Consumer Credit June 2009, Some say the glass is half full...

Because we don't actually make anything in America anymore, we prefer to sell insurance, mortgages, and things made in China to each other, consumer spending is 70% of all the economic activity. No spending + No sales = Bad times.

I often wondered how my friends bought McMansions, had (2) Suburban Assault Vehicles...errr...SUV's, and took vacations to Europe, hell the McMansion payment would eat my whole month's check. It turns out they couldn't afford any of this stuff either, they were levered to the gills and buying everything on credit, consuming today and pushing the bill down the road. Today the Federal Government released it's consumer credit report http://www.federalreserve.gov/releases/g19/Current/ . Not surprisingly the amount of credit outstanding is down 10 billion dollars, mostly on Credit Cards (revolving) and even though home sales and new mortgages are going through the roof outstanding credit for mortgages is down, it leads me to believe that more people are defaulting than buying.

What is truly interesting is that while the consumer's (ie me and you)balance is shrinking the Federal governments is ballooning. Could it be that we are shifting our debt to Uncle Sam? I guess that's ok because when I print money they call it counterfeiting, when the Treasury does it they call it Quantitative Easing.

For all the unemployed Mortgage Brokers, Real Estate agents, Car Salespeople, Roofers, Painters, Masons, and Middle Managers of all stripes please pay attention this could be valuable job training below......