/biz/ - Business & Finance

>>16797382
I'd counter with:

The influx into bonds has also been a huge run-up, this is at the crux of the inverted yield curve. People are drastically seeking returns, yet want to feel safe and hedged, thus the half a trillion inflows into long term bonds specifically this year. Money market inflows are actually not that big of a deal, if you look at the overall numbers it correlates extremely well with extremely risk averse long term retirement accounts rotating out of their extended duration bonds during the run-up into less interest risk investments. It's also interesting to note MMF inflows continue to grow in tandem with increasing retirement.

Income to debt is also an interesting piece of data to look at. You're correct that it's lower now then it has been before the top of other bubbles like 2008, that is kind of misleading though if you consider the quality of the debt. Household debt, including payments, has historically been very high with mortage payments, which in turn caused the debt to buildup slower as equity was also built at some rate for homeowners. Within the last 11 years though car payments have nearly doubled in debt allocations for consumers, and student loans of course have done the same. Degrees and automobiles do not build equity and cannot be collateralized, so I think thats something interesting to look at. It means if a downturn does come for employment and employee pay in some form that nice debt to income ratio is likely to evaporate at a very quick pace. Almost everywhere else in the world besides america is at record levels of household debt however. There has been a global consumer debt binge, and while our economy may not reflect that all of the foreign ones do.

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