Twenty Reasons Why We're Not Consuming

[Crewleader]

Nouriel Roubini, 11.20.08, 12:00 AM EST


No savings--and a pile of debt.

This week's news about October retail sales (-2.8% relative to the previous month and now down in real terms for five months in a row) confirm that the U.S. has entered its most severe consumer-led recession in decades. At this rate of free fall in consumption, real gross domestic product growth could be a whopping 5% negative or even worse in the fourth quarter of 2008. And this is not a temporary phenomenon: Almost all of the fundamentals driving consumption are heading south on a persistent and structural basis.

Consider the many severe negative factors affecting consumption. One can count at least 20 separate or complementary causes that will sharply reduce consumption in the next several years:

http://www.forbes.com/home/2008/11/19/consumer-debt-savings-oped-cx_nr_1120roubini.html

[barb162]

1. Roubini is outstanding.

I look at his site daily these days.