Picture du Jour: Are they spending and borrowing?

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The two graphs below come courtesy of Investment Tools (via the Dow Theory Letters).

Commercial and industrial loans outstanding

The trend of loans is still strongly southwards. Also, the rate-of-change indicator (green line in the bottom section of the chart) does not yet seem to have started bottoming out.

are-they-spending-and-borrowing-1

Consumer credit outstanding

“One of the most sensitive measures of consumer spending is the trend of consumer credit. Consumers are hiding in the basement and saving. I get the feeling deflation is in the air,” said Richard Russell. The rate-of-change indicator also indicates no respite any time soon.

are-they-spending-and-borrowing-2

Source: Dow Theory Letters, January 21, 2010.

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