Showing posts from April, 2018

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Clearly, Not Everyone Is Getting Rich Off The Stock Market

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…

Here's What It Takes To Afford The Median Home In San Francisco

Couldn't help but notice this article from Bloomberg the other day featuring the fact that San Francisco's median home price just hit a new high of $1.6 million.

Just to make sure we're clear on terms, median price means that price at which half the transactions are higher and half the transactions are lower. Put a different way, this means that 1 out of every 2 homes currently available for sale in San Francisco is priced at $1.6 million or higher.

I got curious as to what that implies about affordability. What does it take, in the current mortgage rate environment, to purchase such a home?

Here's the "standard" answer, from

As it turns out, at least from the terms available on this website, one must be able to put down 20% to qualify for the 30-year jumbo loan needed to buy such a home. So, you have to be able to come up with $320,000 just to play. Assuming you can pony up that sort of cash, you get the privilege of tying yourself to a monthly…