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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Smiling Bob who wrote (261953)	7/18/2010 9:06:00 PM
From: CalculatedRisk	Read Replies (2) \| Respond to of 306849

Yep - they bought into the V-shaped recovery nonsense ... we can see this in the import numbers too.

To: Smiling Bob who wrote (261953)	7/18/2010 9:11:07 PM
From: SeachRE	Respond to of 306849

Americans are looking for bargains. And food coupons are being used by some millionaires now. The old days are over. IMO, we are in a Japan-style 'lost decade'.

To: Smiling Bob who wrote (261953)	7/19/2010 5:42:22 PM
From: tejek	Read Replies (2) \| Respond to of 306849

Thanks for the positive input. Do you all suck some arsenic down in the AM to get you in the mood? Seriously, I have never seen such negative people. Yes, things are not good but they are no where near as bad as you all make them out to be. Seriously.

To: Smiling Bob who wrote (261953)	7/20/2010 1:27:39 AM
From: Smiling Bob	Respond to of 306849

party on garth Plastic surgery Commentary: Falling consumer debt takes toll on spending, may hurt growth By Irwin Kellner, MarketWatch PORT WASHINGTON, N.Y. (MarketWatch) -- Consumers are pruning their debts so quickly, you would think that they must be cutting their credit cards in two. Chalk up another reason to expect a double-dip. People are not only borrowing less, they are actually paying off some of their debts. According to the Federal Reserve, total household credit outstanding has declined for seven quarters in a row. Such a prolonged period of debt reduction is virtually unparalleled in the postwar era. Since the end of the Second World War, the usual thing was for consumer credit to rise. In the 1940s, debt would rise about as fast as household incomes, leveling off at around 50% of annual earnings. Kellner's Forecasts See economic calendar date report forecast previous July 19 Home builders' index 16 17 July 20 Housing starts 575,000 593,000 July 22 Jobless claims 440,000 429,000 July 22 Leading indicators -0.3% 0.4% 89051 Starting in the 1950s, with the introduction of credit cards, household debt began to rise faster than incomes. They passed 100% of annual incomes in the 1980s and peaked at close to 135% a couple of years ago. But the recession that began at the end of 2007 did a number on employment and incomes. At the same time, the financial meltdown of 2008 caused the banks to cut back on loans of all types, but especially those made to consumers. As a consequence, consumers began to borrow less and credit outstanding began to fall. At the same time, people began to rebuild their savings accounts, which they had virtually emptied during the bubble years. This de-leveraging has begun to take its toll on consumer spending. In the most recent two months, retail sales declined after rising (tepidly) during the previous seven months. As they buy less, retailers are forced to reduce selling prices and run special sales in order to move merchandise. The more prices fall, the more discounts people demand; they tend to hold off buying until they believe that tags have reached rock-bottom. Those who deny that we are headed for (or are in) a double-dip believe that the contraction of household debt over the past two years has reached a level that has made people comfortable enough to go out and spend. Since retail sales make up one-half of consumers' spending, and thus, one-third of the gross domestic product, it would be difficult for the economy to expand in the absence of a rise in these outlays. But these optimists overlook the fact that besides hurting from the drop in employment, most households are also suffering from a decline in their wealth because of the drop in prices of homes and their investments. In addition, debt-to-incomes levels remain historically high. They may have to fall for another year or more before people feel comfortable enough to resume their regular visits to the mall. This leaves business with lots of unsold goods that must be whittled down. The process of doing this will hurt prospects for growth, just as rebuilding depleted stocks caused the economy to pull out of its power dive a year ago. One way or another, people (and businesses) have reached a new stage -- one that virtually ensures a double-dip. They are hunkering down and are likely to drag the economy with them for some time to come. logo Copyright © 2010 MarketWatch, Inc. All rights reserved. By using this site, you agree to the Terms of Service and Privacy Policy