This is a quick hit but I think something to watch. You saw the blurb from Reuters in today's links on how US consumer debt surged higher for the first time since the financial crisis. My thesis has been that consumers only retrench when forced to because of their 'uncreditworthiness'. I like to say that deleveraging in balance sheet recessions happens largely during recessions. And I think of 'uncreditworthiness' as consumers either actively declining credit in order to pare down debt or being declined by banks as uncreditworthy.
There are certainly supply constraints when the business cycle is at its nadir. However, at this point in the business cycle, i.e. in the third year after recession has supposedly ended and after FDIC-insured US banks have started earning tens of billions each...
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Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He has also been a regular economic and financial commentator in print and on television for the past decade. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.