American’s are waking up to the reality that their homes are no longer ATM’s. This will have long-term repercussions on aggregate U.S. demand, and will certainly put a large dent in our consumption driven economy. Many Americans might be willing to replace home equity loans (mortgage equity withdrawals or MEWs) with an added job or two if there were any. In time they likely will, but don’t expect the levered consumer to return for at least 60-80 years, that’s about how long it took us to forget the last deflationary period.
Equity Extraction Data
CalculatedRisk, March 24, 2009