Posts filed under “Finance”

Fade the Consumer Credit Headline (For Now)

The Fed released its G.19 report on Consumer Credit last Thursday, and it stirred some optimism (see also here):

The new U.S. consumer credit numbers reflect an economy that is reaccelerating, and that is very bullish for growth — as well as inflation. All in all, U.S. household credit surged by $7.62 billion in February, ramping up faster than at any other time since June 2008.

I respectfully beg to differ.  While the story gives a passing nod to the rise in student loans, the fact of the matter is that student loans are virtually the whole story, and the downward trend/trajectory in credit, save that category, has really not reversed.

Let’s have a look:

What we’ve got above is Total Revolving, Total Non-revolving, and Total Non-revolving minus TOTALGOV (the category that includes student loans).  Without the increase in student loans — which is to say the green line and the blue line — the trend in credit (both revolving and non) continues downward.

But let’s take a look at exactly how much the TOTALGOV (i.e. Student loan) series is goosing non-revolving credit:

It is, quite literally, a reverse cliff-dive.

In short, fade the notion that consumer credit is experiencing some sort of credit renaissance and that happy days are here again.

That said, we are indeed moving in the right direction, as these two indicators of leverage clearly show (below).  So there would appear to be light at the end of the tunnel.  We’ve got a way to go, for sure, but progress is being made.  When the consumer credit cycle does eventually turn it is my belief that, for a variety of reasons — such as demographics and the lessons (hopefully) learned by today’s younger adults –  it will be fairly weak.

Category: Consumer Spending, Credit, Current Affairs, Data Analysis, Economy, Finance

UK Emergency Budget

Information is Beautiful has this tasty chartporn depicting the UK emergency budget: > click for larger graphic via The Guardian

Category: Digital Media, Finance

Personal Bankruptcy in America

Giant graphic of information, courtesy of Billshrink: click for ginormous graphic

Category: Economy, Finance

The (F)utility of GDP?

Interesting argument here by Richard Posner on the (f)utility of GDP. Money shot: “But it is necessary to emphasize that it [GDP] is just a starting point. I disagree with economists who say the “recession” ended in the third quarter. The depression (as I think we should call it if only because of its enormous…Read More

Category: Data Analysis, Economy, Finance

Austrian bank collapse furthers fears of contagion

The Austrian government has nationalized the insolvent bank Hypo Group Alpe Adria (HGAA). The financial institution, which has 40 billion Euros in assets, is the country’s sixth largest bank. But, in relative terms, this is a very large bankruptcy – using GDP at purchasing power parity, an American HGAA would have assets of $2.5 trillion,…Read More

Category: Bailouts, Currency, Finance

The Greatest Deception in the History of Finance

What is the greatest deception in the history of finance?  Depending upon your perspective, some entities and events of deception that come to mind might include corporate accounting scandals, rogue traders, Ponzi schemes, and various entities and events related to the financial crises (market bubbles) throughout history. “The greatest hazard of all, losing one’s self,…Read More

Category: Finance, Psychology

New York vs Singapore vs London: Best Financial Center?

Fascinating stuff: “New York has withstood the worst economic crisis in seven decades and remains the leading global financial center, followed by Singapore, which topped London as investors’ preferred place for doing business, according to Bloomberg Global Poll. Twenty-nine percent of respondents in the quarterly poll of investors, traders and analysts who subscribe to the…Read More

Category: Finance

Afternoon Reading

A few interesting reads for your Tuesday: • Goldman Sachs: U.S. Stocks Primed for Takeovers (Bloomberg) • Climbing the Golden Wall of Worry (Barron’s) • Zen Lessons in Market Analysis (Hussman) • Home rescue plan delaying, not solving crisis (Reuters) • End the war on drugs, start the legalization (Marketwatch) • The Years of Magical…Read More

Category: Finance, Financial Press, Markets

StockTwits and the Power of Social Leverage

“The Human Ticker”


“The Human Ticker”: StockTwits and the Power of Social Leverage
Aaron Task
Aug 26, 2009 04:13pm”The-Human-Ticker”-StockTwits-and-the-Power-of-Social-Leverage

Category: Finance, Technology, Video

Professionals Are Buying The Stock Market Rally. Are You?

My quote:

“This is a trading rally not a multi-year rally,” he says. Eventually something’s got to give: “We’ve never had six-month period before where we’ve lost two million jobs and the market’s gained 50%,” he says. “That’s simply unprecedented.”



Professionals Are Buying The Stock Market Rally. Are You?
Peter Gorenstein
Yahoo Tech Ticker, August 21, 2009 08:00am EDT

Category: Finance, Video