Buzz & Banter
Kevin's highlight of the front page Sunday NYT's article re: mortgage refi's is as important an observation as has been made on this site (and I wish I had made it). And that's saying a lot given the extraordinary number of insights the other contributors have made in their articles of late.
I have, perhaps to a fault, concentrated my commentary on the economic health of the US consumer, owing to the fact that it is the US consumer that is, well, the world's consumer of last resort. His ability to keep on spending is what, literally, is propping up much of the economic growth we are seeing.
I don't want to make too much out of one data point, but the example that Kevin highlighted speaks volumes and, in any case, is not limited in nature, as a perusal of any number of statistics from the mortgage industry can attest. This example is hardly unique. That the US consumer is levering up in order to maintain or in some cases increase discretionary consumption expenditures (if a new Dodge Dakota isn't discretionary, I don't know what is), should give anyone attuned to risk a chill.
That a piper must be paid for such leverage, for such beyond-means spending, is a truism to which much of financial history can testify.
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