[HangnJudge]

More cheerie news...


http://market-ticker.denninger.net/

Consumer credit decreased at an annual rate of 6 percent in the third quarter of 2009. Revolving credit decreased at an annual rate of 10 percent, and nonrevolving credit decreased at an annual rate of 3-3/4 percent. In September, consumer credit decreased at an annual rate of 7-1/4 percent.

We are a credit-based system, as are all modern monetary systems. No meaningful economic recovery can or will occur until the consumer has purged his balance sheet of the inappropriate debt he has and is once again able to earn and borrow.

[HangnJudge]

And...



http://market-ticker.denninger.net/

The turn upward in this chart was a near-exact correlation with the end of the recession in the early part of the decade. Not only are we dramatically worse now, we haven't even begun to turn, and those who have exited the labor force continues to skyrocket.

The key item here is loan losses. They will not begin to stabilize until year-over-year job loss turns.

[lentulusgracchus]

[Your quoted article]
We are a credit-based system, as are all modern monetary systems. No meaningful economic recovery can or will occur until the consumer has purged his balance sheet of the inappropriate debt he has and is once again able to earn and borrow.

Recent articles in Minyanville.com and FinancialSense.com raise these same consumer-credit/consumer-income issues and challenge the idea that the recovery "this time" will actually be a recovery at all in any meaningful sense, rather than an "L-shaped recovery" i.e. stabilization at a permanently lower per-capita GDP, recovery suppressed by job/income/purchasing-power loss.

[Notary Sojac]

It's true that consumer credit has dropped. However I see that as a "bad thing" in the same way that a rapid drop in body temperature from 103 degrees to 99 degrees is a "bad thing".

It's just this generation of Americans finally learning that life lesson about not spending money you don't have.