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> We've encouraged everyone to lever out as far as possible Household debt to GDP has gone down since the low interest rate environment kicked off in 2010. Sa

by bko 5y ago

> We've encouraged everyone to lever out as far as possible Household debt to GDP has gone down since the low interest rate environment kicked off in 2010. Same is true for household debt as a percentage of personal income. Although I will note that its debt payments, not absolute amount of debt and obviously lower rates lower the interest portion of debt payments. I agree there is something troubling going on but it's not a personal debt crisis https://fred.stlouisfed.org/series/HDTGPDUSQ163N https://fred.stlouisfed.org/series/HDTGPDUSQ163N https://fred.stlouisfed.org/series/TDSP https://fred.stlouisfed.org/series/TDSP

lumost 5y ago
There are many troubling things happening at the moment. From a US centric point of view. - Inflation is at it's highest since the 1970s in the US - There is a large military conflict in Europe. - There are shortages of chips, energy, and food on the horizon. - Unprofitable growth stocks have valuations as high as 100:1 on revenue. - There is increasing militarized tension on many portions of the global supply chain (Russia:EU, China:US, China:Taiwan). - Housing has appreciated by up to 40% YoY in major US cities. - A global pandemic has introduced lockdowns, and potentially permanently changed people's relationship with work. While killing a million people. - The US legislative branch is utterly paralyzed. - The US business cycle hasn't seen a recession since ~2010. I'm sure I missed a few, but the fact that a recession hasn't happened should be more surprising than a recession happening.
- deleted 5y ago
  [deleted]
- miohtama 5y ago
  There is also financialization that has been going for a while: https://en.wikipedia.org/wiki/Financialization https://en.wikipedia.org/wiki/Financialization Finance industry share going up vs. Real economy output, which could be cause or the consequence of high valuations.
  - lumost 5y ago
    Could also be an artifact of a global economy based around the dollar. Quoting Asimov's description of Trantor in Foundation. > This enormous population was devoted almost entirely to the administrative necessities of Empire, and found themselves to be few for the complications of the task.
- monkeynotes 5y ago
  Let's not forget COVID is not done yet. We've had two years of restrictions and now it seems like folks are behaving as if it's over. Mutations are propagating and yet most people are out and about without masks and the dialog around vaccines has all but dried up. The ongoing confusion about what this disease's risk factor is worrisome. First I think people have much more distrust in science and government. There is still a deep divide amongst the population and I am concerned about how we will handle another wave of restrictions whilst the economy buckles and a global war is on the horizon.
  - QuarterReptile 5y ago
    COVID is endemic, which is functionally equivalent to 'over'. Just as there are bad flu seasons, there will likely be bad COVID seasons, but overall Africa has blessed the whole world with a relatively benign and incredibly infectious variant that keeps immune systems attuned without crashing. We have overwhelming returned to normal behavior around illness, which preferentially propagates mild pathogens by only stranding really sick people at home (where they don't spread things), while the rest of us go around unknowingly sharing our mildly inconvenient Omicron and omicron++ with one another.
  - aftbit 5y ago
    In my neck of the woods, there would need to be a serious new threat to motivate people back into school closings and lockdowns. Heck, we're still below 60% fully vaccinated and only 30% have received any boosters. My states's population is done with COVID, even if COVID isn't done with us. That said, SARS-CoV-2 is endemic now, with known animal reservoirs. We're not going to stop it with NPIs anymore.
  - godshatter 5y ago
    I'm out and about without wearing a mask because the numbers of deaths per day due to covid in my state has dropped down to single digit numbers and the number of current cases is currently 1/30 of where it was at it's peak. Should those numbers start going back up, I'll start taking more precautions. We have to start living life again where we are able to or a series of economic woes will become the new normal instead of a single correction due to the pandemic.
- nightski 5y ago
  I'm sure many of us saw the GDP numbers this morning and thought - finally some data that makes sense!
- beamatronic 5y ago
  All of these look like they were caused by politicians making bad choices
omginternets 5y ago
Could that also be because people are living paycheck to paycheck and not buying things like houses and cars anymore? Relatedly: a decrease in debt is exactly what I would expect from an Uberized economy where nobody owns anything anymore. I’m not sure this is such a good measure of economic health. Stated differently: a small amount of debt is an indication that people are investing in things. That’s usually a good sign.
- antiterra 5y ago
  > Could that also be because people are living paycheck to paycheck and not buying things like houses and cars anymore? No. New car sales are currently bottlenecked by supply chain issues, not demand. Housing sale demand is dropping, but still very solid compared to inventory. At some point, this supply restriction becomes inflationary. If you can buy a new car and resell it a month later for more than you paid, the MSRP is below demand. Since consumers react poorly to price increases, this is also coupled by reduction in quality or service.
newaccount2021 5y ago

by bko 5y ago

lumost 5y ago

There are many troubling things happening at the moment. From a US centric point of view. - Inflation is at it's highest since the 1970s in the US - There is a large military conflict in Europe. - There are shortages of chips, energy, and food on the horizon. - Unprofitable growth stocks have valuations as high as 100:1 on revenue. - There is increasing militarized tension on many portions of the global supply chain (Russia:EU, China:US, China:Taiwan). - Housing has appreciated by up to 40% YoY in major US cities. - A global pandemic has introduced lockdowns, and potentially permanently changed people's relationship with work. While killing a million people. - The US legislative branch is utterly paralyzed. - The US business cycle hasn't seen a recession since ~2010. I'm sure I missed a few, but the fact that a recession hasn't happened should be more surprising than a recession happening.

deleted 5y ago
[deleted]
miohtama 5y ago
There is also financialization that has been going for a while: https://en.wikipedia.org/wiki/Financialization https://en.wikipedia.org/wiki/Financialization Finance industry share going up vs. Real economy output, which could be cause or the consequence of high valuations.
- lumost 5y ago
  Could also be an artifact of a global economy based around the dollar. Quoting Asimov's description of Trantor in Foundation. > This enormous population was devoted almost entirely to the administrative necessities of Empire, and found themselves to be few for the complications of the task.
monkeynotes 5y ago
Let's not forget COVID is not done yet. We've had two years of restrictions and now it seems like folks are behaving as if it's over. Mutations are propagating and yet most people are out and about without masks and the dialog around vaccines has all but dried up. The ongoing confusion about what this disease's risk factor is worrisome. First I think people have much more distrust in science and government. There is still a deep divide amongst the population and I am concerned about how we will handle another wave of restrictions whilst the economy buckles and a global war is on the horizon.
- QuarterReptile 5y ago
  COVID is endemic, which is functionally equivalent to 'over'. Just as there are bad flu seasons, there will likely be bad COVID seasons, but overall Africa has blessed the whole world with a relatively benign and incredibly infectious variant that keeps immune systems attuned without crashing. We have overwhelming returned to normal behavior around illness, which preferentially propagates mild pathogens by only stranding really sick people at home (where they don't spread things), while the rest of us go around unknowingly sharing our mildly inconvenient Omicron and omicron++ with one another.
- aftbit 5y ago
  In my neck of the woods, there would need to be a serious new threat to motivate people back into school closings and lockdowns. Heck, we're still below 60% fully vaccinated and only 30% have received any boosters. My states's population is done with COVID, even if COVID isn't done with us. That said, SARS-CoV-2 is endemic now, with known animal reservoirs. We're not going to stop it with NPIs anymore.
- godshatter 5y ago
  I'm out and about without wearing a mask because the numbers of deaths per day due to covid in my state has dropped down to single digit numbers and the number of current cases is currently 1/30 of where it was at it's peak. Should those numbers start going back up, I'll start taking more precautions. We have to start living life again where we are able to or a series of economic woes will become the new normal instead of a single correction due to the pandemic.
nightski 5y ago
I'm sure many of us saw the GDP numbers this morning and thought - finally some data that makes sense!
beamatronic 5y ago
All of these look like they were caused by politicians making bad choices

omginternets 5y ago

Could that also be because people are living paycheck to paycheck and not buying things like houses and cars anymore? Relatedly: a decrease in debt is exactly what I would expect from an Uberized economy where nobody owns anything anymore. I’m not sure this is such a good measure of economic health. Stated differently: a small amount of debt is an indication that people are investing in things. That’s usually a good sign.

antiterra 5y ago
> Could that also be because people are living paycheck to paycheck and not buying things like houses and cars anymore? No. New car sales are currently bottlenecked by supply chain issues, not demand. Housing sale demand is dropping, but still very solid compared to inventory. At some point, this supply restriction becomes inflationary. If you can buy a new car and resell it a month later for more than you paid, the MSRP is below demand. Since consumers react poorly to price increases, this is also coupled by reduction in quality or service.

newaccount2021 5y ago