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’US deleveraging isn’t just about defaults and charge-offs
So the New York Fed is now blogging, and its first post happens to be about one of our favourite topics, consumer deleveraging.
More specifically, the authors scrutinise the Consumer Credit Panel report in an effort to discern how much of the deleveraging since the crisis is the result of households actually paying down debt rather than defaulting on various types of loans.
Chinese consumer credit binge begins
We’ve just seen Chinese GDP rise 11.9 per cent in Q1.
And urban house prices increased 11.7 per cent in March.
And retail sales are up 17 per cent.
So here’s another dramatic Chinese statistic to throw into the mix,
US consumer credit, re-crunched
January, it seems, was a blip – albeit a bigger blip than first believed. But the trend in shrinking consumer credit in the US looks to have reasserted itself: figures released on Wednesday show consumer debt falling at an annualised rate of 5.6 per cent during February.
US households’ absolute deleveraging
Alternate titles: Frugality is the new black. Frugality is the new frugality. Americans discover thrift. Etc.
From the FT on Friday:
Americans reduced their household debt for the first year on record last year as they aggressively cut back on spending to cope with the recession,
US consumer credit uncrunched?
Something to celebrate, surely? Consumer debt shrank by a palty $1.7bn in December, the smallest contraction since last February and way below the $9bn contraction expected by economists.
In fact, the contraction in consumer debt is just a tenth of that originally seen in November,
US consumer credit falls again, but the decline is slowing…
US consumer credit fell by a smaller-than-expected $3.5bn in October, according to data released by the Federal Reserve on Monday. Analysts had forecast a decline of $9.5bn.
In October, consumer credit outstanding fell at a 1.69 percent annual rate to $2,480bn,
UK banks still not lending
The Bank of England’s just-released trends in lending report offers some interesting statistics and charts, as ever.
Here’s a selection of some of the data points that caught FT Alphaville’s eye.
First,
US consumers failing to spend, data show
Proponents of the theory that there has been a secular shift in the American psyche — away for a culture of consumerism and toward a new-found frugality — will be heartened by the latest consumer credit data from the Federal Reserve.
US consumers’ credit problem
Data released on Wednesday show US consumer credit declined for the seventh straight month in August as wary, cash-strapped consumers kept their credit cards in their wallets.
The Federal Reserve said consumer credit outstanding fell by a more-than-expected $12bn in August to $2,460bn.
As unemployment climbs, more Americans file for bankruptcy
The news just gets better and better – if you’re a bear.
Reuters, citing data from the American Bankruptcy Institute, reported consumer bankruptcies had soared 41 per cent in September compared with the same period a year ago and were up 4 per cent from August.
$134bn of US Option ARM RMBS to recast by 2011, Fitch says
First, some definitions and context (via Tanta, RIP). Emphasis FT Alphaville’s:
“Reset” refers to a rate change. “Recast” refers to a payment change.
…
Option ARMs do not “recast” until the sooner of 1) the loan reaching its balance cap or 2) the first “scheduled”
Shop till you drop
The Fed’s “consumer credit outstanding” measure tumbled by a record $21.6bn in July. Here’s what that drop looks like in graphic terms:
(H/T Marc Ostwald at Monument Securities)
US consumers: massive deleveraging in full swing
Consumer credit outstanding – think credit card debt and auto loans – tumbled a seasonally adjusted annual rate of 10.4 per cent to $2,472bn, the Federal Reserve said on Tuesday.
Revolving credit decreased at an annual rate of 8 per cent,
Sorry sir, your credit-card has been rejected due to insufficent lender’s funds
Meredith Whitney’s call on credit-card exposure being the next big impairment factor on financial balance sheets appears to be gaining traction by the day. Certainly, what started as a trickle of disappointing news flow risks becoming a steady stream both in the UK and in the US.
Unsecured, insecurity in the UK
The Bank of England launched a brand new report on Tuesday entitled ‘Trends in Lending’.
The reasoning behind the publication was described as follows:
The publication is launched at a time when the world economy has entered a deep and synchronised downturn,