RebelCapitalist: Financial Information for the Rest of Us | The Great De-Leveraging Continues

The Great De-Leveraging Continues - Part 2

Sep 08, 2009 | By: Mr_Blue | Tags: debt, financial oligarchy, consumer credit

This is becoming a recurring theme for consumer credit which is good because we are loaded with debt. According to numbers released by the Fed today, we have reduced the amount of consumer credit (this excludes home mortgages) at annual rate of 10.5%. This is the largest drop on record. But this is only half of the story.

Total consumer credit (excluding home mortgages) is still a whopping $2.472 trillion. We reached a high of $2.578 trillion in third quarter of 2008. People are obviously still considered about their jobs and as a result are paying down their debt. But there is another side to this.

Banks are not lending or providing credit. Remember when Pres. Bush and Treasury Secretary Henry Paulson said that the Wall Street bailout was needed so that banks would start lending again to people and small businesses, well it’s not happening:

U.S. banks tightened standards on all types of loans in the second quarter and said they expect to maintain strict criteria on lending until at least the second half of 2010, a Federal Reserve report showed on Aug. 17.

We were duped! The bailout was for the financial oligarchy. This oligarchy was the only ones who benefited from this bailout.