Quarterly Insights: Getting Back to "Normal"

In the past 12 years, there have been two distinct economic and market environments. The first, a period of rampant borrowing, was fueled by a red-hot real estate market. The second, a period of deleveraging, saw a reversal of the debt buildup with household debt ratios declining through a combination of bank write-offs, debt repayment and income growth. It could be argued that much of the needed deleveraging has now been accomplished or, at minimum, that spending habits have changed enough to set the economic system on a path toward a more normal economic environment.