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News Link • Economy - Economics USA

Karl Denninger: Revolving Credit Drops at an Annual Rate of 13 Percent

For those who argue that we are emerging from recession and that we are seeing real final demand increases, you have to square that against these charts. It simply isn't happening. That's a $9.5 billion decrease in revolving (credit card) debt in one month (February) and a $2 billion non-revolving decrease. While in the intermediate and longer term de-leveraging is good for the consumer, in the short term it throws cold water all over the improving final demand picture. Here's what's going on folks - the so-called "increased consumer spending" is coming from people not paying their mortgages, blowing it on silly stuff like iPads instead, along with the government borrowing and spending.

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