By Chris at www.CapitalistExploits.at
Him: "This market is absolutely 100% gonna crash."
Me: "You sound so certain?"
Him: "Just look at the valuations."
Me: "Pricey valuations don't always culminate in a market crash. There are other factors to consider."
According to a recent study, the average total household debt in America is just over $132,500, broken down as per the chart below...
... and thanks to the Fed's recent and ongoing rate increases, the repayment of said debt will become increasingly more difficult. So difficult, in fact, that most Americans will be saddled with a sizable chunk of it at the time of their death.
Actually, most already are.
Authored by Jorg Guido Hulsmann via The Mises Institute,
June 21, 2007 is when the financial crisis - which had officially started on February 7 with an announcement by HSBC - hit home for Wall Street, with the news that Bear Stearns had staved off the collapse (not for long) of 2 subprime-focused hedge funds. This is what the NYT wrote that day:
The high-stakes game of brinksmanship began early yesterday on Wall Street, and continued throughout the day. Bankers traded telephone calls, frenetically negotiating the fate of two hedge funds.
Moments ago the Fed released the first phase of its annual stress test which, once again, found that all thirty-four of the US largest banks "passed", exceeding minimum projected capital and leverage ratios under severely adverse scenarios, based on their projected ability to withstand economic shocks, which as Bloomberg notes, shows that "firms are getting the hang of the once-dreaded reviews." The result marks the third straight year all firms cleared the minimum requirements in the exams’ first phase, begging the question just how "stressful" this test truly is.