Consumers Got the Memo

Although consumer debt is at an all-time high, consumers themselves got the message during the last crisis: Pay down debt, own more assets.

That’s taken the U.S. household debt-to-asset ratio to levels last seen in the 1970s, around the time the U.S. went off the gold standard:

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Households, unlike government, have paid down their debt and benefited from rising asset prices (Source: FRED)

Contrast that with government. The U.S. government, still enduring its longest “shutdown” ever, managed to grow its debt by half a trillion dollars – while its doors were officially closed!

Rising government debt, moreso relative to GDP than the total value, is on the precipice of full-blown crisis level. When the government gets into trouble, households need to be prepared.

We expect the end of AI buildout euphoria in the stock market may be the catalyst. What you can do right is get your own financial house in order. Pay off debt. Own hard assets. Don’t borrow to invest in the stock market.

~ Addison

P.S. We’ve invited Bloomberg’s #1 employment analyst Andrew Zatlin, to join us tomorrow on Grey Swan Live! for obvious reasons:

Andrew Zatlin — the #1-ranked economic forecaster on Bloomberg and one of the most connected data minds in finance.

For decades, Andrew has helped billion-dollar hedge funds stay three steps ahead of Washington’s chaos, consumer shifts, and global supply chain shocks.

As unemployment ticks up, politicians trade on insider intel, and Pelosi closes out an era, he’ll reveal what his data is signaling next — and what investors should prepare for.

If you have requests for new guests you’d like to see join us for Grey Swan Live!, or have any questions for our guests, send them here.

Although consumer debt is at an all-time high, consumers themselves got the message during the last crisis: Pay down debt, own more assets.

That’s taken the U.S. household debt-to-asset ratio to levels last seen in the 1970s, around the time the U.S. went off the gold standard:

Turn Your Images On

Households, unlike government, have paid down their debt and benefited from rising asset prices (Source: FRED)

Contrast that with government. The U.S. government, still enduring its longest “shutdown” ever, managed to grow its debt by half a trillion dollars – while its doors were officially closed!

Rising government debt, moreso relative to GDP than the total value, is on the precipice of full-blown crisis level. When the government gets into trouble, households need to be prepared.

~ Addison

P.S. We’ve invited Bloomberg’s #1 employment analyst Andrew Zatlin, to join us tomorrow on Grey Swan Live! for obvious reasons:

Andrew Zatlin — the #1-ranked economic forecaster on Bloomberg and one of the most connected data minds in finance.

For decades, Andrew has helped billion-dollar hedge funds stay three steps ahead of Washington’s chaos, consumer shifts, and global supply chain shocks.

As unemployment ticks up, politicians trade on insider intel, and Pelosi closes out an era, he’ll reveal what his data is signaling next — and what investors should prepare for.

If you have requests for new guests you’d like to see join us for Grey Swan Live!, or have any questions for our guests, send them here.

The stock market “rebalancing” is a polite way to put it. Energy and health care are getting a healthy boost. But tech hardware and software makers are still getting dressed down and have been asked to report to the principal’s office.

The great rotation underway has triggered a series of “Hindenburg Omens.” Five have occurred in recent weeks.

The S&P 500 has traded in a 3.7% range over the past two months — less than half the 20-year median of 8.6%. One of the tightest ranges in modern history.

In trader parlance, the indexes are “flat,” a setup that often materializes before a sell-off at the top after a multi-year bull market.

Goldman Sachs told its own traders to be aware that institutional trading activity resembles a VIX reading near 35. Rather than a reading of 20, where the VIX has been trading over that same 2-month period.

The U.S. software ETF, IGV, tested its April 2025 lows last week and trades roughly 35% below its peak. The “SaaS-pocalypse” in software companies reflects the fear of Citrini’s 2028 scenario happening in real time. That divergence now exceeds the spread seen at the peak of the Great Financial Crisis.

Under the surface, the “great rotation” we wrote about last week is threatening to widen.

Despite its overly-educated 40-million-plus population, on a GDP per capita basis Canada is null. Collectively, the Great White North would rank as America’s second-lowest state, coming in above Mississippi, but below Alabama.

SpaceX is the most valuable private startup in history — and if its success continues, it might become the most valuable public company in history.

After all, as Musk famously said in 2023, “I have never lost money for those who invest in me and I am not starting now.”

For investors, SpaceX has been a wild, joyful ride — and now the journey continues!