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Politics : Stockman Scott's Political Debate Porch

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To: Jim Willie CB who wrote (10054)	12/6/2002 2:30:20 PM
From: westpacific	Read Replies (2) of 89467

Cash-Out Mortgage Insanity! Refinancings Hit Record 12.2% US Household Debt rises at a rate of 9.6%. An economist worries about a drop in prices. American families used mortgage refinancing to pull cash from their homes at a record pace in the 3rd quarter, helping fuel a continued spending spree, but raising the risk of a nasty fall if housing prices break. The Federal Reserve's flow of funds report issued Thursday showed that so-called cash-out refinancings grew at a $320Billion annual rate during the quarter, and that household debt overall climbed at a 9.6% pace, subtantially faster than in the hottest years of the 1990s boom!!!!!! Analysts said that altough some of the funds appear to have gone into improving the homes from which the money was drawn, much more of it went into paying for routine purchases, a dangerous trend. "Its setting people up for a big down-drop" said GS economist Jan Hatzius. Hatzius said the cash-out refinancing helps explain why consumer spending rose at 4.1% annual pace in the quarter, helping bouy an otherwise sagging economy. The trend is unsustainable, going forward it has got to come down. The quarterly FED report showed that household net worth fell almost a half point to $6.38Trillion between second and third quarters. ------Comment, the average American has lost it, they have ZERO discipline and are going to be buried! The FED is causing a FALSE SENSE of SECURITY amongst Americans and this is the biggest mistake they have made!! It will sink the average American!

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