Yeah, but all at once!
The Wall Street Journal had a short article Tuesday that mentioned consumer debt is still at 124% of disposable income. I don't know what the right number for this would be but it was 61% of disposable income in 1984. While down a good 10% from the recent peak, it appears to still have a long way to go. But I didn't think it would try to get there all at once! Consumer credit for last month was announced, and the estimates around the Street were for a decline in credit outstanding of $4 billion. It declined $21.6 billion (that is for July) and last month's number was revised from a decline of $10.3 billion to -$15.5 billion.
So much for expert estimates.
I think this is a record decline and I am very glad the stock market took it in stride. At the end of the day, we know the consumers were way over their heads and had to pull back. We might as well get it underway and recognize that any recovery in the US economy will not in any way be led by the consumer.