April 11, 2008
Confidence in economy waning
Another day, more Americans are showing concern about the economy and their own economic conditions. Here are the first few graphs of an Associated Press article from this morning:
Americans' confidence in the economy fell to a new low, dragged down by worries about mounting job losses, record-high home foreclosures and zooming energy prices.According to the RBC Cash Index, confidence dropped to a mark of 29.5 in April, down from 33.1 in March. The new reading was the worst since the index began in 2002. It marked the fourth month in a row where confidence has fallen to an all-time low. "Consumers are very pessimistic," said Mark Vitner, economist at Wachovia. "There are not a lot of happy campers out there." Over the past year, consumer confidence has deteriorated significantly. Worsening problems in housing, harder-to-get credit, financial turmoil on Wall Street and lofty energy prices have put people in a much more gloomy mind-set. Last April, confidence stood at 85.4. The index is based on results from the international polling firm Ipsos.
I'm certainly less confident now than I was last April. But what has really changed? Nothing. As I walk down the downtown Roanoke streets for lunch, I only see new construction going up. As I drive through downtown Blacksburg, there are shoppers. When I head over to the New River Valley Mall, there are people with full bags.
What am I missing?
Comments
[April 19, 2008 12:18 AM]
LarryGlad to see the business blog.
What's missing is evidence that the person carrying the shopping bags has a positive savings rate and is not just racking up more debt on a credit card. The shopper may be driving a SUV purchased on easy credit three years ago. The bank may be chasing them for a mortgage payment.
The current crisis was easily predicted: negative savings rates of most Americans combined with easy credit = financial crisis.
This is the American version of the SouthEast Asia recession and collapse of the housing bubble from the late 90's. I lived there and saw it happen first hand. None of these events surprise me.
[April 21, 2008 11:00 PM]
CentelI agree Larry , the question of a slowing economy is simple, yes we are clearly in hard times . Prices of products and gas are going up every single day, the housing market is not that great at all , look at Smith Mountian Lake or even the Roanoke housing market, things are not rosie . One can not judge conditions on one area , you have to look at the whole picture. To say nothing is wrong is a stupid conclusion. You touched on some very important issues .