The Fed warned of a looming credit crunch. Americans say it’s already arrived.

Hey readers. Phil Rosen here. As you might guess about a writer, I love to read.

I've collected hundreds of books over the years, and stacks of paperbacks line the walls of my room. But the most useful knowledge I've learned comes from a very small fraction of those books.

This is the Pareto principle, more popularly known as the 80-20 rule: Roughly 80% of impact comes from 20% of the causes.

Once you start looking for it, the idea pops up everywhere. Twenty percent of your office carpet likely gets used 80% of the time. A small number of employees often power the lion's share of a company's revenue.

We just saw a more extreme distribution play out in the stock market, too. Just 20 names drove 90% of the gains in the S&P 500 over the first three months of the year.

Now that you have your water cooler fact for the day, let's get to the news.

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1. Americans are already feeling the effects of a credit crunch. The Fed has been warning of tightening credit conditions since last month's handful of bank failures, but policymakers spoke as if it were some future event.

A new survey from New York Fed economists paints a more pressing picture.

An increasing number of US households perceive that their access to credit has deteriorated, with the share of respondents saying so hitting a new high in March.

"Respondents were more pessimistic about future credit availability as well, with the share of households expecting it will be harder to obtain credit a year from now also rising," the economists said.

Remember, a so-called credit crunch means lenders raise the bar for borrowers, and people have to meet stricter parameters to get a loan.

The survey also found that the perceived probability of missing a minimum debt payment in the next three months climbed 0.3% to 10.9%.

But even before Silicon Valley Bank went belly-up, securing credit had already become more difficult over the last year, given the central bank raised interest rates nine consecutive times.

In the fourth quarter of 2022 — before the bank turmoil — nearly 45% of banks already made it more difficult for businesses to get a commercial and industrial loan, a separate Fed survey found.

"The credit crunch has started," Torsten Slok, chief economist at Apollo Global Management, said in response to the report.

Ultimately, borrowing snags across the economy only worsen the odds of a recession. And right now, according to billionaire hedge fund proprietor Paul Singer, the US is facing an "extraordinarily dangerous and confusing period."

"Valuations are still very high," he said. "There's a significant chance of recession. We see the possibility of a lengthy period of low returns in financial assets, low returns in real estate, corporate profits, unemployment rates higher than exist now and lots of inflation in the next round."

Are you feeling the impact of tighter credit conditions this month? Tweet me (@philrosenn) or email me (prosen@insider.com) to let me know.

In other news:

2. US stock futures rise early Tuesday, as investors brace for a consumer inflation reading Wednesday and an update on producer price pressures the day after. Meanwhile, bitcoin climbed above $30,000 for the first time since June 2022. Here are the latest market moves.

3. On the docket: Albertsons Companies, JD Sports, and more, all reporting.

4. Goldman Sachs listed 29 stocks that are set to beat Wall Street consensus earnings estimates. Investors can turn to these names for earnings growth this year, according to analysts at the bank. Here's their full list.

5. Housing is so unaffordable that banks are losing money for each mortgage they finance for the first time ever. In 2022, mortgage financiers lost an average of $301 per home loan. One reason for the negative profits? Tumbling demand for homes.

6. These 12 charts show just how bleak things look in the economy right now. Bank of America's top strategists shared a series of visualizations ranging from manufacturing activity to global earnings that all point toward recession. See for yourself.

7. Russia's economy is becoming increasingly "primitive," according to a Russian economist that Moscow targeted with a criminal case. To Konstantin Sonin, Putin's war on Ukraine is going to push the nation down the same troubling path as the regime of decades ago: "I think we are seriously going to follow the Soviet Union's path from the 1970s to the complete economic implosion of the late 1980s."

8. These four real estate investors bought property with none of their own savings. They shared how they raised capital to get started: "We're using other people's money to make us more money."

9. RBC recommended this batch of high-conviction stocks that look poised to deliver market-beating returns. Gains for these global names are coming regardless of market volatility, the strategists said. See the list of 30 stocks.

10. Nintendo stock rallied after "The Super Mario Bros Movie" broke box office records. Following the film's $377 million haul this weekend, JPMorgan said it expects the Mario film to surpass Frozen II in its total revenue — which means more than $1.45 billion.

Curated by Phil Rosen in New York. Feedback or tips? Tweet @philrosenn or email prosen@insider.com.

Edited by Jason Ma in Los Angeles and Hallam Bullock (@hallam_bullock) in London.