Turns out, to the greatest consternation of some folks on Wall Street, millennials are smart.

"They don't trust the stock market," Goldman Sachs determined in a survey. Only 18% thought the stock market was "the best way to save for the future." It's a big deal for Wall Street because millennials, having surpassed the baby boomers, are now the largest US generation — and the future source of bonus checks for Wall Street.

"Millennials will become the most important financial generation in America, and the industry will have to adapt to meet their needs," the report warned.

The older ones in the cohort have seen the market soar, collapse, re-soar, re-collapse, re-soar ... They've seen what amount of monetary gyrations the Fed undertook to reinflate stocks this time around. They've read about the stock-market scandals and manipulations, high-frequency trading, dark pools, and spoofing. They've seen that the little guy gets mauled, that you can make a ton of money if you get in at the right time and get out before it's too late. They've seen hard-working people get wiped out. They'd rather play with their apps than mess with that infernal machine.

But they do have a problem, smart as they are: They're carrying on their shoulders a good part of the $1.2 trillion of student debt outstanding. In 2004, Americans under the age of 30 had $146 billion in student loans, according to Equifax. By 2014, in just 10 years, the student-debt burden of the under-30 cohort had skyrocket by 152% to $369 billion.

Delinquencies are rising. Some of the millennials have gotten caught up in the for-profit-college scandals that have left them with lots of debt and little education. Now they're waiting for a taxpayer bailout. It has been the school of hard knocks for them.

But there are consequences. Equifax determined in its analysis that millennials aren't borrowing money to buy homes as their predecessors a decade ago did — "a trend that may have as much to do with high levels of student debt and poor job prospects as it has to do with trauma from the housing bust."

The analysis also confirmed our suspicions that those earning less than $30,000 per year — so for example, lawyers working as bartenders — face the highest risk of delinquency. Then with each $10,000 increase in income, the delinquency rate drops by 20%. A "phenomenon that demonstrates the strain student debt puts on young consumers starting their careers," as Equifax put it.

Unlike their predecessors, millennials still have trouble staying current on their student loans as late as four years into a job, which is where the delinquency rates of their predecessors began to improve.

And given these realities, millennials are establishing a new trend: They're not piling on mortgages. In 2006, 33.2% of their predecessors under 30 who had student debt also had mortgage debt. By 2014, just eight years later, the number plunged to 20.9%.

But it's not just the additional burden of student loans; even Millennials who don't have student loans aren't borrowing to buy a home: In 2006, 29.6% of Americans under 30 without student loans had mortgage debt. By 2014, their number dropped to 21.7%.

When the New York Fed asked renters in its Survey of Consumer Expectations why they hadn't bought a home yet, for crying out loud, 55.7% responded: "too much debt/not saved enough." The problem is only getting worse. With rents rising sharply, with incomes nearly stagnant, and with home prices soaring, renters won't be able to save up enough money for even a puny 3% down payment. Just one of the many distortions Housing Bubble 2 is leaving behind in its wake.

"Equifax data suggests that the conventional theory — millennials are the rental generation and uninterested in home ownership — is only a part of the story," Dennis Carlson, deputy chief economist at Equifax, said. "Importantly, large amounts of student debt and less than stellar job prospects for recent college graduates make the dream of home ownership shine less brightly than in the past."

So they don’t trust the stock market, and they're not borrowing money to buy overpriced homes either, even with interest rates at historic lows. They'd rather rent, remain flexible, live in urban centers rather than distant suburbs, and do their thing. The perfect nightmare generation for Wall Street.

Why does this economy "feel" so much worse than the overall economic numbers, lousy as they are? Because we get hit by per-capita reality. Read … Why This Economy Feels So Lousy