Posted on 10/16/2007 6:33:32 AM PDT by Hydroshock
Fortune Magazine) -- Here I go. I am about to walk into one of the biggest sucker's games in the whole world of economics: declaring that the U.S. consumer is tapped out, so desperately in hock and troubled about the future that he finally just can't spend like it's 1999 anymore. And to be clear, that is what I'm declaring. Unless I can talk myself out of it by the end of the column.
I must be nuts. One of the most reliable ways to look like a business dope over the past several years has been to announce that the consumer spending party is finally over. Every year, usually in the fourth quarter, assorted boffins prove beyond doubt that U.S. consumers cannot possibly keep spending as they have been. Consumers then ignore those reports and keep right on spending anyway.
The question of consumer behavior is enormously important because more than 70% of U.S. economic activity is consumer spending. Most companies thus depend on our buying, which means that most of the valuation of the U.S. stock market depends on it also.
And because we buy so many imports - almost $2 trillion worth last year - plenty of foreign economies depend on us as well. So it's easy to see why everybody wonders what U.S. consumers will do next.
(Excerpt) Read more at money.cnn.com ...
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After a binge comes the hangover................
My BS meter just shot up.
It’s only true if those bastards in the Democratic Congress don’t renew the tax cuts...
When I compare my expenditures to those of other American consumers, I’m pretty representative. Have always been able to pick rising stocks successfully because I know that if I like a product or business, other consumers will too. Anyway: I’m still spending, and so are my neighbors. Big delivery trucks from Best Buys and major appliance stores come up the streets of our neighborhood. Remodelling and other big-ticket expenses continue. Everybody seems to be driving a new car or truck. Most important measure: it’s hard to find a parking place at the mall. It doesn’t smell or feel like the onset of a recession. I’m not worried (yet). That will disappoint you, of course.
Having said that, I suspect there is a lot of truth to what the author says in this article. In fact, I have long believed that the real motive behind the illegal alien amnesty proposal in Congress was not the desire to get more cheap labor into this country . . . it was the need to get more consumers into this country.
Oh well, who are the globalists and “free traders” going to stick next to keep ‘globalisation’ going?
I’ve spent more than 40K on remodeling this year...Best Buy and Lowe’s are always packed.
In fact it started Sunday spending $1K on some 'stuff'. No scratch that, three weeks ago I bought another Fender guitar and a new Fender G-DEC amplifier. So it started then I guess.
And what defines a 'spending binge' anyway?
To The Police: Stop Me Before I Buy More Guitars!
/s
Noone can be disapponted because people are not worried. It’s not judgement day or anything it’s just a recession that follows an economic firework.
With no money in their pockets - what is it people can buy ?
The answer for the last years was - sell the worth of your home in the future and get a car on credit.
Since interests where so low that worked great for a while but it was clear that it doesn’t for ever.
Normaly low taxes are ment to be an instrument for stimulating an economy by enabeling investments that otherwise would be found to risky.
In the last years this instrument was used to get people on cruising holydays in the caribean sea. The money shelled out is not working in a factory waiting to pay back the printer - it’s burned and gone.
Now comes the time to rise interests to not loose the ability to pay for imported commodities.
Get back to work.
And more people paying into Social Security?
Carolyn
LOL! That's the story of my life, too... ;)
That’s only a small part of it. If there’s any chance in hell that the guy wading across the Rio Grande today will be shopping in a car dealership a couple of years from now, this country wants to make it as easy as possible for him to get here.
Do you and your friends buy all that crap on credit?
Like a broken clock which must be correct twice each day, the “pundit”s”once again claim the consumer is tapped out and the sky will shortly fall.
And when it happens and America slides into a recession, let’s see their take when oil prices drop below $50.00bbl because the economic engine that pulls the entire worlds economic train has ceased to run. Will they be happy?
It’s(the economy) being artificially pumped up as far as I’m concerned, and it can’t last forever.
Agreed.
If domestic and foreign events proceed apace we will see this Congress out on its ass next year as voters vote for newcomers.
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