Saturday, February 21, 2009

The Worst is Yet to Come:" Americans' Standard of Living Permanently Changed

Hat Tip Jerry!

There's no question the American consumer is hurting in the face of a burst housing bubble, financial market meltdown and rising unemployment.
But "the worst is yet to come," according to Howard Davidowitz, chairman of Davidowitz & Associates, who believes American's standard of living is undergoing a "permanent change" - and not for the better as a result of:

- An $8 trillion negative wealth effect from declining home values.
- A $10 trillion negative wealth effect from weakened capital markets.
- A $14 trillion consumer debt load amid "exploding unemployment", leading to "exploding bankruptcies."

"The average American used to be able to borrow to buy a home, send their kids to a good school [and] buy a car," Davidowitz says. "A lot of that is gone."

Going forward, the veteran retail industry consultant foresees higher savings rate and people trading down in both the goods and services they buy - as well as their aspirations.

The end of rampant consumerism is ultimately a good thing, he says, but the unraveling of an economy built on debt-fueled spending will be painful for years to come.

Note: A bit of a video/audio sync issue, but message is worth it

1 Comments:

At 2/22/2009 3:57 PM, Anonymous Anonymous said...

Youtubers... If you are going to add a stupid graphic to the end of your video, be sure the audio track also extends. Otherwise the youtube video processing program will compress the video and stretch the audio. Best just to end the video at the end of the clip. Forget advertising your stupid site.

(This has been a public service announcement)

 

Post a Comment

Links to this post:

Create a Link

<< Home

me