It would take at least seven years of steady reduction for consumer debt to reach a more normal level.
Resolved true The record shows it happened or was so.
Prediction: Statements about events outside the person's control, checked once they fell due: did they come true?
The second judge would not resolve this claim; the verdict shown is the first judge's.
Said for an organisation they lead or work for; it counts on both records.
What would count as true or false
The prediction is that, as of July 2010, US household (consumer) debt would need at least seven years to fall back to a 'more normal' level, meaning not before about July 2017. Use the household debt to disposable personal income ratio, from the Federal Reserve's Z.1 accounts or the NY Fed. Take 'normal' to be the definition Grantham gave in the source letter if he gave one; otherwise use the level of about 2000, before the bubble. TRUE: the ratio had not returned to the normal level by July 2017 (it got there later or never). MOSTLY FALSE: it reached the normal level between mid-2016 and mid-2017, just short of seven years. FALSE: it reached the normal level before mid-2016.
Set before the research began.
Evidence (4)
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E1 Household Debt-to-Income Ratios in the Enhanced Financial Accounts, Accessible Data Federal Reserve Board (FEDS Notes) · 9 January 2018
“| 2015:Q4 | 0.94 | | 2016:Q1 | 0.95 | | 2016:Q2 | 0.95 | | 2016:Q3 | 0.95 | | 2016:Q4 | 0.96 | | 2017:Q1 | 0.95 | | 2017:Q2 | 0.95 | | 2017:Q3 | 0.96 |”
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E2 Household Debt-to-Income Ratios in the Enhanced Financial Accounts, Accessible Data Federal Reserve Board (FEDS Notes) · 9 January 2018
“| 2000:Q1 | 0.84 | | 2000:Q2 | 0.85 | | 2000:Q3 | 0.86 | | 2000:Q4 | 0.87 |”
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E3 There Is Only One Way Out of the Recession | Brookings Brookings Institution · 28 July 2016
“In an analysis published in May of 2009, the Federal Reserve Bank of San Francisco suggested that the household debt/disposable income ratio might well have to fall much farther, to around 100 percent, a process that could take much of the decade, even if the household savings rate were to rise to 10 percent.”
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E4 There Is Only One Way Out of the Recession | Brookings Brookings Institution · 28 July 2016
“debt peaked in late 2007 at about $12.5 trillion—a stunning 133 percent of disposable income.”
Reasoning
No evidence gives Grantham's own definition of a "normal" level, so the criteria's fallback benchmark applies: the level of about 2000. The Federal Reserve's household debt-to-income series puts the ratio at 0.84–0.87 across 2000 (E2). It was still 0.95 in 2017:Q1 and 2017:Q2 and had stayed at 0.94–0.96 since 2015:Q4 (E1). Since the ratio had not returned to the 2000 level by July 2017, the prediction resolves true.
Cite this claim
Jeremy Grantham, “It would take at least seven years of steady reduction for consumer debt to reach a more normal level.” (said July 2010). Verdict: resolved true. Reliability API, claim c_54eb5cfeb3ae, method 0.1.0+28da144b, dataset release v1.1.2. https://epistacklabs.com/claims/c_54eb5cfeb3ae
This claim is in dataset release v1.1.2, with the same verdict.
Reply to this claim
More prediction claims by Jeremy Grantham
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Resolved false
“we can conclude that the final low for this market might be well into 2024.”
The final low of this bear market might come well into 2024.
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Mixed
“near certainty it was a year ago, is much more likely than not.”
A continued market decline of at least substantial proportions is much more likely than not.
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Mostly false
“after a bloodbath is not unusual and may very well not outlive January.”
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Mostly true
“may help to support the market for a few more months.”
The Presidential Cycle's positive influence may help support the market for a few more months.
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Resolved true
“Each cycle is different and unique—but every historical parallel suggests that the worst is yet to come.”
Verdicts are made automatically; how verdicts are made.