CHART OF THE DAY: The Single Reason This "Recovery" Isn't Like Any Other

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If you’ve been reading for a while, we’ve been very bullish on the whole idea of the ongoing “balance sheet recession” characterised by the ongoing need of households to deleverage.

To put it another way: Households are saddled with so much debt from the boom, that even with all the wrenching pain of the bust, they still have a lot of debt to cut.

For proof that this is the deciding factor behind the boom, consider this chart from the Council on Foreign Relations (.pdf).

In past recessions, debt intake never bothered to slowdown. Even in the worst ones, leveraging up continued.

Now? flat. And perhaps worrisome is that it hasn’t gone down more, since that just means the pain drags out longer.

chart of the day, household debt stock relative to end of recession, june 2011

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