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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: GraceZ who wrote (57371)	4/4/2006 1:45:59 AM
From: mishedlo	Read Replies (1) of 110194

To believe that people are simply borrowing endlessly without paying it back to maintain lifestyles beyond what they can afford you'd have to make the argument that most American families are basically insolvent. This isn't true, a very small percentage are. I believe you mean to say it isn't true YET. The home equity extraction to support consumption in conjunction with a negative savings rate has to be 4 or more standard deviations above the norm. If housing slides after that extraction and people lose their jobs (both highly likely IMO), then I do not know about "majority" but huges percentages of the population will be in deep shit with no means of paying it all back EVER. Mish

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