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To: Ilaine who wrote (108322)	6/12/2001 8:09:34 PM
From: Mark Adams	Respond to of 436258

The importance of household balance sheets smh.com.au Consumer Debt as % of Networth rbcassociates.homestead.com US Consumer Balance Sheet rbcassociates.homestead.com

To: Ilaine who wrote (108322)	6/12/2001 8:12:26 PM
From: Mark Adams	Read Replies (1) \| Respond to of 436258

It's that lies, damn lies and statistics that I'm looking for. By looking at a wider range of data, looking at the scale, and looking for plausible explanations (ie population growth) that haven't been considered or were intentionally omitted.

To: Ilaine who wrote (108322)	6/13/2001 9:43:16 PM
From: Mark Adams	Read Replies (1) \| Respond to of 436258

Charts Total Household Debt, Mortgage Debt and Consumer Credit as a Percentage of GDP and PDI rbcassociates.homestead.com Total household debt does exceed PDI, and is at a record. This is akin to a business borrowing $100 with an annual income of $100. So what? Charts Total Business and Corporate Debt as Percent of GDP rbcassociates.homestead.com Business debt has ticked up since 94, but remains below 1990 peak. A chart that shows only data since 1994 or 95 would tend to mislead. When comparing Debt to income, we ignore Investment. How do we know debt did not fund investment? All we can conclude when comparing debt to income is leverage, and coverage ratios address this better. Even then, we use a poor measure of income that excludes capital gains but includes taxes paid on those gains. Finally, all of these aggregate numbers are poor indicators of consumer health, as we can only speculate as to the distribution of debt amoung the various income and wealth groups. (There is data in the census tables that shows it's pretty equally distributed and hasn't shifted dramatically during the 90's. Table 796). Nominal numbers were used for GDP and PDI, as it wasn't clear if the Feds numbers in Table D.3 were chained or nominal. Cross references NIPA tables 1.1 and 2.1 to the Fed Flow of Funds table D.3 . Prudent Bear said consumer debt was 110% of personal income, and that's not correct This is not correct. Consumer Debt is appx 20% of PDI. It's on the chart, mucking along the bottom.