The Credit Collapse

8 Comments so far ↓

• MSheridan // Sep 7, 2010 at 11:39 am

  It might be more helpful to show the 5-year graph, or even the 1-year. Unless you’re looking backward, you can’t tell much about a point in time on the big scale.

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• buddyglass // Sep 7, 2010 at 4:15 pm

  It looks like the TOTCI continued to decline after the early-90s recession and the early-o0s recession. So, I’m not getting why the chart is so scary.

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• Oldskool // Sep 7, 2010 at 5:11 pm

  It looks like lending stopped once banks were bailed out by taxpayers. Sounds like business as usual. We are actually subsidizing their mistreatment of us. And “mistreatment” is the kindest way I can put it.

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• abk1985 // Sep 7, 2010 at 8:09 pm

  This looks like a short thread that no one cares about: so, Rosh Hashanah, David!

  (This year RH comes tomorrow at sundown, and as is the case with most diaspora celebrations, you get two days. But, coming on Wednesday, that means: screwed for Yom Kippur, which should come on a weekend. But never fear: Succoth follows, and depending on the level of observance, that’s three four day weekends out of four! Such a deal! )

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• nhthinker // Sep 7, 2010 at 10:22 pm

  The charts show loans declined for 3 years AFTER the recessions ended – extrapolating – we are in for at least another 18 months of declining loans if the trends repeat.

  Realistically- the US economy LOST two major planks in the GNP growth since the 1990s: housing and financial instruments. Both were mirages.

  Those planks of the economy had dramatically masked the impacts of the erosion of the manufacturing jobs.
  (The manufacturing jobs are lost due to lower cost labor and lower cost environmental regulation in China and India combined with increased efficiency in shipping and improvements in education and use of English).
  The erosion of manufacturing jobs can be slowed a bit but it is not going to be reversed to an overall growth in manufacturing jobs.

  There have been no real replacements in the economy to address the trade imbalance.
  The trade imbalance was sustainable as long as Americans were willing to consume beyond their means and borrow the difference. They can’t borrow anymore. The magic American consumer to stoke the engine of the world economy is tapped out and so is their credit.

  The world can not afford half the world’s population of 6 billion people moving into middle class. The contention for resources will remain very expensive until the energy become much cheaper. High unemployment is the new norm unless minimum wage and benefits fall to better balance with the global market for workers OR a “magic” American only industry gets invented- But since all major companies are multi-national with at least some operations in China- I do not think that is likely to happen.

  Hopefully a major country like Greece with become enslaved (forced to give up their democracy) and America will be scared enough to wake up before we slip into the same enslavement.

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• JonF // Sep 8, 2010 at 1:17 am

  Re: Those planks of the economy had dramatically masked the impacts of the erosion of the manufacturing jobs.

  The sector the jobs are in is irrelevant. What’s missing are middle income jobs, period.

  Re: Hopefully a major country like Greece with become enslaved (forced to give up their democracy)

  Won’t happen. Rather we will see massive revolutions break out if things get to that point, rivaling the upheavals of 1848 if not 1789.

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• nhthinker // Sep 8, 2010 at 6:42 am

  “The sector the jobs are in is irrelevant.”

  I disagree. Wage-earner confidence requires recession resistant jobs.
  The growth in middle income jobs had been in the housing and financial industry focused in large part on consumers that were financially irresponsible.

  The type of jobs make a difference.

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• Sinan // Sep 9, 2010 at 12:02 am

  Nthinker…your post was perfect.

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