The Great Consumer Crash of 2009

[Crewleader]

* by James Quinn
* August 19, 2008

James Quinn is senior director of strategic planning, the Wharton School, University of Pennsylvania

“It is easy to ignore the storm if you look at the opposite horizon. When the storm reaches your location there can be no more ignorance.”

I hate to tell you, but the storm has reached your location and it is a Category 5 hurricane. The levees are leaking. Ignore it at your own peril. The 6,000 sq ft McMansion buying, BMW leasing, $5 Starbucks latte drinking, granite countertop upgrading, home equity borrowing days are coming to an end. The American consumer will not go without a fight. For the last seven years the American consumer has carried the weight of the world on its shoulders. This has been a heavy burden, but when you take steroids it doesn’t seem so heavy. The steroid of choice for the American consumer has been debt. We have utilized home equity loans, cash out refinancing, credit card debt, and auto loans to live above our means. It has been a fun ride, but the ride is over. We can’t get steroids from our dealer (banks) anymore.



http://www.prudentbear.com/index.php/commentary/guestcommentary?art_id=10098&

[no_hypocrisy]

1. Here's another issue: This economy is dependent upon consumers

buying stuff, regardless of whether they have money for the stuff or not. When people stop buying, inventories swell, contract canceled, materials not purchased, employees are laid off, and everyone eventually goes down.

[Warpy]

2. They might just do it this time, kill off the consumer economy

and put us into another depression. We're already easily at double digit unemployment and people are starting to see servicing their debt load eat into their subsistence budget as prices for subsistence items keep rising.

What that means is that people will be buying enough food to keep themselves alive and enough fuel to get to work and mending and patching everything else in an attempt to squeeze the most useful life out of it as possible.

Keeping the illusion of a healthy economy going by putting everybody in debt is a short term strategy, as we're about to find out. Our economy has been getting progressively sicker for decades, but the symptoms have been masked by the feel good pill of easy credit.

You can't suck wealth away from the people who keep a consumer economy going and expect that consumer economy to keep going forever. The wealthy have realized astronomical short term gains, but their party is over, too.

Now comes the hangover, and it's going to be a doozy.

[Yavin4]

3. Don't Worry President McCain Will Start A War with Iran

And that will solve all of our problems. Oh, and he will give corporations a huge tax cut to boot.

[liberalla]

5. yep, no need to worry...

See you in the soup line...

[Leftist Agitator]

4. k&r

[judasdisney]

6. Obama's being set-up for failure: bond market crisis, dollar collapse, capital flight,

Obama's being set-up for failure: bond market crisis, dollar collapse, capital flight,
the CIA/NSA/FBI/DIA's stacked with Cheney sleeper cells, Obama can't be allowed to "witchhunt" Bush cabal crimes because he's the first black President and that would look "angry".

Meanwhile, the FDIC expects up to 300 bank failures by 2010: http://www.reuters.com/article/governmentFilingsNews/idUSN2935372320080729

Meanwhile, there's two U.S. political dynastic families who don't like the competition, teaming up to kneecap the new guy.

Guess who will be blamed? "It happened on Obama's watch."

Obama has to play nice: "I can't blame the previous administration. I'm about the future, not the past."

Everybody knew this was coming but the dumbf&&k Dems.

http://en.wikipedia.org/wiki/Deep_state

[ramapo]

7. He has to win first

Can't be blamed if he doesn't win. And yes if he is so "fortunate?" he will have a shitload of major problems to fight. Somehow the house of cards that qualifies as our economic infrastructure has been held together with chewing gum and funny money. It is entirely possible it'll be allowed to tumble into a heap in order to discredit the Democratic Party for the next generation or two. Then again, Obama might actually manage to fix a few things. If nothing else, these are interesting times.