Friday, September 09, 2011

Cautious or scared?

"Even taking into account the many financial pressures they face, households seem exceptionally cautious." - Ben Bernanke, 9/8/2011
Allow me to explain, Ben: 
1. 10% unemployment 
2. 20% underemployment 
3. Depreciating home values 
4. High credit card/student loan debt 
5. Stagnating retirement portfolios 
6. Tight lending atmosphere 
7. High energy, raw material and food costs 
8. Nothing worth buying once you have an iPhone 
9. Free everything thanks to cheap broadband 
10. Lack of confidence in President, Fed Reserve, Financial System, Congress, State & Local municipal governments, PTA 
How many of these items did the $600 billion you just spent on QE2 alleviate? How many did QE2 actually exacerbate? Go to Princeton this weekend and scratch your beard puzzling over that, let us know what you come up with."
QOTD: Bernanke on Consumers - The Reformed Broker

On exactly the same topic....

"It does not take a genius to understand why consumer spending is weak.
  1. Unemployment rate is 9% 
  2. Real wages are falling 
  3. Income advances go to the wealthy 
  4. Middle class is shrinking 
  5. Jobs hard to find 
  6. Approval ratings of Congress and Obama at record lows 
  7. Consumers have high debt ratios 
  8. Home prices are still falling 
  9. Homeowners are trapped in their homes, unable to refinance 
  10. Boomers need to save for retirement 

However, those simple facts are far too complicated for a PhD like Fed chairman Ben Bernanke to figure out. Note that Bernanke even cited some of the 10 factors I mentioned, yet he is still surprised. What a dunce. Is it any wonder his policies are so counterproductive when he cannot figure out simple things the average person can see clearly?"

Bernanke, a Complete Dunce, "Puzzled by Weak Consumer Spending - Mish

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