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

To: High-Tech East who wrote (14623)	9/20/2002 6:36:23 PM
From: robert b furman	Read Replies (1) \| Respond to of 19219

Hi Ken, A lot of people don't realize that with the lower rates and record refi's,The overall debt load is being reduced at a much faster rate. Only about 60% of the mortgage refi's add (increase principle) In all other cases terms are shortened and /or principle becomes a bigger component of the reduced payment. Thus debt is being reduced at a faster rate. This is particularly true in shorter term financings like autos. Many people who jumped on 0.0 % over year now have paid off 1/3 of their note and have accomplished an early equity position. This has not been a cure all - but the longer this profitless recession allows historically low interest rates - we build a vibrance that can fuel robust growth into the future. I'm thinking that the minute we see investment in capital (facility and equipment) by the manufacturing sectorincrease,rates will increase quickly, but not significantly. Any rise in rates will defer the consumer,as they will be spoiled with free money.The weaning of free money could well defer new consumer durable purchases - hopefully by then we'll have neat new "must have " electronic gizmos to fuel our purchases. One thing for sure ,the auto analysts/economists are predicting a cooling of the sales rates in the year of 03 - but then they also said that about 02 and it will be a strong year. The longer low rates continue - the healthier and more robust the future recovery will be. We're planting the seeds of a consumer with increasing equity for a long time,with these refi's.That is a good thing and it is not often talked about. JMHO Bob