tag:blogger.com,1999:blog-6616959642391988608.post597622979723108148..comments2024-03-28T00:18:25.641-07:00Comments on Calafia Beach Pundit: Household financial burdens easeScott Grannishttp://www.blogger.com/profile/14028519647946868684noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-6616959642391988608.post-18006749686407505782009-09-25T12:18:45.423-07:002009-09-25T12:18:45.423-07:00CFP: Debt to income and debt to GDP ratios have in...CFP: Debt to income and debt to GDP ratios have indeed risen, and are probably at all time highs. But that is a misleading statistic. The interest rate on the debt and the repayment period are not insignificant factors, and they are left out of these numbers. The appropriate measure of debt burdens is the monthly payment relative to the person's ability to pay (disposable income).<br /><br />Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-6177915822130553132009-09-25T12:09:45.763-07:002009-09-25T12:09:45.763-07:00Public: I'm not sure your assumptions are corr...Public: I'm not sure your assumptions are correct. I doubt that a majority of households refinanced and took equity out. About half of all households own their home outright. As I tried to point out, these numbers are aggregate numbers: a portion of the population is in trouble, but the majority of people are not.Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-32803504373286200292009-09-25T11:41:10.352-07:002009-09-25T11:41:10.352-07:00Scott,
Thanks for the chart and for bringing atte...Scott,<br /><br />Thanks for the chart and for bringing attention to debt payments as a percentage of disposable income. Very interesting.<br /><br />How do you respond to those who focus on debt levels - consumer, financial, government or all combined - to income/GDP. Those percentages have risen dramatically over the past 20+ years. I believe Total Debt is around 3.75 times GDP.<br /><br />In CFP, EAhttps://www.blogger.com/profile/01745165113059985912noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-5743603211796751032009-09-25T09:07:19.278-07:002009-09-25T09:07:19.278-07:00Scott,
I just cannot wrap my head around this cha...Scott,<br /><br />I just cannot wrap my head around this chart. How can the majority of Americans purchase homes and cash in on their equity during a time of stagnating income, not have higher debt burdens?<br /><br />In addition, does this data in any way reflect the burden of people only paying the minimum to service their debt? <br /><br />Saying the burden is 15-20% means nothing if you Public Libraryhttps://www.blogger.com/profile/00017383928897945054noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-41020831227233237482009-09-24T17:28:49.547-07:002009-09-24T17:28:49.547-07:00See my post on oil factoids--households are spendi...See my post on oil factoids--households are spending the same portion of their disposable income on oil today as in 2001. Healthcare costs are obviously rising. Property taxes on the margin must be coming down, however, given the decline in property prices in most areas.Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-84596183356713072042009-09-24T16:37:17.717-07:002009-09-24T16:37:17.717-07:00Scott,
What do you think about the impact of risi...Scott,<br /><br />What do you think about the impact of rising health costs, property taxes, and fuel costs since 2001?<br /><br />Further, with U6/independent contractor unemployment rate approaching 20%...do you think we might run into issues when adjustable rate mortgages recast in the next few years?<br /><br />But overall, it seems like things are doing great on the margin.alstryhttps://www.blogger.com/profile/16025398896639165994noreply@blogger.com