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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Killswitch who wrote (103893)	7/6/2009 8:16:58 PM
From: bart13	Read Replies (2) \| Respond to of 110194

I've heard all sorts of numbers supposedly representing debt deflation in the US - some over $30 trillion - and not one has had substantive facts listed or shown any detailed logic. That $14 trillion could even be world wide for all I know. For example, mortgages are screwed... but total mortgages in the US per Z1 is about $10 trillion. Average housing price drop is under 20% and in the worst places averages about 45%. So splitting the difference and using roughly 30% of $10 trillion, that's "only" about $3 trillion. Even using 40% its only about $4 trillion. Credit card default rates are at around 10% now and total credit card balances are about 950 billion, and even doubling that 10% rate only shows another roughly 2/10 of a trillion loss. Adding in the rest of consumer credit at a 20% "loss" only totals another 3/10 of a trillion. Total credit in my chart and per Z1 is about $40 trillion, and it includes real estate, consumer, bank, comm'l/industrial, etc. That $14 trillion debt deflation total just plain doesn't make a bit of sense since that would be about 35% of total credit. I think that Mauldin needs to check his facts and get them corrected since it appears from here that he's quite incorrect. At this point, I'd almost bet that he doesn't have a clue about total growth in stimulus, M3, credit or gov't debt either.