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Retailers are preparing for a triple whammy as the restoration of the payroll tax, surging gas prices, and stagnant employment and wages take a bite out of consumers’ disposable income, leaving them with less cash to spend on clothing, groceries, and eating out. As a result, more than three years after the recession officially ended, American consumers might be preparing to downshift again, if only slightly, with low-income consumers hit the [...] From David Rosenberg of Gluskin Sheff Shared Sacrifice Our hedge fund desk has always told me that among the most reliable cyclical indicators for the American consumers is the restaurant sector. Traffic is slowing down precipitously and the companies are issuing negative guidance. I took a look at the monthly details from the latest PCE data and saw that in nominal dollars, consumer spending on eating out sagged 0.4% in October and has [...]  from Paul B. Farrell: The global economic crisis will not end till 2016 or later, warns IMF Chief Economist Olivier Blanchard: It will take “at least a decade from the beginning of the crisis for the world economy to get back to decent shape,” according to a recent Reuters’ report on a Blanchard interview in Europe. “It’s not yet a lost decade,” Blanchard said, “ but it will surely take at least a [...] Ethan A. Huff The cost of genetically-modified (GM) corn and soy feed for conventional cattle is surging so high, and availability plunging so low, as a result of persistent drought conditions and resultant crop failures that conventional feedlot farmers are having to seek out less expensive and more plentiful alternatives. But such alternatives are not exactly the types of things you would typically expect a farmer to feed his [...] Billionaires Dumping Stocks, Economist Knows Why Despite the 6.5% stock market rally over the last three months, a handful of billionaires are quietly dumping their American stocks . . . and fast. … With 70% of the U.S. economy dependent on consumer spending, Buffett’s apparent lack of faith in these companies’ future prospects is worrisome. Unfortunately Buffett isn’t alone. Fellow billionaire John Paulson, who made a fortune betting on the subprime mortgage meltdown, is clearing [...] From Zero Hedge: As we noted earlier, the main reason for the surge in consumer “confidence” in September was the near record surge in sentiment for those making $15,000-$25,000, which soared from 43.5 to 62.4 in the month, the most since April 2009. And whether this was due to their forecast of the future, and expectation that things will get much better, or not, we don’t know, what we do know is [...] From The Burning Platform: Is it just me, or are the signs of consumer collapse as clear as a Lowe’s parking lot on a Saturday afternoon? Sometimes I wonder if I’m just seeing the world through my pessimistic lens, skewing my point of view. My daily commute through West Philadelphia is not very enlightening, as the squalor, filth, and lack of legal commerce remain consistent from year to year. This community is [...] From Crossing Wall Street: Most credit-card holders don’t realize this, but there’s an easy way to lower your card’s interest rate: Just ask your provider to do it. No joke. Just call them up and say in your nicest voice that you’d like your APR lowered. Don’t be rash and threaten to leave or exhibit any histrionics like that. Just say that you’ve been a cardholder for such-and-such period and you’d like to [...] From FT:
In recent years, Tupperware has seemed to epitomise the American dream. Seven decades ago, Earl Silas Tupper stumbled on the idea of using plastic seals for plastic boxes. And from those humble origins, a direct sales giant emerged, with those “Tupperware parties” selling plastic to millions of housewives. But these days those air-tight boxes come with a twist. Four decades ago, 90 per cent of the company’s sales were [...] Ethan A. Huff Most of the genetically-modified (GM) corn products forced on American consumers today are hidden in processed foods in the form of high-fructose corn syrup (HFCS), corn oil, corn starch, and various other corn-based additives. But soon to be available at a Walmart near you is Monsanto’s Bt sweet corn, the agri-giant’s first ever GM corn product made available to consumers as whole ears right on [...] Wolf Richter, Testosterone Pit
The strongest and toughest creatures out there that no one has been able to subdue yet, the inexplicable American consumers, are digging in their heels though the entire power structure has been pushing them relentlessly to buy more and more with money they don’t have, and borrow against future income they might never make, just so that GDP can edge up for another desperate quarter.
But it’s been tough. Despite [...] (Reuters) – The United States faces 20-percent odds of a return to recession, rating agency Standard & Poor’s said on Tuesday, although it said a slow recovery remains the company’s baseline forecast for the world’s biggest economy. “But the risk of another downward leg on the recession remains real,” the agency said in a statement. While S&P said it could be underestimating American consumers, years of stagnation, as Japanhas seen, could also occur. http://www.reuters.com/article/2012/06/26/us-usa-ratings-sandp-idUSBRE85P0Z120120626 From Zero Hedge: The strongest and toughest creature out there, and maybe the smartest one, that no one has been able to subdue yet, the inexplicable American consumer has hit a wall. And it showed up in a prosaic but ugly eight-K filing by Visa. Credit cards are a true anomaly in these crazy times of ours. The yield on 10-year Treasury notes swooned to a new record low of 1.61%. Interest [...] American consumers are in the best financial shape they’ve been in since the third quarter of 2008, according to the latest report from CredAbility.
But high unemployment and difficulty paying for housing are two major reasons that so many American cities continue to be in distress. CredAbility’s consumer distress index tracks the financial conditions of American household by measuring five categories: employment, housing, credit, household budgets and net worth. A score below 70% indicates a state of [...] Patrick Henningsen It’s official: Americans have now been safely conditioned to accept $4 per gallon of gasoline. It worked. While fuel prices skyrocket and stabilize at new highs, a powerful and highly organized cartel of corporations are now reclining in their boardroom chairs and patting each other on the backs for finally conquering the will of the formerly ferrell American consumer. For an economy begging for recovery, these new price highs cannot mean [...] The onward march of the Chinese consumer continues, with China overtaking the U.S. as the biggest grocery market in the world in 2011, according to new research out of the United Kingdom. The Chinese grocery sector was worth $970 billion (607 billion pounds) at the end of 2011, while the U.S. market came in at $913.5 billion (572 billion pounds), research by food industry analysts IGD showed. The figures come at a [...] Why save when one can spend (and, more importantly, why save when one has ZIRP)? This appears to have been the motto of American consumers in the past three months when the US Savings rate has plunged from 4.7% in December to a tiny 3.7% in February: the lowest since December 2007′s 2.6%, and just as the recession and the market crash was about to send everyone scrambling for the safety [...] Ethan A. Huff Most of the genetically-modified (GM) corn products forced on American consumers today are hidden in processed foods in the form of high-fructose corn syrup (HFCS), corn oil, corn starch, and various other corn-based additives. But soon to be available at a Walmart near you is Monsanto’s Bt sweet corn, the agri-giant’s first ever GM corn product made available to consumers as whole ears right on [...] Great Depression happened in 1929. It took over 10 years to cure. Effects of depression: That’s where when the buyer ran out of the market…. and this is what happening now in 2008. Investors now are [...] From Investment Postcards from Cape Town: … Shilling believes the global economy will be dominated by an era of deleveraging and sees the following causes slowing down growth over the years ahead: 1. U.S. consumers will shift from a 25-year borrowing-and-spending binge to a saving spree. This will spread abroad as American consumers curtail the imports of the goods and services many foreign nations depend on for economic growth. 2. Financial deleveraging will [...] Ron Paul The Fed’s latest actions in cooperating with foreign central banks to undertake liquidity swaps of dollars for foreign currencies is another reason why Congress needs enhanced power to oversee and audit the Fed. Under current law Congress cannot examine these types of agreements. Those who would argue that auditing the Fed or these agreements with central banks harms the Fed’s independence should reevaluate the Fed’s supposed [...] From Ron Paul Statement on the Fed’s Continued Euro Bailout The Fed’s latest actions in cooperating with foreign central banks to undertake liquidity swaps of dollars for foreign currencies is another reason why Congress needs enhanced power to oversee and audit the Fed. Under current law Congress cannot examine these types of agreements. Those who would argue that auditing the Fed or these agreements with central banks harms the Fed’s independence should reevaluate [...] From The Economic Collapse: We all knew that this was coming, didn’t we? Each year, Black Friday violence just seems to get worse and worse. What does it say about American consumers when they are willing to fight like crazed animals just to save a few bucks on cheap plastic crap made in China? Not that retailers are innocent in any of this. It certainly seems as though many of them purposely [...] The global debt crisis, of course, is nothing new. Since the dawn of time, men have been lending other men money (or other things of value) and not getting them back. But it’s only recently that the solution to this state of affairs has gotten so complicated that even PhD economists can’t figure it out. In most situations in which people or companies can’t pay their debts, a simple thing happens. It’s called “bankruptcy.” The [...] US lawmakers introduced a bill on Wednesday that would give US authorities more tools to crack down on websites accused of piracy of movies, television shows and music and the sale of counterfeit goods. The Stop Online Piracy Act has received bipartisan support in the House of Representatives and is the House version of a bill introduced in the Senate in May known as the Theft of Intellectual Property Act or Protect IP Act. The legislation has [...] Change Is At The Margin One of the questions we have been asked recently was what underpinned our once-controversial but now more mainstream call that this economy was heading for a severe slowdown, which it certainly has this year. Our main message all along was that the debt binge of the past three decades was unsustainable. The pundits who insist that the American consumers will never [...] by Stephen Roach 04:45 AM Aug 29, 2011 One number says it all. The number is 0.2 per cent. It is the average annualised growth of United States consumer spending over the past 14 quarters – calculated in inflation-adjusted terms from the first quarter of 2008 to the second quarter of this year. Never before in the post-World War II era have American consumers been so weak [...] Promoting Economic Growth American consumers have too much debt, not enough savings and are afraid they will lose their jobs—if they haven’t lost them already. It might be time for something that hasn’t been done since the 1930s to get Americans spending again: national debt forgiveness, Stephen Roach told CNBC Monday. A stronger dollar [...] If America’s good days are over, so are China’s “Be careful with what you wish,” goes an old saying. “Because when it comes true, it may not be good for you.” Everyone who follows closely US-Chinese economic relations cannot help but be puzzled by China’s bold statement, after the S&P downgrade of US debt, that “America’s good day’s over.“ While China, as America’s largest foreign investor in US Treasuries, has [...] |
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