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Its all on credit especially the new cars and all the flashy clothes & designer clothes you see.
Unfortunately, some of it probably is.
However, the simple fact is that, even in the current economic climate, there are a lot of people who are doing just fine financially and can afford to buy things like cars and new clothes (flashy or otherwise).
Same here, seeing a lot of new cars with the paper plates around
My dad is a high level manager at a car dealership and for the last month of 2011 he was swamped like everyday with new sales. Working late. Working Saturdays. I asked him if it was because of deals or something with the car companies trying to unload inventory, but he pretty much couldn't offer any explaination for it.
My dad is a high level manager at a car dealership and for the last month of 2011 he was swamped like everyday with new sales. Working late. Working Saturdays. I asked him if it was because of deals or something with the car companies trying to unload inventory, but he pretty much couldn't offer any explaination for it.
Check the pricing on used cars currently versus new. It makes NO SENSE to buy used these days and probably is contributing to new car sales.
The automobile market is doing quite nicely; granted it won't reach the absurd sales numbers of 4-5 years ago since folks can no longer use their homes for ATM machines, but 2012 is going to be a very good year for the automobile industry.
I disagree. I think it was the "all on credit" thing that caused the economic downturn, but these days people are being careful to live within their means.
My husband and I are taking a dream vacation this summer, it's paid for. We didn't put a dime onto credit cards. In fact I made three of the four payments by check to the travel agent, the last I put on my AmEx because I wanted to get the points. I paid it off the minute it hit my online statement. We don't carry debt other than our mortgage. (We also have a 0% car loan--we kept the cash in the bank and used their money. I could pay it off at any time, but why?)
I know most of our friends have become more careful with not acquiring debt. One friend held off buying a new car (her old one was 12 years old with 150K miles) until she could pay cash for a new one. Many of my neighbors in the upscale neighborhood I live in have held off on major purchases such as cars and expensive vacations.
By the way, it's quite possible that your 20-something neighbors are either leasing the cars or using a car allowance to buy that luxury car. Or maybe they just make a lot more money than you give them credit for.
Home sales are slowly rising because people are feeling more secure in their jobs and have paid off debt. In fact for the past two years the amount of consumer debt has dropped every month, and the debt-to-income ration has dropped markedly.
And if you think the cost of home ownership doesn't rise every year, you're wrong. Taxes and insurance rise annually, as do the costs of maintaining the home--painting, lawn care, etc. In areas with rent control, the cost of housing in owner occupied homes can actually rise at a higher rate than that of rent.
Oh, and you CAN find rentals in eastern MA for under $2500, due to a two year work project that will require me to be in Boston 10-15 days a month I've been looking for one, and I've found a number of nice studios and 1 BR apartments in the $1200-1600 range. Good neighborhoods and off-street parking, no basement apartments, either.
I agree. I have seen my free-spending friends cut back and pay off credit cards at a minimum. There are a ton of 15 year mortgages now in my neighborhood. I think a lot of people like to tell themselves EVERYONE is buying their stuff on credit to make themselves feel a bit better.
You really can't evaluate the economy on a local basis. Although the official numbers are "questionable" due to the seasonal adjustments made and later revisions they are about the only way to really judge economic activity.
An example of "seasonal adjustment" is the latest initial claim numbers. The reported number is 399,000 new claims. The actual raw data is 642,481 initial claims.
Retail sales is another indicator and despite the hype they weren't all that great. A 7% increase over 2010 isn't saying much but it is an improvement. How much of that increase is due to inflation is another matter.
Home sales are reported on regularly however the recent admission by the NAR that they greatly overstated the numbers for a couple of years makes that data questionable.
Do you really think we will see the economy improve? Seriously?
Look at the growth of debt from 1980 in relation to the growth in GDP. It took a 7% annual growth in debt to result in an annual GDP growth of 4%. People do not have the capability to continue adding debt which will result in contraction in GDP. Our politicians have replaced private demand with deficit spending. They are currently borrowing close to 12% of GDP. This can not continue indefinitely. As soon as the rug is pulled out from under them the result is going to be at least a 20 to 30% drop in GDP.
Just because some talking head on the television set tells you things are getting better doesn't make it so. Throughout this economic crisis the political powers have been engaged in "perception management" (aka propaganda) repeating the lie "it is getting better" in order to influence people.
Look at the raw data- Tell me how the economy will grow without the ability to add additional debt. Tell me how we can grow our economy from our surplus production when our traitors in Washington have pimped out manufacturing to third world cess pools.
So far our government has done everything in its power to hide and pretend they can fix this. Right now government debt is over 100% of GDP, in order to continue the "recovery" they will have to add 10% to the debt every year and we will be Greece in a year or two. Unless they can figure out how to inflate another debt bubble it is game over.
Exactly and why the MSM is just propaganda and hype.
Until I see factories going up, hiring thousands of people, I won't believe any of it. Without manufacturing, the service sector will eventually bottom out. A huge population, and we are 3rd in the world, cannot employee this many people in low end service sector jobs, with a small, rich, elite class.
People always think of manufacturing as just factory jobs, but there are white-collar jobs too, from managers, to engineers, manufacturing engineers, computer support, and more. Companies buy parts for assembly, computers, uniforms, insurance, software programs, catering, you name it. It all feeds into the economy.
Just because the news says it, doesn't make it so. Just because some people are comfortable, doesn't mean the boat doesn't have a hole in it.
Jim Kramer is a halfwit. Just remember that, in 2008, he said we had nothing to worry about. Days before Bear Stearns collapsed he said it was a perfectly safe investment.
Anybody with an IQ higher than a rhesus monkey should know that home prices are STILL overvalued versus inflation. Do yourself a favor and type in Case Shiller Index into Google and see the chart yourself. Home prices went through the roof in the last decade chiefly due to the oversupply of credit and the total relaxation of underwriting. And the latest home sales figures may be nothing more than a dead cat bounce.
On to new car sales. Because of the stupid Cash For Clunkers program, used cars have gotten ridiculously expensive. So, for about the first time in human history, it actually makes better financial sense to buy a new one as opposed to a used one.
What's more, the employment numbers remain very, very anemic.
To me, the Credit Crisis has yet to run its course. Right now the headline grabber is the economic fate of Europe and the Euro. But coming right on its heels is the coming crash of the Chinese real estate market. If those two happen at the same time then, well, My God. Save your money and hang on for dear life.
So true. But really, homes and cars are just symptoms of the sickened economy. It took 4 decades to destroy the economies of the so-called Rust Belt states, where manufacturing provided good paying jobs.
I see people who loathe unions, are glad the unions are gone, but don't have a word to say about the overpaid government unionized workers, who can retire at 40 and are taken care of, for the rest of their lives. They get pensions, and everyone KNOWS pensions are better than 401Ks.
They get every holiday off, with pay, and the taxpayer is paying for all of this.
I continue to see people managing to move into new homes and luxury apts, eat out at restaurants, buy new cars, travel on vacations, shop at malls, send their kids to private school/college, etc.
It doesn't seem like there's a recession except when I look at my circumstances.
So true. But really, homes and cars are just symptoms of the sickened economy. It took 4 decades to destroy the economies of the so-called Rust Belt states, where manufacturing provided good paying jobs.
I see people who loathe unions, are glad the unions are gone, but don't have a word to say about the overpaid government unionized workers, who can retire at 40 and are taken care of, for the rest of their lives. They get pensions, and everyone KNOWS pensions are better than 401Ks.
They get every holiday off, with pay, and the taxpayer is paying for all of this.
Who can retire at 40? A pension that can end up not being funded is better than a 401k where the money goes to you directly? I think you've missed the pension system basically going away.
Most skilled workers in white collar jobs get hOlidays off.
What I find amusing is all those who complain about taxes and government workers but barely pay any taxes themselves.
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