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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: nextrade! who wrote (18288)	3/8/2004 8:48:02 PM
From: nextrade!	Read Replies (1) \| Respond to of 306849

Households rack up debt at fastest pace since 1987 New York Times Mar. 8, 2004 12:00 AM azcentral.com Americans, it seems, are feeling optimistic, or maybe fatalistic, about their financial future. The Federal Reserve's latest reading of the nation's debt, including both household and government borrowing, grew last year at a pace not seen since the late 1980s. According to the quarterly federal funds report, the total national debt, excluding the obligations of banks and other financial institutions, grew by 8.1 percent last year, its fastest pace since 1988. Households threw caution to the wind, mortgaging and remortgaging their homes and expanding their debt by 10.4 percent, the biggest percentage gain since 1987. Federal government borrowing expanded by 10.9 percent, the fastest rate since 1992. Only businesses pulled back. Still hobbled by credit overhangs from the late 1990s, corporate borrowing inched ahead by 3 percent. Overall, the nation's debt grew by about $1.7 trillion last year, to $22.4 trillion, the Fed said. The federal government accounted for about 18 percent of the total, local governments for roughly 7 percent, households for 42 percent and businesses for 33 percent. A deep recession put a sour end to the 1980s credit bender. But economists are not willing to predict how the current borrowing binge will play out. "There's a time-bomb issue," said Allen Sinai, head of Precision Economics, a consulting firm. "There are potential adverse consequences, but we don't know when."