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The Paradox of Thrift |
rffrydr
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 Posted: Wed Jul 22, 2009 11:07 pm Post subject: The Paradox of Thrift |
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What's bad for the goose is good for the gander:
[img]http://2.bp.blogspot.com/_qPOGUD58m4Q/Sfl7H99PP7I/AAAAAAAAASM/ErFB8_CdrWc/s400/HY+spread+vs+RFFR.bmp
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And that's how the stock market goes from "reflexivity" to causation. It becomes it's own cause.
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rffrydr
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| Posted: Tue Feb 02, 2010 12:33 pm Post subject: |
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Savings is spending:
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rffrydr
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| Posted: Fri Dec 18, 2009 10:58 pm Post subject: |
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It's been observed that our american sense of savings is an extension of our Protestant tradition and that we don't stand a chance of savings in this modern misshapen world of ours. I doubt that: we certainly are one of the most religious countries in the world. Whether we've gotten to the point where our propensity to spend is measured by our ability to spend is probably another question. The Net Worth numbers are not too bad (depending how you adjust the bad mortgages outstanding). Lotta wealth in the 90's; lotta generational transfer.
Nonetheless, this could be a free option on economic recovery. Meanwhile I'll keep the faith--in women.
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rffrydr
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rffrydr
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rffrydr
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| Posted: Sat Nov 14, 2009 4:39 pm Post subject: |
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| Quote: | But Pipas said the shift to smaller vehicles is about more than fuel prices.
He said it reflects changing demographics and a new, less-ostentatious aesthetic.
"Consumers in the future will be more careful about living within their means," he said. |
http://www.detnews.com/article/20091114/AUTO01/911140319/1148/rss25
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rffrydr
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| Posted: Wed Nov 11, 2009 6:27 am Post subject: |
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Redbook said that sales were up 1.7% in the first week of November. Business improved in seasonal apparel and other weather driven items.
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rffrydr
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| Posted: Thu Oct 22, 2009 10:29 pm Post subject: |
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Amazon.
No gas; no tax; peer-reviewed and priced right.
Same story with the Kindle generation?
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rffrydr
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| Posted: Wed Oct 14, 2009 11:17 pm Post subject: |
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Analyst after analyst speak of the spending drought as consumers "invest" in their balance sheets over a multi-year trip to 10%. I myself called attention to this new savings' culture last fall. The mistake now is not recognizing the qualitative change in what we call spending anymore. The race to refi into a new Escalade lease (10 starbucks holders and five mini-LCDs, please) is over. This is true. But, much the way inventory building drives the first leg of recovery, so does it in the consumer.
Spending is also a necessity. It can also be value-added. It can be a double-negative rather than a splurge. Even the end-of-world is something to be invested:
http://www.google.com/hostednews/ap/article/ALeqM5jpdcxje-YAFDJZhFz32imz1h0pxwD9AT6S4G1
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rffrydr
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| Posted: Wed Oct 14, 2009 8:00 am Post subject: |
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Brother Frank doesn't get it--even as he's screaming it for all to hear:
| Quote: | Of all the markets I follow, none is perhaps more dangerous at this time than the market for Junk Bonds. It is ironic that two years following the beginning of the great crash of 2007-08 the reach for yield is so striking that investors are willing to pay up for sub-par (in many cases, truly junk paper) just because they are desperate for yields. Credit quality on these bonds has deteriorated radically as today’s climate is nowhere near as positive as the climate that prevailed back in mid 2007. Yet today, yields are even lower. This predicament falls squarely on the doorstep of one Chairman Bernanke. Thank you, Mr. Chairman, for depriving the Senior Citizens and Savers of the United States from their interest income.
Thank you, Mr. Chairman, for generously handing that income stream money over to the large Money Center banks who need to rebuild their imploded balance sheets. Thank you for forcing investors who have no business doing so, to take unwarranted risks with their hard earned savings as yields on money markets are now so low that there for many is almost no choice but to seek out the high yields offered by low quality bonds. In my view this is poor, very poor policy making by the Fed which continues to compound one mistake upon another. |
Moral: The pointing finger is always a good indicator...of something else. 
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rffrydr
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| Posted: Sun Sep 06, 2009 7:42 pm Post subject: |
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Squaring the circle in energy, QED:
http://www.ft.com/cms/s/0/28bfbdd2-97dd-11de-8d3d-00144feabdc0.html
| Quote: | US utilities hit as consumers go green
By Sheila McNulty in Houston
Published: September 2 2009 17:40 | Last updated: September 2 2009 17:40
After an energy audit on her home this summer, Meredith Keelan spent $12,000 to install six solar panels and deep insulation in her attic.
She fitted a solar-powered attic fan and bought a new fuse box. The solar fan means her mechanical ones rarely blow. Ms Keelan uses three times less power during the day, when the solar panels power her home, than at night, when she relies on the grid. Once she pays off these energy improvements, Ms Keelan will invest in six more panels, at $1,700 each.
The high-school teacher believes she will recover her investment, on which she received a 30 per cent tax credit, in six years, through savings on her energy bills.
“I am ecstatic,” she said. But power producers are not.
A growing number of businesses and residential customers are doing what Ms Keelan has done to reduce power use, putting extra strains on utilities already grappling with a drop in demand from industrial users as a result of the economic downturn.
Wholesale power demand was down 15.3 per cent in the second quarter compared to last year, according to data compiled by Credit Suisse Securities. Total retail demand was down 5.4 per cent, with industrial demand plunging 14.7 per cent, commercial demand falling 3.5 per cent and residential demand dropping 1.7 per cent.
The steep drop in US power demand in the first half of this year has led Credit Suisse to forecast the steepest annual decline since the second world war – a 2.8 per cent drop. The economic downturn and the weather are responsible for a large part of that. But even when markets recover, analysts say, demand will stay lower as consumers and regulators seek ways to reduce consumption.
“This has greatly challenged conventional wisdom that load growth was a given,” said George Given, head of global power research at Wood Mackenzie, the consultancy. “It’s unprecedented.”
US utilities have been able to plan for 1-2 per cent demand growth annually for years, he said. Yet, apart from the decline in residential use, a large amount of the drop has come from industrial customers: “This caught utilities off-guard.”
Mr Given believes that conservation efforts, which are easiest to implement, are reducing power demand, with people turning off giant plasma televisions when not watching and better managing overall energy use.
Many are ordering energy audits and following advice for lasting changes, such as double-glazed windows, improving insulation and buying energy-efficient heating and cooling units, as well as appliances.
“There is a mindset change in consumers,” said John Berger, chief executive of Standard Renewable Energy, which sells energy audits and solar energy. Those who follow the advice in energy audits typically reduce power demand 20-30 per cent. “The demand for that service is going up exponentially,” he said.
The company’s energy efficiency and solar businesses have both grown about 20 per cent per month in the past six months.
The impact on utilities’ bottom lines has led to talk about forcing consumers to pay a flat fee for electricity, so utilities will be profitable even if power demand continues to drop.
“It’s desperate behaviour,” Mr Berger said.
“Change and moving ahead is what this country is all about.” |
The key sentence is the last: "desperate behavior is moving the country ahead."
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rffrydr
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| Posted: Thu Sep 03, 2009 9:21 pm Post subject: |
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It's made its way into the grain of individual retail purchases (or maybe this is where it begins): "Value" is THE WORD in retail these days. The ads shout it. Percentage off sales going nowhere; dollars off is what's moving merchandise.
It'll be interesting to see how this is expressed in the "school" sales this week. Certainly has better potential than is being credited for since, after all, when it comes to children that is an investment in your future. Christmas will come late this year (and hurt retailers looking to get a "jump.") --which doesn't mean it will be a bad one. See: "Compression of Time."
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rffrydr
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| Posted: Mon Aug 03, 2009 1:48 pm Post subject: |
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Businessweek runs the cover "The Incredible Shrinking Boomers" inspired by Mercedes' effort to "introduce" itself to gen X/Y.
http://www.businessweek.com/magazine/toc/09_31/B4141magazine.htm
The savings culture is upon us like a darkness sweeping the land (or so you will hear). That is no doubt true. But equally true is that the Boomers should redefine what that in itself means. This is not going to be the Depression era of abstemiousness. It only takes a fraction of work hours to buy a quart of milk as it did then. Look for "the more you spend the more you save" style from the Boomers. The article hints at this (Nordstrom rack stores, "Ikea" hotels).
Indeed the broader structural components of this last two-decade boom have not disintegrated--yet. Indeed, we are blessed. We have the aging but not dead spend, spend, spend boomers awaiting on the other side of the cycle (ready to invest in US debt, cars and solar), we have the now well-globalized world ready to be like mike, and continued (if imbalanced) world peace. All are under threat. All may give in. But as for now, surprises on the upside.
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