Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: tradermike_1999 who started this subject	6/16/2001 12:34:31 AM
From: TobagoJack	Read Replies (1) of 74559

Commotion, confrontation, controversy, insults, sarcasm ... run away, run away ... grantsinvestor.com QUOTE A PENNY SAVED IS NO FUN by Mary Levai 07:00 AM 06\|15\|2001 Record decline in net worth fails to constrain consumer spending. Now starring in "I'll Think About That Tomorrow": U.S. consumers -- pitted against the dark force of shriveling net worth. Marvel as they bring to life the latest stats from International Strategy & Investment (ISI), which show that year-over-year net worth recorded its biggest drop ever, 8%, in the first quarter of 2001. See Dick (in a gesture of blissful ignorance) chuck his unopened brokerage statement in the trash as he swaggers out the door and into the arms of a waiting luxury-car dealer, pen at the ready for his signature. See Jane banish bummer thoughts of oppressive mortgage payments as she John Hancocks the deal on a swanky 5,000-square-foot home. But viewer discretion is advised: ISI data going back to 1968 also show that consumers typically reduce their spending when net worth declines. The lag effect may account for the present level of denial. Should consumers ultimately come to see the wisdom of saving over shopping, the screen may go dark on this long-running hit. Mass consumer saving as consumers struggle to replenish financial assets may then set the stage for a sobering replacement: "The Incredible, Shrinking GDP." UNQUOTE

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