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To: KyrosL who wrote (108103)	6/11/2001 6:31:01 PM
From: Mark Adams	Respond to of 436258

First the more relevant ratio of consumer debt burden is debt service to disposable income, rather than total debt to disposable income. I believe this ratio is currently at or very near a record. This is because, as your graphs show, revolving (mostly credit card) debt has been rising sharply and interest rates for revolving debt are over two times interest rates for non-revolving debt (mostly car loans.) Moreover, while interest rates for non-revolving debt are affected by Fed interest rate reductions, interest rates for revolving debt are largely not affected. Great Point! Wait a minute. I found that the 'interest coverage ratio' for consumers had not grown substantially based on NIPA numbers. At which point I was informed "that's because interest rates are lower". God forbid official inflation comes back and interest rates go up. But then can credit cards charge >18-22%? + Interest payments have grown from 2.28% (94) to 3.03% (00) of disposable personal income, after falling from 2.7% (90) from Message 15543838 If we were to talk principle payments on debt being historically high rather than interest- then I'd suspect churn as revolving balances are paid off monthly more frequently now than prior years. Regarding the leasing- I understand it is included. Check federalreserve.gov for more details. I also thought mortgages were included- you'll see in the above link that the fastest growing form of credit is "Pools of securitized assets". But I could be wrong.

To: KyrosL who wrote (108103)	6/11/2001 6:52:22 PM
From: Mark Adams	Read Replies (2) \| Respond to of 436258

Ah- I did make a slight error on the comparisons of debt to income. I didn't get enough zeros in the multiplier for a billion. So the numbers in the last two charts are 100 times too high. Consumer Debt to Gross Income ranges between .15 and .17 over the past 30 years. Now the number seems too low- maybe mortgage debt isn't classed as consumer debt by the fed.