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Non-Tech : Tulipomania Blowoff Contest: Why and When will it end? -- Ignore unavailable to you. Want to Upgrade?

To: RockyBalboa who wrote (2918)	7/10/2000 4:57:30 PM
From: Mad2	Read Replies (1) \| Respond to of 3543

Here's a disconcerting tidbit on consumer credit. dismal.com As the credit rubberband tightens, the snapback ultimately stings more when the rubberband breaks mad2 Consumer Credit (G19) Analysis Posted: 7/10/00 4:09:00 PM EST Released: 07/10/2000 Next Release: 08/07/2000 Analysis by: Brian Nottage Actual: $11.8 billion Consensus: $8.0 billion Source: Thomson IFR Consumer Credit: Month to Month % Chg. (SA) Categories May-00 Apr-00 Mar-00 Feb-00 Jan-00 Total Credit 0.8 0.6 0.7 0.5 1.3 ...Nonrevolving 0.9 0.3 0.5 0.5 1.1 ...Revolving 0.7 1.1 1.2 0.6 1.5 Monthly Change in Level 11.8 8.8 10.6 7.5 18.2 Summary Dismal Delivery Interested in this release? Be notified when it's updated with our free Dismal Delivery. Consumer credit growth once again surpassed expectations in May, rising by $11.8 billion. April’s $9.3 billion gain was revised slightly downward to $8.8 billion. May’s figure simply extends the ongoing uptick in consumer credit growth. In recent months growth has come primarily from the revolving side. Revolving debt increased $4.6 billion. Nonrevolving debt rebounded, rising $7.1 billion. Much of the nonrevolving side is being held up by continued strong use of incentives by auto finance companies. Auto interest rates rose in May, but remain about as low as they have been all year. Consumer debt is now rising at an 8% year-over-year pace. Analysis The rapid pace of household debt accumulation continues unabated. May’s growth in consumer credit outstanding once again bested expectations as it surged $11.8 billion. Both the revolving and nonrevolving categories posted gains. Nonrevolving gains were higher this month, but credit card debt has transitioned into the engine driving growth since last November. Credit growth is settling into a range of fairly rapid growth. Despite nascent signs of slowing spending, households continue to spend in excess of their income gains by a wide margin pushing them to take on increasing levels of debt. And many of the most voracious borrowers are at lower income levels who are not simply financing their purchases out of capital gains. Lenders have started to express concerns about the risks of this faster borrowing, however, and this may be finally translating into action. According to the second quarter Fed Senior Loan Officer Survey, more consumer lenders tightened than loosened loan standards; this is the first time that has happened since 1996. Credit growth is not expected to accelerate further and will slow over the next six months, both as consumer spending slows further and as lenders become stricter in the face of credit quality worries.