Weak Consumers, Creditless Firms Impacts Recovery

Two interesting front page articles this morning expand on several of our favorite themes.

The first, the NYT’s A Reluctance to Spend May Be a Legacy of the Recession, treads over some well worn ground with anecdotes and data.  The anecdotal stuff is the usual mix of sad tales, and psychology, some signs of improvement and recovery.

Two data points worth noting are:

“Between 2003 and 2007 — prime years of the housing boom — the net worth of an American household expanded to about $540,000, from about $400,000, according to an analysis of federal data by Moody’s Economy.com.

Now, the wealth effect is working in reverse: by the first three months of this year, household net worth had dropped to $421,000 . . .

As recently as the middle of 2007, Americans saved less than 2 percent of their income, according to the Bureau of Economic Analysis. In recent months, the rate has exceeded 4 percent.”

What is omitted from the article is the why:  3 asset class collapses (Stocks, Housing, then Stocks again) will wreak havoc with yor psychology. Add to it shrinking Real Income, and voila! Consumers find frugality to be their new mantra.

The WSJ takes a different tack, looking at the advantages of larger versus smaller firms — but using the same anecdotal hooks to tell the story (I omit anecdotes for the obvious reasons):

The U.S. recovery is a tale of two economies. At one extreme of Corporate America is a cadre of companies and banks, mostly big, united by an enviable access to credit. At the other end are firms, chiefly small, with slumping sales that can’t borrow or are facing stiff terms to do so.

On Main Street, there are consumers with rock-solid jobs — but also legions of debt-strapped individuals struggling to keep their noses above water.

This split helps explain the patchiness of the recovery that appears to be taking hold after the worst recession in a half-century . . .”

Both of these are well worth your Saturday morning reading time . . .



A Reluctance to Spend May Be a Legacy of the Recession
NYT, August 28, 2009

Halting Recovery Divides America in Two
WSJ, August 29, 2009

Sayings of the Jewish Buddha



The Jewish Buddha says:

If there is no self, whose arthritis is this?

Be here now. Be someplace else later. Is that so complicated?

Drink tea and nourish life; with the first sip, joy; with the second sip, satisfaction; with the third sip, peace; with the fourth, a Danish.

Wherever you go, there you are. Your luggage is another story.

Accept misfortune as a blessing. Do not wish for perfect health, or a life without problems. What would you talk about?

The journey of a thousand miles begins with a single Oy.

There is no escaping karma. In a previous life, you never called, you never wrote, you never visited. And whose fault was that?

Zen is not easy. It takes effort to attain nothingness. And then what do you have? Bupkis.

The Tao does not speak. The Tao does not blame. The Tao does not take sides. The Tao has no expectations. The Tao demands nothing of others. The Tao is not Jewish.

Breathe in. Breathe out. Breathe in. Breathe out. Forget this and attaining Enlightenment will be the least of your problems.

Let your mind be as a floating cloud. Let your stillness be as a wooded glen. And sit up straight. You’ll never meet the Buddha with such rounded shoulders.

Deep inside you are ten thousand flowers.  Each flower blossoms ten thousand times. Each blossom has ten thousand petals.  You might want to see a specialist.

Be aware of your body. Be aware of your perceptions.  Keep in mind that not every physical sensation is a symptom of a terminal illness.

The Torah says, Love your neighbor as yourself.  The Buddha says, There is no self.  So … maybe we’re off the hook?

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