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Gold/Mining/Energy : Big Dog's Boom Boom Room

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To: excardog who wrote (2355)	6/25/2001 11:37:41 AM
From: chowder	Read Replies (1) of 206223

Hi Cardog! >> I'm pretty sure we are all aware that consumer debt is considered high. Yet declining interest rates should be beneficial, no? << No! lower rates aren't getting down to the consumer level for the most part. Mortgage rates haven't come down enough to make refinancing beneficial. Credit card rates are still high. I was just reading Agora-Inc. this morning where they state a startling new study done by MGIC Capital Markets Group, says American homeowners are in the process of rewriting the traditional rules of refinancing: rather than getting a new mortgage at a lower interest rate, they are taking out larger loans at rates slightly higher than what they were paying before. Mortgage market researchers report that the average borrowers in the current refinance boom took out loans $41,000 larger and at an interest rate 0.6 of a percentage point higher than they had prior to the refinance. Why would people do that? Because they have credit card debt and other debts at even higher rates! And it's getting harder and harder to pay them. How is the consumer going to bail the economy out under these circumstances? Sooner or later something has to give, I would think. Cardog, I could be wrong, maybe Greenspan and the consumer can bail us out. Meanwhile, I won't mind picking up a trade here and there in the patch.

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