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 | 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...

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