Why has market gone crazy? And outlook?

[Deertick]

Originally Posted by japhi

Demand on everything increased due to easy access to cheap money. The stimulus cheques were great but how many people saw their house appreciate by 100k? Lots, and people leveraged up. Literally everything ran hot. So hot that we can expect money to get significantly more expensive and if the Fed ian’t careful a possible recession.

Not a doomer take but money was cheap and east and folks blew their brains out on debt. That debt is about to get significantly more expensive. Asset prices will follow.

Sounds good, but It doesn't look like the Fed data supports that theory in relation to taking on debt to finance cards.

HELOC loans dropped by $45B from Q3 2020 to Q3 2021. Credit card debt dropped by $3B. Autos up $80B.
New mortgages (not cash out refi) jumped as people took advantage of the low rates and jump in equity to sell and move up. Here, I believe you are right. The piper is coming.

Once people that didn't 'need' the money realized such, most paid off debt or saved it. Those who needed it, used it for those needs.

*Opinion* The people who used "cheap money" to purchase cards (and meme stocks and crypto) are the same who would use a payday loan to go to a casino.

There aren't many, and they surely could not move the market.