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Clearly, Not Everyone Is Getting Rich Off The Stock Market

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Well, the NY Fed was out today with its Quarterly Report on Household Debt and Credit for Q4 2017. Clearly, Americans are in a lot of debt. Take a look.


Just a couple of quick hits from the report. Total U.S. household debt rose $193 billion in the 4th quarter, to a new all-time peak of $13.15 trillion. That's 17.9% above the most recent trough in Q2 2013. Broken down by segment, what do you suppose was the largest gain in percentage terms? Credit cards, with a 3.2% increase. In the picture above, the widening gap represented by the red arrows reflects the fact that non-housing debt is rising at a faster pace than housing debt.

Here's what's troubling about that. Below is a picture of the stock market, as represented by the S&P 500 index, over that same period; from the most recent credit trough in Q2 2013 to the end of 2017.


And thus, the title of this article. Over that period, the S&P 500 index rose by 75%; from roughly 1,600 to 2,800. Apparently, however, the r…

Goldman Sachs - Increasing U.S. Debt Poses Fiscal Dangers

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Last week, I penned a quick article suggesting that not everyone is getting rich off the stock market. It highlighted the most recent NY Fed report which featured, among other things, that U.S. household debt reached an all-time high in Q4 2017, some 17.9% above its most recent trough in Q2 2013. Further, that the segment with the largest gains was credit cards, with a 3.2% increase. The article went on to feature the sharp rise in the U.S. stock market over that same period and posited that, clearly, the rising tide was not lifting all boats. Finally, it raised the question of what this might portend for U.S. households should interest rates rise moving forward.

Today, Goldman Sachs is out with a piece suggesting the U.S. government faces exactly this same challenge. Here's a quick picture from the linked Bloomberg article.


The Heisenberg, whose economic and geopolitical commentary I find most helpful, has recently featured the concept that current U.S. fiscal policy of piling sti…

Clearly, Not Everyone Is Getting Rich Off The Stock Market

Image
Well, the NY Fed was out today with its Quarterly Report on Household Debt and Credit for Q4 2017. Clearly, Americans are in a lot of debt. Take a look.


Just a couple of quick hits from the report. Total U.S. household debt rose $193 billion in the 4th quarter, to a new all-time peak of $13.15 trillion. That's 17.9% above the most recent trough in Q2 2013. Broken down by segment, what do you suppose was the largest gain in percentage terms? Credit cards, with a 3.2% increase. In the picture above, the widening gap represented by the red arrows reflects the fact that non-housing debt is rising at a faster pace than housing debt.

Here's what's troubling about that. Below is a picture of the stock market, as represented by the S&P 500 index, over that same period; from the most recent credit trough in Q2 2013 to the end of 2017.


And thus, the title of this article. Over that period, the S&P 500 index rose by 75%; from roughly 1,600 to 2,800. Apparently, however, the r…