Latest / Financial Survival Network / Understanding the Surge in Household Debt with Andrew Arons #5943

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Understanding the Surge in Household Debt with Andrew Arons #5943 · Financial Survival Network

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  Yeah, Well, the debt report obviously came in and consumers are having more
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  debt than ever before. Right, we saw student own debt up, Whatto
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  debt up. Mortgage originations though did dip on higher interest rates, you know,
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  and with all this debt out there, it leads me to believe at
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  some point that I think the Fed may be bringing down interest rates midway through
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  next year. You are listening to Carrie Let's's Financial Survival Network, where you
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  get valuable information you just can't find anywhere else to thrive in today's trying times.
• 0:36
  You need the Financial Survival Network now more than ever. Go to Financial
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  Survivalnetwork dot com and get your free newsletter and gift. Financial Survival Network now
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  more than ever. And welcome. You are listening to the Financial Survival Network.
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  I'm your host, Carrie loves. Hey. It's November seventh election day,
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  and who knows what we're voting for this time? Probably not many of
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  you are voting, but we vote every day in the global economy, and
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  right now the votes are for more and more debt. Will that lead to
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  a higher stock market price? Well, let's talk with Andrew Aarons and you
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  find him at SYNERGYAGM dot com got a question for Andrew or myself kl at
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  Carrie luds dot com is the email address Andrew, We got a debt report.
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  Debt. You know, it just reminds me the Great Gatsby that all
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  the saying. It's been used so many times. It's a cliche. How
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  did you go bankrupt? And he answers, well, slowly at first,
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  and then quickly looks like, with it debt going up the way it's going,
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  that's going to apply to all of us. So don't you think,
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  Yeah, well, the debt report obviously came in and consumers are having more
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  debt than ever before. Right, we saw the student own debt up,
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  Whatto debt up. Mortgage originations though did dip on higher interest rates, you
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  know, and with all this debt out there, it leads me to believe
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  at some point that I think the Fed maybe bringing down interest rates midway through
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  next year. Yeah, they got to have a choice, but to cut
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  rates. Well, I mean, I'll have a choice, but I really
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  think that it's going to hurt the economy if they don't, you know,
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  reduce rates. And it looks like, you know, they're trying to get
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  inflation in check, and I think so far they've done a better job than
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  most people have expected. But with regards to all the debt out there,
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  I don't think that we could keep rates really this high. Okay, So
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  looking at it though, you know, economy really not doing well, the
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  banks, especially the regionals, cane to go down, and we continue to
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  get increases in the Fed's emergency lending fund to these banks. Does that further
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  cement your case for what you're talking about? I think so. And you
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  know, if we take a look at the stock market action on some of
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  these regional banks in the last week since we saw the big balance, a
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  lot of these stocks are up. So hopefully, you know, like I
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  said, the market looks six months forward, and you know, I see
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  that rates should go down, and in my opinion, I see a higher
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  stock market. I don't really remember in a very very long time where we're
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  going to, in my opinion, have a really good bond market and possibly
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  a really good stock market, which you know, for the average investor in
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  retirement with a ballanced portfolio or sixty forty foil, this may look pretty good.
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  You know, going forward here, you think it's baked into the cake.
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  What's the what's the alternative argument against that? Well, I mean,
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  I don't really think it's it's it's baked into the cake. Yet you'd see
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  in the market have extreme volatility. I guess the case against it is inflation
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  is just out of control and the FED, you know, has to keep
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  raising raikes. But you know, I don't really see that happening, Kerry.
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  You know, again, this is just my opinion. But you know,
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  I've been doing this for over thirty years, and you know, I
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  have a pretty good feel on what's going on. And it's just my opinion
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  that usually the FED seems to overdo it, and I just don't really see
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  the Fed, you know, raising rates. I think in January, here's
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  like a fifty percent chance that they raise, but that's not a very good
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  percentage. So looks to me like the Fed will probably stop here, take
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  a pause, see what happens. And you know, as we do that,
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  it looks like the stock market, you know, is a little bit
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  more risk gone here. And you know, with all this money, one
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  of the things that I'm looking at is all this money that's in money market
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  right now that hit a record high of five point six trillion dollars in money
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  market, and you know, with rates possibly going lower next year, that
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  really to me bodes really well, absolutely going into the final stretch of this
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  year, which you know, we just get out of the worst stretch that
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  we're typically in, and we we had a very poor you know, September
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  and October and November to May. It's typically a really good time in the
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  market. The market's up seventy five percent of the time, you know,
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  going back to nineteen fifty and next year we're going into an election year,
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  and you know, the election year, the market's typically up eighty percent of
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  the time going back to nineteen twenty eight. So I'm very very positive.
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  I mean, you know, despite the fact that the markets have had an
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  intra year average you know loss at fourteen point three percent over the last forty
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  three years, the market's been up seventy five percent of the time. And
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  I just feel, you know, right now, we've had some extreme volatility
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  in the market. We're coming out of the coronavirus here and hopefully things settled
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  out overseas. I know what we've got, you know, what's going on,
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  how it do wors and we don't know what's going to happen with that,
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  but as long as they don't spread, you know, it's not really
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  having an extreme impact here in the markets. Okay, all right, so
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  I guess maybe we're going to be a little bit better than people are thinking.
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  Is that you're thought? I think so, I I really do.
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  I feel like, you know, there are sectors in the market that are
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  the leaders, and you know, we've had we saw the technology sector,
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  uh, you know, do really well and then really give back all its
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  gains. And you know, we thought a lot of the dividend stops we're
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  going to do well this year, which really hasn't materialized because of higher rates
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  and money markets and things like that. But uh, you know, I
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  think I think we're finally going to have some sort of options in the market
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  that we haven't had in a really really long time. And you know,
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  it seems kind of strange of how this may come to some sort of equilibrium,
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  but in my opinion, this may be very very good for the market.
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  All right, Hey, well we could We would all love to see
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  that, wouldn't we. Of course? Of course, I know, I
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  know, you know, I know there's a lot of wrinkles and you know,
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  Mark it's sentiment has been pretty It's not great right now with everything going
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  on in this crazy world that we live in, but it does look like
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  to me that you know, if we look six months out, things are
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  starting to maybe aligned pretty pretty well. All right, Well, hey,
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  I'd love to see it happen. I'm not convinced, but hey, nobody
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  really knows, do they No one knows, right, No one really knows.
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  You know, if you have that herb mentality, typically are not do
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  it pretty well with the market. So I would say that, you know,
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  I'm not trying to be a total contrarian here. It's just that the
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  way that I'm looking at things to me look pretty positive. I mean,
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  over the last you know, twenty some odd years, we really haven't had
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  a place to go in the in the in the bomb market, and now
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  the bomb market may be somewhat attractive for portfolios. You know, I manage
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  money for individuals and most of these people are you know, over the age
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  of sixty. And you know, the returns in the banks were pretty much
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  zero since the financial crisis, and uh, you know, they have they
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  have an alternative at this point. Obviously, we've got to keep inflation in
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  check, uh inflation. You know, they say the number is three dy
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  point seven. The numbers probably higher, especially you know with healthcare and uh,
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  you know, travel and all the things uh you know, uh that
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  people in retirement are are spending their money on. But to me, it
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  looks like, uh, you know, the feed is really trying very hard
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  to keep inflation in check. Okay, well, yeah, it's just at
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  what cost? Right, at what cost exactly? I mean, at what
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  cost? And and right now, you know, with this with this debt
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  report out, you know, uh, the credit report out today and all
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  this debt that's that we have. You know, it's certainly at it's pretty
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  dismal when you look at that. But uh, you know, even though
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  consumers have had more credit card debt than ever, it seems that uh,
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  you know a lot of them. The credit scores are are are not going
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  down. So that's a good thing. Yeah, they keep rating them though,
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  you know, they keep changing everything, so you don't really we really
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  don't know the number stuff, all right, We could only we could only
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  go with the data we're presented with. Yeah, no matter how big it.
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  Uh, yeah, I know what you're saying there. I know it's
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  something I watch pretty much like a hawk, can I right? Right?
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  Okay, because it's credit. It's the lifeblood of the modern economy, right,
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  absolutely, absolutely, And you know, we'll see what happens here because
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  it's an interesting cycle that we're in right now with mortgage rates and and housing
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  and how that will affect. But uh, you know I I I have
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  to think that this is going to be somewhat temporary. I don't think that
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  we're going to have these rates, you know, for many years to come.
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  All right, So hey, well, one thing's for sure, at
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  least to the obesity epidemic. Everybody's making money off of those anti obesity drugs,
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  right, So maybe that's so we'll do okay there, Well you know
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  that that that's like a segue into you know where I think, you know,
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  the market's going to be pretty strong, and you know, I think
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  that technology, pharma, biotech, these these are the stocks that I think
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  are going to do extremely well. And you know that's that's where I see
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  the growth coming. I mean, the earnings still look very good. I
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  mean eighty percent of the companies beat their earnings the last quarter, and and
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  you know, the market to me does look pretty strong despite everything that's going
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  on. You know, I I said, in this crazy world that we
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  live in, all right, So I hey, so when we have this
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  discussion next year, where do you think we'll be. Well, you know,
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  I think that they're looking at the S and P maybe doing nine or
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  ten percent earnings next year, so earning's growth, so you know, maybe
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  we're going to be, you know, at an all time high. I
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  think that's a real possibility. And you know, I think there's also a
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  good opportunity in the fixed income market as well. I'd be locking into some
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  balanced portfolios for people with dropping yields ahead. So that's where I think things
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  lie. And then we're going to be in the election year, which is
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  typically pretty good, and you know, being election day, we'll see where
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  things are a year from now, yeah what happens. Yeah, hey,
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  that's another reason why rates are probably going to come down. I remember Barons
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  one saying the Federal Reserve is doing what it does best, it's elect re
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  electing a president, right right, absolutely, So it will be you know,
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  a year from now, I think I think, you know, I
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  like to come back on the show and talk about, you know, where
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  things are at, and hopefully I hope my predictions are right. Yeah,
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  I hope you're right too, for sure, because the alternative is pretty bleak
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  and all right, so just tell us again. The best place to find
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  you again, you can find me at synerg a MG dot com. Uh.
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  You know, we've put out weekly commentary on the markets, and you
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  know, if anyone would like to reach out to me, they certainly can.
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  They can find me, you know, on the web. All right,
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  Hey, got a question for Andrew and myself k L at Carrie LUTs
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  dot com is the place to send the email and questions or comments. We'd
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  love to get them from you and answer and you'll find a link to andrew
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  site on the show notes of this interview on Financial Survival Network dot com.
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  Andrews, been a pleasure. Thanks so much for stopping by. Thanks for
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  having me, Carrie, Thanks for listening to Carrie Lenses. Financial Survival Network.
• 14:15
  Your solution to today's trying times from the latest go to Financial Survivalnetwork dot
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  com Financial servi Network more than ever