by senor_tiburon
The bailout the fed is offering considering won’t be enough. And they’re not giving money to consumers directly, so consumers won’t be able to deal with their rising debt.
Bear gang chiming in here with some sexy DD to remind you to hold your puts. (Previously posted some of this as a comment in the daily discussion thread, but kept digging and found more scary stuff.) Look at the US Commercial Bank stats over the last decade (from ToS).
| March 2011 (billions of $US) | Feb 2020 (billions of US$) | Approx. % change in debt | |
|---|---|---|---|
| Commercial and Industrial Loans | ~1,200 | ~2,350 | +96% |
| All consumer loans | ~1,070 | ~1,600 | +49.8% |
| Consumer Credit Card Debt (& other revolving plans) | ~600 | ~860 | +43% |
| Real Estate Loans | ~3,570 | ~4,640 | +30% |
These dramatic increases in debt over the last decade relative to small changes in median household income (~56k in 2011 vs. ~63k in 2018) + increases in consumer loan defaults over the last few years + the Fed making it easier to take out even more debt + beerflu impact on consumer paychecks/employment/spending +incompetent government handling of beerflu = recession inbound. Hold onto those puts, bear gang (but beware of a bounce this week).
Disclaimer: This information is only for educational purposes. Do not make any investment decisions based on the information in this article. Do you own due diligence.