Student And Car Loans Go Exponential, Courtesy Of Uncle Sam

Another month, another $14.5 billion increase in student and car loans, offset by a measly $1.4 billion in credit card debt, following last month's upward revised $200 million drop in revolving debt. Total consumer debt in September increase by $15.9 billion, just below the $16.0 billion estimate, and the problem is that with the Fed's credit injection fading, someone has to step on the borrowing pedal. Alas, if one takes away student and car loans, the credit creation is not nearly enough to push US consumption higher.


Revolving credit: the credit card buying spree from late spring is long gone. Compared the recent "recovery" period to the "healthy" credit card purchasing days of 2007 reveals that nothing is as it should be.


So it's all up to non-revolving credit, which continues to increase between $10 and $15 billion each month.


What's most troubling is that after several months of depository institutions funding the bulk of credit needs, the past two months have reverted to the old normal, where Uncle Sam is the sole provider of consumer credit.


In any event, the most amusing chart is the following. It simply screams sustainable.