What Happens From Here?

Submitted by B3stAuD1t0rofA11tiME t3_11c1ei3 in wallstreetbets

Everyday you hear about credit card debt that is going through the roof, people withdrawing from 401k’s to pay for groceries and of course those interest rates that are rising faster since the beginning of time to defeat something called inflation.

Gen Z = the parents of Gen X so they have some catching up to do on average credit card balance.

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https://preview.redd.it/idmke1ounfka1.png?width=599&format=png&auto=webp&v=enabled&s=1ba362cd4d20c83308248868b68d871b425b274c

But closing in on 1st place with 90+ days delinquent

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https://preview.redd.it/993hq4nvnfka1.png?width=570&format=png&auto=webp&v=enabled&s=f68dc8e6757a77658bc3f16a55ee30a2264f7476

Consumer debt is at $4.8 Trillion up $400M from a year ago and up $800M prior to covid in 2019

Guess how much of that is student loans? $1.8 Trillion or almost 40%.

Is this the catalyst that will break the camels back and cause the recession? Probably not. If you exclude the student loan debt from the picture. Consumer debt is around normal levels if not lower.

There is more cash sitting on the sidelines than Pablo Escobar had and he would have invested it in the market if he could have, but that wasn’t an option.

We are going to the moon when everyone rushes back into stocks again trying to time the bottom.

FOMO will happen and all of a sudden the S&P 500 will be at 5,000 and some people will still have their d*cks in their hand.

Anyways, just my opinion...have a wonderful evening!

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Comments

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Milot25wallst t1_ja123hz wrote

Wtf is this average, I have 68k on all my ccs 🤣

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isucktrading t1_ja16qyv wrote

You are a broke ass mofo !!

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Milot25wallst t1_ja2sa76 wrote

Business debt tho, I spend almost 2-3k daily

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benji3k t1_ja2tkzq wrote

Options premiums are also coded as a business expenses in my ledger. We are just a couple of entrepreneurs trying to make it.

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joeyjoejoeshabidooo t1_ja2hi65 wrote

And I have zero. So I’ve already halved the average. You’re on the high end.

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rwtf2008 t1_ja5jhqj wrote

Pfft, I have -$68k on mine. You’re just average now.

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crypt0_sports t1_ja14jgm wrote

This is a ignore reality and pump hopium into the void of denial regarding the inevitable.

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Modelminorityperson t1_ja2i47y wrote

There are 2 credit cards with no balance transfer fees and promotional interest rates for the first 12 to 18 months on balance transfers. I am currently paying my debt off with the Navy federal credit Union platinum card. You have to be a vet or related to one.

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paperfkinhandz t1_ja2kblv wrote

You should get PenFed. They have better rates than navy

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4troglodyte t1_ja3hrgm wrote

I have accounts with both NFCU and PenFed…I believe NFCU remains the largest Credit Union in the World…Go Navy💪🦍

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paperfkinhandz t1_ja3vgmu wrote

Yeah, but navy get they orders from pentagon!

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4troglodyte t1_ja3wwn8 wrote

And that should scare the hell out of you right now if you are a Veteran. The spideys on my neck are tingling for good reason.

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Currently_There t1_ja4eh59 wrote

Depends on where you live. Here in Hawaii, 70k is probably average. Cheap places are going to be cheap.

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Hkmachine22 t1_ja2w9o9 wrote

Do you pay the balance off every month? Look into a line of credit if you don’t. Much lower interest rates if you have to carry expenses more than 30 days.

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CaptainStonks t1_ja2bgr1 wrote

"Gen Z = the parents of Gen X" are you expecting the Gen Z'ers to invent a time machine in the future? OK Boomer.

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aleeb9 t1_ja5upwp wrote

It’s how you know he is super smart, and you should follow him with SPX 5000 calls for November

2

crypt0_sports t1_ja149y2 wrote

This is a prime example of someone shilling their bags by picking and choosing data based on what they want the outcome to be.

Fact remains: Credit card debt to savings ratio is the worst in recorded history.

You can only swipe so much for $40 Olive Garden plates and $15 Little Mac meals before you max out. People are simply refusing to cut back on spending, even at super inflated prices.

This is unsustainable.

It should also be noted that Gen X are just some of the parents of Gen Z & not the other way around.

Short term this refusal to stop spending will fuel earnings and the market overall. But even this analysis shows Gen Z & Millennial credit card debt defaults increasing at a rapid pace, even with student loan suspensions for what seems like an infinite amount of time.

They will more than likely stay suspended through the 2024 presidential election and if the Democrats win, through 2028.

If they don’t expect the moratorium to expire Dec of 2024 so the GOP can inherit a disaster of debt and be blamed for the inevitable crash.

Also people are normalizing $1500-$2500 rents.

That’s simply absurd & unsustainable as well.

Enjoy your short term pump in the market - but the reality will kick in at some point and number not always go up.

The only way to slow down consumer spending it seems is for 1 point increases constantly. The Feds actions aren’t helping clearly - just prolonging the inevitable.

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cl0wn_w0rld t1_ja3tkwv wrote

fed needs to pull of the bandaid, startinng with 75bps in March. get the real rate positive. 6% here we come!

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crypt0_sports t1_ja3tz9u wrote

Exactly let’s start getting these homes under 300k averages so the real estate and greedy fuckers thinking they will retire off rent at 45 can go and get promptly fucked.

See you behind the dumpster 🫡

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joefunk76 t1_ja4901d wrote

As much as I would love for you to be right, you seem to presume that aren’t a million more greedy fuckers hoping to retire at 45 who would scoop up all those homes at lower prices.

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Ok-Grapefruit1284 t1_ja4g8ec wrote

In my area, investment firms are buying up cheaper houses and flipping them into high priced rentals or reselling them for 100k more than they were previously listed for. Sure there are a few independent flippers but mostly it’s companies. We don’t stand a chance.

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crypt0_sports t1_ja4e7cz wrote

You may be right there but only do many people can leverage that kind of additional debt

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SohndesRheins t1_ja6bzl6 wrote

Man that would be awesome. I'm 15 years away from 45, and my parents are in their 60s and are chronic alcoholics. If they both die in 15 years then I'll definitely liquidate their assets, pay off my house, and buy a rental property or two and retire by age 45. By all means, please drop housing prices.

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rocketseeker t1_ja4za4g wrote

75bps being considered pulling the bandaid feels like a hurricane screaming “GET TO THE FKN BASEMENT U REGARD” on our faces until it inevitably destroys all our houses and mattresses stuffed with money

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Jerund t1_ja3vsgd wrote

1500-2500 rent is cheap depending where you are for a household with 2 working people…

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crypt0_sports t1_ja3xhd1 wrote

The only place that is semi reasonable is in a large metro city where avg incomes for 1 person are near $80-100k. There’s no reason rent should be anywhere near that in the woods , in the middle of bumfuck, or a rural area 2 plus hours out of a major city for an apartment.

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DogeAutist t1_ja5ho3d wrote

Supply and demand amigo. Arbitrary numbers mean nothing. Rental increases are sustained until a better option presents itself for the rentors. Three families in a 3 bedroom two bath home, kids sleeping in closets. This shit is normal. I suspect it will continue as I don't see interest rates dropping anytime soon, and talk of the housing crash has spooked alot of new construction.

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crypt0_sports t1_ja5i877 wrote

Well if they lose their jobs all bets are off the table.

Based on your logic then you’ll have 12 people and 3 generations living in a 2 br 1 bath house all while hundreds of thousands of homes sit empty while an investor refuses to take anything less than $2500 a month on a property they overpaid by 2x ?

If so then you’ll have armed security patrolling these neighborhoods trying to run off squatters.

Make it make sense.

P.s. new manufactured homes are now starting at 49k where I am and they were 79k less than a year ago.

So they apparently know something.

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DogeAutist t1_ja5k25u wrote

Everyone in the household works. It's not a theory. I see it daily. And if one or two lose job the family gets replaced or the throw another in the living room.

Nowhere to put a manufactured homes (where I'm at anyways)and even then you have to rent the land and that goes up annually as well.

Also, most these people work in a variation of service industry. They will always have work cleaning houses, taking care of children, fixing cars. And that work at this price point is just not possible if they move 1 hour outside of the city in a manufactured home.

I'm in Cali, so I know this ain't the norm, but it's what I'm seeing here. Think about it, how is it different than 4 college kids renting a 3 bedroom and two splitting the master.

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crypt0_sports t1_ja5lmqy wrote

Oh you’re in Cali I’m in Central Texas, different planets.

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_ziros_ t1_ja4wnu6 wrote

Where did you find the data that the credit card debt to savings ratio is the worst in history? I’m trying to further support my bear/short thesis and trying to collect as much data as I can. It’d be really helpful if you can share the link with me and I can save it for later. Thank you much appreciated

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garycow t1_ja4zydn wrote

he made it up - savings are still high

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36Taylor36 t1_ja5ls70 wrote

Is it me or does CC debt look that its on the same level as late 2019.

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crypt0_sports t1_ja5lx14 wrote

The savings rates were way higher compared to now and the interest rates were still nothing.

Two large variables.

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garycow t1_ja4zsai wrote

couldn't happen o a better party

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crypt0_sports t1_ja508vz wrote

They’d do the same thing if it was the other way around trust that

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jonsnuuuuuu t1_ja1ikj6 wrote

Hey man. Just came to say I genuinely don’t give a shit about any of this because I’m personally unaffected. I’ll continue to invest in my favorite stocks and index funds because I can and I don’t care what the market does. Thanks for this write up though I hope you make money

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crypt0_sports t1_ja1iwsd wrote

From your point of view, as long as spending continues to happen at record pace you’ll be a winner.

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jonsnuuuuuu t1_ja1jl3r wrote

Sort of. More like as long as I don’t need the money and have my high paying job I don’t give a shit what the market is doing for the next 30 years

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crypt0_sports t1_ja1k7fb wrote

At least you’re honest lol

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jonsnuuuuuu t1_ja1kl1t wrote

I know this is Wall Street bets but from the comments it feels like people are playing with money they need and not money they don’t. So yeah I find it weird when people on this sub are freaking out and trying to predict the SPY. like just pick up or down and place your bet. Otherwise you shouldn’t be here

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crypt0_sports t1_ja1kvzi wrote

Yupppp they most definitely are! That’s dangerous degeneracy. Better off playing roulette some of them.

You should see crypto during a bull run it goes from mania to despair in a matter of hours sometimes

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dmfr628 t1_ja1imao wrote

Just paid off my 20k of credit card debt. Gotta update the numbers accordingly. My student debt is 0 as I is smooth in the brain

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xsportbikeriderx t1_ja14aoc wrote

I bet we see 3000SPX long before 5000..

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Wander21 t1_ja2mjxk wrote

Not to mention current money supply just can't support Spy 5000

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StockNinja99 t1_ja45be9 wrote

That’s not true at all, there’s a huge amount of cash on the sidelines

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Wander21 t1_ja4a0iu wrote

Even if student loan forgiveness act finally passed, it will only infuse 400 billion into current system, still not enough by a lot compare to one year ago, and SPY peaked at around 4800

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hodlethestonks t1_ja1ttyb wrote

Everyone losing their shit and seeing crash is imminent means there Will Be no crash

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ACiD_80 t1_ja244zg wrote

Actually, the stock market is driven by how people feel about it.

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ACiD_80 t1_ja3v6e7 wrote

Which in turn is driven for the most part by the media/news.

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hodlethestonks t1_ja4c29o wrote

I'm saying that If majority is feeling bearish already and suspecting crash then that negativity is already priced in (not buying, buying puts, shorts).

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ACiD_80 t1_ja4d531 wrote

This 'already priced in' argument seems to be really popular amongst those who cant defend their arguments.

I could say the same thing and say the recovery is already priced in.

It's such a baseless/moot argument.

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[deleted] t1_ja6ce40 wrote

[deleted]

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ACiD_80 t1_ja6cyg7 wrote

No.

You cant really know/predict if something is already (fully) priced in or not.
That is an assumption/opinion.

That the stock market is driven by emotion and opinion is just a fact.
You think something wll go up, you buy.
You think something will go down, you sell.
Simple.

So one is a fact and the other is an assumption/guess.

1

Theta_Ome t1_ja1r70t wrote

Everyone is panicking over numbers while traditional finance completely ignores the crypto holdings (or at least what is left)

The amount lost in crypto implosion is not dampening the massive gains.

As crypto continues to liquidate back into the equities market, you’ll see more and more headlines about doom trying to shake retail out so institutions can buy the dip.

Institutions were the money backing most of the exchanges that collapsed, looking for those 200,000% gains as owners of exchanges burned them. Retail rugged them hard.

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GuiltyBee60 t1_ja3f4x3 wrote

the apartment I used to live in sent me a bill of $12 K (for breaking the lease) .. very respectfully I asked them to go fck off!

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DeadStringScrolls t1_ja1zck3 wrote

The middle class continues to dwindle is what happens from here.

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suicide_walter t1_ja178og wrote

Don’t forget that fixed income is now an extremely attractive allocation for “sideline cash”

“9% BBB bonds and Canadian bank LRCNs are so fucking good right now, there’s no reason to over allocate into risk assets”

  • fixed income PM I know
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B3stAuD1t0rofA11tiME OP t1_ja17tgo wrote

I talk to you guys all the time and you all repeat the same thing. The course of your life is changing and you don’t even see it.

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suicide_walter t1_ja1954i wrote

I’m not sure what you’re trying to say. We just had a FOMO rally; it stalled and the daydreamer’s soft landing is looking less likely. The market was pricing in rate cuts by year end… absurd.

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B3stAuD1t0rofA11tiME OP t1_ja1xxhr wrote

You got about as much sense as a bird flying in the sky. There’s a lot that bird don't know though it don’t change the fact the world is happening to him all the same

−5

sinncab6 t1_ja2lvo6 wrote

Something tells me you've never lived through an era with sharp rate hikes. Hint: The market corrects itself and it takes a while.

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B3stAuD1t0rofA11tiME OP t1_ja5443i wrote

Please tell me you have puts currently so I know who I am betting against

−1

sinncab6 t1_ja6zp7i wrote

On what companies? Because I've got puts and calls you can in fact play both sides

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cl0wn_w0rld t1_ja3uljr wrote

I just re-read your OP and i am sure how it equates to "the course of your life is changing and you dont see it"

there is a lot more going on than consumer credit card debt. consumers are spending and keeping things proped up because they feel good about their job and income security. once unemployment kicks up a little bit and the layoffs spread to other industries and main st, people will stop spending.

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yorklebit t1_ja1i1in wrote

All of the below is just my personal opinion and should not be construed as anything except that. Probably what happens is the market stays stuck in a range or goes down until the Fed stops raising interest rates. When they stop or make it clear (firmly) they will stop soon, the market starts going up from that point. How low it goes before it starts going up again is anybody's guess, but will probably depend on how severely they continue to raise rates and how severe the economic fallout from the rate-raising is.

You can see on a chart (e.g. SPY) how the market attempted an uptrend starting about mid October last year. IMO this was predicated on the (putative, forthcoming) ending of interest rates rising. Now that is majorly in question and so the uptrend is in question and MAY fail and turn out to be one of those famous "dead cat bounces."

Economically, good news is bad news right now, until the good news doesn't imply a rate raise anymore.

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VisualMod t1_ja117nu wrote

>It is interesting that you mention student loan debt as a potential catalyst for recession. I have seen data that suggests that this type of debt is actually quite manageable for most people and does not pose a significant risk to the economy. However, it is worth noting that rising interest rates could make this situation more difficult for borrowers in the future.

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JeromeJGarcia t1_ja3cd6h wrote

Got divorced, used the 10% of assets I got to pay off debt under my name and haven’t paid a penny in interest for the last 6 years. I use the card for everything and now Chase is paying me in points, they bought me a $2600 ebike last summer. Debt sucks. I got the feels for those that are about to eat a shit sandwich.

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iPigman t1_ja3lokh wrote

>Gen Z = the parents of Gen X

Nobody tell him.

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B3stAuD1t0rofA11tiME OP t1_ja600sa wrote

Captain Stonks already found the easter egg so I can't award you any points at this time.

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DelightedAutist t1_ja2t06q wrote

There are like 2 people from the silent generation left. Useless data points.

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Pasvopesusieni99 t1_ja2wmds wrote

According to google there is still almost 6% of the Total population in Silent generation living in the US

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DelightedAutist t1_ja2ykpb wrote

If they’re carrying cc debt at 78-95 years old I am flabbergasted.

2

dwinps t1_ja3tlo9 wrote

Stays just report card balances not whether the statement balance is paid in full every month

So you can have credit card debt but not be carrying it month to month

2

ZadarskiDrake t1_ja3af1n wrote

I keep seeing these charts and hearing things about how bad the economy is and I agree I am broke af meanwhile my rich friend took me out for dinner last night and I was just amazed at how carelessly people who make a lot of money spend. He paid for our meals ($100+) and he spent like $60 on drinks for himself without even thinking twice about it. He is 27 and makes $150,000 per year and for people like him, they will never struggle or be affected by inflation. He is going to be promoted to IT manager next year and he said his base pay will go to $200,000 + $20,000 yearly bonus . If you guys are smart, go to school and major in computer science or engineering. You will make alot of money and never have to worry about surviving.

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vaibhav_bu t1_ja40y2z wrote

Just read about the layoffs in the tech industry and this rosy picture that you painted will start to fade away.

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StockNinja99 t1_ja45on9 wrote

The layoffs are a tiny fraction of the workforce, many these tech firms still have more people on the payroll then in 2020

2

vaibhav_bu t1_ja5sqzx wrote

I don’t think using the same number of employees as 2020 is a good measure to see if the companies are bloated. But the amount of “wasted resources” in big tech companies (FAANG) is insane. The only reason why they were able to support this was because of the crazy profits that were raked in, take that profit out of the equation and everything falls through.

2

uponhillsandvalleys t1_ja7l7yh wrote

Tech industry ≠ tech support for non-tech industries.

This isn’t a hard concept.

Layoffs at Snapchat/Facebook are not related whatsoever to roles like networking engineer at a healthcare corporate data center.

1

LouieS76 t1_ja3wuan wrote

Looks like more bank bailouts are coming.

3

something-quirky- t1_ja2zzk6 wrote

Well the answer is quite clear, surprised you couldn’t figure it out for yourself. The numbers may go, or it could possibly go down.

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Dry-Stop2000 t1_ja3ih9w wrote

There will be no crash, SP500 is sitting sideways (Paul Wall, baby)

2

B3stAuD1t0rofA11tiME OP t1_ja3jwnl wrote

What it do. I’m on like a light switch. My wrist well froze up like a computer glitch.

2

to_the_andromeda t1_ja3jq3p wrote

Nothing is gonna happen until someone pokes the bubble...people enjoyed the rise in prices now they are enjoying the rise in the rate of inflation. Next they will enjoy the zombie apocalypse

2

VisualMod t1_ja1172y wrote

User Report
Total Submissions 10 First Seen In WSB 9 months ago
Total Comments 398 Previous Best DD
Account Age 6 years [^scan ^comment ](https://www.reddit.com/message/compose/?to=VisualMod&subject=scan_comment&message=Replace%20this%20text%20with%20a%20comment%20ID%20(which%20looks%20like%20h26cq3k)%20to%20have%20the%20bot%20scan%20your%20comment%20and%20correct%20your%20first%20seen%20date.) [^scan ^submission ](https://www.reddit.com/message/compose/?to=VisualMod&subject=scan_submission&message=Replace%20this%20text%20with%20a%20submission%20ID%20(which%20looks%20like%20h26cq3k)%20to%20have%20the%20bot%20scan%20your%20submission%20and%20correct%20your%20first%20seen%20date.)
>TL;DR: Consumer debt is at $4.8 Trillion up $400M from a year ago and up $800M prior to covid in 2019. Student loan debt is $1.8 Trillion or almost 40% of the total.
1

Dangerous_Ad4451 t1_ja27dak wrote

Nothing happens. The bus is always on the move. Some will get off while some get in. Financially illiterate folks will get burned while financially savvy folks will thrive. It is nothing new

1

Shuttodeath t1_ja2x83v wrote

hw thinks more genz buying stocks rn, they are focus on fast moving money like crypto. stocks are old ways of making money😁

1

nomoneynicetruck t1_ja3atkl wrote

We've had an artificially low FF rate since the Obama years. And that's helped to produce a generation of people who only know how to buy risk assets and consume. So know when there's easy money in fixed income we have cc debt and flat lining stocks.

1

Rabid-tumbleweed t1_ja3nrb2 wrote

Gen X are the children of the Baby boomers. Did you really think it went Boomers, Gen Z, Gen X, Gen Y?

1

McSnoots t1_ja3sded wrote

I have 7k on credit cards. As soon as tax return arrives I’m paying it all off

1

PSUBagMan2 t1_ja5mc5t wrote

Posts like these made me glad I'm not poor. Imagine being a full grown adult and carrying credit card debt lmao

−2

jonsnuuuuuu t1_ja1ie3i wrote

As someone unaffected by all of this I literally just keep buying my favorite index funds/stocks/cryptos and continue to not care

−5

ACiD_80 t1_ja247u5 wrote

Good, more money to gain for those who care.

1