This chart shows the total of consumer loans at all commercial banks in the U.S. as of the end of February. As the chart shows, credit is being extended to consumers at an above-average rate, and keeps posting all-time highs. This recession has nothing to do with a shortage of money. Instead, there is a shortage of confidence: in the banking system, in counterparty risk, and in government policies which threaten capital with punitive tax rates.In Argentina it is almost 10 pm, and we are just about to leave the hotel for a party. Dinner won't be served until almost midnight, and the festivities will undoubtedly stretch into the wee hours of the night. This is a country that I have never been able to fully understand, even after we lived here for four years. Tucumán is probably the city with the most active night life I have seen anywhere, with the possible exception of Madrid. There is a great shortage of money here (middle class salaries are maybe as high as $1000 per month) but no shortage of enthusiasm for life.
Scott,
ReplyDeleteI'm not sure that this is an encouraging trend. Many consumer loans are through lines of credit. When people have decreased assets with which to secure credit, borrowings on these lines of credit typically increase. Notice the previous high point above the trend line: 1997. That was the previous lowpoint for the real value of housing. (and our housing bubble hasn't finished deflating).
P.S. As a first generation American of European descent I think I might even be more in tune with Latin American cultural habits than you. My family typically ate Thanksgiving dinner at around 8 or 9 in the evening. When I first met Americans who instructed me that it should be eaten in the afternoon I was horrified!!!
P.P.S. My father used to go on business trips to Mexico, Columbia, Brazil, etc. Every business trip for him there was like a vacation. As for me I've spent some time in Mexico and once had a beautiful Ecuadoran girlfriend named Pilar (she and I had incompatible personalities but that is another matter.) I hope you are having a good time. Live it up!
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