Nomura’s Richard Koo is back, suprising us with another note following quickly on his last. But we can see how it happened. Heck, some people are suggesting that the West’s balance sheet recession is over. Read more
Ezra Klein has offered a name for the current situation that’s not nearly as sexy as the ones we came up with, but which is reasonable enough:
If it were up to me, we would call what we’re in a “household-debt crisis,” or something more elegant that gets the same idea across, as that would at least help us think more clearly about what we need to do to get out. …
An important question given struggling financial stocks, a stalling US economy, US public sector cuts and concerns over the impotence of QE3. Take your pick, really.
Fortunately it was also a question tackled Friday morning in a special conference call hosted by Nomura’s US banking analyst Brian Foran, Japan banking analyst Ken Takamiya, and Richard Koo from the Nomura Research Institute. Read more
Credit Suisse have just published a note that adds a small bit of nuance to the US deleveraging narrative.
Household debt as a percentage of disposable income is the ratio typically used when discussing the progress of US debt reduction. And by this ratio, although decent progress has been made, it remains well above the 84 per cent average that prevailed in the 90s: Read more
The Federal Reserve Bank of New York’s Q1 report on household debt and credit is out, and it was the first quarter where total consumer debt held steady after nine straight quarters of declines:
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. More than we thought, to be honest. Read more