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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: Lucretius who wrote (2857)7/10/2000 11:52:07 AM
From: pater tenebrarum  Read Replies (1) of 436258
 
i know...so is this:

Individual and corporate debt have surged in the US recently
to unprecedented levels.

o A record $4.5 trillion in debt has been accumulated by
U.S. nonfinancial corporations -- up 67 percent in the
past five years.

o Household borrowing has risen almost 60 percent during
that period -- to a total of $6.5 trillion.

o While borrowing and spending may be good for the economy,
bankers are concerned that companies and individuals who
can least afford to do so are piling on debt -- setting
up a critical situation if the economy goes sour.

o More than $160 billion of "subprime" mortgage loans to
lower-credit borrowers were made last year, representing
11 percent of all mortgages -- up from $40 billion, or
just 4 percent of the total, in 1993.

Over 40 percent of new home mortgages are extended to home
buyers who put down less than 10 percent of the purchase price.
The firm SMR Research estimates that at least one-quarter of all
new mortgages go people who are "basically broke" -- and it
warns that the actual figure could be much higher.

The value of corporate "junk bonds" outstanding has soared to
$529 billion from just $173 billion a decade ago. Some 5.4
percent of US companies with junk bonds defaulted on interest
payments in the past 12 months -- up from over 1 percent in
1997.

Source: Gregory Zuckerman, "Debtor Nation: Borrowing Levels
Reach a Record, Sparking Debate," Wall Street Journal, July 5, 2000.

because it means the Fed will have to increase the money supply to bail everyone out...
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