Student loans are the only bubble still around

Debt deleveraging has taken place in the mortgage market as well as in the credit card market, but not in the student loans market. And that is reflected in the delinquency rates.

Student loans have now a higher delinquency rate than the other two categories. And this is only getting worse with the terrible labor market conditions.

For more see the story in Mother Jones.

Household's financial burden

Matt Franko, via Mike Norman, shows that household financial obligations as a share of disposable personal income is at almost the level of the early 1980s. Deleveraging has been accomplished to a great extent. In part, this results from the Fed's low interest rate policy. However, if wages do not go up, or government does not step up spending, then only another bubble will get the economy going. Hope it doesn't come to that.

I'm out of here (for a few days at any rate). Happy New Year to all!

Heterodox Central Bankers on Debt Deleveraging

Arturo O'Connell is an advisor to the president of the Central Bank of Argentina. He has not given a talk at the last conference, but here is his recent talk "The Challenge of Deleveraging and Overhangs of Debt" at the Institute of New Economic Thinking (INET).