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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: russwinter who wrote (12695)	10/3/2004 6:08:16 PM
From: GraceZ	Respond to of 116555

This is a debt servicing chart, not a debt trend chart. Yes it is. This is the one thing that matters the most to individuals as well as business, can you service the debt. People don't cut their debt until they reach the level where the debt can't be serviced. They actually have a rather narrow range of what they can stand. The fact that so many have converted floating rate to fixed positions them (I did and so did most of the people i know) for the inevitable upswing of interest rates. What it doesn't do is put the mortgage and bond holders in a great position. Still... holding bonds has been one of the brighter ideas in the last twenty years. Lots variable rate loans out there. Yes, I've held one varible rate mortgage for the last 18 years and now it's so small I could pay it off from my checking account (but why bother?). I'm troubled by the word "lots". What percentage of total consumer debt outstanding is varable or the percentage of variable rate mortgages in a country which clearly prefers fixed rate even at the risk of over paying on interest? Always when I see these figures they always remark on the percentage of loans originated, or the percentage increase in varible rate loans from a previous period. No one ever cites just how much varible rate is out there. You'd think the refi marketers would be salivating at the posiblity of another rate hike scare that would push everyone out of these variable rate loans