This morning's LA Times lays bare the shocking decline in consumer confidence since last Summer with this novel graphic. (Click to enlarge, or pick up your copy's front page.)
Is there a relationship between consumer confidence and home-buying? Of course.
If you prefer a longer view, the second graph (courtesy of Market Harmonics) shows about 9 years' worth of data from the same source (Conference Board), though it is missing the newest figure.
Finally, a separate consumer survey released by the University of Michigan last week showed confidence at its lowest level in 26 years.
Also today, the U.S. economy grew by just 0.6% in Q1 – hey, maybe it's not a recession! – while inflation crept up and the Fed cut again.
There's more to say but let's hit all of that another day.
For the time being, take a look at the LAT article that accompanied the graphic (see "Shaken Consumers Clamp Wallets Shut"), which somehow prophesies the imminent end of American consumers' love affair with credit-fueled living, even though every such prior prediction has proved incorrect.
Wednesday, April 30, 2008
Confidence Off a Cliff
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30 comments:
This graph is a tad sensationalistic and a short period was chosen to make it look more dire. Take it back to 2001 or 1995 to see just how volatile consumer confidence can be. Still, this low of a number definitely isn't a good thing.
Sorry. MBW can only go back one year. It is a better timeframe for his agenda.
I agree the extra context helps; story is updated with a longer-term graph added.
4:18 - you say so little, but your bitterness really comes through.
What agenda could MBW have that makes any difference in your life?
I have seen a lot of the opinions fly around in here, but I don't see how any of it has had impact (if any) on the sale price of a home. Please don't bring up the fence thing. It was a nominal cost that any real buyer would have requested seeing that potential issue with their own eyes.
I am relatively new to this blog, and I have come to the conclusion that the real problem with this site is the irrational and nonsensical remarks from people like 4:18 that think somehow a blog is going to impact the market values in MB.
If you don't like MBW's blog, just go away.
A much more balanced graph. Thanks.
GDP grew 0.6% only because of an (unintended) inventory build. It is highly likely to turn negative in Q2.
Right, 4:34. Only one opinion and one viewpoint is allowed here - yours. And if the cult of the clueless - I'm officially designating you a member - doesn't like someone else's point of view, you are permitted to request that MBW censor them.
Fact is, there is an agenda. You just haven't been paying attention because it dovetails nicely with yours. It's partly about trying to talk the market down. That element appears quite often when the COTC slams homesellers in those ridiculous pricing polls and by spreading misinformation about the seller's financial situation (how many homesellers with job relocations have been accused on this blog of facing foreclosure because of an ARM reset - ridiculous!) and about the state of the market here as a whole (can't wait to see next month's median sale price with all the high-end homes closing here soon).
It's also one big group therapy session for the bitter renter contingent who need this blog and their fellow cult members to make them feel good about renting versus owning.
I like the guy (or gal) who recently said here that all the renters should go to a particular website called angryrenter.com because it would allow his fellow COTC members to get back at homeowners. As he said, "Let's do everything we can to ensure that their overpriced bubble homes collapse!" A bit over the top but honest, at least (and there is such a site, believe it or not).
Why do we have all of this anger regarding contrary viewpoints? It is as if some of you believe that the contingent which shouts the loudest will prevail and move the market in the desired direction. Let's have everyone state, calmly if possible, where they think this is going and see who is right in 6 to 12 months. We can pat that person on the back.
Just Me, It's directed at you personally and let's just leave it that...sorry. I couldn't help making light of it all. I actually find a lot of the hostility here very funny. Huggy's right about MBC being therapy, but I actually believe it's therapy for both sides. The funniest thing of the day was the bizarre Mookie impersonator. Unfair, inappropriate, but damn funny to read someone trying to imitate the Mook.
Huggy - Have you had a chance to read my question that I posted last night under the story of "Newbies in the Trees?" Would love to hear your thoughts.
Interesting material, especially the University of Michigan survey. The lowest in 26 years . . . Hmmmmm, that would be since 1982. The beginning of the biggest bull market in United States history. Oh, but I'm sure things are going to get worse. Right MBW's? Time to put your cash in a sack. Sell, sell, sell.
Mook, I'm not Hug and don't presume to speak for him. But why on earth would he want to give you any advice regarding your specific situation? You wrote that you had engaged an agent, and a mortgage broker (or was that your alter ego). Why not ask them? If I were Hug, I'd be concerned about liability exposure if you acted on his advice and didn't get the intended result (just kidding about the last part).
The following companies just filed for Bankruptcy:
> Hollywood Video
> Levitz
> Sharper Image
> Performance Team Freight
> Linens n' Things
> Circuit City
If you have gift cards use them asap. These companies are a sign of worse things yet to come. No wonder consumer confidence is in the tank.
Huggy, are you actually trying to suggest with a straight face that prices in Manhattan Beach are not softening? This is my first day on this blog and I can already peg you as a scared shitless real estate agent. I own a home here and am definitely not cheering for any price declines, and I don't believe the sky is falling, but to rail as you are against the bears seems a little silly, and pathetic. Maybe if you were a little more busy selling homes you'd have less time to be posting on this blog. Back to work!
> Hollywood Video: On the brink of BK for about 4 years. Ever hear of Net Flicks?
> Levitz: Cheesy furniture for cheesy people. Chinese eating their lunch for 7 years.
> Sharper Image: Other than the nose hair clippers, what is worth buying there. In trouble for 5 years. Check out their stock performance, I mean non-performance.
> Performance Team Freight: Who the hell is Performance Team Freight? Who cares?
> Linens n' Things: My wife has said this place sucks for at least the last 5 years. Bed, Bath and Beyond rules . . . according to her.
> Circuit City: A poor Best Buy wannabe. Circuit City is where you go if you absolutely cannot find what you are looking for . . . and they don't have it either but you won't find out for an hour because the service is so bad.
In short these places were on a death spiral unrelated to the economy (although I've never heard of Performance Team Freight . . . I guess no performance, no team and no freight)
7:36 I mean this in all do respect, you have the classics poor man's mentality -- now is the time to buy, and I don't mean specifically MB RE, but during times like this is how Warren Buffet rose to the top. Maybe there's an apartment building in Bakersfield you could steal. All I'm saying is, keep your mind open to attaining wealth. Again, do disrespect intended.
Sorry my friend, I meant "no disrespect intended."
8:09, this is 7:36. You obviously missed the point. With all "do" respect, I have been seriously long in the market since December 1. A little scarey in Jan, but a fun ride since then. Of course shorted Circuit City, Linens and things, Hollywood Video and Sharper Image. Bummer though, Buffet took out my 5000 shares of Wrigley, basis of 42.
8:17 What do you think about Sirius Satellite Radio?
Can I please, please be shunned to be a member of the "Cult of the Clueless"? I love that there is not a semblance of rational argument by Huggy, just sophomoric name calling. I don't know why having a bearish opinion should be equated with cluelessness, but I don't sense that we are dealing with the deepest of intellects.
-WealthyRenter*
"note to Huggy, wealth is not equated with having a lot of debt. That is just debt. Wealth is having a large, positive net worth.
Hey 8:31: It looks like the internet guy on the Strand with that kick-ass KAA mansion has the best of both worlds.
All this and history shows RE market will drag at a bottom for 3-5 yrs, no bounce... and we have more downside to go.
I'm just saying the trend data shows this, the historic data shows this, and the hard data shows more bad mortg ahead of us than behind us. I,m just saying...
Does anyone on this website remember the early to mid 90's? This is exactly what was happening then. I'm neither fish nor foul and here's why:
Huggy is a crazy old bastard trying to convince himself and the rest of us against of the inevitable.
Mookie is a young, dumb day trader with very liquid cash.
You're both ridiculous ideologues who will loose.
(can't wait to see next month's median sale price with all the high-end homes closing here soon).
Huggy, you're now using monthly median sales data? Welcome! Welcome to the COTC!
MBW: How about a poll of the favorite and least favorite non-anonymous posters? My personal favorites are Mookie and Huggy and yourself. My least favorite is Waiting to Buy. He always launches into an attack without ever being ironic or humorous. Just Me also doesn't bring much to the blooooog, but who am I to talk, being the chicksh** anonymous poster that I am. Ha!
Some random thoughts from Huggy:
Justme said It is as if some of you believe that the contingent which shouts the loudest will prevail and move the market in the desired direction.
How do you shout on a blog? Would that mean typing in all caps?
Mookie asked me Have you had a chance to read my question that I posted last night?
Sorry, Mookster, but while your logic seems sound to me, there is another party to this transaction, the seller, who is not likely to cut his price $450,000 after 58 days on the market. However, in my view, the house is overpriced. Even in a booming market in 2003, it took almost 5 months to sell that home (sale price at that time was $1,522,500). Closest comp - a smaller (3256 sf), but nicely remodeled, home at 420 30th closed in March at $2,275,000 (after 191 DOM). I say go for it. Just know that after the momentary sense of elation your realtor will feel when you tell him/her you're ready to write an offer, there will be an audible groan when you reveal the price you want to offer.
7:49 said This is my first day on this blog and I can already peg you as a scared shitless real estate agent.
You're right, 7:49. You've got me pegged. I must now hang my head in shame. Woe is me.
8:31 said Can I please, please be shunned to be a member of the "Cult of the Clueless"? I love that there is not a semblance of rational argument by Huggy, just sophomoric name calling.
And the difference from your comment is what again?
9:17 said Huggy is a crazy old bastard trying to convince himself and the rest of us against of the inevitable.
Ouch! The only comfort I can derive from that comment is it comes from someone with barely any knowledge of English syntax.
Waiting to Buy said Huggy, you're now using monthly median sales data? Welcome! Welcome to the COTC!
My bad. Sarcasm in print, no matter how obvious to most, apparently doesn't register with you all in the COTC.
See, Hugs, what a little more work can do to help you create a valuable comment? Your insight on Mookie's question was terrific.
Your tired, stale old line about bitter renters and whatnot at 5:46pm was a waste of everyone's time, including yours.
If your rep here means anything to you, that offer to contact me for an oppty of a different sort stands.
8:23 p.m.
You can't be serious !!
8:17... what convinces you that now is a good time to be long in the market? I agree consumer confidence tends to be a lagging indicator, but I have trouble seeing how high commodity prices and a bad credit market can be good for most American equities.
I'm baffled in this environment. It's a rare time when I'm glad to be young, and with not much money to lose...
9:17 - I'm neither young or a day trader.
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