The froth before another stock market crisis: Stock market is overvalued by 27 percent based on historical price to earnings ratio.
The stock market has once again become an overvalued casino where only the large financial players can use massive leverage to enjoy short-term rewards. Even looking at historical price-to-earnings (PE) ratios we find that stocks are dramatically overpriced. Yet the stock market is a sham for most Americans. In fact 53 percent of Americans don’t […]
US households cannot avoid soft default consequences of deleveraging: While US households continue to unwind debt total public debt soars out of control.
The US is walking in a financial minefield. The recent government shutdown simply highlighted the mega dysfunction in our Congress run by millionaires. The government is in a deep capture by large financial interests. The IMF now has an indicator looking at household debt measured against GDP. Since the recession, US households have undergone a […]
The US cannot avoid a soft default even if a hard default is avoided: Debt ceiling already breached and US Treasury operating in emergency mode while US is paying $415 billion in annual interest expenses.
All the talk has shifted from the government shutdown to the US actually defaulting on outstanding debts. The markets were in deep fear but the last couple of days rumors that the debt ceiling would be raised put the rocket boosters on the stock market. Of course, the majority of Americans have little money in […]
Debt serfdom via student loans: A new class of indentured servants now carry the $1.1 trillion student loan bubble and cracks are already plaguing the system.
$1.1 trillion. That is the amount of student debt being carried on the backs of millions of Americans. Student debt has become a rite of passage for many young Americans. In fact, many Americans establish their first credit line with student debt as they enter college. The crisis is large and has a direct connection […]
The day of reckoning for student debt has arrived and the bubble begins to deflate: JP Morgan exits the student debt market. Similar trends occurred with the subprime market in 2007.
The student debt bubble begins its inevitable decline from unparalleled heights. This week too big to fail bank JP Morgan issued a memorandum that it is exiting the student loan business. What is interesting in this move is that it is eerily similar to banking moves made back in 2007 as some banks started to […]
Long live the reemergence of the FIRE economy: Over the last decade GDP is up $5.2 trillion while the total credit market debt owed is up $24.5 trillion.
The current economy is juiced on the rivers of easy debt. An addiction that is only getting worse. Want to go to college? You’ll very likely go into deep student debt given the rise in college tuition. Want a home? Prices are soaring because of speculation but you’ll need a bigger mortgage to buy. Want […]
The uneasiness of Quantitative Easing: How QE is ineffective with helping the broader economy in favor of boosting support for too big to fail banks.
Quantitative Easing outside of economic and financial circles is a mystery to most of the public. In fact, start talking about the Federal Reserve and eyes will glaze over as if you were speaking in tongues. The financial sector counts on the public being ignorant of such things. That is why the failure of QE […]