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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Joan Osland Graffius who wrote (3894)	12/26/2003 9:27:43 AM
From: MulhollandDrive	Respond to of 110194

do not know what will get the citizens in this country to start saving. I believe we will have some event that will force this to occur and I would bet this savings will not be in stocks of companies that have no stockholder equity. <g> joan, i have no idea what "event" will prod the u.s. consumer into saving, or perhaps i should say more correctly decelerated spending.. or whether the monies "saved" by a lessening of spending actually go into investment or simply into higher food prices, insurance, taxes, etc...as they are forced to reallocate funds to a higher percent of income to necessities resulting in lesser disposable income i do have a sense the increased urgency to save will have a direct correlation to housing. just as the wealth effect spurred spending, the perception of overhanging debt in mortgages ....especially after the refinance boom that caused many to mortgage the future even further by the cash-out re-fi to either restructure existing debt or use that cash for immediate consumerism, the rebound effect of which may cause that "wake up in the middle of the night" moment, where the individual realizes the "game clock" is running, there are no time outs, and they are behind on the "score" (home equity, bank accounts, investments, whatever).....almost a "buyer's remorse" situation.....not so much at the taking on of the real estate debt itself, as i believe americans are deeply ingrained with the idea that RE is a "safe" investment, but rather a concern that they are not making sufficient headway on the debt as they bear down heavily in larger numbers toward retirement.