During the first week in November, consumer confidence tumbled downward to the lowest level since Hurricane Katrina, based on reports this morning. Yes -- that is the lowest level since the summer of 2005. What changed from October? Well, never underestimate the power of the media to take situations like energy prices (oil prices) and the messy house market (foreclosures and more) and extol all the bad virtues into every nightly newscast to give the public a certain perception. It happens.
The RBC Cash Index moved from over 80 to just 64 from the October to November, with the stock market's highs in October now wearing off as the DJIA settles into the sub-14,000 rage once again.
But my my, how a few weeks can change things. Oil prices consistently nearing the $100/barrel level and with so many houses on the market (and with new credit expectations for millions of buyers) caused the confidence level to plunge.
Huge losses at Merrill Lynch and Citicorp -- tied directly to subprime mortgages -- have shaken some investors as well, although they should not. Stupid decisions by financial CEOs don't make for a shaky economy, right? But then again, consumer confidence is just that - confidence. Reality can be quite different in the end.
Consumer confidence at a two-year low
Posted Nov 9th 2007 11:11AM by Brian White
Filed under: Forecasts
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