaps Whoa....lmao

 

Thu, 06/07/2012 - 16:02 | Link to Comment 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 | Link to Comment cougar_w
cougar_w's picture

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

Thu, 06/07/2012 - 16:08 | Link to Comment 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 | Link to Comment infinity8
infinity8's picture

Maybe this will cheer you up: http://online.wsj.com/article/SB1000142405270230383020457744814422687708...

 

"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 | Link to Comment 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 | Link to Comment stocktivity
stocktivity's picture

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

Thu, 06/07/2012 - 18:00 | Link to Comment 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?

Grim.

Thu, 06/07/2012 - 18:22 | Link to Comment 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 | Link to Comment 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 | Link to Comment Sweet Chicken
Sweet Chicken's picture

HERE HERE

 

this!

Thu, 06/07/2012 - 15:51 | Link to Comment lizzy36
lizzy36's picture

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

Thu, 06/07/2012 - 15:52 | Link to Comment 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 | Link to Comment fuu
fuu's picture

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

DaMint!

Thu, 06/07/2012 - 16:06 | Link to Comment 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 | Link to Comment percyklein
percyklein's picture

Sure did knock the crap out of the SPY.

Thu, 06/07/2012 - 15:55 | Link to Comment ParkAveFlasher
ParkAveFlasher's picture

In fact I too am inflating right now, myself.

Thu, 06/07/2012 - 15:56 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment cougar_w
cougar_w's picture

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

http://madscienceunlimited.com/fiction/uncomfortableWithTheTruth.html

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:

http://madscienceunlimited.com/fiction/thisHeartOfGold.html

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 | Link to Comment 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 | Link to Comment CPL
CPL's picture

lolwut?

Thu, 06/07/2012 - 16:05 | Link to Comment 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 | Link to Comment 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 | Link to Comment junkyardjack
junkyardjack's picture

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

Thu, 06/07/2012 - 16:08 | Link to Comment GolfHatesMe
GolfHatesMe's picture

They're Magicly delicious!

Thu, 06/07/2012 - 16:10 | Link to Comment Conman
Conman's picture

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

Thu, 06/07/2012 - 16:14 | Link to Comment Temporalist
Temporalist's picture

It's A Kind Of Magic

http://www.youtube.com/watch?v=FytMNBUR2CQ&feature=youtu.be&t=5s

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

Thu, 06/07/2012 - 16:13 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment Snakeeyes
Snakeeyes's picture

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

 

http://confoundedinterest.wordpress.com/wp-admin/post.php?post=15280&action=edit&message=6&postpost=v2

Thu, 06/07/2012 - 17:34 | Link to Comment 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 | Link to Comment SwingForce
SwingForce's picture

The Fed is a Criminal Enterprize...

Thu, 06/07/2012 - 17:44 | Link to Comment 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 | Link to Comment CPL
CPL's picture

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

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

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

Unbelievable...

Thu, 06/07/2012 - 18:18 | Link to Comment Vince Clortho
Vince Clortho's picture

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

Thu, 06/07/2012 - 19:02 | Link to Comment 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 | Link to Comment Cole Younger
Cole Younger's picture

It is rather clever....

Thu, 06/07/2012 - 20:34 | Link to Comment 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.

http://www.silohome.com/

Thu, 06/07/2012 - 21:57 | Link to Comment 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.

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