freddyv wrote:That consumer spending has remained above 70% is shocking to me and shows that while the public seems to know that something is going on, the real substantive change that Generational Dynamics calls for has not really taken hold. How can we have 10% unemployment and 17% underemployment and so many businesses gone without having a drop in consumer spending?
Here's another quote from Richard Russell that I hadn't seen when I posted the above quote:
Richard Russell wrote:I just read the famous Levy Forecast (they were a favorite of the late Barron's editor, Bob Bleiberg. The Levys talk about the "new abnormal," and they note the following:
"Net private investment didn't merely have a cyclical decline, it ceased.
S&P profits both reported and operating earnings -- completely collapsed to below zero for the first time ever.
Household wealth as a percentage of disposable personal income experienced by far the greatest decline in the post-War era.
From a big-picture perspective none of this makes sense. How can we be losing so much wealth and yet have consumer spending remain at 70%?
Ahhhh...could it just be that the economy as whole is shrinking just as fast as consumer spending but that consumer spending will shrink over a longer term?