Doom and gloom
It's in my nature to, as Marty Zweig says, "always be worried", and whether I'm quite convinced the world is going to end or not, it's worth noting the case in favor as presented by MSN.

Doom and gloom article 1, in which a director of a silver company shills for precious metals:

Folks are either leveraged to the hilt in housing or real estate investments, and/or they are piling into stocks. In both cases, the rationalization is some variation of the greater-fool theory.

I don't believe that. Certainly not for housing, where most buyers have no intention of flipping to the next buyer; most homebuyers are buying a home as much as an investment. I also think that most stock-buyers are thinking in terms of the economy and earnings growth these days, and not just that the market is going up. There are still, I'm sure, investors who haven't thought about why a stock has value, but I don't think a lot of the people who have are deliberately buying overvalued stocks at this point.

Doom and gloom article 2 concerns consumer debt.

Although the credit card industry says average household consumer debt comes to $9,000, Manning said, it is actually closer to $13,000 when the roughly 40 percent of households that pay their balances each month are taken out of the equation.

I bet it's over $20,000 if you exclude the households that carry less than $20,000.

Incidentally, any time I see reports of loans at "800% interest rates" I'm fully convinced that there's some misleading taking place here. These are usually very short-term loans with an origination (paperwork) fee that turns out to exceed the interest on the loan, and somebody with an agenda wants to call the paperwork fee "interest". Money intended to be charged as interest can be moved to items like this, but there are reasons for items like this to exist aside from evasion of usury laws, and until we're going after the government for charging sales tax on the lunch I'm going to consume right after buying it — 40 cents on a $5 meal in only 30 minutes, that's 140,000% interest! — it's not quite fair to pretend otherwise. Tell me a $150 fee is being assessed on a $500 loan and I'll be impressed, but divide it by the length of the loan and hide the raw data and I feel obligated to ignore anything you say.
- posted by dWj @ 1:11 PM