![](https://i.imgur.com/CLvY2jA.png")
19-03-2023, 09:18 AM
The US has a big bubble due to zero rates in 2020-2022. The debt levels shot up to above financial crisis level.
What they have people believe is the regulation post financial crisis will prevent a "similar crisis". Yes we won't get a similar one involving the major banks like BoA, Citigroup etc we will just have another type of crisis.
We know throughiut economic history when debt levels shoot up crisis is inevitable. The question is where and how. Often we only manage to understand after the crisis become full blown. People on YouTube saying SVB, Signature bank collapse don't look as serious as Lehman. Of course, that is because the Lehman moment for the current crisis has not come yet.
Under the surface the US real estate especially commercial real estate is heading for collapse. Auto loans defaults are at highest levels.
Looking even deeper, there are many difficult to understand spaces where high risks and high debts are taken and these will become like the Lehman and housing collapse of 2008.
One area is in shadow banking for private equity. This area exploded in 2020 due to easy money made and escape regulators scrutiny. The total amount estimated by some is as high as US$10T. Not that we know for sure this is epicenter of collapse or something else. But given the high risk of the US levered economy, you should be prepared for this likelihood. Hedges are available and still relatively cheap at this point in time. However, the best move for most would be to sell and reduce exposure.
https://www.ft.com/content/7416159d-fa24...2696cd0ede
What they have people believe is the regulation post financial crisis will prevent a "similar crisis". Yes we won't get a similar one involving the major banks like BoA, Citigroup etc we will just have another type of crisis.
We know throughiut economic history when debt levels shoot up crisis is inevitable. The question is where and how. Often we only manage to understand after the crisis become full blown. People on YouTube saying SVB, Signature bank collapse don't look as serious as Lehman. Of course, that is because the Lehman moment for the current crisis has not come yet.
Under the surface the US real estate especially commercial real estate is heading for collapse. Auto loans defaults are at highest levels.
Looking even deeper, there are many difficult to understand spaces where high risks and high debts are taken and these will become like the Lehman and housing collapse of 2008.
One area is in shadow banking for private equity. This area exploded in 2020 due to easy money made and escape regulators scrutiny. The total amount estimated by some is as high as US$10T. Not that we know for sure this is epicenter of collapse or something else. But given the high risk of the US levered economy, you should be prepared for this likelihood. Hedges are available and still relatively cheap at this point in time. However, the best move for most would be to sell and reduce exposure.
https://www.ft.com/content/7416159d-fa24...2696cd0ede
I, being poor, have only my dreams; I have spread my dreams under your feet; Tread softly because you tread on my dreams.
