The Notion of Green Shoots is Laughable!

There cannot be a recovery without the consumer. The consumer cannot increase his spending from recent years without increasing his credit load. But he is overleveraged and is in the process of correcting that, despite what the government might want him to do. Consumers seem to be more intelligent, at least in their actions, than our government. Another rapid response by Karl Denninger:

Posted by Karl Denninger in Macro Economics at 15:23

FLASH: Consumer Credit RECORD Contraction

*U.S. JULY CONSUMER CREDIT WAS FORECAST TO DROP BY $4 BILLION
*U.S. JULY CREDIT CARD, OTHER REVOLVING DEBT FALLS $6.1 BLN
*U.S. JULY NON-REVOLVING BORROWING FALLS RECORD $15.4 BILLION
*U.S. JUNE CREDIT FALLS $15.5 BLN, REVISED FROM $10.3 BLN DROP
*U.S. JULY CONSUMER CREDIT FALLS RECORD $21.6 BILLION, FED SAYS
Forget the so-called “recovery” given these sorts of numbers.
Consumers are unable and unwilling to borrow.
The inevitable contraction that is necessary to put the financial system back into balance is happening – whether The Fed wants it to or not.
This is a roughly 0.8% contraction in one month.
This contraction has to happen – it is on-balance a good thing that it is, in that only by clearing the debt load can be stabilize our economy. 
However for those who are looking for evidence of a significant rebound in economic activity you’re going to be disappointed!
The Fed does not have the updated tables yet on their data program; when they do I will re-run my previous credit graphs and post them.
They’re ugly.

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