Tuesday, March 27, 2007

Links of the day

Corporate Debt Bubble: Not If, When -- WSJ..."Big bank insiders are 'eerily candid' about credit cycle dangers, but admit they don't want to miss the 'next big deal,' lest their banks, or their bonuses, suffer. 'Covenant lite' loans, so called because of their scant performance requirements, are already at $41 billion in 2007 -- more than the last 10 years combined -- and represent 37% of all corporate loans, vs. 1% in 2005. Still, while admitting that the markets simply can't go any further, S&P analyst Steven Miller warns: "If you tried to call the end, you'd be really poor waiting for it."...this is a partial explanation for the existence of business cycles...the incentives for dealmakers to overextend leads to booms and busts...

Subprime Meltdown Could Affect Car Loans..."A slight uptick in delinquencies among subprime car loans suggests that subprime mortgage holders, unable to make their house payments as their adjustable-rate mortgages are reset upward, are also having trouble making their car payments"...this is a logical extension of debt problems for people who are in trouble...the question is, if you are in this situation which would you rather lose, the car or the house...

Some Statistics on Healthcare..."
The productivity of the US health care system is terrible compared to other developed countries"..."in short: the average American receives mediocre-to-bad health care outcomes while paying twice as much as citizens of the rest of the developed world."

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