With the S&P 500
within about 8 % of its highest
level in history, with historically reliable valuation measures at obscene
levels, implying near - zero 10 - 12 year S&P 500 nominal total returns; with an extended period of extreme overvalued, overbought, overbullish conditions replaced by deterioration in market internals that signal a clear shift toward risk - aversion among investors; with credit spreads on
low - grade
debt blowing out to multi-year highs; and with leading economic measures deteriorating rapidly, we continue to classify market conditions
within the most hostile return / risk profile we identify — a classification that has been observed in only about 9 % of history.
Even though the bank card rate at 3.11 % is 61 basis points above its recent
low while the other default rates are
within a few basis points of the
low, there is little reason to be concerned over rising consumer
debt levels.