Posted on 11/07/2011 3:30:35 PM PST by Comparative Advantage
Superficially, it was all smiles following the announcement of the September consumer credit number which rose by $7.4 billion on a seasonally adjusted basis, on expectations of $5.2 billion (and down from the revised $9.7 billion borrowed in August). However a quick look under the surface reveals the same old trickery we have grown to know and love: revolving credit declined by $627 million, while the entire growth was in Non-revolving borrowing, which rose by $8 billion. What does non-revolving credit fund? Why auto loans (read subprime GM car loans) and student loans of course, the latter being the very same loans which even the president now is saying have to be reduced. As for the former, the G.19 now no longer even bother to report such data as Loan to Value, Interest Rates, Maturity and Amount Financed: analysts are left to imagine the best possible outcome. And just to confirm where consumer credit in 2011 has come from, of the $32 billion in credit issued YTD, $89.7 billion of it comes from the US government. The only other positive source of credit in 2011, for the whopping amount of $1 billion are savings institutions. Every other traditional source of credit is now... a drain.
(Excerpt) Read more at zerohedge.com ...
"You can't kill the beast while sucking at its teat"
-- Claire Wolfe
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