Wednesday Outlook: The Credit Addiction

The US consumer needs a credit card bailout like a crack addict needs another fix. Now we’re going to back up credit card debt and auto loans.

When all this bailing out started, I tossed out the old English maxim: “In for a penny, in for a pound.” That was an understatement. Once the government went down this road there was no stopping them.

Da Boyz on the trading desks and hedge funds like all this money pumping so they bid up stocks when they can.

Once again volume really didn’t pick up until the last hour, but what there was wasn’t impressive. Breadth was good but not great. And, just in the nick of time, fellow blog reader and subscriber David Hurwitz provides us with today’s data direct from Geneva where he’s vacationing. Thanks David! Now go have some fun!

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Comments

[Jackson Cash:]

Good analysis. Thank you for providing comprehensive commentary with adequate technical attribution.

2008 Nov 25 11:18 PM

[dlaw:]

Yeah, let's cut credit card debt by 40%.

Then we can all go live in a cave.

2008 Nov 26 12:31 AM

[Anthony Alfidi:]

Technical analysis won't help very much in this market. Day traders can easily get crushed when the next surprise announcement of a government bailout or liquidity injection moves the market against you.

2008 Nov 26 01:13 AM

[Chipset35:]

David,
Nice article!

I especially like your chart comments.
It's nice to see a columnist that I can feel good about.

Especially after being burned on NG which a different columnist was bullish on and then AFTER it announced bad news and fell like a rock, he changed to bearish....gee...anyon... can do that!

Regardless, I will be eagerly anticipating your future columns and ignoring the rest!

Have a happy Thanksgiving!

2008 Nov 26 08:15 AM

[fg144331:]

I really think we have a boat without a rudder OR a captain, what a mess.

2008 Nov 26 09:41 AM

[sieraromero:]

I wish you all a very happy Thanksgiving and coming Christmas. It may be the last one for a good many years for most of the middle class.

2008 Nov 26 09:57 AM

[Teutonic Kn...:]

Just want to add my 2 cents. I am not an economist and would only be able to offer some eclectic remarks.

As the financial crisis takes a null over the Thanksgiving weekend, one begins to ponder the total potential damage caused by the meltdown. Absent any further revealtion in the near future, and from what I have been reading in the open literature and the media, the damage looks something like in the order of around $10T.

Wow! $10T that had been "wrongfully leveraged. No matter how hard we work the $ printing machine, our economy would just have to work itself up to "make up" for that money we thought were there but weren't. The end result down the road would be hyper-inflation, hyper-unemployment. The next decade would be a very difficult one for all of us.


On Nov 26 09:57 AM sieraromero wrote:

> I wish you all a very happy Thanksgiving and coming Christmas. It
> may be the last one for a good many years for most of the middle
> class.

2008 Nov 29 11:37 PM