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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: jimmg who wrote (76471)	12/22/2006 5:13:19 PM
From: russwinter	Read Replies (3) of 110194

<middle class still has the ability and propensity to not only sustain but to grow their spending.> If you measure middle class "ability" () by cash on hand to buy products AND service debt and bills, then they have few "resources" () left. Lows in demand deposits occur mid-month (after mortgages are paid) and here's another low. research.stlouisfed.org As far as "propensity" (*), that's another issue. But having an inclination is dangerous indeed without the ability. Not sure you should hang your hat just on consumer "inclinations" much longer, or on lenders prior propensity to loan new reserves to people with poor ability. Fighting gravity if you do, they will fall to earth. () Webster's "ability": having sufficient resources or power () "resources": available funds, or new reserves (*)"propensity" : inclination or interest in

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