On 3/1/07, paul phillips <[EMAIL PROTECTED]> wrote:
Since a lot of the upper income group (professionals in particular) and increasingly, middle income earners, have their retirement savings in RRSPs (in Canada) and I believe 401s in the US, would not a significant drop in the stock market be expected to have a wealth effect on consumption, particularly on 'luxury' home purchase which might carry mortgage obligations into retirement?
right. But these shifts are not the kind I was writing about (the transitory changes in the SM). It's only persistent declines or persistent stagnation of SM prices that have the wealth effect. This is reinforced to the extent that stock-owners are leveraged, either in the "Market" or in house ownership. -- Jim Devine / "The truth is more important than the facts." -- Frank Lloyd Wright
