U.S. CitiesCity-Data Forum Index
Covid-19 Information Page
Go Back   City-Data Forum > General Forums > Economics
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 09-23-2010, 08:23 AM
 
Location: San Diego California
6,797 posts, read 6,669,200 times
Reputation: 5180

Advertisements

Washington's Blog (http://www.washingtonsblog.com/2010/09/american-consumers-are-not-deleveraging.html - broken link)

The truth is the suffering associated with the great recession for most is still yet to be experienced. The recovery being touted by the press daily is being financed to the tune of 8 billion dollars monthly by people not paying their mortgages. In other words there is no recovery. Is this situation sustainable? Of course not. Have American consumers learned to save and live within their means? No. They are still spending other people’s money to support lifestyles they themselves cannot afford. This ensures that another leg down in the great recession awaits us, and it will be much more painful that anything we have experienced up until now.
Rate this post positively Reply With Quote Quick reply to this message

 
Old 09-23-2010, 09:50 AM
 
8,265 posts, read 11,266,262 times
Reputation: 4788
There has been plenty of stuff saying Americans savings rate have indeed increased very much over the last few years.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 09-23-2010, 10:38 AM
 
Location: San Diego California
6,797 posts, read 6,669,200 times
Reputation: 5180
Quote:
Originally Posted by slackjaw View Post
There has been plenty of stuff saying Americans savings rate have indeed increased very much over the last few years.
"Stuff" is a kind way to put it. At one point they also told us the recession would never happen, and that housing prices were stable.
A trillion dollars worth of stimulus, 8 billion a month in diverted mortgage payments,(1% of total economy) and 2+ years of unemployment payments are not keeping this economy from deteriorating.
The course we are on is clearly unsustainable. At some point in the not too distant future, the price for irresponsibility will have to be paid.
When people no longer have free housing,(7.3 million) and government sponsored paychecks for not working,(5 million) the real deflation and pain will begin.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 09-23-2010, 10:49 AM
 
8,265 posts, read 11,266,262 times
Reputation: 4788
Quote:
Originally Posted by jimhcom View Post
"Stuff" is a kind way to put it. At one point they also told us the recession would never happen
I'm not talking about opinion pieces predicting the future about recessions, I'm talking about statistics on savings rates. Americans got pretty spooked by the recession and upped their savings rates to a 15 year high.



I understand that makes you uncomfortable since it doesn't jibe with part of your rant, but I think it is a reasonable result of hard economic times. Look at it this way, if the savings rate were at a record low on that graph would you then embrace it as the truth? I think so.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 09-23-2010, 11:37 AM
 
Location: Backwoods of Maine
7,322 posts, read 9,102,175 times
Reputation: 20155
Quote:
Originally Posted by jimhcom View Post
When people no longer have free housing,(7.3 million) and government sponsored paychecks for not working,(5 million) the real deflation and pain will begin.
Hmmmm...lemme get this straight. The Federal Reserve was started in 1913, 97 years ago. Since that time, the purchasing power of a dollar has dropped to 4 cents.

I just don't see deflation anywhere here. I see "asset deflation", but that is not the same thing as deflation. I'm seeing a lot of inflation starting to kick in. Bernanke will never allow deflation - not on his watch! He was the student of the Great Depression, remember? He's the one who said he'd drop money out of helicopters first, remember?
Rate this post positively Reply With Quote Quick reply to this message
 
Old 09-23-2010, 02:21 PM
 
Location: San Diego California
6,797 posts, read 6,669,200 times
Reputation: 5180
Quote:
Originally Posted by slackjaw View Post
I'm not talking about opinion pieces predicting the future about recessions, I'm talking about statistics on savings rates. Americans got pretty spooked by the recession and upped their savings rates to a 15 year high.



I understand that makes you uncomfortable since it doesn't jibe with part of your rant, but I think it is a reasonable result of hard economic times. Look at it this way, if the savings rate were at a record low on that graph would you then embrace it as the truth? I think so.
U.S. Savings Rate Declines Further - Daniel Indiviglio - Business - The Atlantic
http://www.google.com/url?sa=t&sourc...Imaqaw&cad=rja
http://www.google.com/url?sa=t&sourc...wHfnHg&cad=rja
As you can see I can provide plenty of articles stating that savings is falling again, but that is not the real issue. Even if I agree with you that
yes, savings did increase the fact remains, they were so spooked they went from a negetive savings rate to a whoping 2%. Do you think a 2% savings rate will save the economy? And what about spending? If people are charging more than they are saving then what is the real savings rate?
Mortgages, credit card debt, auto loans, home equity loans, and student loans -- peaked at $13.8 trillion in 2008. After two years of supposed deleveraging, frugality, and mass austerity, the balance is $13.5 trillion. Consumers have buckled down and have paid off 2.2% of their debts, it seems.
A simple search of the Federal Reserve website reveals that banks have charged off 5.66% of all their loans in the last two years.
So, let's get down to the nitty gritty. If consumer debt was $13.8 trillion at the end of 2008 and the banks have since written off 5.66% of that debt, total write-offs were $800 billion.
If total consumer debt now sits at $13.5 trillion, then consumers have actually taken on $500 billion of additional debt since the end of 2008; consumers haven't cut back at all. They're still spending and borrowing.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 09-23-2010, 02:44 PM
 
Location: San Diego California
6,797 posts, read 6,669,200 times
Reputation: 5180
Quote:
Originally Posted by Nor'Eastah View Post
Hmmmm...lemme get this straight. The Federal Reserve was started in 1913, 97 years ago. Since that time, the purchasing power of a dollar has dropped to 4 cents.

I just don't see deflation anywhere here. I see "asset deflation", but that is not the same thing as deflation. I'm seeing a lot of inflation starting to kick in. Bernanke will never allow deflation - not on his watch! He was the student of the Great Depression, remember? He's the one who said he'd drop money out of helicopters first, remember?
Bernanke would like to stop deflation, I agree. But he has for the most part now run out of bullets.
Most anything he tries now in the way of direct asset purchases will be counterproductive. The fact remains that asset prices are still way out of line with the public’s ability to pay.
So long as that imbalance remains, debt will have to be either written off, or the assets sold at market value, both of which are deflationary. Deflation is not a short term process, during the great depression it took 8 years, without massive government intervention.
With massive intervention, Japan has been going thru it for 30 years, but still cannot stop it.
As far as helicopter drops go, the banks (who the Fed works for) do not want hyperinflation any more than we do. It would mean they would be paid back in dollars worth less than what they loaned. There is a reason that the big boys are all sitting on piles of cash now, like me they are betting on cheaper asset prices down the road.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 09-23-2010, 02:59 PM
 
Location: Texas
2,847 posts, read 2,148,808 times
Reputation: 1755
Quote:
Originally Posted by jimhcom View Post
There is a reason that the big boys are all sitting on piles of cash now, like me they are betting on cheaper asset prices down the road.

Me too. Completely agree. May be 2 or 3 years out, but cheap asset prices are real.

Unusual worry for economy: Is inflation too low? - Yahoo! Finance (http://finance.yahoo.com/news/Unusual-worry-for-economy-Is-apf-1253519994.html?source=patrick.net#y-article-hd - broken link)
Rate this post positively Reply With Quote Quick reply to this message
 
Old 09-23-2010, 03:11 PM
 
8,265 posts, read 11,266,262 times
Reputation: 4788
Quote:
Originally Posted by jimhcom View Post
As you can see I can provide plenty of articles stating that savings is falling again,
From Atlantic article:

"I've written several times about how the personal savings rate in the U.S. has increased significantly since the beginning of the recession.


From CNN article:

"In the short term, the savings rate has increased slightly"



From chart on blog, showing spike in savings rate since recession:

Rate this post positively Reply With Quote Quick reply to this message
 
Old 09-23-2010, 03:33 PM
 
5,428 posts, read 10,400,601 times
Reputation: 4525
Quote:
Originally Posted by slackjaw View Post
There has been plenty of stuff saying Americans savings rate have indeed increased very much over the last few years.
So what correlation do you think this is to anything related to the topic?

So the upper end is not spending as much?

Back towards the point, the "pyramid" is still narrowing, even if the peak is higher. Still all points to a topple and collapse.
Rate this post positively Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Economics

All times are GMT -6. The time now is 02:00 PM.

© 2005-2021, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Contact Us - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37 - Top