The Homa Files

Here are a couple of charts that put things in perspective

Ask yourself: Which one doesn’t isn’t like the others?

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Consumers have been deleveraging.

The ratio of mortgage debt to disposable income has retreated by 20 percentage points and continues to fall.

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More broadly, the percentage of disposable income servicing household debt is at a historic low …

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Similarly, businesses have been aggressively deleveraging.

The ratio of total debt to to equity is historic lows …

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So, businesses’ ratio of income (EBIT) to net interest is at a historic high.

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The Federal government?

Well, that’s a different story …

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Bottom line: Consumers and businesses – having learned hard lessons during the financial crisis — are strengthening their financial positions.

Team Obama: Spend, spend, spend.

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This entry was posted on January 16, 2013 at 12:37 pm and is filed under Debt - Deficit, Economy, Financial leverage, Gov't Waste & Inefficiency, Gov't Spending. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.