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The facts as reported by the American Bankruptcy Institute: consumer bankruptcy filings reached 126,434 in July, a 34.3% increase year over year, and a 8.7% increase sequentially (116,365 in June).

July's number is the highest monthly bankruptcy total since the October 2005 bankruptcy reform aka the Bankruptcy Abuse Prevention and Consumer Protection Act.

"Today's bankruptcy filing number reflects the sustained and growing financial stress on U.S. households," said ABI Executive Director Samuel J. Gerdano. "Rising unemployment on top of high pre-existing debt burdens is a formula for higher bankruptcies through the end of this year."

In short, the main driver of US GDP, the consumer, has yet to experience any of the fringe benefits that have driven the S&P up by 50% in the last 4 months. Un-recasted unemployment numbers are in line with an almost straight line decline (still) while consumer bankruptcies continue accelerating. But why should this matter - the US is now at a point where inventory pick up and continued government flows into the economy will singlehandedly propell America as the spearhead of efficient capitalism well into the 22nd century.

The only question is whether historians will use a "quadr" or "quint" prefix to the -illion they describe U.S. indebtedness on December 31, 2099.

Source: July Consumer Bankruptcy Filings: Highest Monthly Total in 4 Years