by Pam Martens and Russ Martens, Wall St On Parade:
At his July 27 press conference, Fed Chair Jerome Powell said this:
“Households are generally in about as strong a financial shape as they’ve been in a very long time – or perhaps ever given the money that’s on people’s balance sheets. So you have a pretty – from a financial stability standpoint – you have a pretty decent picture.”
That statement captures a rear view mirror look at U.S. households. The picture is deteriorating rapidly. More on that in a moment, but first a look at some hair-raising charts that capture the dire straits of U.S. households during the 2008-2010 financial crisis versus today. The New York Fed released its Household Debt and Credit Report for the second quarter of 2022 last week. It showed total household debt rising by $312 billion in the second quarter to reach an historic high of $16.10 trillion. Also setting a new historic record was mortgage debt, which climbed to $11.39 trillion and represented 70.5 percent of all household debt.