{"id":3102,"date":"2025-10-09T17:12:58","date_gmt":"2025-10-09T17:12:58","guid":{"rendered":"https:\/\/trusteconomics.eu\/?p=3102"},"modified":"2025-10-09T17:14:23","modified_gmt":"2025-10-09T17:14:23","slug":"the-subprime-monster-returns-the-american-economy-is-cracking-a-new-bomb-explodes","status":"publish","type":"post","link":"https:\/\/trusteconomics.eu\/index.php\/2025\/10\/09\/the-subprime-monster-returns-the-american-economy-is-cracking-a-new-bomb-explodes\/","title":{"rendered":"The subprime monster returns: The American economy is cracking, a new bomb explodes"},"content":{"rendered":"\r\n

In a stark warning to markets, Trust Economics warns that a subprime crisis \u2014 especially among the lower-income classes in the US \u2014 is brewing beneath the surface of a seemingly stable economy and market euphoria. Trust Economics Chief Economist Thanos Chonthrogiannis points out that these cracks in the credit system are significant, but not so large as to signal an immediate peak. (For more analysis, please read the article titled “US: Middle class will disappear – Warning of Subprime 2.0 crash<\/a>“).<\/p>\r\n\r\n\r\n\r\n

Key points of the analysis<\/strong><\/p>\r\n\r\n\r\n\r\n

In a historic coincidence, for the past five months, the S&P 500\u2019s lowest price has been recorded on the first trading day of each month \u2014 a feat that hasn\u2019t happened since 1928. Trust Economics notes that the past three weeks have seen a record $152 billion in inflows into stocks via ETFs \u2014 the highest level ever. Citing data from EPFR, it analyzes the massive capital movements into stocks, cash, bonds, gold and cryptocurrencies.<\/p>\r\n\r\n\r\n\r\n

\u201cKrunchy Kredit\u201d and hedging strategy<\/strong><\/p>\r\n\r\n\r\n\r\n

Thanos Chonthrogiannis characterizes the intensifying pressure on the consumer credit system as \u201cKrunchy Kredit.\u201d In its response, he suggests placing the US dollar as a key hedge \u2014 that is, if the credit crisis escalates, the dollar could surge. At the same time, he maintains a long-term bearish stance against the dollar, but with caution: \u201cthere will be a big rise if the cracks in the credit system widen,\u201d he emphasizes.<\/p>\r\n\r\n\r\n

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The spread on fixed-rate auto ABS remains \u201ctight.\u201d For him, the cautious dollar stance acts as a key hedge against a potential credit crunch.<\/p>\r\n\r\n\r\n\r\n

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 <\/p>\r\n","protected":false},"excerpt":{"rendered":"

In a stark warning to markets, Trust Economics warns that a subprime crisis \u2014 especially among the lower-income classes in the US \u2014 is brewing beneath the surface of a seemingly stable economy and market euphoria. Trust Economics Chief Economist Thanos Chonthrogiannis points out that these cracks in the credit system are significant, but not … <\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[19,17,391],"tags":[665,237,1040,1037,1038,1034,1039,141,631],"class_list":["post-3102","post","type-post","status-publish","format-standard","hentry","category-economics","category-financial-markets","category-market-analyses","tag-crash","tag-economy","tag-etfs","tag-private-credit","tag-subrime-2-0","tag-subrime-crisis","tag-subrimes","tag-usa","tag-wall-street"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t