Thursday, December 9, 2010

More on Consumer Credit

Karl Denninger details why the jump in non-revolving consumer credit was not necessarily all it was made out to be (hat tip Jim Driscoll):

Except for the idiots borrowing to go to school [who] are going to find that they will never be able to pay it back, having bought into the Kool-Aid (and who will be destroyed by it), the actual non-revolving debt acceptance was down at a 58% annualized rate of change!

That's not a decline -- it's a collapse.
Well then.

Here's the supporting data (assuming Federal owned consumer credit is all student loans).

For those that like ranting... enjoy as I turn it back to Karl:
While the "pumpers" all said that strong auto sales were part of the recovery, that's a lie; "finance companies" (which include GMAC, Ford Motor Credit (FCZ), etc.) declined at a nearly 6% rate for the month, which on an annualized basis is just plain nasty.

"Positive surprise"? Oh hell no. Not only are consumers shunning credit cards, they're shunning credit of all types -- except for young people, who continue to be bamboozled into taking on debt for a so-called "education" into a collapsing credit, salary and employment environment.
Source: Federal Reserve