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To: Mark Adams who wrote (107752)	6/8/2001 6:33:13 PM
From: pater tenebrarum	Respond to of 436258

but debt service to disposable income is also close to an all time high - it's close to 15%, a percentage last seen in 1987. i believe this percentage includes all debt service payments, not only interest rates, but excludes leasing payments (the Fed has decided to simply not count leasing - mainly of cars these days - as consumer debt, however , that is what it really IS and it should be included in consumer debt data. currently it's included nowhere, as if it didn't exist). i have to check though to make sure i have the above right (i.e. composition of debt service payments as a percentage of disposable income). regarding corporations, the bull market not only filled the pension plan cookie jar. the large tech companies have been engaging in the US version of 'zaitechu' for years, speculating in the stocks of other tech companies. e.g. INTC had no increase in operating earnings since '97, but 'investment' income increased markedly from '97 to 2000, allowing them to report an increase in earnings. almost 1/3 of Cisco's fiscal third quarter income in 2000 was due to speculation profits. likewise, corporations have profited from put selling , and big tax deductions on ESOPs , which only show up as income, with no associated expense (it is a form of employee compensation that is borne by existing shareholders who must accept dilution of their holdings). pooling of interests accounting in take-overs was also used to inflate profits. needless to say, at least in the tech sector the demise of the mania has also meant the demise of these types of income. the virtuous cycle wasn't all that virtuous imo, since it has led to an accumulation of intractable economic imbalances that the vicious cycle now needs to take care of. the latter has imo already begun...