SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : Applied Materials No-Politics Thread (AMAT)
AMAT 322.34+1.1%3:59 PM EST
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Jacob Snyder who wrote (5279)2/1/2003 10:44:53 AM
From: Kirk ©  Read Replies (2) of 25522
 
This is a major misconception made by bears:

For December, consumer spending up 0.9% (incomes up only 0.4%, so that means more than half of the increase in consumer spending was financed with yet more debt).

IF I refinance $100,000 in mortgage, lowering rates by only 1%, then I have roughly $1,000 a year more money to spend without adding any debt!

A family making $60,000 a year might have a $100,000 mortgage. I think all would say that the extra $80 a month they get from that refi would be spent.

what gets counted as consumer spending? Do mortgages and taxes count? I'd think that extra $1K a year to spend per $100K in mortgage refinanced is a big deal. Also, if you pay off one car that you bought with a 7% loan and buy a new car with a 3%, 5 yr loan, then you can afford more car... thus higher spending. Yes, you have "more debt" but is it dangerous debt if the payment is fixed for the term AND it is the same dollar amount but at a lower interest rate so you can afford to borrow more? Hardly something to worry about.

Now if you tell me people most of the spending is from people taking money out of their homes (which is some of the case but see the car example on why this is not an issue if they don't lose their jobs) AND increasing their monthly payment above their increase in income, then I'd worry.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2026 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News