Can this be considered news anymore? Seems the American Consumer has no need to save money anymore.
U.S. Nov. Personal Spending Rises 0.3%; Core Prices Up 0.1%
Because the rise in spending matched the increase in incomes, the savings rate held at a minus 0.2 percent for a second month. A negative rate suggests consumers are dipping into savings to maintain spending.
Why bother saving? You’d be a fool. Save for a home down payment? Don’t need one anymore. Save money for a car? No money down lease! Save money for retirement? Nah, we’ll just sell our house and retire on the gains. Save for college expenses? Let the kids take out their own student loans.
PERSONAL INCOME AND OUTLAYS: NOVEMBER 2005
Personal Savings Rate
By the way, past months numbers are being sharply revised downwards. The preliminary for August was something on the order of only -0.7% when it was initially released as a preliminary number. It’s since been revised downward, first to -2.2% and again to -3.4%. So if the last two months numbers are starting to look benign, I’d wait to see whether or not these are significantly revised downward in the future as well.
Eight months most certainly makes a trend.
Know someone who is in over his head and has been borrowing from equity line to stay afloat. Thinks after all borrowing still ahead. Told him to unload the property before it tanks and he goes bankrupt.Hope he gets out in time. Lots of people going to get hurt in this Housing bust.
Never ever seen so many people sign their life away to own a POS shack that is insanely priced.
Buyers need to wise up and just say that’s it. No bids no nothing until we get “substantial” price drops of at least 25% +.
Income are not going up while taxes energy and cost of living continues to increase. This is truly a recipe for disaster. many are not fully aware that a financial trainwreck is heading their way.
The prudent sane and rational people will be rewarded for their patience.
I can’t wait until Greenspan is gone. He’s the cause of all this. You can’t have these old senior citizens running this country. They are too set on old-school business and are not reacting quickly enough to change, especially our economy.
Greenspan already blew it once when the stock market got out of control, you think he would have learned from his own mistakes.
It’s all about reaction time. Whether your driving or making a business decision, any hesitation could cost you dearly.
Unfortunately, it was us americans who are feeling the pain from greenspans delayed reactions.
I was amazed to see a 20 something person put 3 pieces of plastic into a bank’s ATM and they were all rejected – assume a bag flag on their standing – and NO the ATM was not our of cash [I then used it, why do I use that one though it is 2 blocks further to walk? My bank does not charge the fee for it own machines, and it is that logic I have been using all these years to help me have some real $ in the bank ! Thank you Mom & Dad for teaching me how to SAVE money.]
This situation exists because of cheap money being supplied by foreign banks and investors looking for decent returns in a yield starved climate. Until thei situation reverses significantly enough, don’t expect the pattern to change. This could take years folks. Technology has enable globalization to take place allowing emerging markets with their vast cheap untapped labor pools to be exploited. So far it’s been for our gain. Eventually this situation will reverse but that’s too far away for anyone to care about right now. There’s a reckoning coming, the question is when.
Grim — if you’ve seen todays Star Ledger, theres an article about how NJ population is almost flat, probably due to high housing costs. Growth last year was 0.4 % and it was low the year before too. So much for the realtor talking point about huge population increases fueling demand.
That brings me to a good thought.
They say that the demand for housing is high, and there’s not enough supply.
What the hell happened in the past 5 years? Was there a massive explosion of mutant babies that aged incredibly fast and now need homes?
Did all the illegal aliens who came into this country by up all the real-estate they had with no-money down? If they had so much money to begin with, why on earth would they want to come here?
Some times 1+1 just doesn’t equal 2…