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With 70% of the GDP driven by consumer spending, Wall Street wants to believe this lie so badly that it has convinced itself it's true. Even worse-than-expected Black Friday sales haven't forced the Street to give up this inane hope.
Real consumer wealth is down more than 40% in the past two years; credit is contracting and unemployment is rising. That is not exactly the recipe for increased consumer spending.
Lesson for investors in 2010: Companies that are dependent on discretionary consumer spending are going to get whacked.
Next: Lie #8: The Fed Only Buys AAA-Rated Bonds and Securities
Goldman Earnings Sink After Buffett Dividend
Johnson & Johnson's Income Falls 23%
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Reader Comments (Page 1 of 1)
12-26-2009 @ 4:40PM
setec5354 said...
The one and only one reason people were spending is that they save over 12 months to make that mini purchase to jack up the number from last year and nothing more!
Just watch how it will worsen in 2010 when job cut increases in 2010!
100% worth watching. The post office is waiting for the contracts to expire so there will never ever be another no-layoff clause attach to the contract and watch how another 20% will be cut in the near future!
try prove me wrong!!!