Comments on: Household debt as an indicator of secular bull and bear markets http://www.creditwritedowns.com/2009/10/household-debt-as-an-indicator-of-secular-bull-and-bear-markets.html Finance, Economics and Markets Fri, 10 Feb 2012 00:37:00 +0000 hourly 1 By: doctorx http://www.creditwritedowns.com/2009/10/household-debt-as-an-indicator-of-secular-bull-and-bear-markets.html#comment-57258 doctorx Wed, 07 Oct 2009 21:11:00 +0000 http://www.creditwritedowns.com/2009/10/household-debt-as-an-indicator-of-secular-bull-and-bear-markets.html#comment-57258 IMO the post WW II bull market in stocks arose from a DJIA with a 7% div yield, a single digit P/E and so many Graham and Dodd "net-net" stocks that in 1958 Graham found dozens of net-nets on the NYSE. When guns and butter came in under LBJ, ALL financial assets underperformed vs gold/oil. When the high interest rate policy and monetarism came in under Volcker, you will find if you do the math that from (say) 1980 or 1982 till now, a zero-coupon 30 yr T-bond outperformed stocks with less risk and volatility. If more fairly you substitute a high-grade corporate bond for the T-bond, the outperformance of bonds widens (the same if you take a high-grade muni). IMO researching this specific relationship is a waste of your valuable time. Consumer debt has been sold by the Merchants of Debt as part of the process of transforming wealth to the financial sector. It goes hand in hand with the ongoing reward to JPMorgan/Sachs of selling more and more debt (now governmental as for now the other sectors are constrained). IMO the healthiest thing for the country and our economy would be for debt on all levels to be reduced (per your companion post). If this were done in an organized way, it could be assoc w a major improvement in the business climate rather than the current trajectory of a better business climate for casino/crony capitalism. OR, other relationships could hold. IMO the post WW II bull market in stocks arose from a DJIA with a 7% div yield, a single digit P/E and so many Graham and Dodd “net-net” stocks that in 1958 Graham found dozens of net-nets on the NYSE.

When guns and butter came in under LBJ, ALL financial assets underperformed vs gold/oil.

When the high interest rate policy and monetarism came in under Volcker, you will find if you do the math that from (say) 1980 or 1982 till now, a zero-coupon 30 yr T-bond outperformed stocks with less risk and volatility. If more fairly you substitute a high-grade corporate bond for the T-bond, the outperformance of bonds widens (the same if you take a high-grade muni).

IMO researching this specific relationship is a waste of your valuable time. Consumer debt has been sold by the Merchants of Debt as part of the process of transforming wealth to the financial sector. It goes hand in hand with the ongoing reward to JPMorgan/Sachs of selling more and more debt (now governmental as for now the other sectors are constrained).

IMO the healthiest thing for the country and our economy would be for debt on all levels to be reduced (per your companion post). If this were done in an organized way, it could be assoc w a major improvement in the business climate rather than the current trajectory of a better business climate for casino/crony capitalism. OR, other relationships could hold.

]]> By: Reddweb http://www.creditwritedowns.com/2009/10/household-debt-as-an-indicator-of-secular-bull-and-bear-markets.html#comment-57253 Reddweb Wed, 07 Oct 2009 19:41:00 +0000 http://www.creditwritedowns.com/2009/10/household-debt-as-an-indicator-of-secular-bull-and-bear-markets.html#comment-57253 please check this article on latest consumer credit http://tiny.cc/poXKN u mentioned short-term bullish, what is u r target for SP 1100s/1200s? thanks! please check this article on latest consumer credit

http://tiny.cc/poXKN

u mentioned short-term bullish, what is u r target for SP 1100s/1200s? thanks!

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