On Mon, Nov 1, 2010 at 8:40 AM, Dan Minette <danmine...@att.net> wrote:
> > >Interesting perspective in the LA Times. > > > >But a bigger problem may turn out to be the millions of Americans who are > still faithfully paying their mortgages, but on houses > >worth far less than before the bubble burst. It's not that these > homeowners > will stop making their payments. It's just the opposite > >— that they will keep doing it. > > I thought about this, and I think the article misses the real > problem....that the rise in home values fueled the '00-'08 economy. There > is ample reason to argue that folks didn't save, because they saw their net > worth going up every year, as their home appreciated. Folks who sold their > homes for bubble prices spent the money; it's gone. Some people took out > second mortgages on their houses and spent the money...with their house > value rising, they spent the value. > No question, either extreme is bad. But how to manage the volatility is the billion - or is that trillion? - dollar question. Nick
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