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Strategies & Market Trends : Sharck Soup

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To: Softechie who wrote (31719)	7/23/2001 11:40:32 AM
From: Softechie	of 37746

Consumer Stamina (CSFB) With consumers responsible for 70% of the firepower in the US economy, their disposition is critical. Unemployment claims have shot to levels not seen in nine years and doomsayers have set their watches for consumer capitualation, yet big ticket purchases such as autos remain near record levels and CSFB Homebuild-ing analyst Ivy Zelman is reporting that backlogs for homes are actually rising. One of the most critical differences to past slowdowns is that household real estate net worth is rising in real terms. Because real estate is the most important asset for 90% of Americans, consumers feel wealthy despite a weak stock market. The May 23 report on households written by CSFB’s eco-nomics group destroyed conventional wisdom by showing that savings rates for 2/3 of Americans have roughly doubled in the past decade. Savings de- posits and money market assets are growing 15% to 25% demonstrating a conservative but by no means bankrupt consumer. We argued last Decem- ber that a consumer sentiment recovery as seen in the 1990-91 recession would mark a S&P 500 rebuilding process. History is, in fact, repeating it- self.

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