10 JUL 2009, Friday

1. Above chart demonstrates that auto loans, home and home equity loans, and credit cards are at record delinquency rates.
2. Americans simply borrowed and spent way too much during the halcyon days of the early-to-mid 2000s. They were counting on ever-rising home values to bail them out from high-risk loans. The lending industry actively egged them on, as did policymakers at the Fed, who kept interest rates too low for too long. And now, the "debt hangover". OUCH!
3. Who can buy anything if they're doing all they can to pay off loans? Where will the consumer come up with the dough to power the economy?
4. This is not shaping up as a typical recession.