The Ignorant Investor

WASHINGTON - Consumers, lured to the malls by unusually warm weather and eager to spend their Christmas gift cards, boosted retail sales by a much larger than expected amount in January with sales outside of autos surging at the fastest pace in six years. . .

"Warm weather and consumers' willingness to spend every penny they have led to a huge increase in retail sales," said Joel Naroff, head of Naroff Economic Advisors. "Households may be tapped out and dipping into savings and wealth, but that still hasn't slowed them down one bit."

All signs point to consumers spending more because they see their homes as both a place to live and as a vehicle for savings. Who needs to save cash as long as one's real estate keeps rising in value?

For me, the gains I have in home equity don't count for anything until those gains are turned into cash. What my house is worth won't count for anything if prices drop significantly, and if there's one thing that the 2000-01 stock market decline taught us, it's that anything that goes up at a historically unprecedented rate can come crashing down just as fast.

Americans are feeling very optimistic, I'd say.