Skip to Content.
Sympa Menu

homestead - Re: [Homestead] Perfect Storm

homestead AT lists.ibiblio.org

Subject: Homestead mailing list

List archive

Chronological Thread  
  • From: Clansgian AT wmconnect.com
  • To: homestead AT lists.ibiblio.org
  • Subject: Re: [Homestead] Perfect Storm
  • Date: Tue, 10 May 2005 16:36:47 EDT

In a message dated 5/9/2005 11:59:07 AM Eastern Standard Time,
genegerue AT ruralize.com writes:


> As for a "sharp rise in interest rates," while possible, the likelihood is
> slim. I know that Alan Greenspan is keenly aware of the value to the
> economy of consumers using home equities for general purchases because the
> broker of our company, Realty Executives, was among the Realtors quizzed
> closely by Greenspan on just that subject.
>

OK. I must be suffering some sort of lapse here, where 2 plus 2 is supposed
to be 7 but somehow I keep coming up with a different answer. I've read this
paragraph a dozen times and every time it reminds me of the old SNL skit
where
someone is asking Regan about his econimic policy and he says, "Picture the
economy like a big blueberry pie. You cut that pie in half. Half of the pie
pays for entitlements. Half the pie pays for defense. And half the pie pays
the interest on the debt."

What I mean is this: if people are using the equity in their home to make
general purchases, then they no longer have that equity in their home, do
they?
Else all they are doing is making a loan to themselves. They are kiting
their own checks to themselves, as it were. Seems to me that this would add
to
the 'perfect storm' likelihood.

James




Archive powered by MHonArc 2.6.24.

Top of Page