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The Daily Hodl 2025-05-11 07:04:55

Billionaire Chamath Palihapitiya Warns One Metric Hinting US Liquidity Crisis, Says Credit Health of Americans Blinking Yellow

Billionaire Chamath Palihapitiya is warning that one metric suggests that the financial health of American consumers is deteriorating. In a new episode of the All-In Podcast, Palihapitiya says he’s keeping a close watch on the price-to-book ratios of subprime lenders Capital One and Credit Acceptance. Investors use the price-to-book ratio to evaluate whether asset-heavy firms like banks are undervalued or overvalued. But the billionaire venture capitalist notes that the financial metric can also be used as an early warning signal for a potential liquidity crisis in the US. “What it shows you is the spread where Credit Acceptance is versus Capital One. And the point in bringing this up is that when you look back historically around these subprime lenders, whenever these guys start to see price to books just start to escalate and get to highs, it tends to portend a liquidity crisis. It tends to show that things are about to roll over. And from that perspective, I think there are some blinking yellow lights that the Fed needs to take seriously.” Source: All-In Podcast/YouTube The billionaire also says that the Fed can get ahead of a potential liquidity crisis by abruptly cutting rates. “Some of the most critical leading indicators, particularly around liquidity and the credit health of the American consumer are blinking yellow. So right now, they are choosing to ignore these historically useful leading indicators.” Last week, the Federal Reserve decided to keep interest rates steady at 4.25% to 4.5%, citing its dual mandate of achieving maximum employment and inflation at 2% over the long run. Follow us on X , Facebook and Telegram Don't Miss a Beat – Subscribe to get email alerts delivered directly to your inbox Check Price Action Surf The Daily Hodl Mix Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing. Generated Image: DALLE3 The post Billionaire Chamath Palihapitiya Warns One Metric Hinting US Liquidity Crisis, Says Credit Health of Americans Blinking Yellow appeared first on The Daily Hodl .

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