The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookiesbefore using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

Bond Outlook January 25th

Bond Outlook [by bridport & cie, January 25th 2006]

Among our criticisms of the US politico-economic system, we have often suggested that irresponsibility is behind the practice of spending ahead of earnings in most branches of the economy. However, we have come across academic research which points to the middle classes living a very precarious lifestyle, dependent on borrowing just to make ends meet. Professor Elizabeth Warren, a specialist in bankruptcy, makes some telling observations based on hard data:


  • Household incomes have indeed gone up but only because wives have joined the labour force; male incomes in real terms have declined
  • The fixed costs of a two-income family with children are so high there is little scope for belt tightening when anything goes wrong
  • Credit is now so widely available that families are allowed (and encouraged) to assume debts that would never have been allowed a generation ago
  • The credit-card companies have rewritten their contracts so that massive increases in interest rate can be applied at any time
  • The additional indebtedness is not being spent mainly on frivolous consumer goods (which, we must admit, was our assumption), but rather on basics: housing, health insurance, pre-school and college education and expenses that let them both go to work (transport, childcare, taxes).

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?