The notion that American consumers are living in debt from spending binges is misleading. The American consumer balance sheets are in pretty good shape.

If you take all Stocks, Bonds, Life Insurance Policy, Bank CDs, 401K holdings and add them all together, subtract out what people owe on credit cards and other forms of indebtedness and what they owe on mortgages and don't count the value of the house and treat the mortgage as pure debt will show the true accounting numbers of what Americans are worth. Subtracting the liabilities from assets will show that consumers assets total approximately 29 trillion. The American people have more savings than the world combined!

With tens of trillions of American assets in this country and abroad, I don't yet see how 300 to 400 billion in losses spread over a few years from bad lending practices is enough to place the economy into a full swing recession. The overall economic fundamentals are still pretty strong and I believe the economy will absorb the mortgage crisis if we have sound monetary policy from Washington and a reasonably stable geopolitical climate.

This economy is somewhat in a state of creative destruction -a shake out of the weak. Creative capital creation is a messy one and we will be seeing this for the next year and then investors will be going into the next big boom biz. The economy doesn't work in a smooth and polished quarterly growth at double digit rates, it binds, lurches with irregularities until all the kinks are worked out.

This country isn't going anywhere, we will survive this!

EAHINC