Mastercard looks at spending and sees huge hole

Posted Nov 5th 2008 10:15AM by Douglas McIntyre
Filed under: MasterCard Inc'A' (MA), Economic Data, Recession

Mastercard (NYSE: MA) has a little unit that looks at consumer spending every month. The view from there is pretty ugly.

According to The Wall Street Journal, "MasterCard SpendingPulse says luxury sales dropped 20% in October from a year earlier." Put another way, the rich are getting poor. Spending on all goods costing more than $1,000 dropped considerably.

The rich are supposed to be able to keep a little money on hand for the holidays. In all likelihood that money was in the stock market. Or, some of the people who drive BMWs lost their jobs as Wall Street has downsized.

What do the numbers say about the middle class and poor? One can guess, that with personal income running flat to down, they will not even be able to buy coal to put in their stockings this holiday.

Santa may as well stay at the North Pole.

Douglas A. McIntyre is an editor at 247wallst.com.

Tags: 110508, inthenews, luxury, MA, mastercard