...and discovering that Wall Street's long anticipated consumer revival is nothing more than a cruel joke, as the following reports attest:
"Recession Generation Opts to Rent Not Buy Houses to Cars" (Bloomberg)
The day Michael Anselmo signed a lease on his first apartment in New York City, he lost his job at Buck Consultants LLC. He spent about 10 months struggling to pay rent with unemployment benefits. Two years later he’s still hesitant to buy a home or even a road bike.
“Every decision that I have made since I lost my job has been colored by that insecurity I feel about the future,” said Anselmo, 28, who now rents an apartment in Austin, Texas, and works as a consultant for UnitedHealth Group Inc. “Buying a house is just further out on the timeline for me than it used to be.”
Anselmo and many of his peers are wary about making large purchases after entering adulthood in the deepest recession and weakest recovery since World War II. Confronting a jobless rate above 8 percent since 2009 and student-loan debt hitting about $1 trillion, 20-to-34-year-olds are renting apartments, cars and even clothing to save money and stay flexible.
"Vacations Become 'Staycations' in Sluggish Economy" (Milford Daily News)
Barbecuing shrimp and zucchini on a grill,siblings Mirlande and Jean Cadet relaxed with their families beneath the pines at Lake Cochituate, waiting for rain showers to pass.
They’d really like to fly to Paris this summer to see their sister but money has been tight so they drove from Boston to Framingham for a family cookout.
"Unfortunately, we can’t go there. Airfare for the children and us would be too much,’’ said Mirande Cadet. "So many bills: house, food, school, car insurance. How much do you pay for gas?’’
"U.S. Back-to-School Shoppers in No Mood to Splurge" (Reuters)
Shoppers from New Jersey to Arizona said they were shopping for basics and making do with last year's supplies if possible.
"Unless the teacher says it is necessary, I am not going to get it," said Bagayoko, the 18-year-old, who who headed to Secaucus, New Jersey from Harlem, New York, to save money on sales tax. Her shopping cart held only pens, pencils, folders and other basics.
She is not alone in being frugal.
"I am not buying the swankiest of anything," said Ann Miller, 47, while shopping for her son Zachary, 8, at the same Walmart store. "I am feeling worse about the economy."
As school districts with strained budgets ask parents to buy more items that in the past would have been supplied by the schools, many parents push kids to make do with old items, shop at discounters or buy only what they really need.
"The school list is longer, but I am trying to get (just) the basics," said Yamila Pichardo, 35, mother of three school-going kids, who said she plans to reuse her kids' backpacks.
"Tim Hortons Says Frugal Customers Cutting Back on Snacks" (CTVNews)
Results may have been even better if consumer confidence was stronger, as negative sentiment about the economy has hit companies across the restaurant industry, noted CFO Cynthia Devine.
"The economic environment in both Canada and the U.S. remains volatile and the continued uncertainty appears to be impacting consumer confidence," she said.
"We too noticed that some of the more moderated growth in the second quarter that carried through into July."
Devine said that while sales during the morning remain robust, Tims has noticed some softness in sales during the afternoon, a trend that appears to be consistent with a consumer looking to trim spending.
"The consumer, if they've got to cut back a little bit during some of these challenging times, then quite likely it's that snacking day part."
"Al's Emporium: Fast Food Slows Down" (Fox News)
Last week, McDonald's reported surprising dips in same-store sales for the first time in nine years.
Same-store sales, which do not include revenue from new stores, is how the restaurant industry measures growth. For McDonald's, they were down 0.1% in the U.S. In Europe they were down 0.6%, and in Asia, the Middle East and Africa, they were down 1.5%.
Every day, McDonald's serves 69 million customers from 33,500 locations in 119 countries. Its sales declines could mean one of two things: 1) The global economy is picking up, so more people are switching to pricier eateries. 2) The global economy is getting so bad that an increasing number of people can't even afford to eat at McDonald's.
CEO Don Thompson blamed a sluggish economy.
"Tyson Profit Misses on Weak U.S. Meat Demand" (Reuters)
Tyson Foods Inc reported weaker-than-expected quarterly sales and earnings and lowered its full-year outlook as higher meat prices dented U.S. demand, and its shares fell 4.5 percent.
...
The U.S. drought is making meat more expensive and will test demand for chicken, beef, pork and possibly even turkey as consumer prices are expected to climb, executives said.
Sales of beef and pork through grocery stores and other retail outlets were down in the latest quarter, while chicken sales were flat.
Sales of chicken at restaurants, cafeterias and other food service customers held up during the summer, boosted somewhat by fast-food restaurants featuring chicken on the menu. Beef demand was softer, but was better than pork, they said.
U.S. shoppers have remained frugal in a still-recovering economy.
"Americans Drop Pay-TV; Business Matures in Weak Economy" (Reuters)
Stubbornly high U.S. unemployment, a weak housing market combined with a mature business prone to regular programming blackouts has seen more than 400,000 American homes drop their cable or satellite TV service since the start of the year.
"The Smaller, Cheaper, Just-for-Us Wedding" (NY Times)
The Wedding Report, a market research firm, has been tracking the change, noting that in the last year, couples participating in the company’s surveys have increasingly reported a desire for “fun, romantic, simple, casual and unique weddings.”
Vendors concur.
“The backyard is the new ballroom,” said Amy Kaneko, an events planner in San Francisco.
Stacy Scott, a caterer in Marin County, Calif., added, “I think people are waking up to the insanity that is the wedding market.”
The experts say these more-intimate and often lower-cost affairs have been brought about by the intersection of a number of trends.
First is the relentlessly downbeat economy. The average wedding now costs more than $27,000, according to TheKnot.com and WeddingChannel.com, with costs running significantly higher in regions like the Bay Area and New York City. But homespun celebrations come with substantially lower price tags.
Google Cuts 4,000 Motorola Employees: The First Step of Motorola’s Revival? Daily Ticker. To save the village, you must first destroy it. The logic of western Capitalism is beyon explanation.
Posted by: roger | August 13, 2012 at 05:37 PM
I love the way they blame it on consumer "confidence" as if we only felt better we'd spend more money.
On Sunday I spent 5 hours at a flea market, selling my stuff to earn money for a car trip within my same state of Pennsylvania (let alone a flight to Paris). The place so packed with vendors that I had to fight for a selling space. I've never seen so many people in one place trying to earn extra money.
Posted by: sharonsj | August 13, 2012 at 08:10 PM
i guess nobody's gonna report buryin' grammaw out back ta save money.. .
i once thought cremation was the way to go, but now i think i'm gonna just take a walk in the woods when i feel like my time's about up - like my ol' dog showed me. If you find me, just bury me where i lay - no need to go real deep either, i think 2 ft deep by about 5 ft long will do.
i haven't had a vacation in years and can't find full time work either, so makin' my livin' space as nice as i'm comfortable with is okay by me.
Posted by: Tom | August 13, 2012 at 08:54 PM
First-hand account from Silicon Valley...
Near the coffee shop I visit every day is a large building that has been vacant for several years. It used to a 24-Hour Fitness. A year ago they divided up the front into sections, where they could rent out smaller areas to more shops. Still no takers. Now I see some action to renovate in preparation for a new store. Today I saw what it is going to become... a DOLLAR TREE.
Welcome to $ilicon Valley. LOL
Posted by: Donald | August 13, 2012 at 10:24 PM
One-on-One with Professor William Black
Professor William Black is an outspoken critic of Wall Street. Black, a former bank regulator and professor of law and economics, says, “Outright fraud caused the great recession, and they are able to do it now with impunity.” Not a single financial elite that caused the crisis has gone to jail. Because laws are not enforced and crooked bankers are allowed to do whatever they wish, Black says, “Each crisis is getting bigger by an order of magnitude.”
http://usawatchdog.com/one-on-one-with-professor-william-black/
Posted by: fraud to blame | August 14, 2012 at 11:47 AM
Never mind the wallets.
The Baltic Dry Index is going negative again, 774pts against 854 last
week. The tail that wags the dog is dangerously close to starting a war
with Iran, ( see the Guardian on Israeli speculation over Iran strike.)
Better keep your gas tank filled up.
September/October should be some very interesting months.
Posted by: roger | August 14, 2012 at 12:11 PM