tag:blogger.com,1999:blog-4290163255778893789.post5759925522061303089..comments2024-03-16T05:19:07.061-04:00Comments on Retirement Blues: Equity Extraction and Personal Consumption ExpendituresJazzbumpahttp://www.blogger.com/profile/07337490817307473659noreply@blogger.comBlogger12125tag:blogger.com,1999:blog-4290163255778893789.post-56869925772379319412019-08-24T03:50:28.565-04:002019-08-24T03:50:28.565-04:00nike huarache
christian louboutin outlet
balenciag...<a href="http://www.nike-huarache.com" rel="nofollow"><strong>nike huarache</strong></a><br /><a href="http://www.christianlouboutin-outletonline.us.com" rel="nofollow"><strong>christian louboutin outlet</strong></a><br /><a href="http://www.balenciaga-shoes.us" rel="nofollow"><strong>balenciaga shoes</strong></a><br /><a href="http://www.christianlouboutinshoessale.com" rel="nofollow"><strong>christian louboutin shoes</strong></a><br /><a href="http://www.yeezyboost-350.uk" rel="nofollow"><strong>yeezy boost 350</strong></a><br /><a href="http://www.adidasnmds.us.com" rel="nofollow"><strong>adidas nmd</strong></a><br /><a href="http://www.coachoutlets.name" rel="nofollow"><strong>coach outlet online</strong></a><br /><a href="http://www.nike-airmax97.us.com" rel="nofollow"><strong>air max 97</strong></a><br /><a href="http://www.adidasyeezys.us.com" rel="nofollow"><strong>yeezy shoes</strong></a><br /><a href="http://www.airmax270.us.com" rel="nofollow"><strong>air max 270</strong></a>yanmaneeehttps://www.blogger.com/profile/15229165146687805497noreply@blogger.comtag:blogger.com,1999:blog-4290163255778893789.post-76857134119263686532014-03-23T01:02:39.172-04:002014-03-23T01:02:39.172-04:00nice!
the extension back to the 1960s was appreci...nice!<br /><br />the extension back to the 1960s was appreciated. I did leave in the 1990s in my original to compare 1990s vs 2000s.<br /><br />We can save a lot of analysis and just take TCMDODNS over GDP, which is our non-financial debt leverage.<br /><br /><a href="http://research.stlouisfed.org/fred2/graph/?g=u4l" rel="nofollow">http://research.stlouisfed.org/fred2/graph/?g=u4l</a><br /><br />when I first made this graph my jaw dropped. SO much had become perfectly clear.Troynoreply@blogger.comtag:blogger.com,1999:blog-4290163255778893789.post-64983354954484233202014-03-19T18:08:58.377-04:002014-03-19T18:08:58.377-04:00Troy,
I spent some time with your graph and data h...Troy,<br />I spent some time with your graph and data <a href="http://newarthurianeconomics.blogspot.com/2014/03/i-tweaked-troys-graph.html" rel="nofollow">here</a>, <a href="http://newarthurianeconomics.blogspot.com/2014/03/i-can-picture-what-i-want-to-do-now-i.html" rel="nofollow">here</a>, and <a href="http://newarthurianeconomics.blogspot.com/2014/03/blog-post.html" rel="nofollow">here</a>.<br />The Arthurianhttps://www.blogger.com/profile/16501331051089400601noreply@blogger.comtag:blogger.com,1999:blog-4290163255778893789.post-29871734703487026142014-03-13T22:55:47.045-04:002014-03-13T22:55:47.045-04:00http://research.stlouisfed.org/fred2/graph/?g=t40
...<a href="http://research.stlouisfed.org/fred2/graph/?g=t40" rel="nofollow">http://research.stlouisfed.org/fred2/graph/?g=t40</a><br /><br />blue is YOY job gains<br />red is YOY consumer credit growth (mostly mortgage)<br /><br />home borrowing did not just fund HELOCs, the cash-out refis paid off credit cards and funded all kinds of business investment, car purchases, vacations, etc etc.<br /><br />Plus all the transaction volume was making the FIRE sector immensely happy, which also trickled out into the wider economy.<br /><br />The credit influx peaked at $100 BILLION PER MONTH for a couple of years. <br /><br />It was really great while it lasted -- it was a money injection DIRECTLY into the middle quintiles.<br /><br />Nobody gets this.Troynoreply@blogger.comtag:blogger.com,1999:blog-4290163255778893789.post-77926677945643251992014-03-13T17:05:15.057-04:002014-03-13T17:05:15.057-04:00I understand your point.
My point was that I susp...I understand your point.<br /><br />My point was that I suspect if you did the same analysis for the same period of total household debt increase vs PCE increase you would see a similar correlation.jimnoreply@blogger.comtag:blogger.com,1999:blog-4290163255778893789.post-41775412821888051582014-03-13T10:16:55.587-04:002014-03-13T10:16:55.587-04:00jim -
Th point is that 2nd liens go to consumptio...jim -<br /><br />Th point is that 2nd liens go to consumption spending and first liens go to mortgage payments.<br /><br />I think this ties in well with the rest of your comment.<br /><br />Thanks,<br /><br />JzBJazzbumpahttps://www.blogger.com/profile/07337490817307473659noreply@blogger.comtag:blogger.com,1999:blog-4290163255778893789.post-58855433266982391852014-03-12T17:49:10.812-04:002014-03-12T17:49:10.812-04:00I don't really see the point in focusing on th...I don't really see the point in focusing on the relationship of equity extraction and personal spending. I'm not really disagreeing. It just seems that second liens have about the same effect as first liens. <br /><br />All loans contribute to increased spending. The reason you usually get a loan is to spend the money. If the loan is equity extraction you might spend it on big screen TVs or on a new car or you might pay someone to remodel your house and then the contractor does the spending. And when the borrowing stops the spending will drop also. <br /><br /><br />That said, It is important to understand the huge extent to which home equity extraction was part of the sub-prime borrowing of the 2001-2007 era. 70% of sub-prime loans were second liens. And home equity extraction could be set up to work like an ATM as can be seen from this 2007 ad. <br />http://heloc-4u.blogspot.com/2007/02/how-to-get-heloc-loan-with-bad-credit.html<br /><br />The popular myth is the housing bubble was about expanding home-ownership, but it was really the opposite. The home-ownership rate now is several percentage points below what it was in 2001 and a lot of the losses were due to people who got in trouble by taking out sub-prime home equity loans.jimnoreply@blogger.comtag:blogger.com,1999:blog-4290163255778893789.post-11617675141809943612014-03-12T16:08:11.366-04:002014-03-12T16:08:11.366-04:00While you've got a rather good demonstration o...While you've got a rather good demonstration of correlation there and it's a fairly plausible contributor, I'd be leery of presuming that it is a primary trigger for the crisis. Consider the leveling and then decline in employment that went along with the decline in availability of home equity. Reduction in home sales sacked a lot of jobs, not just in home construction but also in related industries (e.g. furnishings). It seems highly probable that the job losses from reduced home sales contributed as much as or more than reductions in potential for equity extraction.State of Thoughthttps://www.blogger.com/profile/10367399699314075343noreply@blogger.comtag:blogger.com,1999:blog-4290163255778893789.post-46599520100231770872014-03-12T10:01:58.416-04:002014-03-12T10:01:58.416-04:00Thanks, Art -
Steve's post is very thoughtful...Thanks, Art -<br /><br />Steve's post is very thoughtful. <br /><br />I'm not going to claim I've discovered the ultimate answer here, but I do think I've identified a significant contributor.<br /><br />P.S. When do you sleep?<br /><br />JzBJazzbumpahttps://www.blogger.com/profile/07337490817307473659noreply@blogger.comtag:blogger.com,1999:blog-4290163255778893789.post-7587205299056041272014-03-12T03:57:02.390-04:002014-03-12T03:57:02.390-04:00Jazz,
I like it. Sounds right to me: As long as co...Jazz,<br />I like it. Sounds right to me: As long as consumption spending was getting a boost from equity extraction, the economy was getting a boost from consumption spending. And then the collapse of the housing bubble toppled the dominoes.<br /><br />Jazz, I think you've answered a question Steve Roth asked <a href="http://www.asymptosis.com/this-time-is-different-federal-debt-didnt-dive-before-the-depression.html" rel="nofollow">at Asymptosis</a> a couple years back: <b>Why did it take almost a decade, this time, for the big drop in Federal debt to create a depression?</b><br /><br />Nice work.<br />The Arthurianhttps://www.blogger.com/profile/16501331051089400601noreply@blogger.comtag:blogger.com,1999:blog-4290163255778893789.post-12580906346331376262014-03-11T23:03:00.601-04:002014-03-11T23:03:00.601-04:00Thanks.
You got here a little early. I've be...Thanks.<br /><br />You got here a little early. I've been editing for the last hour. <br /><br />Should be just a little bit better now.<br /><br />I'll put it up at Angry Bear in the morning.<br /><br />Cheers!<br />JzBJazzbumpahttps://www.blogger.com/profile/07337490817307473659noreply@blogger.comtag:blogger.com,1999:blog-4290163255778893789.post-32071403584247388812014-03-11T22:08:28.557-04:002014-03-11T22:08:28.557-04:00You should publish this, sweetie.
Fantastic writi...You should publish this, sweetie.<br /><br />Fantastic writing.<br /><br />Great reporting!Cirzehttps://www.blogger.com/profile/07070125217972397204noreply@blogger.com