De leveraging Has Only Begun

“You can come up with all kinds of explanations for the fact that the recovery is fading: Japan, the Arab unrest, house prices, concerns over Europe, etc.

In reality there’s only one good answer: This isn’t a business cycle, it’s a balance sheet recession. And though there’s been some deleveraging (thank you Federal spending), the consumer is still way too leveraged to have any new breathing room.”

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