I Want it All, and I Want it Now, Market Disconnect
Big problems "down under" and perhaps a view into the near term can be found in Sydney's Pay Later Poor
"I call them the pay-nothing-now poor -- couples who have wanted everything now. Retailers have created this new breed of poor.
People who have overextended themselves to buy a new home and then signed up to all these contracts to get the furniture, the television and cable.
Suddenly there is a quarter-percent rise in interest rates and/or a hike in petrol prices and of course, it's a disaster.
We never heard of borrowing money from the bank to pay for wine or to get our hair done in the 1970s. That would have been absolute nonsense, but that's what we are doing now through all these credit cards."
Fleck comments and we agree that its a "I want it all and I want it now" mentality and general market disconnect...
Sadly, the same can be said for Americans. The use-your-house-as-an-ATM phenomenon is exactly why the economy recovered in the wake of the last stock bubble.
I don't think there's any reason to believe that Americans won't find themselves in a similar predicament to what some of the Aussies are experiencing right now.
But that's not what the market thinks at the moment -- and therein lies the disconnect that I have been discussing for some time.
"I call them the pay-nothing-now poor -- couples who have wanted everything now. Retailers have created this new breed of poor.
People who have overextended themselves to buy a new home and then signed up to all these contracts to get the furniture, the television and cable.
Suddenly there is a quarter-percent rise in interest rates and/or a hike in petrol prices and of course, it's a disaster.
We never heard of borrowing money from the bank to pay for wine or to get our hair done in the 1970s. That would have been absolute nonsense, but that's what we are doing now through all these credit cards."
Fleck comments and we agree that its a "I want it all and I want it now" mentality and general market disconnect...
Sadly, the same can be said for Americans. The use-your-house-as-an-ATM phenomenon is exactly why the economy recovered in the wake of the last stock bubble.
I don't think there's any reason to believe that Americans won't find themselves in a similar predicament to what some of the Aussies are experiencing right now.
But that's not what the market thinks at the moment -- and therein lies the disconnect that I have been discussing for some time.
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