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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Steve Lee who wrote (5716)	2/25/2002 10:15:33 PM
From: Hawkmoon	Read Replies (1) \| Respond to of 33421

In the past, when interest rates have been low, have consumers enjoyed a lower ratio, rather than this time where they have used the lower rates to expand their borrowing? Hmmm... I'm not so sure about that Steve... It would seem that the percentage of household debt has remained within a relatively narrow range, no matter what the interest rates have been. Thus, when rates go down, they refinance to reduce their overall percentage expense. But when rates are sky high, they still require basic housing and transportation. But overall, expenses generally remain within a 2% range.. (since we know at least 40% of our income goes to Uncle Sugar, it makes me wonder if the FRB's definition of desposable income is pre or post tax... :0) Hawk

To: Steve Lee who wrote (5716)	2/26/2002 12:21:38 PM
From: John Pitera	Respond to of 33421

Hi Steve, I think that several different interest rates would have to be shown, from short end interest rate numbers up to 10 to 30 year interest rates. Also remember that much of the mortgage debt is fixed. Also when you consider consumer and corporate debt, there is the subprime, prime and super prime borrowers. The subprime market the less credit worthy borrowers. Subprime borrowers for vehicles have been paying 10% to 15% to 20% on car loans this past year, while the best credit risks have been able to use 0% financing, This type of stratification occurs among all the different types of credit users out there and it makes it harder to generalize. John

To: Steve Lee who wrote (5716)	2/28/2002 1:08:09 PM
From: John Pitera	Read Replies (2) \| Respond to of 33421

Hi Steve, The BKX has been the strongest relative strength index out of the SOX, BTK, XBD, and a few others this week. and It's an important group. So it's got a little tailwind, but we'll want to see if it gets snuffed back out. I'd argue that when the BKX had the massive collapse back on January 29th, that was the signal that you could go and short the loved stocks like EMLX, BRCD, QLGC, CSCO,IBM etc. thecapitalmarkets.com. the BKX collapsed through it's 21,50 and 200 dma all the same day. And if you look EMLX that was the time to start shorting it, look at the serious erosion that has occurred in so many favorite names after the BKX gave the "All Clear To Short Signal" John