For the 34 million households who took money out of their homes over the last four years by refinancing or borrowing against their equity — roughly one-third of the nation — the savings rate was running at a negative 13 percent in the middle of 2006, according to Moody’s Economy.com. That means they were borrowing heavily against their assets to finance their day-to-day lives.
Real estate values have plumeted, lenders have tightened, solvency is an issue for all levels of finance. Line of credit on home equity are now dead..and so it this consumer driven "growth economy". We have been in a technical recession since 1999 on the macro (dollar value level). Where does the growth come from now? What is left for the feds and the economic powers to pump into the system to keep this facade going? That question scares me.