Thursday, March 11, 2010

Was Consumer Delevering Part II

On Monday I asked if the consumer was relevering and showed the below chart (makes special note of the revolving debt).

Felix Salmon with some interesting analysis that shows perhaps they never really were:
It turns out that while total debt outstanding dropped by $93 billion, charge-offs added up to $83 billion — which means that only 10% of the decrease in credit card debt — less than $10 billion — was due to people actually paying down their balances.

Source: Cardhub

1 comment:

  1. Jake -- just in case the subject comes up again, you might want to know the CardHub data was incorrect. They applied a rate from the Fed chargeoff data, which is for commercial banks only, to the total revolving debt, which is only 1/3 from commercial banks. See

    Jim Fickett