Despite all the rosy studies done by all those Journals of Pointless Academic Research, consumer confidence is lower this month than it was last month. The Prelminary Index of Sentiment dropped from 73.5 in September to 69.4 in October. That means people aren’t exactly swiping those credit cards.
All of this is rather amusing considering credit card companies have arbitrarily and, I might add, rudely cranked up interest rates on their best customers, thereby pissing them off enough not to even use their plastic. The word “Doh” comes to mind. I mean how stupid are these credit card companies to actually imagine that people who have great credit any pay their debts regularly are going to just smile and tolerate an arbitrary interest rate hike? Among all those insulted customers, consumer debt has declined in October….again……for the seventh month in a row. Not only are people not willing to pay off losses for debt they didn’t personally incur, but they are also not bothering to add any new debt of their own to the mix.
Savings are up, and borrowing is down –
There’s also another problem that’s holding up the economic recovery. People are doing something radically stupid: They are saving money and they are not buying things they can’t pay for. As a matter of fact, plenty of them are also not buying what they CAN afford. They sure have a lot of nerve!
The recession is only over if you ask the right people. While some sectors are starting to see the light at the end of the tunnel, consumers remain concerned. It may be tempting to listen to the experts over the average Joe, but the former don’t control 70% of the U.S. economy. So, as long as people are worried about unemployment (which continues to rise), the levels of debt they carry and whether they’re at risk of foreclosure, the recession will live on in the hearts of those who write checks and swipe credit cards.
I’ll bet you didn’t know that the Middle Class that got so rudely screwed in the past year actually control 70% of the economy. Over all, I would say they are not only lacking confidence in the economy and job market, but those who have been responsible borrowers are also royally pissed off at the way they have been treated — and they are fighting back.
Gee, this has got to be rough on Bank of America and Capital One and all those other thieving SOBs. And that is why I am personally playing the world’s smallest violin for the whole lot of them.
They are not only stuck with the customers that can’t pay off their debts, but they don’t have to hire an economist to tell them that the rest of the country isn’t about to pay off their losses for them in the form of ludicrous arbitrary rate hikes mid-stream. The horns not only remain pulled in, but consumers are hoarding what they have left that hasn’t been stolen from them already by the Goldman Sachs and Federal Reserve Wall Street crowd.
70% of the economy is controlled by just regular working people. Now that’s power. Suddenly, the Middle Class is starting to look awfully important to the same people who have crapped on them for the past year. Just food for thought.
So, we’re now more dependent than before on the average Joe’s open wallet to guide us out of the recession.
Atta way. Screw us and then blame us for not being willing to bend over again to do the same thing that brought this economy to its knees to begin with: Buy what we can’t afford and charge it at exorbitant rates.
The words We Don’t Trust You Any Longer come to mind. Middle America isn’t going to Play. People are storing up their staples, hunkering down and living as though there is a depression, whether the economists say so or not.
Go ahead and laugh, but I predict that in six months, the credit card companies will be cutting interest rates to the bare bones and begging people with zero balances to use their cards. I also predict that plenty of those same people are going to refuse to do it. As it stands already, use of debit cards attached to checking accounts are on a major upswing. And for those who have been burned or insulted by the Capital One, Chase Bank and Bank of America, the memory isn’t going to be leaving the consumer anytime soon.
The mills of the gods grind slowly but they grind exceedingly fine.
Cry me a river, Bank of America. Cry me a river.