Economist Warns Of Consumer-led Recession

[Purveyor]

Source: Globe and Mail

Tightening credit, slumping auto sales, retailers missing sales and profit targets has analysts ringing alarm bells

WASHINGTON -- The U.S. economy may be on the brink of its first consumer-led recession in nearly two decades, according to Merrill Lynch economist David Rosenberg.

"There are plenty of signs now suggesting that we may be in the early stages of a consumer-led recession for the first time in 17 years," Mr. Rosenberg warned in a report to clients.

"The future is very likely in the hands of the consumer on Main Street, USA, and the latest signposts are not encouraging."

He and other economists point to several alarm bells for the world's largest economy: Banks are tightening consumer lending standards, auto sales have slumped to a nine-year low and key retailers keep missing their sales and profit targets.



Read more: http://www.theglobeandmail.com/servlet/story/LAC.20070815.RCONSUMER15/TPStory/Business

[Deja Q]

1. Most people I know of aren't "boycotting", they just can't afford anything.

:(

Especially if a cheaply made product that breaks down has to have them spend for the same item over and over again.

Just a thought... simplistic in the whole scheme of things, but one way or the other the consumer is not the sole cause of economic malaise.

[amandabeech]

17. Try estate sales and auctions and yard sales.

Sometimes you can find well cared-for stuff from the time when things were meant to last more than 6 months.

[Tansy_Gold]

19. Or look for quality, hand-made good from local artisans

I've been promoting local arts and crafts for more than twenty years, and I'll take this opportunity to do it again:

Check out a local craft fair and you'll likely find a woodworker who makes toy trains and cars and airplanes all of unpainted wood, so you don't have to fear any lead-tainted Chinese paint.

Learn to live without logos on your clothes: Take pride in wearing something unique you've made yourself or bought from someone else who did.

Choose quality over quantity: Taken care of, that hand-made heirloom quilt will last far longer than the cheap but trendy polyester bedspread produced in an Asian sweatshop -- longer than ten or twelve of them!

Make do with less; most of the world gets by on a small fraction of the material goods Americans think they can't live without.

Use it up
Wear it out
Make do or
Do without

I have a feeling a lot of people will be learning that creed in the months and years to come.


Tansy Gold, who has lived by it for many, many years and has had a helluva lot of fun in the process

[amandabeech]

27. I wish that the local artisans would make a decent toaster oven or

garden shears. Those are the kinds of things that break all the time these days.

I've seen some wonderful toys at craft fairs. I have a beautiful sweater and some very graceful salad server utensils that I bought at a fair and a shop in a funky resort town.

[Tansy_Gold]

45. For me, it's hose nozzles. Can't get them to last more

than a couple months. It's the Arizona sun on plastic that does it. I make do as long as I can with a thumb over the end of the hose, but BF always finds out and buys another nozzle. ;-)

I'd like to help on the toaster oven dilemma, but since I don't own one, I can't offer any advice. I've got a pair of kitchen shears that were part of a set given to me when I got married in 1969, and they work pretty well for trimming small plants. I have no idea what I'll do if they ever wear out. . . .

But I do know what you mean: there are a lot of things we have come to see as virtually necessary to modern life and that we just can't find without resorting to the "Made in China or some other place" label. But maybe if we do what we can to support local small businesses, we can help to get at least that segment of the economy healthy and thriving again.

Besides, when we move away from buying easily disposable (but not biodegradable) junk, we benefit the environment, too.


Tansy Gold, tryin' to be greener

[BronxBoy]

55. Amen to that

First of all let me add to your call to support local artisans to also support local growers and farmers. That's my pet project.

We go through about 1 nozzle a month! We grow organic veggies for market and we like the nozzles with the adjustable settings. They are the cheapest things around! If you know of a quality manufacturer, please PM me.

[Demeter]

57. My Toaster Oven/Microwave is Nearly 20 Years Old

Mechanical knob instead of digital buttons...you'll have to take it from my cold, dead hands...

[SoCalDem]

58. My Manning & Bowman waffle iron was a wedding gift 37½ years ago

The shiny chrome top is marred by bread wrappers getting melted onto it, but it works like a charm.. still has the original cloth cord :)

We still have some old cloth diapers that my husband uses to clean car windows.. (our baby was born in '78)

I also have Revereware pots & pans that were purchased in the late 40's..

Old is better sometimes:)

[Demeter]

59. I Used My Mother's Waffle Iron Until It Self Destructed 50 Years After Her Wedding

they just don't make anything like they used to.

[SoCalDem]

60. Truth be told, you could have had it fixed, if you could have found an old timer

On the main street in our town, there were shoe REPAIR places, and appliance repair places & TV repair places ,& camera repair places & furniture repair places.

I used to always get my husband's boots re-heeled and his Florsheims re-soled..

[Demeter]

61. The heating element melted

I had already fixed it once--didn't want to start a fire...

[llmart]

62. "there are a lot of things we have come to see as virtually necessary.....

Therein lies the problem. Most of what we think is necessary is not. Before you buy, ask yourself, "why am I buying this? Do I really need it? What did people do before there was such an item?" You'd be surprised what you can do without.

P.S. Hey, I got married in 1969 too! We're old enough to remember quality.

[Delphinus]

67. That's the question I ask myself with every purchase,

including food. Do I really need it?

[amandabeech]

80. Actually, I use toaster ovens in place of regular ovens as much as possible.

The toaster oven uses much less electricity than a large regular oven, and some things don't do that well in the microwave.

I see my toaster oven (when it works) as the geo metro and the oven as a big station wagon. The metro will get you all over at slower speeds and with light loads. You take the station wagon out when you have large loads or have to go 75 mph on the Interstate in order to avoid being run over by a semi.

[mcscajun]

2. Translation: The Business World is finally waking up to the fact that People are Broke.

"It is no secret that many customers are running out of money toward the end of the month," said Wal-Mart chief executive officer Lee Scott.

DUH!

[madrchsod]

8. walmarts bottom line is going to take a big hit

walmart can`t deep discount merchandise like other retailers do. less than a dollar off a 5 dollar item is`t clearance pricing

[Chemical Bill]

20. Wait a minute!!! You mean that shrinking real wages mean...

that we have less money to spend? Who would have thought? :shrug:

Good thing that the top 10% have had their taxes cut! They will spend us out of this. :sarcasm:

Bill

[Mend]

24. and what a shame that the rich need buy only one can opener....that leaves

299,000,000 million unsold because no one else has any money. Do these jerks ever think anything through at all?

[Tandalayo_Scheisskopf]

30. Yup.

These are our best and brightest economic minds, too.

We are so fucking doomed.

[Vidar]

52. Exactly right.

[nadinbrzezinski]

3. Correct me if I am wrong, but wasn't Reagan

the President back oh seventeen years ago> Or was that bush

Let me see

2007-17 = 1990

Nah, it could not have been right wing policies back then either... nope, none whatsoever

Now if this was a Democrat in the white house (remember Carter), the song and dance would be very different

We call it... spin

[Autumn Colors]

4. Yes, it's the consumers' fault

It's our fault that all the jobs were outsourced to other countries. It's our fault that people either don't have jobs and can't buy anything or have to use all their money just to pay for rent/mortgage, gas, and food.

Yes, it's our fault we don't have any money to buy a new car or go to the movies or buy any "stuff" that doesn't either keep a roof over our head, help us maintain our health or feed ourselves so we don't die, and get ourselves to and from work JUST so we can pay for the the roof, the food and medical bills/medications, and again .... the gas.

Yup, we caused this whole situation into existence.

[shanti]

38. what could be easier

or more predictable, than blaming it on us?

those evil, greedy fucks...:mad:

[Lorien]

5. Consumer led? Er, no.

Big oil and bad banking led...but not consumer led. The price of fuel has doubled since Busch stole office, driving up the price of all goods-especially food. Banks made bad loans, lying about consumer's income to make realty sales. They also pushed credit cards to anyone and everyone (including dead people and pets), then lobbied congress to let them drive up the interest to absurd levels, and congress voted for it! Consumers, also once known as "citizens", are struggling with health care costs, layoffs, drops in salary (mine is down 65% from the Clinton years), insurance costs, and unemployment on top of inflation and rising interest rates. We're getting what only those who voted for * deserve!

[HowHasItComeToThis]

18. It is the bankers, period

it is known as skimming

[Maggie_May]

6. Oh no tell me its not so

The trickle down economics is not working. The big tax cuts to the corporations that are supposed to give us jobs so we can go and buy new cars and houses and other stuff is not working. The huge corporations that got greedy and took there jobs overseas so they could get away with cheap labor are now wondering why we are having a hard time making ends meet. I new it wouldn't take long for the queen ant(corporations) not to get her food when the little ants (Us) were having a hard time finding food.

[AX10]

7. No, it's the fault of the corporations who have charged too much...

for their mediocre goods and services. It's the fault of Bush for giving the country away to the oil mafia.

[aquart]

9. Well, you go to buy and it says Made in China...and you put it back.

[yorkiemommie1]

28. yes!

i couldn't find a single article of women's clothing today that wasn't made in another country.

i will make do or do without.

[candice]

48. Are there any U.S. tailors left? I wear my clothes until they wear out now.

[bikebloke]

68. I make my own stitch repairs...

by hand. Then I'll get some more life out of clothing before they're relegated to bicycle and spectacle rags.

[Manifestor_of_Light]

70. Yes there are.

You can have them make your clothes or you can sew them yourself.

Most clothes now are loose, not fitted, which makes them much easier to make.

I have three old all steel Singer sewing machines--they'll never wear out, and they make excellent buttonholes with an attachment that uses cams.


My mom taught me to sew when I was young. It's not difficult if you can think in 3-D.

[Maggie_May]

10. NIKKEI Down 323 points

and watch there market crash as well

[Deja Q]

22. A global crash; it seems the USA can't be cut free of the global market after all.

I wonder what the new world order is going to be like...

[Purveyor]

40. Now its down 554 pts or 3.37%....

[GeorgeGist]

11. It's the consumer's fault ...

the evil bastards aren't consuming enough to feed the pigs.

[rucky]

14. you give consumers too much credit.

the pigs are in control.

[Deja Q]

21. Consuming is great! But one needs a job to be able to do so.

One that allows being able to consume. It's just a matter of finding ways to remain viable...

:shrug:

[Wcross]

12. A lot of consumers financed their lifestyle with HELOC's.

Run up a credit card, refinance the house. Refinance the house if you want a new boat. Having a mid-life crisis? Get a Harley and a clip on pony tail. Never worry about the cost, just the monthly payment.

Housing always goes up 10%+ per year, it never goes down. I'll just borrow my way to prosperity!

Time to pay the bill.

[Yavin4]

37. BINGO!!!

Basing an entire economy on consumer debt spending is not sustainable for the long term.

[Megahurtz]

77. Lol!

That pic always just cracks me up! :D

[rucky]

13. Our little shop has seen a sharp drop in business over the last 2 months

compared to last year's figures.

and our internet traffic is up, but our conversion is way down.

[amandabeech]

15. Corporations have been making really good profits.

However, they haven't been distributing a fair share of them to their U.S. employees, let alone their Chinese ones. Every penney is used to "enhance shareholder value."

If you have a nice pension or own a lot of mutual funds you get a little trickle, but if you don't, you're out of luck.

Trickle down, my behind!

[pitohui]

16. drop the dern prices

how can i buy anything when milk is almost $5 a gallon and gas is $3 a gallon? nothing is left after the necessaries are taken care of

[prolesunited]

23. Wow, where is milk $5 a gallon?

I don't drink the stuff anymore so I'm not paying attention.

[Maggie_May]

26. Its true

and to try to feed a family of 5 its a fortune it cost me almost 200 bucks a week.

[LafayetteTGR]

29. $4.84 in Louisiana nm

[candice]

49. I read that milk products are being shipped to China...which is why we are paying more...????

[thunder rising]

34. Just a thought, but since farmers are in a pinch too

I wonder if they are interested in leasing out cows. I'll bet there is an arrangement that could be made based on production...whatever. The case for a "coop cow".

[Cobalt Violet]

25. These economists are dopes.

I have a painting degree and I can tell you that if business fails to pay people enough to be consumers they aren't going to consume. It's really that simple. Do they really give people degrees for that?

[thunder rising]

32. yes, but just before the hand shake they had you a little cup of ... KOOL-AID

[RainDog]

31. Gambling vs Living

I'm not sure where I read this, but it does make sense, unlike the idiotic "trickle down" theory that is the b.s cover for greed...

anyway, after a certain point, the rich do not need to buy another this or that and the money goes to speculating or gambling among themselves in the stock market, etc.

however, if wages are such that money in an economy is spread among a whole lot of people, those various groups will need to buy more big ticket items like appliances, for instance, because the money is spread across households, cities, states, etc.

if you didn't hear it or see the thread earlier, listen to Naomi Klein on today's democracy now.

[DU GrovelBot]

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[Yavin4]

35. Gee, Do Ya Think Outsourcing has Anything To Do With This?

Call me crazy, but do ya think that sending over thousands and thousands of mfg. and tech job overseas maybe, just maybe, is having an effect here?

It's kind of hard buying shit with no money, and it's kind of hard getting money with no job. We tried that "give everybody debt" thing, but that didn't work.

What do I know? I aint got no show on CNBC.

[rodeodance]

36. So, the consumer is now the Enemy!

[Cobalt-60]

39. We don't rate as enemies with them

just as domestic animals.
They're shocked to discover that starving the livestock resulted in lower output from them.
They're probably considering the application of force to increase spending.

[depakid]

41. Decades of declining real wages

plus an end to draining home equity... one should expect nothing less.

[Trajan]

42. It's about WAGES .....

The Republicans, with some considerable Democratic connivance, have done everything they can to stifle wages for so long now ....

The reduction of influence among unions has had a debilitating effect on wages across the board ....

Ever hear of General Progression ? .... COLA Fold In ? ...

I used to hear of them all the time ..... now not a peep ....

Why ? .. Because I work in a NON Union shop ... Making 75 % of the wages I used to make at the end of the 90's ...... I make today what I made 16 years ago .....

Prices have changed 'much' in the last 16 years ..... and my pay has dropped ....

WTF are they thinking ? ...... Paying workers WELL drives economic activity ...... Priming the pump and making it possible for companies to record sales, mark revenues and amass profits .....

Trickle down ??? ... HAH ! .... a fool's errand ...

[Occulus]

69. I'm waiting for a natural productivity crash, myself

For how much longer can employers press higher and yet higher "productivity levels" from their existing employees without hiring new ones, and still avoid their workers keeling over in a faint? That actually happened where I work a couple weeks ago; some guy working two jobs in back-to-back shifts went out on the floor and left on a stretcher towed by EMTs simply from being overworked and not getting enough sleep. No, the shareholders must see ever-rising values of their stocks! Thus, the employers keep the employees they have (or get rid of a fewhuge chunk numbering in the thousands), and tell them "produce more, or else you could see this factory close!!"

Guess what happens next? The factory or store or what-have-you still closes to move operations to a "more profitable" area (overseas is great! WeThey can make a whole lot more profit there by paying workers a fifth, or a tenth, of what we were obliged to pay their American counterparts!!), leaving entire regions lacking jobs which were once held by tens of thousands of workers. See the city of Detroit for more on this subject.

I'm getting more than a little bit pissed off about this. People can only work so hard, period. It doesn't matter how much you pay them. But then, to see your job start to go overseas, you are made to feel it's somehow your fault, for not working "hard enough"- let alone that you're already giving more work for what amounts to less pay now than you were when hired in at the beginning. That is, if you get hired in full-time at all. Even the USPS is turning into an at-will employer, if you can believe it, with its global and increasing use of so-called "casuals" and actual temp service workers. :grr:

That last really burns me. Management is forcing continuing "certifications" upon us- we get people higher up the chain than our plant manager coming in and breathing down our necks for weeks at a time in order to meet postal managers' arbitrary numerical goals, and, when we reach those levels of productivity or "quality" (WTF? I thought "quality" when it comes to mail meant getting there, on time, in one piece), we're asked a year or so later to reach yet higher "numbers". It is consistently given to us with an undertone that our jobs somehow depend upon this, and that's with a contract and a union (that can't strike! On, NOOO, we can't have that! :grr:).

Question: If we, as a union (any union will do, not just mine), can only ask for more money when the contract is up for negotiation, how is it, then, that postal managers- or any managers, for that matter- think they can ask us for ever-increasing levels of production between contract negotiations?

I know I'm not the only worker of any stripe that has to deal with this bullshit. I also know I'm sick and fucking tired of it.

[ProudDad]

76. Now if this guy was in charge

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x2955625

[Megahurtz]

78. Good God.

:wow: I can believe it.

I went through that shit with the P.O. back in the late 80's and 90's when I used to work for them. Have I got many nightmare stories. They started going Corporate even back then. They seriously almost worked me to death. Sounds like they're doing the same thing and I imagine it's gotten worse.

I feel for you. :hug:

[Occulus]

83. Allow me to clarify a bit-

USPS does not have shareholders.

But still.

[KillCapitalism]

43. DUH, who didn't know this...

This should be obvious to most anyone out there. Of course consumer spending is going to be in the toilet with high unemployment, out-of-control inflation, and low wages for those lucky enough to have work.

[Neshanic]

44. YOU INGRATES! You consumers! How dare you stall out the economy.

It was not enough for you that we made sure our CEO's made millions upon millions in pay. We slaved day and night giving gargantuan bonuses to people who packed shit in a box and then sold it down the line. We worked our fingers to the bone outsourcing EVERYTHING! Now you do this to us? It's all YOUR fault you, you , bad , bad consumers!

[lovuian]

46. They have held our wages so far down on top of Healthcare

Taxes Gas Food prices and HOUSING

plus energy bills

people are stretched to the max

Wars are fought overseas they don't help us

just we pay for them
Reality is now we must pay for Iraq

and there is none to be had

[PSPS]

47. No problem! Gary Coleman says all my troubles are solved at Cash Call!

Just before he drives away in his high-end car, it shows the interest rate:

99.2 %

Another thing bushco has brought us: Legalized loan sharking

These guys should be swinging from lamp posts.

[candice]

50. Can't afford much, but the real food at my farmers' market makes life worth living...

tasting real food makes me happier than any of the crap I could buy to stuff my abode with. Now I'm asking myself if I really need what I buy, and if I do, is it something I'll keep and use for a long time.

Nothing for the landfill. Nothing that wastes resources or contributes to global warming that I don't really really need (and can afford to pay for with cash). Since I'm making what I made a decade ago, and all of the costs have escalated, I can't buy much really even if I wanted to fill my place with crap. I've been disappointed with the low quality of Chinese goods and never knew how good we had it when things were made in America. I do seek out craftspeople and buy locally from small businesses for which I have sympathy.

[llmart]

63. That's really the way to go anyway.....

life isn't about filling your place up with cheap, useless crap.

[Miss Chybil]

51. We can't buy anything because we have to pay for GAS!!!!!

Thanks Cheney.

[greymattermom]

53. also demographics

I'm in the leading edge of the boomer group, and my house is full. I can afford to buy stuff, just can't stand looking at it and am getting rid of stuff all the time. I also buy at garage sales to find older things that will last so I don't need more than one. Many folks who could afford to buy things don't want them anymore.

[llmart]

64. I didn't see your post until now.....

I'm with you. But I realized that about 15 years ago. Gave it all away to Salvation Army. I don't have the time or mental energy to expend on taking care of it, moving it around, looking at it, cleaning it, etc. etc. etc. I'd rather be taking a walk, reading a book, listening to music, having coffee with a friend, playing with my dog. I can afford to buy just about anything I want, but I don't want anything.

[Manifestor_of_Light]

71. I cleaned out my parents' house.

And got an auction house to come get it and sell it. I filled up 60 boxes with glass and china and misc. tchotchkes. Also some old solid furniture I was sick of looking at. The house was just too full of furniture. It filled up a 40 ft goooseneck trailer.

I didn't get a ton of money for all the stuff but I just don't have time to worry about it.

[kineneb]

82. also getting rid of stuff

the only thing I am currently collecting is shop (hand & power) tools. One can never have too many clamps. Got a disk/belt sander combo for my birthday, so I can finish some projects.

Moving to a new place forces one to assess the amount of crap one wishes to collect.

[NuttyFluffers]

54. "Hey everybody, follow me! I'll lead you... to your doom! Mwa ha ha!" -- Big Bad Consumer

and somehow this 'pass the buck' crap reporting passes for journalism today. :silly:

[Demeter]

56. Did the Economists Mention Unemployment? Underemployment? Hello? Is This Thing On?

I thought not.

[Orsino]

65. How long will we allow these consumers...

...to terrorize the media and the corporations, leading all into the abyss?

"Consumer-led," my ass.

[fasttense]

66. Consumers should be declared an Iraq destabilizing force and all their

assets should be seized. It wont help the economy but it will make the bushes feel like a king.

[Autumn Colors]

81. Great idea!!!

If we declare them enemies of the state and seize all their "stuff" ... that will force them (or their unarrested families) to go out and buy new stuff....

Brilliant!

[Manifestor_of_Light]

72. They destroyed the middle class and they're surprised??

No middle class jobs for the educated and skilled, no raises for people who still have jobs, blah blah.....

If there's no middle class to drive the economy, it's screwed.

[ProudDad]

73. Buy Used, Buy Local or Don't Buy

Starve the beast!!!!

This is GREAT!!!

[ProudDad]

74. Check this out

We'll all have to develop local economies soon:

"The End of Suburbia"

http://www.youtube.com/watch?v=Q3uvzcY2Xug&mode=related&search=

Get ready!!!

[ProudDad]

75. But it CAN'T be a recession

the corporate capitalist masters are MINTING money...

[Javaman]

79. "we may be in the early stages of a consumer-led recession for the first time in 17 years,"

And who was prez when that happened??????

:banghead:

The brain damaged nut doesn't fall far from the tree.