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To: kapkan4u who wrote (170943)	9/11/2002 9:42:52 AM
From: Robert Douglas	Respond to of 186894

<The ramifications of excess debt are going to be very far reaching indeed.> I would love to see some solid data on corporate and consumer debt-to-equity ratio for the last three years. Reading from charts provided by Merrill Lynch's Bruce Steinberg in his Aug. 9, 2002 "Weekly Economic & Financial Commentary." Debt service as a percentage of disposable income - Ex transactions usage. Today: 12.7% of income. Last trough: 1994 11.3% of income. Prior peak: 1987 14.0% of income. Starting point: 1980 13.0% of income. So you can see, by this measure, household debt service has not risen in 22 years and is significantly below its highs. Corporate balance sheets: Interest expense/EBITDA. Today: 14.6% Last trough: 1996 10.0% Prior peak: 1990 21% Cycle trough: 1978 11% Cycle peak: 1974 16% Balance sheets are in pretty good shape. I fail to see any "far reaching ramifications." Be sure to look at debt in context and not absolute levels.