it escapes our economy. While consumers have certainly been motivated to reduce debt and firm up their balance sheets, debt service as a percentage of disposable income is reaching a relatively low level. While this is in large part due to exceptionally low interest rates the effect has dramatically lowered the cost of debt service. The question moving forward is: will 11% debt service to disposable income strangle our economy going forward? As this percentage is approximately what it was in 1980, or in 1992 thus it seems likely that it will not. Conclusion Equities are not dead, they are in hibernation. Unfortunately, the current valuation of the market remains a good deal above where past generational bull markets have begun. So it is likely that Gross may be correct for a while longer and 6.6% real returns may elude us for several years. Stock market returns are notoriously unpredictable, they could be zero for the next ten years or you could see all the returns of the next ten years in the next two or three years. With bonds yielding less than inflation a perceived turn in the US economy could push the market up. Then a market timer will face a difficult choice: chase a climbing market or wait. With bonds trading up to such elevated valuations the market is brimming with fear, but while the fear trade guarantees return of capital it will not provide return of purchasing power (at least for risk free bonds -- corporate