- The Big Picture - http://www.ritholtz.com/blog -

Chart of the Week: Personal Expenditure Income Ratio versus Mortgage Ref Rate

Posted By Barry Ritholtz On February 4, 2005 @ 10:51 am In Economy,Markets | Comments Disabled

Our latest chart comes courtesy of Michael Panzner, author of "The New Laws of the Stock Market Jungle [1]

click for larger graphic:
Panzer_pers_exp_refi [2]

Panzner [3] observes:

"Reports suggest many U.S. consumers have tapped the equity in their homes to
finance their spendthrift ways in recent years. That relationship seems apparent when one looks at the ratio of U.S. personal consumption expenditures to personal income and compares it to the Mortage Bankers Association refinancing index (see attached).

However, the recent drop-off in the spending-income ratio to levels last seen nearly four years ago, amid an overall slowdown in refinancing activity (which is at least partly attributable to Federal Reserve tightening and higher short-term interest rates), suggests that overstretched homeowners’ cupboards may be getting bare.

Is this a sign of trouble to come for consumer spending — and the economy at large?"

>
Random Items

Europe vs. America [4] 

When Jack Welch Was Deputy Director for Intelligence [5]

Bloomberg: Bush Making False Claims About Social Security [6]

Military’s Self-Inflicted Wound [7]

Hide Your iPod, Here Comes Bill [8]

Revenge of the Right Brain [9] 

 

>
Quote of the Day

"There have been 3 great inventions since the beginning of time: fire, the wheel, and central banking."

-Will Rogers [10]


Article printed from The Big Picture: http://www.ritholtz.com/blog

URL to article: http://www.ritholtz.com/blog/2005/02/chart-of-the-week-personal-expenditure-income-ratio-versus-mortgage-ref-rate/

URLs in this post:

[1] The New Laws of the Stock Market Jungle: http://www.amazon.com/exec/obidos/tg/detail/-/032124785X/ref=ase_thebigpictu09-20/104-5115086-3833537?v=glance&s=books

[2] Image: http://bigpicture.typepad.com/.shared/image.html?/photos/uncategorized/panzer_pers_exp_refi.jpg

[3] Panzner: http://www.stockmarketjungle.com/

[4] Europe vs. America: http://www.nybooks.com/articles/17726

[5] When Jack Welch Was Deputy Director for Intelligence: http://www.cia.gov/csi/studies/vol48no3/article04.html

[6] Bush Making False Claims About Social Security : http://quote.bloomberg.com/apps/news?pid=10000039&refer=columnist_berry&sid=aJ9dbBFwsZ1k#

[7] Military’s Self-Inflicted Wound: http://www.latimes.com/news/opinion/commentary/la-oe-belkin19jan19,1,4947810,print.story?coll=la-news-comment-opinions&ctrack=1&cset=true

[8] Hide Your iPod, Here Comes Bill: http://wired.com/news/mac/0,2125,66460,00.html?tw=wn_tophead_2

[9] Revenge of the Right Brain: http://www.wired.com/wired/archive/13.02/brain.html

[10] Will Rogers: http://www.willrogers.org/

Copyright © 2008 The Big Picture. All rights reserved.