Unintended Consequences

The Daily Reckoning ^ | 10-22-2009 | Ian Mathias (Not John Ross Or Henry Bowman)

[blam]

Unintended Consequences

By Ian Mathias

10/22/09 Baltimore, Maryland – Follow this one… how the recent rise in retail sales might bust the housing “recovery”:

“Retail sales growth is understandably proving meager and hard to regenerate,” writes our macro sage Rob Parenteau, “in a nation where private debt deleveraging is under way and net job generation has yet to return. The early read on consumer expectations for October shows a seven-point drop, which is very indicative of the hesitancy that we suspect will characterize the tentative return to higher spending by U.S. households. Too many rugs have been ripped out from underneath them over the past two years.

“The shallow recovery in the dollar level of retail sales is, nevertheless, enough to help produce a positive GDP result for Q3, with consensus estimates centering on 3.5% of late. As this will mark an official end to the severe recession, one consequence is that Treasury bond buyers may be reluctant to add to their exposures, especially with the Fed’s quantitative easing for this asset category ending in a month. The housing recovery is tentative enough that a backup in mortgage rates into year-end would undoubtedly prove problematic.”

[snip]

[hoosierham]

Like many workers who have seen no pay increases,or been forced to accept pay rate cuts,loss of usual overtime,and other benefits,I am trying to reduce indebtedness.Buying expensive stuff just because it “the holidays” is not part of my plan.

[griswold3]

Good for you! You can ‘live like nobody else so that you can live like nobody else!’ -Dave Ramsey.
(You’ll be surprised how much you save without the ‘interest’ tacked onto purchases.)
FYI, the word on the street is that the LA ports have less freight coming in.
If your looking for a special item, get it now as that probably means less holiday inventory. Also, there could be less ‘discounts’ on current merchandise. So don’t wait.
Oh, yeah, shop like a ‘conservative’ and conserve.