As the household net worth (purely debt) as a % of disposable income (“wealth effect”) gets above 600%, savings rates seem to drop sub-5% in unison; then net worth dissipates rapidly. 2018 has the largest divergence in modern history.
h/t @OccupyWisdom
Just looking over some 2008 financial crisis data….
The drop in the #DowJones to bear market territory that everyone remembers took 8 MONTHS. Oct 2007 – June 2008.
The latest drop in the Dow, that nobody is worried about was > 10%, in 14 DAYS.
It’s coming faster this time.
https://twitter.com/OccupyWisdom/status/964678628641591296
Phrase of the week: Don't panic pic.twitter.com/pF3xbuhpIp
— Mark Constantine (@vexmark) February 11, 2018
US Internank loans almost dried up!
Banks dont trust & loan to each other
Interbank loans suddenly fell to 10 bln$ from 80 bln$ in Jan, one month before the Feb bonds-stocks-vol crash
This significantly indicates that markets really fear of a new financial turmoil! pic.twitter.com/N6sivkxp6R
— Erkan Oz (@ThewizardofTwoo) February 12, 2018
https://twitter.com/OccupyWisdom/status/965023324937039877
https://twitter.com/OccupyWisdom/status/965434182502633472
https://twitter.com/OccupyWisdom/status/965022994211930113
Money is no longer free for the federal government, and interest payments are going to start squeezing the budget again
For most of the past decade, fixed-income investors have effectively been telling the U.S. government: Borrow more money! Please!A simple quantitative measure of this sentiment has been the yield on inflation-indexed five-year Treasury bonds (aka Treasury Inflation-Protected Securities, or TIPS), which has been below 1 percent since September 2009 and spent much of the time since then in negative territory. Yes, investors have been paying the U.S. government to take their money.