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Consumer Confidence plummets, Stock Market reacts

Discussion in 'Economics and Financials' started by padre31, Jun 29, 2010.

  1. padre31

    padre31 Premium Member Luxury Box

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    inching to 100k posts
    http://money.cnn.com/2010/06/29/markets/markets_newyork/index.htm


    Ouch, the Stock Markets had regained much of the losses from 08-09, but it is now below 9,900, if Consumers aren't spending the economy won't recover even in the short term.
     
    gafinfan likes this.
  2. gafinfan

    gafinfan gunner Club Member

    One can't spend what one does not have. Now if we can make the Government see the light on this point then we could be on to something!

    You know it just might be better to let this house of cards just come falling down but the idiots inside the beltway have no plan other than run those damn presses and print, print, print! Which is no plan at all!
     
  3. unluckyluciano

    unluckyluciano For My Hero JetsSuck

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    They aren't spending there was a report last week most were saving.
     
  4. Fin D

    Fin D Sigh

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    Actually, our consumer economy is absolutely built on spending what you don't have. Its all about credit.

    I feel like times will be tough for awhile, but as Lucky pointed out, people are saving money, which is a good thing.
     
    vt_dolfan likes this.
  5. my 2 cents

    my 2 cents Well-Known Member

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    I agree with the first part, the debate is whether that is a good thing or bad thing, but the second part is not nearly as simple as you indicate.

    Real income (which is inflation adjusted) has risen modestly and savings has also grown a bit in raw figures, but as always numbers are misleading. If you factor out durable goods spending then real income is flat at best....and despite durable goods pricing tanking the CPI grew 1.1% the last full quarter.

    Now inventories are growing. Another tell the tale industry is transportation and you have worn out mothballed trucks that cannot be replaced due to the still tight credit and an uptick in demand from port cities due to imports........all in all you cannot find a truck and truckers are collecting massive amounts of unemployment because they cannot find a chariot.

    All his means is income grew faster than spending and if you look at a 4% overall savings rate which is a .2% increase and a .5% increase in wages...coupled with a .4% increase in taxes, a .2% increase in prices (which excluding durable goods is more like .4%), coupled with increasing unemployment rate............then you got a decrease in real economic consumer activity....which in my humble opinion has led to the decrease in consumer confidence......

    GDP as been revised downward, unemployment numbers cannot be hidden much longer, the run on durable goods and housing is over for many reasons, we are not seeing job growth, inventories are starting to buldge,....all in alll...it sucks IMHO....

    On a positive note the Euro continues to plummet which buys time and helps short term but is not good long term, the yuan is now floating and as long as Europe is in turmoil and China is not balanced from a production/consumption basis then we can tread water, Chinese are now seeking minimum wage requirements and regulatory obstacles are increasing.....India, Malaysia, and a couyple other smaller countries are key to keeping pricing in line as the Chinese divest of the dollar long term....problem is that long term we will compete on a consumption basis with China and we are in a BBBBBAAAADDDDDDD situation debt wise and China owns our mortgage.............

    My take is we had a run based on durable goods incentives and tax breaks for housing and major purchases and other incentives and we are coming back to reality which is fewer workers working longer hours and spending more to buy less...............but just my 2 cents................but not near as simple of analysis as indicated............again IMHO.........
     
    gafinfan, vt_dolfan and padre31 like this.
  6. unluckyluciano

    unluckyluciano For My Hero JetsSuck

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    The lack of consumer confidence I think has more to do with the going on in europe and china right now then anything.
     
  7. 2socks

    2socks Rebuilding Since 1973

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    Lets not forget about the gulf as well. People have to have confidence in our leader so they are willing to part easier with their hard earned dollar.

    Confidence in the President is down and the gulf oil spill and our governmental lack of response has not helped

    Couple that with the lack of jobs being created as promised, the continued worsening of the housing market and continued layoffs despite a trillion dollars being pumped into the economy and having little to no effect. People are beginning to question weather the President knows what he is talking about??
     
  8. vt_dolfan

    vt_dolfan Season Ticket Holder Club Member

    I think you nailed it perfectly.....this is gonna be a long drawn out Storm that we are just gonna have to batten down the hatches and wait out.....and the landscape isnt gonna look the same once its over.
     
  9. gafinfan

    gafinfan gunner Club Member

    I maybe over pessimistic but the last time the world found itself standing at this abyss the answer was a World War. If one subs todays China for the Japan of the early 1930's it is going to take more than just battening down the hatches and you are so right that the landscape will be far different. God knows I hope I'm wrong but .........
     
  10. vt_dolfan

    vt_dolfan Season Ticket Holder Club Member

    Yeh..to say a tempest of a **** storm is brewing is an understatement. Not sure who ranks higher on my list right now....China...or the Borg?
     

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