.comment-link {margin-left:.6em;}
Visit Freedom's Zone Donate To Project Valour

Tuesday, March 13, 2007

We Are In A Recession

Advance Retail for February is out. Little juicy nuggets you might not notice from table 1A include:
In short, Virginia, we are in a recession. Deranged ramblings regarding bad weather in February are deranged ramblings because the same pattern was evident in January, when weather was exceptionally good, and autos and high end retailer sales in February increased. If people have money they are spending it, but overall people don't have money to spend. High end stores like Nieman Marcus, Nordstrom's etc reported ripping, booming sales for February. Walmart is showing the worst sales figures in 28 years. QED.

Consumer credit from last week (Jan preliminary) showed moderate increases, no doubt because consumers were appalled by the credit card binge in November. The bottom line is that Q4 2006 total consumer debt rate of increase doubled from Q4 2005. Q4 2006 revolving credit (credit cards, basically) rate of increase nearly doubled from Q4 2005.

What we are seeing in consumer credit is the end of consumer spending financed by mortgage equity extraction (MEW). And what we are seeing in retail is that the consumer cannot borrow enough on credit cards to sustain spending increases.

Now these two reports make it clear that consumer spending will be decisively weak all this year, and that is because of the income distribution involved in those total wage increases reported so positively by the media. The problem is that the top echelon is getting nearly all of it, while the bottom echelon is getting less than enough to compensate for price increases.

The end result is that the housing problems have spread throughout the wider economy. In short, we are experiencing contraction not just in manufacturing, autos and housing, but in consumer spending. Very shortly we should see the four week moving average of initial unemployment claims move past the 350,000 mark.

A Manpower survey reported that employment plans overall are "neutral". My private inquiries show that most big companies that have significant sales to consumers are, if anything, planning job cuts. The problems in housing are due to accelerate because of the ongoing credit contraction in nonprime and Alt-A. What you see is what you get, economically. It's going to be more of the same right through this year and into 2008.


Comments:
You are the first to call it.

Here is a site with folks observations of how bad inflation is.

http://thehousingbubbleblog.com/?p=2479#comments
 
Housing will be the primary cause of full blown recession by year end. And it won't just be Virginia.

Details at http://infohype.blogspot.com
 
Didn't take the Dhimmi's long to destroy a booming economy along with the stock market. They did it a lot faster than expected with their threats of massive tax increases and take aways from us to give to others (they're relatives). Guess i'll get my wish for $5 a gallon gas to see how the dhimmi's react to they're own stupidity. Running Haliburton out of the country won't help other than speeding up the rise in gas prices.
Firefighter
 
ed in texas

There It Is!
http://www.europac.net/externalframeset.asp?from=home&id=8016

Yep, looks the same from both sides.
 
Time for Bush to cut taxes again!

It seems like each time we go into recession, we mortgage our future a little more to get back out. (What do we have to show for this last expansion??? - Nothing) Eventually, there will be nothing left to mortgage. Social security/medicare are waiting like a pernicious albatross.
 
Post a Comment



<< Home

This page is powered by Blogger. Isn't yours?