Big Short's Steve Eisman: I Am Surprised No One Could See What's Coming, Buy This Or Stay Doomed

Recent data on consumer financial health, especially concerning credit card delinquencies, paints a complex picture. Steve Eisman notes that while overall credit quality remains solid and delinquencies are beginning to decrease, significant challenges persist. The Federal Bank of St. Louis reports that the percentage of delinquent credit card debt has been climbing sharply since mid-2022, reaching levels not seen since the global financial crisis. Notably, the poorest 10% of zip codes are experiencing delinquency rates as high as 21%.
Economic strain is further evidenced by falling personal savings rates among Americans. The Bureau of Economic Analysis reported a savings rate of 3.6% in April, significantly below the historical average of 8% dating back to 1959. This drop in savings, coupled with higher prices, suggests that consumers are under considerable financial pressure. Yet, interestingly, spending has not waned. Major payment networks like American Express, Visa, and MasterCard have noted that consumer spending, especially on travel and experiences, remains robust. A Morgan Stanley survey even found that 60% of U.S. consumers plan to travel this summer.

Big Short's Steve Eisman: I Am Surprised No One Could See What's Coming, Buy This Or Stay Doomed

[ScottLarrry]

The distress for banks was a farce; what we have experienced in the past 2 years is a result of a system that has worked incredibly well. The Fed just had to tighten credit to cool the economy.

[tommyg]

Drop in savings? Trillions on the sidelines. Trillions in cash and bonds.