haha
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
This is absolutely correct. I had a drink with a woman nearing normal retirement age. She lives in a nice house in an expensive neighborhood which she and her husband bought many years ago when it was cheaper by at least 20 x. She wound up with the house in her divorce. She was saying how bad she felt that she would have to leave the neighborhood when she quits work. I asked if the taxes and upkeep were too high: she said no, I have refinanced many times and I can't afford the payments without a job.The economy is 70% consumer based, and was funded by home equity withdrawal the last 7 years. Consumers have increased spending, over income, steadily by 1-2%/year for the last 25. Incomes have been down since 2000 due to global wage arbritrage (one reason corp profits got so high), and so they have spent the house equity to make up the difference. I have a study of what funds consumers, in aggregate, have left to spend, and the only thing left is pension type money, which is hard or impossible to raid.
I have known her for years- the re-financing wasn't for home repairs or even for luxuries. It was to keep up a semblance of the life she was accustomed to as an upper-middle class married woman.
I have to think that she is not alone, and that this source of cash drying up is going to make a big difference to the economy. The only thing that could possibly put it off would be to somehow re-blow the bubble.
Ha