Normally, we would report the change in total
consumer debt (revolving and non-revolving) in this space, but today we
will pass, for the simple reason that the number is the merely the
latest entrant in a long series of absolutely made up garbage.
It appears that in the "quiet period" of data releases, when the BLS
realized its "non-critical", pre-update 8MHz 8086-based machines are
unable to boot up the random number generator spreadsheets known as
"economic data", Ben Bernanke decided to quietly slip a modest revision
to the monthly consumer credit data. A modest revision, which amounts to a whopping $180 billion cumulative increase in non-revolving credit beginning in January 2006.
So add that to the GDP [12], to Personal Income [13], to Household Net Worth [14], to the BLS' JOLTS "data [15]", and of course, to last year's repeat revision of consumer credit data [16], as a data set, which while present, is absolutely meaningless following recent arbitrary revisions which meant all prior data contained therein was just as irrelevant.
To summarize: for whatever reason, the Fed decided to recast its entire non-revolving credit data series starting in January 2006, and has magically created $188 billion in student loan and car debt that previously "did not exist."
Old vs Revised series shown below.
[17]
For those who still opt to live in the Matrix and be treated like mushrooms, demanding to know just what the "new" fabricated, made up series implies, here it is: total consumer credit rose by$13.6 billion driven entirely by non-revolving credit, or $14.5 billion of the total, while revolving credit has now dripped for three months in a row as households continue to pay down their credit cards, better known as deleverage. In other words: using Uncle Sam as a charge card for cars and university courses, for everything else there is paying down debt.
[18]
Finally, perhaps the most amusing implication of today's revision, is the longer term chart of non-revolving credit. As the St Louis Fed chart below shows, we are about to go beyond exponential and purely asymptotic.
[19]
So add that to the GDP [12], to Personal Income [13], to Household Net Worth [14], to the BLS' JOLTS "data [15]", and of course, to last year's repeat revision of consumer credit data [16], as a data set, which while present, is absolutely meaningless following recent arbitrary revisions which meant all prior data contained therein was just as irrelevant.
To summarize: for whatever reason, the Fed decided to recast its entire non-revolving credit data series starting in January 2006, and has magically created $188 billion in student loan and car debt that previously "did not exist."
Old vs Revised series shown below.
[17]For those who still opt to live in the Matrix and be treated like mushrooms, demanding to know just what the "new" fabricated, made up series implies, here it is: total consumer credit rose by$13.6 billion driven entirely by non-revolving credit, or $14.5 billion of the total, while revolving credit has now dripped for three months in a row as households continue to pay down their credit cards, better known as deleverage. In other words: using Uncle Sam as a charge card for cars and university courses, for everything else there is paying down debt.
[18]Finally, perhaps the most amusing implication of today's revision, is the longer term chart of non-revolving credit. As the St Louis Fed chart below shows, we are about to go beyond exponential and purely asymptotic.
[19]
