You wanna know what is going on? David Rosenberg explains…
“US consumers are cutting back, and where they are not cutting back, they are scaling down. This new cycle is all about ‘getting small’ and it is deflationary. For yet another in the litany of signs pointing in the direction of social change towards thrift, have a look at what is transpiring at the upper echelons of the income strata – Now Even Millionaires See the Benefits of Budgeting on page B5 of the Saturday NYT is a must read.
“Not only are the rich trading down, but the article quotes a high net worth financial advisor who said ‘many of our clients are very happy to be sitting on bond portfolios and cash reserves.’ And see the article on page 2 of the Sunday NYT – Beauty Products Lose Some Appeal During Recession. According to the NPD Research Group, total sales of department store beauty products are down 7% from year-ago levels. Women are apparently opting for the ‘natural look’ – “some people are selectively replacing higher-priced items with cheaper products from drug stores and discount stores.”
Right on, David!
And here’s the CEO of Pepsico:
“The age of thrift is here.”
Even in Japan, after 20 years of coughing and sneezing, people have caught “the thrift bug,” says The New York Times.
What’s a consumer economy need in order to keep growing?
Uh…it’s needs consumer spending.
What do consumers need in order to boost spending?
Uh…they need more…Read more…