AP: Consumer borrowing unexpectedly surges in March

My guess is that the Stock Market will regard this as "good news"...




http://biz.yahoo.com/ap/080507/consumer_credit.html


Consumer borrowing unexpectedly surges in March
Wednesday May 7, 5:09 pm ET
By Martin Crutsinger, AP Economics Writer
Consumers increase their borrowing in March at the fastest pace in 4 months

WASHINGTON (AP) -- Consumer borrowing rose in March at the fastest pace in four months, more than double the increase of the previous month, in what was seen as a sign of rising economic stress.
The Federal Reserve reported Wednesday that consumers increased their borrowing at an annual rate of 7.2 percent, compared with a 3.1 percent rate of increase in February.

The gain was much larger than economists had been expecting and reflected strong borrowing on credit cards and also in the category that includes auto loans. The increase in consumer debt totaled $15.3 billion at an annual rate in March, much bigger than the $6 billion increase that economists had been expecting.

Economists said consumers were being forced to make greater use of their credit cards during hard economic times when they are being battered by job losses, soaring gasoline prices and higher food costs.

"This represents distressed borrowing. Consumers need cash and they have turned back to their credit cards to fill the void left by lost jobs and weaker incomes," said Mark Zandi, chief economist at Moody's Economy.com.

but i'm sure they'll try.

Economists said consumers were being forced to make greater use of their credit cards during hard economic times when they are being battered by job losses, soaring gasoline prices and higher food costs.

"This represents distressed borrowing. Consumers need cash and they have turned back to their credit cards to fill the void left by lost jobs and weaker incomes," said Mark Zandi, chief economist at Moody's Economy.com.

Seems that the market rises on a lot of the bad economic indicators these days...

Aside from commodities it's completely removed from the reality on the street in any case. Especially compared to the real standards of economic health: inflation, strength of the dollar, employment, and most importantly consumer confidence.

All of those 4 are controlled to a very large extent by government policy. I'm of the opinion that the market has been oversold as a factor in economic health in order to justify this super laissez faire crap at the expense of the four really important economic factors. Holding up the market as the end all be all is another way of saying "Trickle down is the way the real world works, the middle class is shit and doesn't matter."

Distressed borrowing - now there's a phrase that says a lot.

Anyone watching the economic figures and fundamentals would not be surprised at all. This country will continue to borrow to finance its lifestyle until the lenders are no longer both willing and able to throw good money after bad debts.