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Old 01-14-2020 , 08:13 PM     VanLang76 est actuellement connect  search   Quote

$16 Trillion Household Debt Bubble Ripe To Burst
Rosenberg says to forget about a housing market crash: “it’s not about mortgages.” He’s looking at the $16 trillion in US household debt, and the one-third of 2019 auto trade-ins that were underwater with negative equity.

Mr. Rosenberg didn’t provide a citation for the $16 trillion debt figure. But at the end of last month, Fox Business reported household debt is up to $15.99 trillion:

A guest commentator said these numbers are fine… unless something changes.

Right now with the economy strong, these numbers, these ratios are okay. But here’s the thing we always have to worry about. What if there’s say a bubble? What if we go into a recession? What if our asset values fall? What if our household income falls?
The Fox Business anchor pointed out previous bubbles caught people by surprise.

NASDAQ is setting these records not seen since ’97 or ’98. Back then we didn’t know, or not a lot of people knew that the bubbles that were forming were forming.
If the figures quoted by Fox Business and David Rosenberg are correct, US consumers took on $2 trillion in household debt in just two quarters since June 2019(!).

The massive expansion of consumer credit over two quarters coincided with record charge offs unseen since 2012. Rosenberg points to more Fed “easing” as the cause.

Anti-Recession Measures At Fed Flood Risk Assets

david rosenberg recession probabilities tweet
Source: Twitter
Soon after assessing a household debt bubble, Rosenberg pointed out a hair-raising pattern in the New York Fed recession model. The probability of recession dropped suddenly from all-time highs right before the dot-com crash and Great Recession hit.

History shows we’re not out of the woods yet. Last month, Rosenberg went on CNBC’s “Closing Bell” to discuss the recession risk. He pointed out ongoing Fed operations are fueling the household debt bubble.

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