Thursday, Aug 21, 2008
It has been a fun ride, but the ride is over. We can’t get steroids from our dealer (banks) anymore.
PrudentBear: The Great Consumer Crash of 2009
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.
Posted by malct @ 05:33 PM (434 views) Add Comment
7 Comments
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1. James said...
malct - get ready for a big surprise... I think that's a genuinely good article. I don't necessarily agree with the conclusions, but it's cogent and well-supported by evidence from decent sources that's quoted at every step. Thanks.
2. plato said...
Huge but great article. Difficult to be positive about any government,bank or non manufacturing business in light of the incredible amount of debt. As for personal debt : Well! It's nothing less than at crippling levels having literally gone off the chart.
These debt figures are astronomical and expanding with every day of non-settlement that passes being constantly fed by weakening currencies and ever rising prices.
As tyrellcorporation said earlier today:
"I really do have a bad feeling about all this."
3. montesquieu said...
Wow. But we know he's right.
'My biggest concern is that our politician leaders and their cronies running our government will continue to try and reverse the normal capitalistic course of recession and expansion. Companies need to fail, housing needs to find its bottom based on supply, demand and price. Those who gambled must be allowed to lose and suffer the consequences. If the government attempts to shift the losses to those who lived lifestyles of thrift, an angry uprising will ensue. Government intervention in this natural process could lead to a decade long depression. Let’s hope that reasonable heads prevail.'
What's the chances of reasonable heads at the heart of the present government?
4. it_is_going_with_a_bang said...
When votes are the issue not much chance. They don't care about 5 years or 10. Only their skins right now. The longer a government is in power the worse they are.
5. alan said...
Oh Bother...I really liked my granite countertop!
Apart from that, I agree. The US of A and the UK left saving to the "growing economies" and spent, spent, spent.
My personal mastercard debt is under £300. I don't have a mortgage. I guess from the stats on average debt I've read recently, that someone has some really big debts!
6. malct said...
mount and gloat ?
7. Gregooo99 said...
I just checked in case I had it wrong. 1+1=2. Honest it is.