Remember that one time before the GFC when subprime lending was all the rage, and the companies which engaged in it, and selling the toxic paper, all looked amazing until they suddenly didn't?
Then ..
Notice how many "FinTech" companies are basically glorified subprime lenders?
Then ..
Notice how many "FinTech" companies are basically glorified subprime lenders?
This is worth paying attention to, in particular because the consumer looks quite vulnerable here insofar as reaching a new debt record, lower savings rates, high underemployment/low labor force participation, and many gov't stimulus packages trailing off. Defaults should rise.
Not only that, but the appetite for debt is likely to be reduced as consumer confidence hits 11 year lows, retail sales fade, and inflationary pressures undermine purchasing power across the board for discretionary spending by the bottom 60% of earners.
If you're too young to remember the Great Financial Crisis or what led up to it, I'd suggest doing some serious homework. There's a lot of really disconcerting debt trends that are re-emerging which suggest that many are content to look past rising risks for diminishing rewards.
To grasp at the extent of the Great Financial Crisis' lingering impact, take note that the Fed is *still* buying worthless mortgage backed securities from banks now 13 years later.
That should tell you everything you need to know about the scale of that crisis as it did not end.
That should tell you everything you need to know about the scale of that crisis as it did not end.
If it did end, if massive bailouts and monetary stimulus did resolve it, then ask yourself why, some 13 years later, we've rarely seen anything resembling a deviation from emergency-level monetary policy?
If everything was resolved, why no normalization of policy?
Exactly.
If everything was resolved, why no normalization of policy?
Exactly.
• • •
Missing some Tweet in this thread? You can try to
force a refresh
