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Shiller on decreasing debt; entered at 2011-05-17 21:21:05

Rmonical
Posts: 2782
Registered: 2007-07-04 Glendale AZ

Got this in my John Maudlin email. Had not seen the numbers before. It confirms mine and others conviction that the so-called deleveraging is write-offs. In particular, mortgage debt. As Karl points out each month, consumer debt ex-student loans, is steadily decreasing.

Quote:

But in those same 10 quarters, $542.2 billion in mortgage debt was charged off and $333.8 billion in consumer debt for an $875.9 billion total. As shown in the last three columns, after accounting for charge-offs, mortgage debt actually rose a bit, $24.2 billion to $10 trillion, consumer debt climbed $159.2 billion to $2.4 trillion and the total rose $183.4 billion to $12.4 trillion. The rise in mortgage debt ex charge-offs is so small that it’s merely a rounding error, but it’s surprising that it didn’t fall significantly. Perhaps financially stressed homeowners who didn’t lose their homes to foreclosure have not been able to reduce their mortgage debt.

Last modified: 2011-05-17 21:21:47 by rmonical
Reason: typo


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