"We risk becoming the best informed society that has ever died of ignorance"
- Rubén Blades

"You can't make up anything anymore. The world itself is a satire. All you're doing is recording it"
- Art Buchwald

"It's getting exciting now, two and one-half. Think of everything we've accomplished, man. Out these windows, we will view the collapse of financial history. One step closer to economic equilibrium"
- Tyler Durden

"It is your corrupt we claim. It is your evil that will be sought by us. With every breath, we shall hunt them down."
- Boondock Saints

Tuesday, December 7, 2010

CCO & Auto Sales

    Today's Consumer Credit was driven mostly through auto sales.  The street expected a contraction of $2bn, actual was an expansion of $3bn.  Total COC increased $3.3bn during the October time period and non-revolving credit grew $9.0bn.  What's more, since August consumer's have accrued more credit at increasing interest rates while decreasing the loan maturity period and the Loan-To-Value Ratio.  Increasing consumer confidence is helping move this indicator as well as the overall better mood being broadcast on TV news. 

Consumer Credit Outstanding
     Markets spiked this morning from POTUS Tax Cut announcement but receded throughout the day and sold off after 1:45.   As I said in a previous post, firms need to unload positions and reduce risk at year-end and this was the catalyst today.  One bond strategist quote in the Wall Street said,  "You don't want to lose in December what you gained in January through November".  The drop in short term and long term US Bond prices reflects investor expectations of rising yields.

Bond Yields
 (click to enlarge)