Posted on 03/25/2008 9:31:38 PM PDT by TigerLikesRooster
US consumer optimism at Watergate low
By Ambrose Evans-Pritchard
Last Updated: 12:55am GMT 26/03/2008
Consumer expectations in America have plummeted to their lowest level since the Watergate crisis and the oil embargo in 1973, while US house prices are now falling at the fastest pace since records began.
The Case-Shiller index of home prices in the 20 largest US cities fell 10.7pc in January from a year earlier, with drops of 19.3pc in both Miami and Las Vegas. The price falls have already left nine million Americans facing negative equity in their houses.
Separately, the US Conference Board released a string of grim figures showing that the financial crisis of the last eight months has suddenly spilt over into the broader economy, causing a plunge in consumer confidence index from 76.4 in February to 64.5 in March.
The most shocking data was for the "Expectations Index". It crashed to a level last seen in December 1973, when the noose was tightening on the Nixon presidency and the 'Great Inflation' had begun to accelerate out of control. The Yom Kippur War two months earlier had led to an Arab oil embargo of the West.
"Obviously, this is a recession signal," said Lynn Franco, the Board's research director. "People are faced with rising gasoline and food prices, and the credit crunch has made it much harder to get a home equity loan."
advertisementThe data comes as a cold shower after the euphoria following the Federal Reserve's rescue of Bear Stearns and the US banking system. It is a reminder that the US economy faces a long stint of hard labour to purge the excesses of the property boom. Americans have scant reserves to tide them through.
The savings rate fell below zero last year for the first time since the 1930s and mortgage debt is now greater than total home equity for the first time ever.
David Blitzer, who puts together the Case-Shiller index for Standard & Poor's, said house prices were now in a vicious downward spiral.
Wall Street took the day's grim news in its stride, and there was little change in the Dow Jones index in late trading.
This guy keeps inventing a new phrase. The last one I saw was "Austrian purge.":-)
Ping!
Liberals have been screaming and whining about the need for “affordable” housing for years. Now that there is going to be an abundance of “affordable” housing, they’re still screaming and whining. Some people would b*tch if you hung them with a new rope.
One of the biggest problems that I see is that the government’s method of measuring inflation is not reflecting the reality that most American are facing. Food and energy are going up, and if you did the exact same things this March that you did last March, you are paying significantly more this March.
Liberals, our tireless domestic subversives, have been touting for years the “worst economy” in generations. That does have a dampening effect on confidence. If only they could be subjected to the kind of world they fight for without dragging the rest of us through it as well.
I agree with you 100%. The “media” has been wanting a “bad economy” since 2000. After a while, people start believing the garbage that they see repeated night after night after night on the nightly “news.”
Time to bang my head against the desk again. Wall Street certainly did NOT take the grim news in stride -- not quite at the open, but close enough, the DJII dropped 100 points less than ten minutes, and it took "them" half the day to push it back.
A whole lot of money is being expended to paint the tape here to keep the S&P just barely hanging on to its 50-DMA for the first time in a couple of months.
Time to bang my head against the desk again. Wall Street certainly did NOT take the grim news in stride -- not quite at the open, but close enough, the DJII dropped 100 points less than ten minutes, and it took "them" half the day to push it back.
A whole lot of money is being expended to paint the tape here to keep the S&P just barely hanging on to its 50-DMA for the first time in a couple of months.
I don’t see how YOUR post relates to MY post but...okay...whatever.
Consumer confidence test, take notice of all the new dealership plates on vehicles in traffic today, this is only a test.
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