1) Why is the Savings Rate so low?
Because for the last 18 Months Americans have been ravaged by Inflation (orange line).
Meanwhile – Wage Growth (blue line) has not kept up. Not even close. pic.twitter.com/T59hRPUSft
— Nick Gerli (@nickgerli1) January 10, 2023
3) Spending cutback + deflation will of course cause a Recession. Potentially a big one.
The stakeholders who will likely get hit hardest in this Recession are:
1) Asset owners (stocks/housing)
2) Debt holders (mortgages/credit cards/car debt)
3) Businesses that lose money— Nick Gerli (@nickgerli1) January 10, 2023
One of the biggest signs you will ever see that we are entering a huge housing decline.
Wells Fargo sees it coming and they are dramatically reducing their exposure and preparing to ride out the storm.
Bag holders for bad debt in mortgage bonds? The Fed owns a few trillion $$$. pic.twitter.com/jXoGT6yF4P
— Wall Street Silver (@WallStreetSilv) January 10, 2023
Equity markets right now: Hallelujah, inflation is falling
Equity markets in 2-3 months: OOOOH, that what why inflation was falling
— AndreasStenoLarsen (@AndreasSteno) January 10, 2023