full force trying to spread negativity the consumer is not dead people will continue to spend very little has changed regarding the US economy between now and June 2007, except that PE ratios have fallen 30% and indexes have fallen 50%. Some stores have closed and unemployment ticked up a staggering, jaw dropping 2.5%. Apparently there is a credit crunch of some sort. People dont have credit and no liquidity???huh ??
the addiction to credit will not end overnight. but with defaults on EVERY type of credit at an all time high spending should slow severely. but with a bailout around every corner why should people stop spending money they don't have?
They won't stop spending, which is why the US economy is still fundamentally sound. Bailouts, tax cuts, & stimulus do work.
Consumers aren't dead. But what has changed between Jan 2007 and today. Government debt, taxes, and capital costs. I believe Upper Middle Class consumption is dead, as the government has directly targeted the destruction of this class. People making between $120 - $600K per year. PE's are down, but don't expect the world to look like March 2005