Confidence Is Gone and Mortgage Debt Dwarfs Assets
Michigan consumer sentiment came out Friday with its biggest drop since September 11, 2001. The index dropped from 76 to 66.5. The biggest thing to point out as evidenced by the chart below is that 66.5 level is the point at which has signaled recessions in the past 30 years. Is this time different? I doubt it!
Source: St. Louis Fed
This morning home builder confidence came out at 14 which is the lowest level since March 2009, the depths of the bear market. It seems very obvious from my vantage point that things are getting worse not better. Case in point, look at the chart below that shows that mortgage debt dwarfs assets by more than $4 trillion! Yes that’s Trillion with a capital T.
Source: bloomberg
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