Future still gloomy
By Daniel at 13 October, 2008, 3:28 pm
I think they are gloomy because nothing regarding the fundamentals or consumers ability to spend has changed.
Think of it as the reverse of a Bull Market. The average of the trend line is up but, it goes too high and then too low and then back too high but always trending up.
This is the same thing only trending down. Consumer led recessions don’t end quickly and this one is still getting worse for consumers.
The only solution the Fed has right now has been, “let’s make borrowing easier again, so consumers can borrow more again to spend more with.”
That isn’t a solution and the consumer may not be able to use it if they do succeed. He is undergoing an “attitude adjustment.” He is beginning to realize debt was his master and he is throwing off the chains but, in doing so, he will drive earnings and tax revenues even lower.
Unemployment, according to the government’s U-6 stat is 11%. While the media publishes the U-3 stat, things are much worse for most workers. Many also, with full time jobs, have seen overtime hours they used to count on, cut big time. That is forcing them to do all kinds of things they aren’t prepared for.
Here is the link for the Government stats on unemployment
http://www.bls.gov/news.release/empsit.t12.htm
JanPaul
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