household debt, first contraction in 55+ years?

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EO 11110
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household debt, first contraction in 55+ years?

Post by EO 11110 » Thu Jul 01, 2010 7:49 am

http://www.mybudget360.com/wp-content/u ... -rates.png

am i seeing that right? first time in 55+ years that household debt has EVER contracted?

implications?

edit: seems approaching zero - not negative (yet?).

Sidney
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Post by Sidney » Thu Jul 01, 2010 8:14 am

Maybe I am reading it wrong. I see the blue line (percentage change) approaching zero (left axis) -- meaning no growth in debt, not contraction.
I always wanted to be a procrastinator.

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EO 11110
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Post by EO 11110 » Thu Jul 01, 2010 8:20 am

Sidney wrote:Maybe I am reading it wrong. I see the blue line (percentage change) approaching zero (left axis) -- meaning no growth in debt, not contraction.
you are right - that's why i added my 'edit' comment. approaching zero - and clearly at a historical low.

what are the implications? falling prices for assets that are typically purchased on credit? houses, cars, college?

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soaring
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Post by soaring » Thu Jul 01, 2010 8:33 am

http://research.stlouisfed.org/fred2/gr ... oet=&fml=a

seems like this chart shows the first ever contraction but maybe it is out of the context you are discussing.
Desiderata

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EO 11110
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Post by EO 11110 » Thu Jul 01, 2010 8:39 am

soaring wrote:http://research.stlouisfed.org/fred2/gr ... oet=&fml=a

seems like this chart shows the first ever contraction but maybe it is out of the context you are discussing.
i think you are right. thanks for the chart.

what are the implications? this is new ground.

joruva
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Post by joruva » Thu Jul 01, 2010 8:42 am

I wonder how much of this is debt written off instead of paid off...

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EO 11110
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Post by EO 11110 » Thu Jul 01, 2010 8:44 am

joruva wrote:I wonder how much this is debt written off instead of paid off...
good point. and i would add - how much is still overvalued? mark to market was replaced with mark to unicorn :)

SP-diceman
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Post by SP-diceman » Thu Jul 01, 2010 10:16 am

Too bad the chart doesnt go back to the 1930's.


Thanks
SP-diceman

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Random Musings
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Post by Random Musings » Thu Jul 01, 2010 3:12 pm

Perhaps household debt "declined", but that was offset by increases in government debt.

RM

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