Spencer Jakab

speaker

981 appearances 14 recordings 1 series first heard Jul 2017 last heard Jun 2021

Spencer Jakab’s voice in public audio — every appearance, attributed to the second.

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WSJ Your Money Briefing · Prepared for a Rainy Day? U.S. Savings Rate Remarkably Low · 1 Nov 2017 podcast

You know, you're not going to stay at this three-ish level for a very long time. voice-verified

Well, that's a really interesting thing, too. voice-verified

Let's look at the savings rate. voice-verified

3.1% is really low, and we point out that it's the lowest in almost 10 years. voice-verified

But the period between 2003 and 2007 was really unique because you had sort of a boom not too different from today. voice-verified

You had easy money, very easy consumer borrowing. voice-verified

But during that period, the thing that made people feel wealthy was the value of their homes. voice-verified

And not only did it make you feel wealthy, like it does during a stock market boom like we're having today, like we had in the late 1990s, but you actually could spend that wealth. voice-verified

So in 1999, if you had bought AOL or Pets.com or whatever stock had voice-verified

gone up fivefold or tenfold, you felt wealthy, but you had to actually sell it in order to take that money and spend it. voice-verified

And people weren't doing that. voice-verified

They're keeping their money in the market for the most part. voice-verified

Exactly. voice-verified

If the value of your house has doubled, you're not only rich on paper, but in 2005 or 2006, you could go out and spend those gains in the value of your home. voice-verified

As a matter of fact, you could spend more than the gains in the value of your home. voice-verified

You could reduce your home equity voice-verified

And people did that to the tune of a couple of trillion dollars during that boom to the point that at the peak, about 10 percent of disposable personal income was coming from money that people were kind of using their home as an ATM to take out and go spend on food. voice-verified

you know, they may have been consolidating debt, but it was mostly spent on whatever, you know, on consumption. voice-verified

And that is, you know, obviously many people live to regret it. voice-verified

They lost their homes or came very close to losing them. voice-verified

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