I think we might see some good come from the current economic crisis but it will be painful:
Expect closings and bankruptcies to rattle the likes of Lane Bryant, Gap, and Starbucks. It’s the inevitable counterpunch to the days of retailers fighting hand over fist for market share during an era of loose credit and minuscule interest rates.
Those days are over, probably for a long time. While accelerating unemployment will only last so long, consumers’ debt loads and credit access don’t figure to recover to pre-party levels for quite awhile.
“I don’t think we will live the same way for 10 years,” says Howard Davidowitz, chairman of New York-based retail consultant and investment bank Davidowitz & Associates. “People are so scared they’re starting to save.”
I guess some people even see a down side to savings and while it might slow down the economy it also might give a better inication of what things are really worth. If you know you are going to have to work for a certain amount of time the burnt coffee at Starbucks suddenly doesn’t seem worth it.
We are probably going to have some very painful contractions in the economy but in the end we might find that we are better off for it. I guess I should thank Bush.
This also means that people have pulled money out of the market and are keeping it in the bank. M2 will grow as a result.
Smart people have pulled their money out of the market, the rest of us have just watched are 401K’s go down the toilet.
If bush had gotten his wish with social security the country would really be in bad shape.
And even smarter people have pulled their money out of the banks.
I have a whole life insurance policy and this is the first time I have ever wondered if the investment is secure.