Buy Now, Pay Later may DIE | Consumer is F**K'd

Buy Now, Pay Later may DIE | Consumer is F**K'd

Summary

~1.0 min read
The consumer faces a worsening outlook from a convergence of issues. Firstly, private credit is experiencing an investor exodus, severely impacting "buy now, pay later" (BNPL) lending. Funds are limiting redemptions, and BNPL firms like Affirm and Klarna are seeing massive stock drops, limiting consumer access to credit. Secondly, UBS warns the Iran war could push oil to $120-$150/barrel if the Strait of Hormuz stays closed, a level Goldman Sachs deems recessionary. UBS notes flat real incomes and declining savings make consumers highly vulnerable to inflation. Past oil shocks often triggered recessions, and the S&P 500 is currently overvalued compared to those periods. This dual squeeze—less available credit and higher expenses—creates a significant recessionary risk for consumers.