Consumer Stress Hiding Beneath a Strong Market

Let's fast forward to today because you've got a lot to say about what I think is an under in some ways under uh covered aspect of today's economy which is the consumer. You know people throw out the K shape and and it's real and it's it matters but um you're really your process uh really dives into you know the implications of the case shape. You've talked about access to credit from boy some of these um micro lenders which uh you know folks are having to access.

You've talked about the trade-off between gas and groceries. Why don't you maybe start from 30,000 ft in terms of what you see uh from a US consumer standpoint and of course we'll ultimately you know bring in the AI part of the you know the analysis but start with the consumer

To carry a a thread through this whole conversation. Um going back to the credit uh the great financial crisis, the banks ha paid $70 billion in fees um yeah plus um in terms of mortgage penalties and fines um sorry fees fines right after the crisis they're like never again. So they pulled back from lending to a wider group of people, right?

Remember, they needed to lend to everybody to keep the uh the the the party going in the in in mortgage land. Um to shrinking that pool dramatically and it took them a long time to do it because different states had different foreclosure rules and um uh and and you had to work the port work the work down the portfolio. I'll give you an example.

the uh home equity uh lines of credit book at bank on bank at banks was close to 700 billion. It's 290 billion today. And you think about the level of equity at the crisis there was 9 trillion of equity.