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“Davidson” submits:

High consumer delinquencies are the condition for recessions that are triggered when lenders are shocked into withholding further credit extension when suddenly scared by unexpected events. The levels that spell high recession risk are 4.75%delinquencies for consumer credit cards and 3.5% for consumer loans. The former has dropped to 3.08% while the latter is holding at 2.75% which reflect normal levels of delinquencies during the business cycle. Overall, the financial system is not experiencing “delinquency stress” and sudden shocks, called “Black Swans”, are not likely to precipitate recession.

There have been dramatic events lately discovering waste and fraud in government spending. It has been suggested that income taxes could be reduced or eliminated by eliminating wasteful government spending. Should this occur, we could see several years of even lower delinquency rates ahead. 

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