Stocks enter the final hour about even and look to finish the best week of the year with the DOW up more than 450 points or some 4.5% while the NASDAQ is ahead about 60 points or 2.7%. Consumer Credit continues to fall, plunging 9.1 billion in May, setting up an all but guaranteed 8 consecutive quarters of declining credit after April’s gain was revised away to an eye opening 14.9 billion decline. This data clearly shows a credit bust in action as consumers pare back debt in response to falling incomes and asset prices brought on by a bursting of the credit bubble.
The ECRI Weekly Leading Index continues to slip dropping to 121.5 last week as the smoothed annualized growth rate dipped to –8.3%. Though the rate of decline has slowed considerably of late.
There has been no shortage of pontificating about the “moral” and “contractual” obligations of homeowners to pay their mortgages as agreed. In glaring contrast to the corporate approach that in a nutshell goes, will pay so long as it makes good economic and business sense.
The NY Times is out with an interesting study in conjunction with CoreLogic that shows that the wealthy are much more likely to follow the corporate approach to mortgage payment than your average homeowner as they default at much higher rates despite their considerable asset and income advantages. Some key findings of the report; the delinquency rate for investment property mortgages over a million is 23%, lower priced properties it is about 10%. What this implies is that the concept of strategic default, or willfully not making payments that the individual could in fact afford to make because they think it doesn’t make good economic and or business sense. Is much more prevalent among the wealthy.
Hi and welcome to The Profit Motive, I’m your host Caleb Lawrence. Once upon a time in America the media acted as the watchdog of the corporations and the state. In the modern era it’s all about ratings and profits, opinion has been substituted for news and frequently is presented as fact. 
