Americans are saving much less and spending more – even though their real disposable incomes are unchanged.

The savings rate just fell to a 10-year low of 3.1%, according to the Commerce Department.

What’s most worrisome to economists is that savings rates below 4% occurred before the last two major market crashes, as people felt what turned out to be a false sense of security, due to rising stock prices and/or home values.

Looks like it’s déjà vu all over again…

I recently wrote how the current bull market is the second longest in modern history. If it manages to last until summer, it will become the longest-running bull market at 9½ years.

A bull market has never made it to its 10th birthday.

In addition, historically, the longer a bull market lasts, the harder and deeper it crashes.

Which indicates the optimism that’s caused Americans to save less and spend more is misplaced. And, to take a line from the movie Grease, that means a lot of people are cruisin’ for a bruisin’.

The vast majority of Americans have little or no savings outside their retirement accounts, according to the latest Federal Reserve Survey of Consumer Finances. [Read more…] “Savings Rate Falls to 10-Year Low”