Net Worth to Total Debt Ratio

The following chart shows household and nonprofit organization net worth divided by total debt in all sectors.

As seen using the red channel, this 60-year linear trend has failed by a large amount in the aftermath of the Great Recession. Epic failure, actually. Should have more of them. Never before has so much additional prosperity been generated by so little additional debt.

Of course, not everyone believes that fairy tales always have happy endings. Here's a scary fable involving bears that's just in time for Halloween.

Net worth has been falling rapidly lately, thanks to the stock and bond markets. We'd be back in the channel if it were to fall another 30% or so, assuming it were to continue to happen rather quickly. And what would be quicker than rapidly rising mortgage rates combined with million dollar homes?

Of course, there's another way to get back in the trend channel. Total credit market debt outstanding is only $91.2 trillion. Yes, only $91.2 trillion. A pittance, really. If we were to quickly increase it by 40% then back in the "safety" of the declining channel we would be. Think what we could do with all that free money! Here's an idea. A $36 trillion Halloween party in the name of world peace! Everyone on the planet could be invited. Nobody goes home empty handed. Woohoo!

Please don't confuse my love of gallows humor for sarcasm, nor my love of sarcasm for gallows humor. It's both. It's almost always both these days, lol. Sigh.

Metaverse Real Estate Gallows Humor

As seen in the image below, I just did an Internet search for "metaverse real estate prices" and I feel the need to share the results.

It's a rare treat to stumble upon such a rewarding gem. Do I keep searching? Do I read the two articles that I found? No, I'm good. I think my questions have been fully answered, lol.

This search was inspired by today's tweet from @MacroAlf:

Thoughts and prayers to people who took a mortgage to buy real estate in the Metaverse.

Mark Twain once said, "Buy land, they're not making it anymore." Too bad he's not still around to offer his thoughts on imaginary land, lol.

TV Show Idea: Soap Bubble

The following chart shows nonresidential construction employees divided by residential construction employees.

With record low housing inventory, record low mortgage rates, a Fed committed to ZIRP for the foreseeable future, and a potential permanent increase in working from home, an acceleration of the downward trend in the chart seems inevitable to me.

Will history repeat? Will 2010 to 2027 play out exactly like 1990 to 2007? Will our next financial crisis be another housing bubble disaster? Will the Fed step in to save the economy with even more ZIRP in 2027? Will long-term Treasury yields continue to temporarily scream higher in a futile effort to resist the overwhelming long-term deflationary forces?

Tune in next week for another exciting episode of Soap Bubble!

Covid Kitty

The Covid Kitty takes after Punxsutawney Phil. If he comes out and sees his shadow then there will be 6 more weeks of pandemic. And then, unfortunately, he repeats the process.