Good article. I would tend to agree, however, getting to this is tough given the skew from the non Joe's. The sad fact is there are more non Joe's today on the low end than before and there are less Joe's on the high end although they are much wealthier which is probably a more important change than the lack of change from the average Joes.

The Federal Reserve's QE reversal, which is paltry by all senses of the word, will hurt the real estate market first given it will be unloading real estate backed bonds. The market has risen on monetary easing and the artificially low rates aren't ending anytime soon. What may end it is when people realize the risk premiums today for low rates doesn't cover the risks they are taking without even considering interest rate rise risks. I don't see this happening until after the housing market melts down again. For there is only so many places for money to go and when real estate bonds go there will be a mad rush for other assets to start.

Good article and nice graphics. You can print as much money as you like but the real issue is credit worthiness which has not improved due to not much change in salaries, lower income earning from investments (dividends not capital appreciation), and already burdened homeowners who can't save. Sadly not just to government but businesses have been binging on credit. And we all know both of these are not sustainable, especially businesses when they don't invest in capital equipment and expansion but engage in stock buybacks and dividends to support stock prices in the short term instead.

The punch bowl isn't over. The assumption is that they are draining it just so they can dump out more punch at a later time. Given their history, it's hard to believe that there won't be more punch.

The central banks have gone way too far, however, some governments can still splurge with more debt.

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Yellen helped the market and every asset class at the cost of killing the economy and encouraging terrible behaviors like business not investing in capital equipment and buying back their shares with debt, incurring debt, and tons of companies trying to buy property and rent it out while no one constructs housing. Why build when you can just own and raise prices. America is going to suffer everything the lost generation of Japan suffered.

She is right things would have been worse without QE and zirp. Things would have been worse for her and the rich and connected people in Washington DC. There will be no money left for the middle class, elderly, and young people as housing prices have risen extraordinarily, education prices have skyrocketed, and health care becomes even more unaffordable for people even the wealthy as incomes have not risen substantially for a decade.

The fact that the Federal Reserve now is in our housing and MBS market is disgusting. If the economy collapses not only can they do little more given the low rates and inflated balance sheet, they will take losses in the housing market. Of course the argument s that they don't have to ever recognize markdowns, however, if they default or don't pay then they still must recognize the lack of interest payments. And them entering to dump bad loans and property direct into the market is frightening and will drive the market down further.

The Federal Reserve should have closed off this stain in the eye of capitalism with horrific potential consequences long ago.

Long term Greek bonds are probably an even worse investment. The German bond may loose you money but so will a 10 year US treasury. You may never get your money back with a Greek bond.

Agreed, The Affluent Society brought up the problem we will be facing in the future. It's worth a read if you ever have the time.