Depositing or De-Leveraging?

Said a banker named Old Ebenezer:
"Don't think me a miserly geezer;
Though to work is a gift,
I must still practice thrift,
As my paycheck is going to Visa."

The Wall Street Journal reports that US personal income was up for the month of December, but spending was down ("Rising Income Is Saved, Not Spent"). This fresh statistic, which reverses the previous three months' higher spending, is cited – perhaps hopefully – as a break in the long-term pattern of Americans' spend-thriftiness. Conspicuous by its absence is any mention of the level of consumer debt, which was ruinously high before the crisis and, though since reduced, remains high today. In any discussion of the trends of American income and spending, one must take care to distinguish between actual saving and de-leveraging. I suspect that our thrift is really debt repayment.
Infographic courtesy of The Wall Street Journal.

Black Friday

When consumers queued up in a quorum,
To do as investors implore 'em,
They bought quite a bit
Of Holiday sh*t,
And forgot all their debts and decorum.

It's all over but the counting: Black Friday 2011 will go down as the all-time greatest, as sales rose 6.6% to a record $11.4 billion. Still, the salient facts suggest that, as the Zero Hedge blog put it, we are literally "shopping like there is no tomorrow." Both the savings rate and consumer credit continue to contract, leading one to question the sustainability of our one-day shopping surge. Curiously, the second-best Black Friday on record was that of 2008, suggesting that this day may not correlate to a vibrant US economy.
Meanwhile, the social networking analysis firm Mashwork analyzed 270,000 Black Friday related tweets to predict that:

• The greatest numbers would shop at Wal-Mart and Best Buy;
• 18% of all purchases would be computers or tablets;
• The iPad would outsell the Kindle Fire by 10-1;
• 46% of shoppers would be purchasing for themselves.

Need we say more?  (Hat tip to Barry Ritholtz.)

Crowded Out by MasterCard

The thing that is most in the way
Of a really robust USA
Is the mountain of debt
On consumers who let
All their spending get carried away.

Joe Weisenthal points out in the Business Insider that the biggest impediment to American employment growth is a lack of demand for goods, which can be traced back to the enormous household debt burden (see graph). Though declining, it is still too high. The only ways around this problem are to develop more exports or substitute government spending until consumers get back on their feet. In a much-maligned conclusion, Weisenthal determines that, far from "getting in the way," government is failing to do its part.

The Expressway's Not The Best Way

The Highway to Credit Perdition
One may exit with acts of contrition;
One may also backslide
In a shiny new ride,
When a loan is the key to ignition.  

The Federal Reserve reported that US consumer debt increased at an annual rate of 2.5% in January. While credit card balances continued to fall, as they have for the last two years, non-revolving consumer loans - especially auto financing - were up sharply.

Consumer Credit Inquiry

With credit card balances trending 
Somewhat lower than prior months' ending, 
The question arose 
Whether anyone knows: 
Is the fall-off in borrowing, or lending?

Credit Card Disclosure Statement

By statistically qualified estimate,
We are 90.5 percent confident,
With your minimum payments,
We'll be one of the claimants
Attending your last will and testament.

The Holiday Season Begins

Today retailers wonder suspensefully:
Is Black Friday concluding successfully?
While economists fret,
"We're already in debt;
This business plan doesn't make sense to me!"