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Seems like the data is mostly in nominal terms. What I don't see is debt to income, debt to total assets/net worth, or debt to home value data.
I'm not convinced that carrying or refinancing a mortgage at 3% (especially if you can take the federal tax exemption) is necessarily a bad idea. Our last new car loan from the local credit union was at 1.9%. Paid it off a year early because it "felt good" - but actually would have done better investing that sum in a diversified portfolio of equities and bonds - especially if it could have been left to grow tax-deferred.
Student debt is worrisome. Increase in auto debt is somewhat understandable as cars are coming with more and more equipment. The '17 model I rented recently in Florida felt more like driving a computer on wheels. Couldn't figure out how to switch off the brightly lit monitor on the dash or I would have - but I digress.
Of course a rise in delinquencies is a warning sign - and some here have already sounded the alarm as that issue might affect the high yield market.
The Bloomberg case and data look completely compelling, meaning irrefutable and properly argued. I am surprised at the other cites. The FT article is modulated to some extent and gets into student loans. But some editors are dimwits. It's their job to insist on context and proper comparables.
Comments
Seems like the data is mostly in nominal terms. What I don't see is debt to income, debt to total assets/net worth, or debt to home value data.
I'm not convinced that carrying or refinancing a mortgage at 3% (especially if you can take the federal tax exemption) is necessarily a bad idea. Our last new car loan from the local credit union was at 1.9%. Paid it off a year early because it "felt good" - but actually would have done better investing that sum in a diversified portfolio of equities and bonds - especially if it could have been left to grow tax-deferred.
Student debt is worrisome. Increase in auto debt is somewhat understandable as cars are coming with more and more equipment. The '17 model I rented recently in Florida felt more like driving a computer on wheels. Couldn't figure out how to switch off the brightly lit monitor on the dash or I would have - but I digress.
Of course a rise in delinquencies is a warning sign - and some here have already sounded the alarm as that issue might affect the high yield market.
Regards,
Ted
Seeing A Debt Crisis That Isn't Really There
https://www.bloomberg.com/view/articles/2017-05-18/oh-no-not-another-debt-crisis
Household Debt: Graphic:
http://ritholtz.com/2017/05/household-debt-2/
:
https://mobile.nytimes.com/2017/05/17/business/dealbook/household-debt-united-states.html
https://wsj.com/articles/u-s-household-debts-hit-record-high-in-first-quarter-1495033206
https://usatoday.com/story/money/2017/05/17/household-debt/101774626/
money.cnn.com/2017/05/17/pf/household-debt-tops-2008/
https://ft.com/content/e45fd8aa-3afb-11e7-821a-6027b8a20f23
cnbc.com/2017/05/17/household-debt-levels-higher-than-2008-debt-levels.html
Actually, frankly I don't know what to call "News" any more. Most of what is on TV is not "News", it is just BS.