Print This Post
Trends show up in all kinds of data
Posted: December 7, 2007 at 10:01 pm by Chuck
On Wednesday I showed you some trends of unemployment data and how a "snapshot" of data does not really give a picture of what is happening. But when you plot the data in a spreadsheet and identify trends then the data takes on a new look.
Today the Federal Reserve released the consumer debt numbers. Tonight I created a spreadsheet of the the revolving debt data (Credit Card Debt) and in interesting trend comes to light. In the months before a recession hit the United States the amount of debt Americans were racking up on credit cards accelerated at a higher rate. Examine the spreadsheet chart I created below.
See how before the tech bubble burst and recession in 2001 that the credit card debt was accelerating in the months prior. Then after the recession ended and the economy stabilized the pace at which debt was being racked up slowed. Now see how in the past year the trend has turned upward again, the debt is rising more quickly again, just like before the recession in 2001.
Just thought you would like to see this information presented in a different way.
And of note, the data released today also showed the the non-revolving credit (i.e. auto loans) has been decreasing in 2007. Another sign of the consumer cutting back on big purchases and at the same time tapping their credit cards more and more for money. To me it is a recipe for disaster.
We will have more over the weekend, including more stocks for the watch list and other updates.
![[Most Recent Quotes from www.kitco.com]](http://www.kitconet.com/charts/metals/gold/t24_au_en_usoz_2.gif)
![[Most Recent Exchange Rate from www.kitco.com]](http://www.weblinks247.com/exrate/24hr-jpy-small.gif)
![[US Dollar Index]](http://www.weblinks247.com/indexes/idx24_usd_en_2.gif)
Chuck -
On November 29 you wrote a blog that noted the market ($indu) was still in a downtrend. You also indicated that once that downtrend was broken it would show that the market was moving up because of fresh buying and “not” because of short covering. Can you show an update of that chart now? My indications are that the trend is broken by your definition. With that in mind, do you stand by your comments that any moves up from here would be because of fresh buying and not short covering? If so, how high do you think this market goes? What sectors of the market would be best positioned to take advantage of this trend break that you pointed out for us?
Thanks…
Excellent post - I agree. I’ve got a bad feeling. But more than feelings is the fact that Americans have never been so far in debt. Not just personal but national debts as well. RECIPE FOR DISASTER. you got that right!
[...] being carried on credit cards was rising at a much higher rate than normal. In a post I made on December 7th, 2007 I discussed the credit card debt situation. By examining the data in a spreadsheet an interesting [...]