An expert says Americans’ standard of living is undergoing a permanent change

[marmar]

from Yahoo!:



Watch the video: http://finance.yahoo.com/tech-ticker/article/176478/%22Worst-Is-Yet-to-Come%22-Americans'-Standard-of-Living-Permanently-Changed?tickers=WMT,WFMI,FDO,%5EGSPC,%5EDJI,RTH


"Worst Is Yet to Come:" Americans' Standard of Living Permanently Changed
Posted Feb 17, 2009 12:53pm EST by Aaron Task in Investing, Recession


There's no question the American consumer is hurting in the face of a burst housing bubble, financial market meltdown and rising unemployment.

But "the worst is yet to come," according to Howard Davidowitz, chairman of Davidowitz & Associates, who believes American's standard of living is undergoing a "permanent change" - and not for the better as a result of:

* An $8 trillion negative wealth effect from declining home values.
* A $10 trillion negative wealth effect from weakened capital markets.
* A $14 trillion consumer debt load amid "exploding unemployment", leading to "exploding bankruptcies."

"The average American used to be able to borrow to buy a home, send their kids to a good school (and) buy a car," Davidowitz says. "A lot of that is gone."

Going forward, the veteran retail industry consultant foresees higher savings rate and people trading down in both the goods and services they buy - as well as their aspirations.

The end of rampant consumerism is ultimately a good thing, he says, but the unraveling of an economy built on debt-fueled spending will be painful for years to come.


http://finance.yahoo.com/tech-ticker/article/176478/%22Worst-Is-Yet-to-Come%22-Americans'-Standard-of-Living-Permanently-Changed?tickers=WMT,WFMI,FDO,%5EGSPC,%5EDJI,RTH

[GoesTo11]

1. Well duh.

With all the bucks I lost for my retirement, I'm cutting my discretionary spending by more than half and will have to stay there unless I time the next market bubble right.

[joeunderdog]

2. Captain Obvious to the rescue!

Yup...we'll be thinking about the good ole times of 1 car per person, billion dollar athletes and be left wondering how it all got so bad.

...check that--we know how it got bad. Bush.

[ixion]

3. gee, ya think?

:eyes:

[donco]

4. Looks to me that there will be plenty of

rental houses available for the foreseeable future.

[madrchsod]

5. why are we to assume that this will be the future?

[FreakinDJ]

6. It is and its here to stay

America hocked its future while greedy RATpublicons sold America's strength (Blue Collar Jobs - The Manufacturing Base) to the lowest bidder - China

We manufacture nothing (except for Bad Loans)
We have nothing to export

We have trade imbalance in staggering proportions and Captain KnitWit (Bush) is telling us it is good for the economy (and quit your whining)