US Debt Data From Kobeissi - Scary

[Chris Seveney]

So I saw the data below and am wondering, are americans fighting inflation with debt? Have incomes kept up with inflation? What will happen when the credit card companies and banks tighten their lending standards?

Do you think the the economy is on the upswing or downswing? Personally not an economist but like to think I have good instincts and will say downswing. Share your thoughts...

According to Kobeissi:

1. Record $17.5 trillion in household debt

2. Record $12.3 trillion in mortgages

3. Record $1.6 trillion in auto loans

4. Near Record $1.6 trillion in student loans

5. Record $1.1 trillion in credit card debt

the total mortgage debt is more than double the 2006 peak and total credit card debt is up 50% since 2020.

Also delinquency rates on credit cards and auto loans just hit their highest since 2008.

[Chris Seveney]

Quote from @Account Closed:

Quote from @Chris Seveney:

So I saw the data below and am wondering, are americans fighting inflation with debt? Have incomes kept up with inflation? What will happen when the credit card companies and banks tighten their lending standards?

Do you think the the economy is on the upswing or downswing? Personally not an economist but like to think I have good instincts and will say downswing. Share your thoughts...

According to Kobeissi:

1. Record $17.5 trillion in household debt

2. Record $12.3 trillion in mortgages

3. Record $1.6 trillion in auto loans

4. Near Record $1.6 trillion in student loans

5. Record $1.1 trillion in credit card debt

the total mortgage debt is more than double the 2006 peak and total credit card debt is up 50% since 2020.

Also delinquency rates on credit cards and auto loans just hit their highest since 2008.

The National anthem for the working class is now:

"I owe, I owe so off to work I go".

 That is very true. As I have posted previously the current economy is a zero sum game and there are going to be BIG winners and BIG losers. There are three options that may occur but we know the third has the same odds as a metor hitting the earth.

1. The cost to own a home plummets to allow the middle class to own a home. This would be done not only through a drop in prices but interest rates. Rates are not going back down to 2-3%, so the savings will be in the cost of the product (home).

2. Interest rates drop and home prices increase. Crushing the american dream for more than half the country. Some reports note over 90% of americans cannot afford to buy a home today.

3. Wages increase so significantly that it allows homes to not drop, stay as is or increase (fat chance).

Clearly someone is going to win in this (potentially current homeowners and upper middle class), with losers being Millenials, Gen Z and others who do not own OR they are the winners and losers are anyone who bought the past 3 years.

Either way, someone will win and someone is gonna lose.

For me, I play offense and defense - I am consistently looking for deals but also if #1 happens, am I protected. Unfortunately, most people ignore #1 and do not plan for it, and those that do not - I will apologize now when I buy your asset for 50 cents on the dollar.