"except that the markets are not a source of consumer cash - at least, for most consumers they're not ..."
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TJ...
The markets affect the spending habits of only a portion of Americans, that is true. But those who are in that category tend to do a whole lot more spending than those who are not affected. That is similar to the fact that most folks pay little or no income taxes but those in the highest tax brackets pay a hugely disproportionate share of all taxes (the philosophical or political arguments for or against that are immaterial here - the simple fact is that they do).
When equity portfolios have dramatic appreciation as they have this year, they can become a source of funds either by selling the stocks or as collateral for borrowing against the stocks, even in a retirement account. If you subtract the total market capitalization back in March from the current total market capitalization, you get an idea how much wealth has been created during this rally -- exactly what Greenspan wanted, and as a bonus he gets improved consumer sentiment.
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