The Magic 8 Ball Economic Recovery: Consumer Borrowing fell $14.8 B in September

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Is Wall St using a Magic 8 Ball to forecast the recovery?

I have to ask since they keep repeating the meme that consumers will spend and all will be well despite the report last week that showed consumer borrowing fell $14.8 Billion in September, a drop that was WAAAAAAAAAY bigger than their vaunted forecasts. Banks are continuing to TIGHTEN CREDIT. The consumers have no money or credit to spend folks, the GDP growth is not organic and cannot be sustained

The markets are up on the weak US Dollar and the idea of an indefinitely loose Fed. I ask again, WHERE IS THE GROWTH GOING TO COME FROM? The consumer ALWAYS leads us out of recessions. I see absolutely nothing to suggest the consumer is ready to lead us again:

CNBC:

…The Federal Reserve said Friday that borrowing fell at an annual rate of $14.8 billion in September. That’s the biggest decline since July and was larger than the $10 billion drop economists expected.

Americans are borrowing less as they try to repair cracked nest eggs and replenish rainy day funds in a dismal jobs market. Many are finding it hard to get credit as banks, hit by the worst financial crisis in decades, have tightened lending standards.

Borrowing by consumers for revolving credit, including credit cards, fell at an annual rate of 13.3 percent in September, the same as August. This category has declined for a record 12 straight months.

Borrowing for non-revolving loans, including auto loans, dropped at an annual rate of 3.7 percent in September after edging up 0.1 percent in August. The August gain reflected the surge in car sales as consumers rushed to take advantage of the government’s Cash for Clunkers program….

November 11, 2009. Tags: , , , , , , , , , , . Economy, Finance, Obama Administration, Politics, Unemployment Statistics, Wall St. 1 comment.

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