The current economic landscape raises concerns about the potential for significant wealth destruction when Housing Bubble 2.0, fueled by the Federal Reserve’s policies, eventually implodes.
Housing Bubble 2.0: Recent data indicates that the implosion of Housing Bubble 2.0 is gaining momentum, with U.S. housing starts falling by a substantial 11.3%. This decline underscores the vulnerability of the housing market, with potentially severe consequences for homeowners and investors.
Credit Card Interest Rates: Meanwhile, the financial strain on consumers is evident, as average credit card interest rates have soared to over 20%. This high-cost debt burden exacerbates financial challenges for many households, potentially leading to defaults and further economic instability.
Multi-family Rental Properties: The multi-family (rental) property sector is also feeling the impact, with starts plummeting by 26% MoM in August to a meager 334K SAAR (seasonally adjusted annual rate). This decline is the most significant since December 2020, signaling potential troubles in the rental market.
Rising Bankruptcies: Against this backdrop, bankruptcies are on the rise in the United States. Increasing financial stress and economic uncertainty are pushing both individuals and businesses to seek bankruptcy protection, adding to the concerns about the overall economic health.
These interconnected dots underscore the fragility of the current economic landscape, with a potential housing market crash, soaring consumer debt, declining rental properties, and a surge in bankruptcies all contributing to growing uncertainty and potential wealth destruction in the near future.
Multi-family (rental) starts imploded. Down 26% MoM in August to just 334K SAAR, lowest since Dec 2020 pic.twitter.com/ggNgCfcmt3
— zerohedge (@zerohedge) September 19, 2023
Housing Starts Decreased to 1.283 million Annual Rate in August
U.S. housing starts in August dropped significantly to the lowest levels since June 2020, declining 11.3% from July to an annual rate of 1.283 million units. This fall was much steeper than analysts' expectations of… pic.twitter.com/MT66asooxt
— Houstonomics (@Houstonomics) September 19, 2023
Yeah, holding 20% interest on your debt is a choice successful people are making… lol This was an actual headline on Bloomberg.
————–
Bloomberg: Credit Card Debt at $1 Trillion Is a Sign of Consumer Strength pic.twitter.com/edHNtJIzn1— Wall Street Silver (@WallStreetSilv) September 19, 2023
Yes, bankruptcies are on the rise in the US – but there’s no need to panic