tag:blogger.com,1999:blog-2098432983500045934.post6057872931416284723..comments2024-03-12T22:19:32.339-04:00Comments on The New Arthurian Economics: Household Debt as a Percent of Total DebtThe Arthurianhttp://www.blogger.com/profile/16501331051089400601noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-2098432983500045934.post-65641161155873880032014-06-06T07:19:45.496-04:002014-06-06T07:19:45.496-04:00Art wrote:
"You can also see two previous pe...Art wrote:<br /><br />"You can also see two previous peaks, one around 1966 and one around 1980, both clearly higher than the housing bubble peak. So, why was the housing bubble a problem?"<br /><br />The problem was imbalance. For 60 years US households kept their liabilities in nearly perfect balance with their home equity and then suddenly found themselves $8 trillion out of balance...(see graph): <br />http://research.stlouisfed.org/fred2/graph/?g=CGm<br /><br />That is about $50K per household drop in home equity while liabilities continued to grow. And there are still years to go before the balance is restored.<br /><br />It is like being informed that half your savings have been wiped out - you don't react by going out and buying a new car (or by buying anything):<br /><br />http://advisorperspectives.com/dshort/charts/indicators/Retail-Sales.html?Retail-Sales-adjusted-for-population-and-inflation.gif<br /><br />And since one person's spending is another one's income the drop in purchasing means 10 million people lose their jobs.jimnoreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-43451143322931348012014-06-05T20:34:44.211-04:002014-06-05T20:34:44.211-04:00"Anyway, big picture - non-finance corporate ..."Anyway, big picture - non-finance corporate debt down, federal down, household down... What's up?"<br /><br />Exactly, Jazz. Stay tuned for Part Four! :)<br />The Arthurianhttps://www.blogger.com/profile/16501331051089400601noreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-23799984193408830642014-06-05T13:26:45.944-04:002014-06-05T13:26:45.944-04:00Maybe look at something like debt service/disposab...Maybe look at something like debt service/disposable income?<br /><br />Anyway, big picture - non-finance corporate debt down, federal down, household down.<br /><br />What's up?<br /><br />Cheers!<br />JzBJazzbumpahttps://www.blogger.com/profile/07337490817307473659noreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-62722834506954504672014-06-05T06:42:00.281-04:002014-06-05T06:42:00.281-04:00You can see the housing bubble in this debt, start...You can see the housing bubble in this debt, starting around the year 2000 and peaking around 28% of TCMDO debt.<br /><br />You can also see two previous peaks, one around 1966 and one around 1980, both clearly higher than the housing bubble peak. So, why was the housing bubble a problem?<br /><br />Maybe because 28 percent of a really really big number is more of a problem than 30 or 31 percent of a much smaller number. Maybe that's it.<br />The Arthurianhttps://www.blogger.com/profile/16501331051089400601noreply@blogger.com