We have been in an artificially low interest rate environment for very long. The S&P 500 has grew significantly in the last 6-7 years. Real estate prices have made a big comeback. I live in Toronto, and real estate prices here are relatively crazy (although there was a dip recently). A 550 sq ft 1-bedroom condo in Midtown/Downtown Toronto will run you about 450k CAD. The average detached house in suburbia will run you about $1m CAD. I know it doesn't compare to places like Manhattan, but the growth rate is completely unsustainable compared to the average Torontonian's income.
Low interest rates have released a lot of cheap money into the market. Interest rates are slightly higher in the US than in Canada, but still very cheap by historical standards. The S&P 500 p/e ratio was 29.04 on Jan 1, 2000. And it was 21.46 on Jan 1, 2008. Today it is sitting at around 25.
My question is, how leveraged are financial institutions and the average Joe right now?
Submitted September 29, 2017 at 11:03AM by Valachio http://ift.tt/2x2fIiP
