Still No Sign of Deleveraging

We're over 4 years into what is supposed to be a once in a generation de-leveraging process.  The only problem is that over the past 4 years the entire US non-financial sector (Government, Households and Corporations) has only accumulated more debt on an aggregate basis.

The Fed Flow of Funds report, which came out today, confirmed that debt among these sectors grew by another $1.8T annualized in 4Q11, which is the fastest pace since 4Q08.  Households were net accumulators of debt for the first time since 2Q08, paying down $150B (annualized) in mortgage debt but borrowing $170B on credit cards and other consumer credit mechanisms.  State and local governments also paid down some debt last quarter as did financial companies, but every other sector accumulated debt.

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