Making Unique Observations in a Very Cluttered World

Wednesday, 7 May 2014

94% Of all March Consumer Credit Was For Student And Car Loans -

94% Of all March Consumer Credit Was For Student And Car Loans - 

Another month, another confirmation that when it comes to the US consumer, it is all about student debt (and to a lesser extent, car loans). Moments ago the Fed reported that consumer credit number for March: at $17.5 billion, it not only blew out the expectation of a $15.5 billion increase (although when one adds last month's $3.5 billion downward revision to $13.0 billion the two month total actually missed), but was the highest monthly increase since February 2013. That's the good news.

The bad news was once again in the composition: of this $17.5 billion $16.4 billion was non-revolving debt, or about 94% of total. The "good", or revolving, credit card debt? Only $1.1 billion.

Further, recall that traditionally when measuring a consumer's confidence in the economy, and their ability to grow their income, the best proxy is a simple one - their credit card. Unfortunately, in the New Normal that is not the case, and as the chart below shows, revolving credit has barely budged from its post-Lehman lows and is still about 20% away from its previous all time high.

As for student debt? We'll just leave that one to the Fed to show:

So where does the consumer credit growth come from? Simple: mostly student and to a lesser extent car loans, aka non-revolving debt. The same student loans which Janet Yellen earlier today lamented are the main reason for the slowdown in household formation, and by implication, the reason why the housing recovery is failing to stick for the fifth year in a row, and despite $2.7 trillion in liquidity injections by the Fed.

Oh well, maybe next month things will be different and all that student debt which is crushing the willingness of young Americans to go out and spend on bulk purchases will be restored.

Finally, and perhaps most important, for all the talk about a surge in consumer bank loans, it bears highlighting that of all the consumer debt so far created in 2014, the Federal Government is by far the primary source at $36.8 billion. As for depository institutions, aka banks: negative $28.2 billion.


Can coffee protect our eyesight? -

Can coffee protect our eyesight? - 

Coffee has been associated with an array of health benefits recently. Last month, Medical News Today reported on a study suggesting that coffee consumption may reduce the risk of type 2 diabetes. Now, new research finds that drinking the beverage may protect against deteriorating eyesight and even blindness.

Researchers from Cornell University in Ithaca, NY, recently published their findings in the Journal of Agricultural and Food Chemistry.

We all know the main ingredient in coffee as caffeine - the stimulant that gives us that boost. But according to the research team, including senior author Chang Y. Lee, green coffee beans (raw coffee) only contain 1% caffeine.

However, each raw coffee bean contains around 7-9% chlorogenic acid (CGA) - an antioxidant that has been associated with many health benefits, such as weight loss and reduction of blood pressure.

Past studies have also indicated that CGA may be a powerful neuroprotectant, and there has been great interest in identifying neuroprotective compounds that block hypoxia - deprivation of oxygen in areas of the body.

Cup of coffee and beans
Researchers found that coffee extract and CGA protected mice against retinal degeneration.
The retina - a thin layer at the back of the eye that is made of light-sensitive cells and other nerve cells that are responsible for receiving and organizing visual information - is prone to hypoxia.

"The retina is one of the most metabolically active tissues in the body, consuming oxygen more rapidly than any other tissues, including the brain," the researchers explain.

"Therefore, it is susceptible to a variety of diseases caused by oxidative stress, including age-related macular degeneration, diabetic retinopathy, and glaucoma - all of which can lead to partial or complete blindness."

The investigators were interested to see whether coffee, particularly CGA, may prevent hypoxia and overall degeneration of the retina in mice.

Read more -