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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: pater tenebrarum who wrote (83141)3/20/2001 9:03:09 PM
From: Ilaine  Read Replies (1) of 436258
 
Using credit card advances and home equity loans to buy stocks isn't quite the same as using call money, because you don't get margin calls when the stock goes down, so you can't get liquidated in a downdraft.

That may be merely prolonging the inevitable but it does prevent the sharp intraday house-of-cards type collapse.

One reason there is more consumer debt, by the way, is all the programs to help more low income people buy houses. Mortgage debt is included in consumer debt. These are low or no down payment loans so that's one reason home equity levels are declining. The US government is going to have to be in unimaginable trouble to default on the loan guarantees it's giving for these mortgages.
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