The Market Ticker

Watch this Bloomberg clip, about 6 minutes in.....

My Ticker from Sunday is quoted verbatim; the guest (some fellow by the name of Hermann) then tries to dissemble his way out of the truth.  Sorry, no dice kiddo.

This sort of appearance in the media angers me.  Everyone is entitled to their opinion but this isn't opinion - it's a blatant misrepresentation of the facts, either from ignorance or worse, intentional misconduct.

Hermann tries to represent that there will be 6-8% growth but then says "we won't project that", then uses the word "ramp" over and over and over with various sectors. 

Hermann represents that "a big chunk of this (the debt I identify in The Ticker) is going to be government debt" and that "households are paying down everything from auto loans, student loans, credit cards, etc."

Both of these representations are blatantly false.

The Fed's G.19 release makes this clear; first, the May 7th release shows the maximum consumer outstanding debt at $2.570 trillion dollars (as revised); this was the all-time maximum.  The current release from June 8th shows $2.519 trillion, or approximately $50 billion less.

That is all - just $51 billion has been paid down, and the contraction did not start until January of this year!

When it comes to Federal Debt Hermann is correct that Federal Debt is going parabolic.  But he misrepresents the facts when he asserts that this parabolic ramp is somehow a transfer of private debt to the Federal Government - it is no such thing.  It is in fact a replacement of private-debt growth that is no longer happening, even though the so-called "de-leveraging" and "cleanup" of private balance sheets, especially the personal balance sheets of Americans, has been essentially non-existent.  It is credit growth that is being replaced by Federal Debt, and that too is unsustainable!

This sort of outrageous falsehood will lead you to your doom if you don't stomp on it hard when you encounter it from your so-called "advisers".  There is absolutely no reason or excuse whatsoever for any so-called "investment advisor" or "pundit" to come up with such bilge - the data is public and published every single month.  It is right there under their face and no excuse can be accepted for any analyst's refusal to acknowledge and deal with these facts.

We have spent nearly thirty years pulling forward demand with more and more debt.  This recession occurred because we hit the wall on the system's capacity to absorb any more private debt service cost.

It is not possible to pull forward demand in this form and fashion any longer.  Capacity utilization in our economy is in the toilet precisely because we built that capacity to serve false demand - debt-fueled consumption that required an ever-greater percentage of GDP to sustain, which in turn caused ever-increasing carrying costs.  We cannot do that any more - the wall has been hit!

These facts are indisputable and readily able to be discerned with nothing more than the published information from The Federal Reserve and our Government.  The facts and figures do not lie.  They present a crystal-clear picture of what happened and why anything other than honestly dealing with how we wound up here will not resolve the issue nor will it lead to sustainable economic growth and prosperity.

Bloomberg, CNBC and the other media outlets have a responsibility to the citizens of this nation and indeed the world to lay forth the facts and figures.  If people wish to have an honest debate on interpretations of those facts and figures, that's fine - I'm all for it - just say when and where.

But I will not sit idly by and watch the facts be intentionally distorted by people touting that which requires a set of facts that simply did not happen and cannot possibly be constructed from what the economic realities are.