On Jan 15, 2009, at 10:56 AM, Jim Devine wrote:
In this "mark to market" world, I can use the equity on my (allegedly) $1 million house as collateral to get new loans.
and
it's not a matter of cash flow. It's the ability to use home equity as collateral (as "an ATM," as one famous economist put it). Having a valuable house increases one's reputation and creditworthiness.
Aren't these just different ways of saying what I'd already said? Wealth means little if you can't turn it into cash. The cash is where the action is, and the asset just an enabling mechanism. So studies of the effects of housing wealth on consumption are looking at an imperfect proxy for something, not the thing itself.
Doug _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
