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Comment by firebird84 | Hacker News Reader

Meh to almost everything here except maybe housing.

Corporate debt is high because DEBT IS STILL CHEAP (fed is changing that). Of course they're going to borrow fuckloads of money, it's practically free by some measures!

The indexing "bubble" is actually a correction for a lack of value from active funds. I don't expect the correction to be corrected.

The cryptocurrency bubble is tiny. 65 billion? That's a rounding error.

5 Stocks accounting for most of growth is troublesome when corrected, but still not catastrophic. If we lose ALL of that growth then we go back to 2016 levels? Ok.

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Just providing nominal values and comparing them to values decades ago is so basic BS marketing strategy. Any investor who wants to figure out risk levels must put it all into context. Usually it means ratios.

Just few examples of putting things into context:

* Household Debt Service Payments as a Percent of Disposable Personal Income https://fred.stlouisfed.org/series/TDSP

* Household Financial Obligations as a percent of Disposable Personal Income (FODSP) https://fred.stlouisfed.org/series/FODSP

* Household Debt to GDP for United States© (HDTGPDUSQ163N) https://fred.stlouisfed.org/series/HDTGPDUSQ163N

The housing bit interests me but I can't take it seriously when they're pointing at the single most irrationally priced area in the nation to make the overall situation look similar. Yes, if you want to live in SF you can expect to pay utterly idiotic amounts. But that's pretty much isolated to SF.

The value of my condo has gone up by over 60% in two years. Canada, Toronto especially, is in for some rough times in this housing bubble.

The real issue is that the big cities like Toronto are the economic centers of the region. When they pop, everything else will be in trouble too.

The value of your condo going up gives very limited information if there is bubble or not.

If you want to figure out what the correct price level is, find statistics that compares price of housing to median income in your area over time. That's the single most important metric determining the correct property valuations.

Prices can go up as long as incomes go up. Major cities have higher productivity and prices can go up until they start to eat too much from the income. In declining areas prices can go down and houses are still overvalued.

Why not check the amount of domestic buyers versus foreign buyers?

That's good idea in some specific areas and price categories.

Wages did not go up by 60% in two years. They barely went up at all.

Of course they didn't. But that's not the issue.

What is the price/income ratio now compared to long term average? How much of the 60% can be explained with prices rebounding to long term normal.

ps. I'm almost sure that house prices in Toronto are exceptionally high compared to income. I'm not arguing against that. I'm arguing against people using wrong numbers to measure things. Find relevant numbers and use them.

https://www.numbeo.com/property-investment/rankings.jsp

The housing index confused me too, as they chose a year after a huge collapse in the housing market as a comparative point. I'm not saying US homes aren't overvalued--or that they are--but it's misrepresentative of the state of the market: https://fred.stlouisfed.org/series/CSUSHPINSA

> 5 Stocks accounting for most of growth is troublesome when corrected, but still not catastrophic.

Yes -- this is the whole point of owning a broad index.

You get exposure to the highest-performing stocks -- what those actual companies are changes over time.

And there's usually another company to step up and fill the gap when one of the leaders falls.

practically free indeed, vs the practically have to pay for keeping my savings on a savings account... shrugs in discontent (tax is higher on my savings then the interest i get, for those that didn't understand)

You have to pay tax on your savings? What country are you in?

Not the parent comment but in the Netherlands where I live you have to pay tax on your savings once it exceeds about 21K EUR.

The government then makes up that you must be at least getting 4% (up to 9% if you have up to 1M) interest, and it wants 30% of that interest of anything over that 21K EUR limit.

Meanwhile the current interest at banks is anywhere from 0.05% to 1% here (most major banks are around 0.2%).

The way you describe it, it's not tax on savings, it's investment income tax. Almost all countries have it.

As a general principle taxing personal investment income should be taxes at least the same amount as labor income. Taxing labor has more negative externalities than taxing investment income.

I think they're saying that they're being taxed as if they were getting 4% interest on their savings, when in reality they're getting less than 1% because rates are low. So even though it's nominally a tax on interest earned, it's effectively a tax on value of assets held in savings over 21k.

pretty sure you're not paying any tax on the money in your savings account (beyond income tax in the year in which it was earned)

possibly they mean pay as in losing value to inflation?

It's crazy what people are reading into this comment.

By practically pay, he just means he has a very low interest rate, and possibly some regular account fee's.

That's valid for some countries, not all.

> Meh to almost everything here except maybe housing.

Care to elaborate more on the housing.

You know, the last 10 years? Housing bubble pops hurt, the rest? Meh

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