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MoodyP's avatar

The market is also ignoring, among other things, the invasion on the southern border. 1000s of (mostly) military aged men from all over the world, including China, are being not only allowed, but assisted, in entering the country. Where they then (temporarily in my view) disappear into the heartland.

There is zero chance this ends well. We are at war on multiple fronts, internally and externally. A whole lot of “buy the dippers” are going to get their asses handed to them. My guess is in the near term.

Keep up the great work. Rational voices in short supply these days.

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GetReady's avatar

Hey Chris, I think I figured out what the 'credit event' you have been eluding to will be: Consumers.

They are going to stop paying their debts - auto, student, credit card and mortgage.

Think about it. It's perfect and it is already starting with auto loans.

With all the potential catalysts to 'prick the bubble', this is the most obvious that is being overlooked.

This was the catalyst for the GFC with mortgages.

People don't feel obligated to pay debt, in fact the government is signaling with student loans that it's not important.

Then there is the 'cancel rent' movement.

Let's face it: people only pay their debts to maintain a credit rating to get more debt.

What happens when they first default? They go all in!

Consumers will spend until they can't. And then they won't pay debts before they stop buying.

They'll be underwater on their mortgages, just like they are with their cars.

Timeline: It'll be in high gear by summer IF Biden stops the student loan moratorium.

Thoughts?

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