Registered Investment Adviser Caleb Lawrence
The major averages fall hard again on little real news, pushing the volatility Index or VIX to 36 in early trade. Sustained readings above 40 for this series are a real warning sign.
Consumer Credit came out after the close, despite another large gain of 18.4 billion it missed expectations in December. Previous months were revised higher November hit 30 billion. To help put these figures in perspective consider the following. Total consumer debt, this doesn’t include real estate related debt, increased 45% since the previous peak in 2008 to 3.84 trillion Dollars. Credit card debt is up 2.4% since the 2008 high, after increasing steadily for 7-straight quarters, usually this series takes a breather after each 4th quarter. Auto loans are up 35% from the previous high in 2008 to 1.114 trillion Dollars. Student loans have been the real standout with a 141% increase since 2008 to 1.49 trillion Dollars. Once again, our economic success and vitality is predicated on an unsustainable mountain of debt that is batting new record highs nearly across the board, personal, financial market, corporate, government, you name it. As the central bankers, economists and mainstream policy wonks take every opportunity to tell everyone how wonderful taking on record levels of debt is.