dmarc117 Posted February 17, 2009 Share Posted February 17, 2009 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. Quote Link to comment Share on other sites More sharing options...
westvirginia Posted February 17, 2009 Share Posted February 17, 2009 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. I'm relatively safe with respect to my job/income and we're doing this. We've revised downward the house we're going to buy, and I've decided just to put a little money into my old truck instead of getting a new one (even with the ridiculous deals available now, and the tax deduction). Also, when I bought a motorcycle I had every intention of buying a Harley low-rider, but when I considered (since I was going to put a lot of miles on it and ride it everywhere possible) the cost difference of over 1/3, I decided to save the funds and buy my Honda. Quote Link to comment Share on other sites More sharing options...
dmarc117 Posted February 17, 2009 Author Share Posted February 17, 2009 (edited) I'm relatively safe with respect to my job/income and we're doing this. We've revised downward the house we're going to buy, and I've decided just to put a little money into my old truck instead of getting a new one (even with the ridiculous deals available now, and the tax deduction). Also, when I bought a motorcycle I had every intention of buying a Harley low-rider, but when I considered (since I was going to put a lot of miles on it and ride it everywhere possible) the cost difference of over 1/3, I decided to save the funds and buy my Honda. yep...thankfully in the city we only need one vehicle. have cut back on all non-essentials. can always start consuming IF the economy shows any life. playing it safe. i read an article in the wsj i believe, that shoe cobblers in nyc were seeing an uptick in biz. people not wanting to buy new shoes having their old ones repaired. Edited February 17, 2009 by dmarc117 Quote Link to comment Share on other sites More sharing options...
Square Posted February 17, 2009 Share Posted February 17, 2009 Meh, I'm trying to sell my house so I can buy the biggest and best SOB I can afford. Ch!ts on sale and I'm buying. Aren't houses kind of like stock? Buy low sell high? At this point I am negating gain on a smaller house but the percentage I am saving on the bigger house will save me more money in the long run. Anyway, I know nobody cares about my personal situation. I just thought it was worth pointing out that some people are cash heavy and are using a down economy to upgrade their larger assets. Quote Link to comment Share on other sites More sharing options...
dmarc117 Posted February 17, 2009 Author Share Posted February 17, 2009 (edited) Meh, I'm trying to sell my house so I can buy the biggest and best SOB I can afford. Ch!ts on sale and I'm buying. Aren't houses kind of like stock? Buy low sell high? At this point I am negating gain on a smaller house but the percentage I am saving on the bigger house will save me more money in the long run. Anyway, I know nobody cares about my personal situation. I just thought it was worth pointing out that some people are cash heavy and are using a down economy to upgrade their larger assets. im all cash. the problem with housing is that the huge increase in prices was due to very sketchy lending policies. these policies are going to change and make it harder to get mortgages. and always becareful of the D word. Edited February 17, 2009 by dmarc117 Quote Link to comment Share on other sites More sharing options...
westvirginia Posted February 17, 2009 Share Posted February 17, 2009 im all cash. the problem with housing is that the huge increase in prices was due to very sketchy lending policies. these policies are going to change and make it harder to get mortgages. and always becareful of the D word. That's my thing, I don't want the debt. Quote Link to comment Share on other sites More sharing options...
driveby Posted February 17, 2009 Share Posted February 17, 2009 I'm on the hook for one thing debtwise, my mortgage. And Obama is going to take care of that for me so Quote Link to comment Share on other sites More sharing options...
Perchoutofwater Posted February 17, 2009 Share Posted February 17, 2009 I've changed my buying philosophy a little bit. I'm still buying values that will last a good while, but at the same time foregoing services that I used to use. An example, I just bought 6 new suits, because of some ridiculous sales a local clothier was having. These suits will last me a decade or more. On the other hand, I find I'm not eating out as much (sorry detlef), and am considering dropping some of the premium channels I get that I rarely watch. I guess what I'm saying, is I'm buying things that will last, rather than things I would consume. Another example is I've bought some guns fairly cheap lately. Quote Link to comment Share on other sites More sharing options...
dmarc117 Posted February 17, 2009 Author Share Posted February 17, 2009 I've changed my buying philosophy a little bit. I'm still buying values that will last a good while, but at the same time foregoing services that I used to use. An example, I just bought 6 new suits, because of some ridiculous sales a local clothier was having. These suits will last me a decade or more. On the other hand, I find I'm not eating out as much (sorry detlef), and am considering dropping some of the premium channels I get that I rarely watch. I guess what I'm saying, is I'm buying things that will last, rather than things I would consume. Another example is I've bought some guns fairly cheap lately. guns and bullets!!! the new world currency!!! Quote Link to comment Share on other sites More sharing options...
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