December 2004: ""Betting the House on the Stock Market""

[NashVegas]

http://elliottwave.com/features/default.aspx?cat=mw&aid=1380&time=pm

The National Association of Securities Dealers is shocked, shocked because -- in the words of a Wall Street Journal headline -- some people are

"Betting the House on the Stock Market"

Homeowners are "pulling money out of their property at a greater rate than ever," and now that the toothpaste is out of the tube, someone thinks somebody needs to do something. "The consequences of this problem can be so devastating," said an NASD official, "that we'd really like to address this to keep it from becoming a big problem."

Sheesh -- what a nag. Don't they know that debt is only a tool that allows money to flow from home equity into the equity market? Who's to say which sort of "equity" is better anyway?

And the really bizarre thing is, the NASD's warning is based on data more than two years old: "From 2001 through the first half of 2002, 11% of total funds obtained from mortgage refinancings were used for stock-market and other financial investments." The fact is, the toothpaste came out of the tube slowly back then; these days it's a gush. According to data on the Federal Reserve's web site, revolving home equity loans stood at $211.1 billion on Dec. 4, 2002. As of Nov. 24, 2004, the figure is an all-time record $394.1.