Clown-Free Zone... sorry, no clowns allowed Message Board

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Pastimes : Clown-Free Zone... sorry, no clowns allowed

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To: awi who wrote (66040)	2/8/2001 5:53:55 PM
From: pater tenebrarum	Read Replies (1) of 436258

of course mortgages make up a big chunk of the overall consumer debt, especially as refinancings have really been all the rage in recent years (just look at the speed with which the GSE balance sheets are expanding). however, one needs to take into account that a big chunk of the increase in mortgage debt was used for things having nothing to do with real estate. from paying off credit card debt (only to run it right back up again) to playing the market, or financing consumption, mortgage debt has been misused in lots of different ways. at the same time real estate bubbles have formed in many regions, and mortgage credit made available in the latter stages of the boom is based on inflated asset prices, which are in peril of deflating as fast as they inflated. besides, every single category of consumer credit has seen huge growth rates in recent years, and every comparison metric one applies shows that the size of outstanding debt is simply extraordinary. debt has grown at much faster rates than GDP and imo we have already gone beyond the stage of ponzi finance, i.e. we've reached the limits.

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