Bailout Fallout: “They all feel poor.”
Even before the Dow threw up, there was this story about how the economy is effecting the average American:
So how bad is it, really?
But don't cry just yet, America:
Cowed by the financial crisis, American consumers are pulling back on their spending, all but guaranteeing that the economic situation will get worse before it gets better.
In response to the falling value of their homes and high gasoline prices, Americans have become more frugal all year. But in recent weeks, as the financial crisis reverberated from Wall Street to Washington, consumers appear to have cut back sharply. Even with the government beginning a giant bailout of the financial system, their confidence may have been too shaken for them to resume their free-spending ways any time soon.
So how bad is it, really?
...According to interviews with shoppers, analysts and company executives, the impact of the financial news of the last two weeks has been palpable in many corners of the country, from car dealerships, which endured the worst month for sales in 15 years, to the flashy casinos of Las Vegas, where spending at luxury restaurants and stores and at gambling tables has gone from bad to worse...
...The picture is just as grim at suburban malls and city boutiques, where traffic is disappearing as retailers brace for what many predict will be a dismal holiday shopping season. Some have responded by reducing the number of sales people or their hours...
...The situation is so uncertain that some retailers are simply not even trying to estimate their sales. Pier 1 Imports and Circuit City stores recently withdrew their guidance to Wall Street about earnings and said they would not offer any more predictions this year...
...Casual dining restaurants, which have struggled in recent years because of a glut of restaurants and higher-quality fare at fast-food chains, have taken a beating already this year, forcing the Bennigan’s chain to close and leaving several others struggling. “I think September could be the worst month of the year, and we’ve had a lot of bad months,” said Lynne Collier, an analyst at KeyBanc Capital Markets who covers the restaurant industry...
But don't cry just yet, America:
Of course, the economic malaise has not yet hurt all businesses. It has even been good for some.
Entertainment and media executives remain optimistic about sales of movie tickets, DVDs and games. At Nintendo of America, the popular Wii video game consoles are still selling briskly at about $300.
Comments
The idea of purchasing our way out of debt was a really stupid one, but one which we bought into because it appealled to the irresponsible adolescence that our country seems to have reverted to.
Time to wake up and do our chores now.