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Politics : Welcome to Slider's Dugout -- Ignore unavailable to you. Want to Upgrade?

To: anyer who wrote (543)	8/31/2005 9:02:22 AM
From: SliderOnTheBlack	Respond to of 50637

A Major Tipping Point for US Consumer Sentiment ? Consumer Spending is 2/3rds of US GDP. Consumer "sentiment" drives - Consumer Spending. Consumer "sentiment" was already cratering prior to Hurricaine Katrina. Credit Card use for "gasoline" purchases is up 50% year over year ! - that is prior to Katrina. Credit Card usuage at "Fast Food" Restaurants...albeit somewhat of a newer paradigm than gasoline purchasing - is soaring as well. US Consumers are now borrowing to fund everyday living expenditures. ...and you wonder why the new Bankruptcy Law Reforms were passed ? - the Credit Card Companies and the Financial Industry - already saw what was coming... US Consumer Sentiment has been propped up by the Refinance Cash-Out Mad Money Bubble...all of the "0%" financing, or no payments for 6 months, you pay what we pay - madness...all bouyed by the Housing Bubble. Prior to Hurricaine Katrina and this most recent spike in Unleaded Gasoline futures... higher Gasoline Pricex were costing the US Consumer + $700 Million per day. - that is money that is not being saved, is often being borrowed and comes in lieu of investment, savings and other discretionary spending. Given the obvious explosion in Debt & Credit by US Consumers in a relative jobless & wageless Economic recovery post 911... the future does not bode well... While many point to the mathematical resilencey of the US Economy and bang the drum about Gasoline still being "cheap" in inflation adjusted terms, or compared to our European friends...that arguement is specious - as a ramp in Gasoline & Energy Prices is occuring atop perhaps the greatest Economic House of Cards in modern US History. It is never the "logic", or the relative inflation adjusted numbers that cause paradigm shifts in Consumer Sentiment and Spending... it is "EMOTION" that causes the shift. Shifts in the "emotional" mindset of American Consumers creates RECESSIONS - not the underlying "logical" numbers. Katrina and rising Energy prices are going to do a great deal of damage to Consumer Sentiment in an environment of massive debt & credit loads, the lowest savings rate post WWII, no real job, or wage growth; rising costs on virtually everything - not just energy; huge US Deficits, a collapsing US Dollar, a War in Iraq that is now causing significant Political divide and now Hurricaine Katrina shifting the headlines, the nightly news and the talk around the water cooler to the negative.... 24 x 7 ... negative. Negative - isn't a good thing. I don't know what is going to reshift things back to the positive...but, unquestionably...the US is shifting into a very dark, dour environment for US Consumer Sentiment - against perhaps the most negative "real" underlying fundamental environment in decades - vis a vis debt, credit, savings, job & wage growth, inflation , US Dollar Purchasing Power, the Political Divide over the Iraq War, Terrorism & GeoPolitical Risk etc ...few bubbles will survive intact - place your bets accordingly. PS: ... may be time to place a bet against Unleaded Gasoline here... parabolic, speculative excess right at a tipping point for the US Consumer Sentiment & Demand ? Patience on Gold...mo later, on Ole' Yeller, Slider ...think HYBRID ELECTRIC $$$$$$$$$$$$$$$$$$$.

To: anyer who wrote (543)	8/31/2005 9:51:02 AM
From: J.B.C.	Read Replies (3) \| Respond to of 50637

Hmmm, I have to respectfully disagree with both you and the following post from Slider. First you say this was "a demand killing event" for gasoline, then you say you would not be surprised to see gasoline rationed. That doesn't fit. As long as the government doesn't implement price controls (practices that totally failed in the '70's)on fuels, there will be ample supply. With the current administration, price controls are totally unlikely. Prices are just now approaching parity with 70's increase and impact. So we've been there before. Also $70 / barrel brings a whole lot of oil opportunities to the market. We will see an oil glut in the future...bank on it. (Just not yet) I see $50 Billion in new construction opportunity just made available by a hurricane. I'm actually thinking after a soft Sept-Oct, it may be rally time on the market overall as the market has to catch-up with inflation driven earnings. Climb that wall of worry. But, I still see good opportunities for gold and silver. Let's look to the past: 9/11 - Now this was an economic killing event....Yet after a wash-out in an already downtrending market that lasted about 1 week, the markets went an a tear for the next several months. War with Iraq (spring of '03), remember all the concern...This was going to kill the economy. When the War started, so did the Market, and it hasn't looked back. JMHO. Jim