On Thu, 17 Oct 1996, Doug Henwood wrote:
> My O is rarely H. Mergers can be a response to profitability pressures, no?
> The health care merger wave in the U.S. now is a response to
> cost-containment pressures, for example. Ditto weapons industry mergers, a
> response to shrinking procurement budgets (relative to GDP, not in absolute
> terms).
Or, the need to invest accumulated assets could cause companies to invest
in LS-CU technologies with larger returns to scale and lower marginal
costs, as well as lower profits, which in turn causes them to compete
with companies further away (either geographically or in terms of
substitutability) and thus increase "competitiveness" at the same time as
they increase concentration. This is consistent with "monopolistic"
features such as a rising profit margin even with falling profit rates.
I don't have any evidence to suggest that it's the case, just that it's
possible.
> Here are the latest household credit numbers - outstanding levels expressed
> as a percentage of disposable personal income, from the Fed's flow of funds
> stats. 1996 figures are averages of the first two quarters; all others are
> averages of the four quarters. Not shown in detail are miscellaneous forms
> of credit like bank loans, security credit, and trade credit; they are,
> however, included in the total. Because interest rates are lower now than
> in the late 1980s, the debt service burden is lower than then, even as the
> debt stock has continued to rise (and personal bankruptcies are at record
> levels).
So do you have any idea what a default level is? International banks
seem to regard anything above a 100% debt/GNP ratio as risky; is it
similar for consumers? Are defaults up? Are the indicators of defaults
well known? Are they worth an academic study?
Curious,
Tavis
> HOUSEHOLD CREDIT, PERCENT OF DISPOSABLE PERSONAL INCOME
>
> home consumer
> total mortgages credit
> 1952 35.5% 21.5% 11.4%
.
.
> 1996 93.1% 62.6% 20.6%
>
>
> Doug
>
> --
>
> Doug Henwood
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