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To: Thomas M. who wrote (116178)	8/8/2001 7:24:07 PM
From: Box-By-The-Riviera™	Read Replies (1) \| Respond to of 436258

cool post!

To: Thomas M. who wrote (116178)	8/8/2001 10:24:12 PM
From: Ilaine	Read Replies (4) \| Respond to of 436258

Total household net worth is at an all-time high, as well. I think that's more meaningful than comparing debt to GDP. Using data from the Fed's most recent Flow of Funds Accounts, Table B.100.e, dividing by annual census data, here is the PER CAPITA household net worth from 1990 to 2000. Note that net worth is calculated by subtracting total liabilities from total assets. Note that this is household net worth, not business, not government. That means that mortgages are subtracted from homeowner's equity, credit card debt is subtracted, all the minuses are subtracted from all the pluses. In real dollars, not inflation-adjusted, for every man, woman and child in America, the total net worth per John 6Pack, Jane 6Pack, and Junior 6Pack was: 2000 $148,640 1999 $153,511 1998 $136,450 1997 $124,911 1996 $112,911 1995 $103,612 1994 $94,151 1993 $92,423 1992 $88,869 1991 $86,485 1990 $81,836 Just to beat a dead horse, I used aggregate data for households, but this isn't data per household. ~~~~~~~~~~~~~~~~~~~ Which, IMO, has jack anything to do with the markets, and doesn't do a whole lot of good in predicting a recession/depression. I am just pointing out to all the people who jump up and down screaming that debt is at an all-time high, so is equity. I have yet to see any convincing data that debt causes depressions. Would that it were that simple.

To: Thomas M. who wrote (116178)	8/9/2001 10:50:25 AM
From: Mark Adams	Read Replies (2) \| Respond to of 436258

I wasn't going to bother commenting, but I changed my mind. In the 80's, we had high inflation with no assurance it would retreat (real interest rates may not have been as extreme as nominal rates would leave you to believe). The worry of the day was the exponential growth of the Federal debt would swallow up all of America's productive capacity within years, bankrupting both the buck and the government. Gold, Guns and Food in the bunker. I doubt many individuals saw a future with a federal budget surplus, short term interest rates below 5%, and unemployment below 5%, all supporting a great bull market. You might have a valid point- that lower interest rates lower the debt service cost as a percentage of disposable income. This is countered by the fact that rates on revolving debt are little changed, and this type of debt makes up a larger portion of the non-mortgage debt today.