Recap 2-7-12

Main Items:

  • RBA kept rates unchanged vs 25bp cut expected.

Overseas:

  • Greece has agreed to lay off 15K public sector workers by the end of ’12. The three parties in the coalition government were apparently close to a deal that would cut ~20% off the country’s minimum wage. Leaders are also near a deal to cut pension benefits by ~20%.

Commentary:

US consumer credit surged ~20bn for a second month in a row, driven by non-revolving, student loans. Aggregate consumer credit growth is now close to prior cycle averages. This chart of the breakdown of consumer credit growth shows how much the non-revolving category is contributing to re-leveraging:


As a result, the student loan outstanding per unemployed has increased sharply over the past couple years:

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