Came across an interesting piece about the beleaguered American consumer today. The consumer was to be blamed partly for the worlds' ills because it was his propensity to consumer (over savings) that created the financial mess. Americans have negative savings rate and so on.
Joel Kurtzman in his post analysing home equity trends concludes that the American Consumer has been pretty sane in his decision making and payment of bills. Quite intriguing, if 48 million consumers contribute to $10 trillion in home equity and American GDP is $13 trillion how can the savings rate be described as it is?
Very very confusing. What exactly constitutes home equity?