zerohedge.com / By Tyler Durden / August 29, 2012
Today the Fed released its quarterly report on household debt and credit, which merely recaps already public data but with some additional nuances. While the focus of the report is on the purported ongoing consumer deleveraging, what has to be highlighted once again is that the bulk of the consumer “deleveraging” is primarily at the mortgage debt level, which as the NY Fed’s blog has shown, and the reason why we quotation marks above, is because the majority of the debt ‘reduction’ for the third year running is due to debt discharge, i.e., forced reductions in debt arising out of default, bankruptcy and other contract termination events, and not due to actually generating incremental equity (cash) used to repay debt.
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