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Strategies & Market Trends : MARKET INDEX TECHNICAL ANALYSIS - MITA -- Ignore unavailable to you. Want to Upgrade?

To: Killswitch who wrote (11257)	3/20/2002 11:43:39 AM
From: patron_anejo_por_favor	Read Replies (1) \| Respond to of 19219

OT: Re Epstein's Barron's article: online.wsj.com First of all, he uses as his source, a "black box" model of debt service which may or may not be valid (since no details are provided, it's impossible to know). Secondly, his central thesis is that service on consumer debt has not increased, based on numbers up to 3rd quarter '01. This conveniently excludes the 4th quarter, where income dropped and consumer debt skyrocketed (due to zero percent financing on autos and exploding mortgage refis among other things). Finally, if his central thesis is correct (ie, debt service as a proportion of income remains constant, total debt rises and falls as a function only of rates), then we'd expect impending rising rates to cause consumers to pay down debt, thus reducing their disposable income over the years to come (which is an unintended validation of the "double dip" recession theory).