The sum of total credit and loans in the US has now contracted to $16 trillion by the end of August. It has contacted by $816 billion since its peak in October 2008:
Annual credit & loan growth has now slowed down to a record low of 0.5% since inception of measuring the data:
Denninger recently had some interesting comments on the credit situation, surging charge off rates, etc. He brings in correlation debt vs. incomes which are obviously needed to service this debt.
Here is his video:
All is by and large in line with what I already wrote in Total US Credit and Loans – How Much Contraction Since Peak?.
The most important conclusion out of this is: In 2000 the Fed managed to blow up another bubble to postpone the correction that was necessary then. A housing bubble ensued. In 2007 we got our payback with a much more severe and painful correction. Now they are obviously trying it again. If they were to succeed with a temporary recovery and create some other kind of bubble (which right now I don’t see anywhere), I would indeed not rule out complete and utter disaster when the inevitable correction of that bubble ensues.