in Economics, Fiscal Policy, Government, News 273 Words

What Is The Real Truth Of The Crisis?

I have asked this on many occassions.  People hear lots of fact and fiction in the news and it is all too confusing.  So, what is the real reason of the tanking economy.

I have said it all before…over and over……the consumer is the answer…both good and bad.

The February consumer confidence index fell to 25 from a downwardly revised 37.4 in January. Economists surveyed by MarketWatch had expected a February reading of 35.

Consumers’ view of current conditions fell, with the proportion of respondents saying that jobs are “hard to get” rising to 47.8% in February from 41.1% in January, and those saying that business conditions are “bad” rising to 51.1% from 47.9%.

The reading on consumers’ expectations fell to a record low, with those anticipating there to be fewer jobs in coming months rising to 47.3% from 36.9%. Those expecting “worse” business conditions also increased, hitting 40.5% from 31.1%, and those expecting more income fell to 7.6% from 10.3%

Those with plans to purchase cars within six months fell to 4.7% from 5.3%. Those with plans to buy homes also dropped, to 2.3% from 2.5%, while those with plans to make purchases of major appliances rose to 24.5% from, 23.6%.
Consumers’ 12-month inflation expectations rose to 5.9% from 5.6%.

Also on the data front Tuesday, the Case-Shiller home price index published by Standard & Poor’s showed that home prices in 20 major cities dropped by 2.5% in December from the prior month and by a record 18.5% from the final month of 2007.

I wrote back in November of 08…Demand must be found if the economy is to recovery.  So far all the best laid plans of mice and politicians have not helped create demand….and the crisis goes on….and on….and……

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