Did the Fed Just Warn the Debt Bubble is Beginning to Burst?

Phoenix Capital Research's picture

While everyone is focusing on political issues, the NY Fed published a stunning report on the state of the US consumer.

According to the NY Fed, the average US household has hit a new record for debt, surpassing the old record set at the peak of the 2007 bubble.

Put simply, the average US household today is more in debt that it was in late 2007: the former peak of a massive debt bubble.

Of course, revealing that we’re in a massive debt bubble is only half the story. The more critical issue for those looking to invest based on this is when the debt bubble bursts.

Bad news… it’s starting already.

Flows of credit card balances into both early and serious delinquencies climbed for the third straight quarter—a trend not seen since 2009.

Source: New York Fed

The NY Fed noted that early and serious delinquencies for credit cards are rising. This is not a new development either… it’s been happening for NINE straight months: a trend not seen since the depth of the great crisis in 2009.

So US households are more in debt than they were in late 2007… and the credit cycle is turning with delinquencies rising just as they did in the Great Crisis of 2008.

Meanwhile, stocks are at all-time highs. So what happens when the markets wake up to the fact that yet another massive debt bubble is beginning to burst?

You've been warned.

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Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

 

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DarkestbeforeDawn's picture

Sorry, but that's a racist comment and you shall be publically shamed for it right here on ZH.  Why does the black line have to be referred to as squiggly" while the red and blue lines are described as straight?  Please replace "squiggly" with "non-linear" or I will be obligated to report you to CNN

tangent's picture

Every country on Earth will take the inflation route to their deaths if need be. So no there will be no "S&P 404" debt error so to speak. They "have no choice" as we were told in 2008.

Trump may as well plan QE4 right now while not yet panicked.

Cthonic's picture

Trading is a high variance game; play it long enough and you'll end up proffering unsolicited investment advice to victims of financial PTSD on the internet.  https://www.youtube.com/watch?v=8_5zWIwDjGM

SheHunter's picture

Someday somehow this damn rigged market will tank.  I've seen the tech bubble and the housing bubble burst.  lost a full shirt in tech and one sleeve in housing...  It is going to be a colorful firework display when it happens this next time.  I am 100% out of this monstrosity bloated market each day at COB.  AMZN and FB and TSLA and NFLX.  I love the smell of crashing FAANGS.

83_vf_1100_c's picture

In the land of the indebted the debt free man is King. I am feeling pretty happy about my situation. Getting old though. Could have a heart attack tomorrow and be dead and then what? Did I win?

MaxThrust's picture

"Did I win?"

The good thing is that you won't give shit.

Silver Savior's picture

Nothing left to do now but sit back and watch how this is going to all play out. I hope it is not too bad because I will have to go hunt food or something. I just wanna sit at Starbucks playing with a Morgan dollar.

WHATDIFFERENCEDOESITMAKE's picture

We had to throw out the charts in Oct of 1987. What makes this any different?

ReturnOfDaMac's picture

Three legs of a piss poor retirement:   Gartman, Graham, and Stockman.

fuckstar's picture

Deep State 2018 campaign op Smaug Must Die

onthedeschutes's picture

Try posting a bullish article...market will probably tank the next day 

gdpetti's picture

Doesn't this site already have a guy for that role? Do you really want Gartman to compete with others? Sooner or later everyone will be 'right'... and it won't be pretty.

Seb's picture

I don't know. Did it?

gmrpeabody's picture

All of this is assuming the black squiggly line follows your straight red arrow all the way down to your straight blue line.., right?

DarkestbeforeDawn's picture

Sorry, but that's a racist comment and you shall be publically shamed for it right here on ZH.  Why does the black line have to be referred to as "squiggly" while the red and blue lines are described as straight?  Please replace "squiggly" with "non-linear" or I will be obligated to report you to CNN