[Mase]

My fear of a recession is based on the massive consumer debt built up over the years, and the fact that consumers can no longer extract barrels of money from the equity in their appreciating homes.

If consumer debt was as massive as you suggest then household net worth wouldn't be setting a new record every quarter. Homeowner equity only accounts for around 20% of our net worth. We own a lot of assets other than our homes.

[Freedom_Is_Not_Free]

For many working couples, the only assets they have are their home or their 401(k). Now that they can’t take money from their homes, they are taking money from their 401(k)s. We’ll see what happens when that runs out.

In the meantime, I expect to see a large reduction in consumption from all the working couples that have no home equity and no 401(k). It doesn’t take every consumer to stop buying to impact the economy.