SeeTheLight

Credit Card Defaults Down in July

Tack,

I agree to you, to a point. The true concern is the psyche of the consumer that has a job. Now I put this as a question to you, has the psyche changed? Are the consumers participating in this recovery?

Many companies are instituting sweeping pay cuts across the board (rather than just laying people off), a direct blow to the discretionary incomes of the 90%. Worse, many are using the recession as an excuse to offshore work. Those are jobs that are never coming back. I don't see that the consumer is going to believe any time soon that they are safe to go back to the heydays before this crisis. Will they spend? Yes. Will they spend at the levels they did previously (buying Hummers and McMansions?) No. (they won't be able to even if they wanted to since they won't have access to easy cheap credit).

I see that companies are still doing aggressive cost cutting to make their numbers (has there been a company that has missed Wall Street expectations in the past 6 months? and yet revenue numbers fall steadily), and if anything many will be going into fourth quarter freezes right about now.

Other than the richest 10% of the people, most people have not participated in the stock market recovery (or if they have its in their 401Ks), nor has their house values increased, and further unemployment looks likely since companies are still aggressively cutting to beat Wall Streets lowered expectations.

I don't see the consumer leading the way out of this recession. The were lied to and now have to fear higher taxes, a smaller job pool, and higher interest rates and inflation when the so-called recovery arrives. When this recovery finally trickles down to the consumer, I suspect they will remain cautious since for a large percentage of them (the baby boomers) retirement is just around the corner, albeit a little farther off now than 2 years ago.

Good Luck all