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Post by rjfliberal07 on Jun 14, 2007 0:08:28 GMT -6
www.msnbc.msn.com/id/3683270/I do not get how consumers ramped up spending to such levels in the face of sky high gas prices, rising inflation(albeit underreported) housing collapse, just to name a few. It just makes no sense. Now even economists are predicting that the U.S economy will re-excelerate come the second to third quarter. Where do they see this coming from? The housing market is only getting worse, inflation is not going away, no rate cut by the fed any time soon, and there a decent chance of supply disruptions in the Gulf of Mexico this Hurricane season causing gas prices to soar further, thus crushing consumer spending. Am I missing something here.
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Post by blueneck on Jun 14, 2007 4:35:50 GMT -6
I am highly suspect of these numbers, I bet they get revised downward quietly over the next few weeks as well. The only possiblility I can think is that there may be some seasonal buying going on with some home improvement lawn and garden type stuff. Car sales bumped up a little, except for honda and ford, with honda posting its first loss in many many years - there is some incentivizing going on and people may be trading in their guzzlers for more economical cars at this gas price point - so car sales might bump up the numbers as well.
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Post by unlawflcombatnt on Jun 14, 2007 4:41:03 GMT -6
There is no way the economy is going to re-accelerate. The latest Personal Income report showed a decline in income of -0.1%, despite the fact that Personal Spending increased. This means that the increase in spending was not only completely accounted for by borrowed money, but was actually less than the "dis-savings." In other words, the gap between consumer spending and income was even greater than the total consumer spending increase.
This is completely unsustainable in the long-term, and not even sustainable in the medium term. Though it's unclear when the real crash will ultimately occur, it is not far away.
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Post by rjfliberal07 on Jun 14, 2007 9:12:26 GMT -6
Yeah, the way I see it the sooner the market crashes the better because it will rid the system of the rampant over speculation and bring some normalcy to the markets. If the government keeps trying to delay the inevitable, eventually the inevitable will come, but even stronger than it otherwise would be. I have not invested in the stock market for a long time now because it is just too risky. Up is down and left is right it seems the way the market behaves to the news. I also love how the market seems to have rallied in part on the hopes of a fed rate cut. I believe the market is sadly mistaken, due to the fact that a rate cut would cause a run on the dollar. If anything, with inflation rearing it's ugly head, the fed will probably have to raise rates soon. Just my opinion here.
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