What Planet Are You From?

This is the question that needs to be asked of every person who is positive on the stock market and broader economy.

Look at this one chart.



Consumer credit dropped $21.6B in July. This is following a drop of $15.5B in June.

Economists had forecast consumer credit would drop $4 billion in July, according to the median of 31 estimates in a Bloomberg News survey. Projections ranged from declines of $12 billion to no change from the previous month. The Fed initially said consumer credit decreased by $10.3 billion in June.

If quite honestly 70% of the GDP is consumer spending, and that spending is dependant on expansion of credit, if credit is evaporating, where is the continued upside bias to GDP Growth?

The consumer is deleveraging at a rate unheard of in modern times. Coupled with job losses, the bulls are living in fantasy island.

No Jobs
No Credit
No Nookie

Get ready for a double dip recession.