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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: UncleBigs who wrote (71935)	10/13/2006 5:08:28 PM
From: russwinter	Read Replies (3) of 110194

There has been an absolute orgy of new consumer borrowing over the last three weeks. That explains the sudden robustness in consumption. Almost unfathomable behavior, given the actual steep declines in housing prices of late. Guess the MoT convinced folks that because they can now save $2.3 billion on gasoline, they should go on a major binge. Even the dormant higher interest HELOCs are being revived, maybe because mortgage standards are under more scrutiny? Add that 17.3 new debt to the 2.3 saved on from gasoline, and you pretty much have your $20.8 billion retail increase figure for Sept. Message 22905857 Then borrow another $50 billion cash outs from your declining "real estate", and you have the Ponzi finance to make house payments until the end of the year, plus go wild for XMAS. HELOC: Sept. 13: 447.0 Oct. 4: 464.3 That's 67% annualized! Real Estate: Sept. 13: 3,104.7 Oct. 4: 3,158.8 29.5% annualized! Bank credit: Sept. 13: 8.003.4 Oct. 4: 8.065.4 13.35% annualized, Houston we have a problem! So much for the rate cut theory. federalreserve.gov

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