More on Family Net Wealth at an all time high

In our prior discussion of Family Net Wealth being at an all time high, we challenged the significance of that assertion within the framework of ultra low interest rates.

Now, a reader sends in this graphic from the prolific offices of Ned Davis Research:

Falling Household Compensation/Rising Household Debt
click for larger chart
household_comp_debt
Obviously, net wealth — as a function of home ownership/low interest rates — takes on a very different light when considering Total Household Compensation as a % of GDP, and Household Debt as a % of net worth . . .

Household Compensation is at a 38 year low relative to GDP. That’s back to levels not seen since 1966. Household Debt as a % of net worth is simply off the hook. Its at the highest its been in the post War period (that’s post WWII). There were modest improvements from 1980-84, and from 1994 – 2000. Since then, its been nearly vertical.

By the way, I just started reading Ned Davis’ book, “The Triumph of Contrarian Investing : Crowds, Manias, and Beating the Market by Going Against the Grain” — its very good, and has an excellent overview on the entire subject.

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