Debt by Americans Up 10%

In the first quarter of 2005, the Federal government debt rose 13.8%, its
fastest quarterly pace in two years. U.S. mortgage debt rose 10.5% in the
first quarter and business debt rose 7.5%. At the end of the 1st quarter,
federal debt held by the public was slightly more than $4.5 trillion. The
value of real estate increased by $395 billion, a slight drop from the 4th
quarter's increase of $397 billion.

In the same period, the amount of new debt taken on by Americans rose
10% to $24.8 trillion, according to the Federal Reserve. It was the fastest
growth since the second quarter of 2003. Household net worth increased
0.7% to $48.8 trillion in the first quarter. Net worth increased to 545% of
disposable income, while owner's equity in real estate rose slightly to
56.3% of market value.

However, the net worth of households' equities fell by $122 billion, and
mutual funds' value declined by $21 billion, the Fed said. The value of
pension fund reserves also dropped by $237 billion.

Increase in debt, fall in households' equity, dropping pension fund together
with looming dangers of a burst in housing bubble and possible rise in oil
price in summer could call for trouble in stock market. This calls for a
cautious outlook (even if we are optimistic for long-term) in next few
months.