Long-Feared Consumer Crunch Is Coming

BusinessWeek Via MSNBC:

The long-awaited, long-feared consumer crunch may finally be here. That might not mean an economywide recession, but the pain for American households will be deep.

In recent years the U.S. mostly has seen narrowly focused downturns, where a few sectors are hit hard while the rest of the economy and financial markets remain relatively unscathed. In the dot-com bust of 2001, for example, tech companies and stocks took it on the chin, while consumer spending and borrowing sailed through without a pause. This time the positions will be reversed, as consumers tank while much of the corporate sector stays on track.

Read the whole story: BusinessWeek Via MSNBC

Comments

[taoist]

10:12 PM on 11/25/2007

Ahhh- insanity: buying stuff you do not need, with money you do not have,to impress people who do not care. If we would all just stop buying stuff we do not have to have.

[gakabani]

11:00 AM on 11/24/2007

It is already here.

[starrianna]

03:32 PM on 11/23/2007

The Economist's latest cover art shows the woman from the movie JAWS swimming with an American flag bikini while JAWS is 2 seconds from chomping her ass up good.

The headline: http://economist.com/opinion/displayStory.cfm?Story_ID=10134118

[VivaZapata]

08:58 PM on 11/22/2007

these guys knew the stuff was going to hit the fan; they were just hoping bush & co. would be out of office before it did and lay it on whoever the democratic president was to be. blew too soon.

[Blutus]

12:49 PM on 11/22/2007

Americans need to stop worrying so much.

This is a good thing.

Americans can only wake up when some
suffering is involved.
A depression or recession may help people
re-focus on what matters in life, family, friends, etc. and not a lot of stuff we do not need.

So, instead of buying crap, we will have to spend more money on the essentials and maybe the crap merchants will disappear.

And the let the Euros rave.
They have always hated us and always will,
even when we were saving their sorry asses.

What Americans need to remember is how lucky we are: we are protected by two oceans
and can incinerate any spot on earth in minutes.

Let those living like ants rage about us
all they want.

We are about to kick Bush right in the head
while Europe is going to have to fight like
hell to prevent another wave of facism.

And it has already started.

[birdboot]

11:22 AM on 11/22/2007

This can't be happenning. We were assured the Iraqi war would be funded by it's oil. Now, it's 100 barrel. Bush was right, wasn't he?
It's sub prime and oil together this time around. The S&L scandal will look like a non event.

Time:
In the run-up to the Iraq invasion, then Deputy Defense Secretary Paul Wolfowitz assured Congress that Iraqi oil would pay for the country's occupation and reconstruction.

[VivaZapata]

12:24 AM on 11/22/2007

IT'S HERE

[pennyfortheguy]

04:28 PM on 11/21/2007

Good. We can eat all of our foreign made products.
Dumbassed Americans.

[realitytrumpsbull]

08:33 AM on 11/21/2007

If people buying useless crap that they don't
really need on credit which is money they
don't really have, then it's like Wile E. Coyote
running off a cliff...nowhere to go but down...
question is, who will gain or profit by all
of this? Hmmmm....

[geobushono]

06:51 PM on 11/20/2007

the full header for this story is:
long feared consumer crunch is finally coming to the hither to untouched middle class....opposition to illegal immigration spikes.

[BlackbirdHighway]

05:44 PM on 11/20/2007

As I understand it, and the media never, ever offers any explanation at all, is that according to these gov't stats, putting money into an IRA or a 401K are not considered savings. Putting money into stocks or mutual funds isn't considered saving either. About the only thing that is considered saving is putting money into a traditional bank savings account. Since those accounts pay interest so low that it is lower than the inflation rate, that saving should be zero.

The real world is not reflected by these stats.

[aintnogod]

05:42 PM on 11/20/2007

All I can say is that my family's household income is almost smack dang in the middle of the median number (true middleclass), and, as far as I can see, all these stupid people around me who have bought over-priced homes, demanded homes much to big for their needs, consumed huge gas-hog SUVs, big screen TVs and extended themselves beyond all reason have driven home prices way beyond what true middleclass wages (if reasonably spent) can afford. It's crazy out there, the American dream turned nightmare.

[mmckinl]

03:50 PM on 11/20/2007

The Good News :The drop in consumer spending will only be temporary .

The Bad News: Consumer spending will be redirected to food and fuel prices as they skyrocket while the Fed tells everyone inflation is 2%.

[jazzman]

01:34 PM on 11/20/2007

The link between corporations and workers has been broken. Rising tides may lift some boats but most those boats are in China. So while the American workers suffer the corporations are prospering with their new found investment wealth, ala Bush tax cuts, by growing profitability overseas. Your tax breaks given to wealthy individuals and companies are being sucked out of the country and going to fuel the economic miracle in China. It's Milton Friedman's supply side miracle. Unfortunately, the American work force is being shoved aside while the miracle benefits the few at the top.

[zeldaM]

12:49 PM on 11/20/2007

I say bring it on. The sooner people stop acting like nouveau riche wannabees, the better off we will be. Granted, there are all sorts of forces at work trying to keep everyone feeling insecure and needing to buy to overcome it, but people have a choice. No one is putting a gun to anyone's head forcing them to buy stuff, spend beyond their means, pass on consumerism to their children and parade around inwardly screaming look at me, pay attention to me.