🌍 Consumer credit bubble bursts into a credit crisis
Consumers are bridging the gap between ~10% price inflation and a 2.6% real-wage decline by borrowing (~$60B of new consumer credit in a single month, the biggest jump in over a decade) rather than cutting their lifestyle. Because consumer behaviour adjusts far slower than investor behaviour, the borrowing keeps building into the recession and breaks as a consumer credit crisis within nine to twelve months.
0
CONVICTION
peaked 65.4 GREEN
EMBER
band
▼ SHORT COF
expression · bearish macro
HIT
outcome · R +24.1% · α +19.9%
2023-05-13
window closed
⚖ Why this verdict
fully deterministic — evaluate.py replays this from daily closes; nothing below is editable or hand-set
- Window: 2022-05-13 → 2023-05-13 — first mention + 12-month horizon, then the window locks.
- The call: ▼ SHORT COF (primary play). COF fell 24.1% over the window → direction-adjusted R = +24.1% (the call made money).
- Benchmark: holding SPY over the same window returned +4.2%
→ α = +24.1 − (+4.2) = +19.9%
— what this call made or lost against just owning the index. This is the number the verdict uses.
Stock-selection read: +28.3% — did COF move the predicted way relative to the market. The two only differ on a SHORT: this call was right about direction relative to the index but still cost money versus holding it.
- Rule fired:
▶ HIT — R ≥ +10% AND α ≥ +5 ✓ (R 24.1, α 19.9)· PARTIAL — R ≥ +5% OR α ≥ 0· MISS — everything else
- Credit: supporters of a HIT earn 1.0 each, opposers the inverse — this feeds the scoreboard weights. supported: Chamath, Friedberg, Jason, Sacks | proxy-sensitive: XLY→MISS (+2.0%)
Conviction timeline
bands: green ≥ 65 · watch ≥ 45 · ember ≥ 15
Plays vs SPY · % since first mention (2022-05-13)
Plays
| expression | symbol | kind | relevance | rationale |
|---|---|---|---|---|
| ▼ SHORT | COF | stock | PRIMARY | largest listed monoline consumer credit-card lender - card charge-offs are the direct read on a consumer credit bust |
| ▼ SHORT | SYF | stock | adjacent | private-label/store-card issuer skewed to the subprime borrower doing the revolving |
| ▼ SHORT | XLY | etf | adjacent | credit-funded discretionary spend rolls over when the borrowing stops |
Mention log
Friedberg
macro w=0.93 · n=40
· E80 (2022-05-13) · explicit_prediction · strength 3
▶ 1:33:33
SUPPORT
· horizon 12mo
“I really think we're going to run into a consumer credit bubble here. ... if we actually do hit a recession and we don't see real wage growth and the consumer credit bubble continues to grow, we're going to face a credit crisis and call it nine to, you know, nine months to a year”
Chamath
macro w=1.06 · n=47
· E87 (2022-07-14) · sentiment · strength 2
▶ 45:46
SUPPORT
“And so where is the stopping and the slowing down of spending? It just may be reflexively this thing where everybody feels like to be, you know, to have the polite dinner conversation. They have to talk about how they're pulling back.”
Friedberg
macro w=0.93 · n=40
· E91 (2022-08-13) · explicit_prediction · strength 3
▶ 41:36
SUPPORT
“And I've mentioned this multiple times now that it's the thing I would watch most closely. While there are core elements of the current economy that look strong, there are real concerns around whether consumers can keep up with their debt payments in the months and quarters ahead.”
Chamath
macro w=1.06 · n=47
· E91 (2022-08-13) · sentiment · strength 2
▶ 44:46
BRUSH_OFF
“I mean, I just think that there is, like, Friedberg has his pet issue, I have my pet issue, Sacks has his pet issue. You ask 100 economists, they'll have their own pet issue, housing affordability, whatever it is. The point is, we have 100 whack-a-mole problems.”
Jason
macro w=1.27 · n=30
· E98 (2022-10-01) · explicit_prediction · strength 2
▶ 35:48
SUPPORT
“But then the person whose variable interest mortgage just kicked in has $500 less a month in savings, so they're now not going to buy an iPhone 14 They're not going to upgrade their car every six years.”
Friedberg
macro w=0.93 · n=40
· E103 (2022-11-05) · explicit_prediction · strength 2
▶ 44:56
SUPPORT
· horizon 24mo
“It's just alarming statistics because if most people have most of their personal net worth tied up in their home asset and their home values are declining or going to decline, and we're seeing this dramatic spike in consumer credit in the US, it paints a really ugly picture for the next two years.”
Who built this conviction
each voice's total force on the score — supports and opposes from every mention, weighted exactly as the replay applied them · share = % of all mention-driven movement
⏳ decay drained -66.3 over the idea's life — that's time passing, attributed to no one
Score events
| episode | kind | Δ | after | note |
|---|---|---|---|---|
| E80 2022-05-13 | init | +47.2 | 47.2 | E80 born by Sacks (explicit_prediction x3) [w=1.12] |
| E80 2022-05-13 | oppose | -12.8 | 34.5 | E80 Chamath opposes x2 [w=1.06] |
| E80 2022-05-13 | reinforce | +16.4 | 50.8 | E80 Friedberg support x3 (new voice) [w=0.93] |
| E81 2022-05-23 | decay | -2.0 | 48.8 | E81 silent |
| E82 2022-05-24 | decay | -2.0 | 46.9 | E82 silent |
| E84 2022-06-24 | decay | -1.9 | 45.0 | E84 silent |
| E85 2022-06-30 | decay | -1.8 | 43.2 | E85 silent |
| E86 2022-07-08 | decay | -1.7 | 41.5 | E86 silent |
| E87 2022-07-14 | reinforce | +9.3 | 50.8 | E87 Chamath support x2 (flipped from oppose) [w=1.06] |
| E87 2022-07-14 | reinforce | +5.5 | 56.3 | E87 Friedberg support x1 [w=0.93] |
| E88 2022-07-22 | decay | -2.3 | 54.0 | E88 silent |
| E89 2022-07-29 | decay | -2.2 | 51.9 | E89 silent |
| E90 2022-08-05 | reinforce | +6.7 | 58.5 | E90 Friedberg support x2 [w=0.93] |
| E91 2022-08-13 | reinforce | +6.9 | 65.4 | E91 Friedberg support x3 [w=0.93] |
| E91 2022-08-13 | brush_off | -22.9 | 42.5 | E91 Chamath brushes off |
| E92 2022-08-20 | decay | -1.7 | 40.8 | E92 silent |
| E93 2022-08-26 | decay | -1.6 | 39.2 | E93 silent |
| E94 2022-09-01 | decay | -1.6 | 37.6 | E94 silent |
| E95 2022-09-10 | decay | -1.5 | 36.1 | E95 silent |
| E96 2022-09-17 | decay | -1.4 | 34.7 | E96 silent |
| E97 2022-09-23 | decay | -1.4 | 33.3 | E97 silent |
| E98 2022-10-01 | reinforce | +10.6 | 43.9 | E98 Chamath support x2 (flipped from brush_off) [w=1.06] |
| E98 2022-10-01 | reinforce | +16.0 | 59.9 | E98 Jason support x2 (new voice) [w=1.27] |
| E99 2022-10-07 | decay | -2.4 | 57.5 | E99 silent |
| E100 2022-10-14 | decay | -2.3 | 55.2 | E100 silent |
| E101 2022-10-22 | decay | -2.2 | 53.0 | E101 silent |
| E102 2022-10-29 | decay | -2.1 | 50.9 | E102 silent |
| E103 2022-11-05 | reinforce | +6.8 | 57.7 | E103 Friedberg support x2 [w=0.93] |
| E105 2022-11-19 | decay | -2.3 | 55.4 | E105 silent |
| E106 2022-12-03 | decay | -2.2 | 53.2 | E106 silent |
| E107 2022-12-10 | decay | -2.1 | 51.1 | E107 silent |
| E108 2022-12-16 | decay | -2.0 | 49.0 | E108 silent |
| E109 2022-12-24 | decay | -2.0 | 47.0 | E109 silent |
| E110 2023-01-06 | decay | -1.9 | 45.2 | E110 silent |
| E111 2023-01-13 | decay | -1.8 | 43.4 | E111 silent |
| E112 2023-01-20 | decay | -1.7 | 41.6 | E112 silent |
| E113 2023-01-27 | decay | -1.7 | 40.0 | E113 silent |
| E114 2023-02-04 | decay | -1.6 | 38.4 | E114 silent |
| E115 2023-02-11 | decay | -1.5 | 36.8 | E115 silent |
| E116 2023-02-17 | decay | -1.5 | 35.4 | E116 silent |
| E118 2023-03-03 | decay | -1.4 | 33.9 | E118 silent |
| E119 2023-03-11 | decay | -1.4 | 32.6 | E119 silent |
| E120 2023-03-17 | decay | -1.3 | 31.3 | E120 silent |
| E121 2023-03-24 | decay | -1.3 | 30.0 | E121 silent |
| E122 2023-03-31 | decay | -1.2 | 28.8 | E122 silent |
| E123 2023-04-07 | decay | -1.2 | 27.7 | E123 silent |
| E124 2023-04-14 | decay | -1.1 | 26.6 | E124 silent |
| E125 2023-04-21 | decay | -1.1 | 25.5 | E125 silent |
| E126 2023-04-28 | decay | -1.0 | 24.5 | E126 silent |
| E128 2023-05-12 | decay | -1.0 | 23.5 | E128 silent |