Once upon a time the health of the US consumer was gauged by one simple thing: how much credit card debt did US households take on in any given month. Which makes sense: American consumers would not go out and spend on credit unless they felt strongly about their future job, income and overall wealth prospects. In simple terms, rising credit card debt was synonymous with confidence and prosperity. In recent years, however, this metric has quietly fallen out of favor with the punditry, for one simple reason: that reason is shown on the chart below, which very likely also shows where the S&P would trade if it weren't for $11 trillion in central bank liquidity injections.
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Sure enough, moments ago the Fed reported household consumer credit for the month of November and it is there we learned that not only did overall consumer credit miss expectations for the 4th month in a row...
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... but that in November revolving credit, aka credit cards, not only declined for the first month since August, but it had its biggest collapse since November of 2013, which not only explains why this year's Thanksgiving spending season was a complete disaster but also shows that contrary to the S&P hitting record highs at roughly this time, the bulk of America is still actively deleveraging.
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The only piece of household debt which did grow in November? Student and to a lesser extend, Auto (primarily subprime) loans. But while we know the demand side of the equation, the just as big question is who is providing all this subprime auto and student debt to Americans - debt which will certainly never be repaid.
The answer... instead of telling you, here is a chart courtesy of @Not_Jim_Cramer.
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