Arjun A Dhingra’s Post

Transcript

Here is what I'm most concerned about with respect to the US economy and where we are headed. There are a lot of things happening that are being reported about in the news cycle, but the thing that troubles me the most is that we are going to eventually have much slower growth here in the United States. That is because so much of this country's economy is predicated on consumption, and consumers that are not consuming or spending are ultimately going to lead to companies and outfits reporting slower growth, less revenue, and that ultimately leads to a recession. Here is what I mean by that, specifically credit card debt. Keeps hitting all time highs, but what's more troubling about it is the footnote underneath that statement and that is that delinquencies and charge offs are now equal to 2008 levels. We all know what happened during that time, which this basically means in English that people have maxed out their credit card and don't want to pay the bill or cannot pay the bill and are walking away from the debt. This cripples a lot of financial institutions because they don't really have a game planner. It wasn't part of their plan to just have people walk away from their debt and not make any kind of a payment. Remember they charge high interest because this is where they make a. Killing. So with the erosion and confidence for the consumer and the inability to go out and take on more credit and spend money and just throw it at whatever is out there, we inevitably, because it's just simple math, we'll have less spending, which means less growth or revenue for companies and restaurants and everything else out there. And when you get 2 consecutive quarters of declining growth, you now have a recession. But what do you guys think is ultimately going to be the catalyst for a recession? Is this something that concerns you? Or do you think we have other things that we need to be focused on that ultimately could slow down this economy?