|
Post by unlawflcombatnt on Mar 30, 2007 18:22:58 GMT -6
An article in Bloomberg describes how the housing decline and increasing mortgage problems are beginning to take a toll on consumer spending. The increase in monthly payments by those with adjustable rates, combined with decreasing ability to extract equity from devaluing homes is reducing consumer spending. Multiple areas are starting to feel the pinch from declining consumer spending power. Home improvement stores, who've been selling to subprime borrowers, may take the biggest hit from the subprime meltdown. A subprime borrower who has his home repossessed is not going to be buying home improvement products or furnishings. Home Depot, the world's largest home improvement retailer, expects its 1st ever annual per-share profit drop this year. Home Depot shares have already declined 8.3% this year. Wal-Mart may also lose sales. IN 2006, Wal-Mart had the lowest same-store sales increase in over 27 years.. Retail sales growth is expected to slow to 4.8% in 2007. This will be the smallest gain in 4 years. Even restaurant sales are declining. Applebee's, a chain with more than 1,900 restaurants, has shown declines in 10 of the last 12 months. Even some leisure industries are being hurt. Carnival Cruise Lines, the world's biggest cruise-ship company, has reduced prices this month in response to the cut back on vacation spending by American consumers. The full article can be found at: www.bloomberg.com/apps/news?pid=20601103&sid=aVXFG8f01LHw&refer=us#
|
|
|
Post by blueneck on Mar 31, 2007 4:33:26 GMT -6
The home equity "ATM" is maxed out, consumer deficit spending is slowing. The artificial consumer based economy is coming to a stop.
Thanks to Greedspans artificially low interest encouraging too easy credit and negative savings.
|
|