Another month down, another month in which US consumers deleveraged by paying down their credit cards. Although that is not exactly correct: as we showed recently, the New Normal source of credit has nothing to do with revolving debt, or credit cards, or any other old normal notions, and everything to do with student debt, which is used for everything except paying for tuition. That, and car loans of course. Sure enough, in February, of the $13.7 billion in new loans created, $13.9 billion, or 102% of all, was there to fund student and car loans.
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And looking further back at the data over the past year, of the $172 billion in new consumer debt, a stunning 96% has gone to new student and car loans.
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So there it is in a nutshell: the deleveraging consumer continues to delever, except when it comes to purchasing Government Motors cars courtesy of government subprime NINJA loans, and of course, student loans, which as we profiled recently [8], are never getting repaid, and will be yet another taxpayer-funded bail out in a few short years.