Clipmarks | JICWyllie's 'consumers' clips

Pound and euro slide amid more housing gloom

Fri, 05 Sep 2008 16:09:41 GMT

clipped by: JICWyllie

"Our estimate is for 25 per cent to 35 per cent house-price falls from their height...resulting in up to 1.3 million households, or 18 per cent of mortgages by value, in negative equity under our recession scenario," said Bruno Paulson, senior analyst at Sanford Bernstein, the research house.

Mr Paulson said that house price falls would be "far worse" than in the last economic downturn in the 1990s and could have a huge negative knock-on effect for the UK's mortgage lenders.

Morgan Stanley estimated in April that house price falls of 15 per cent over the subsequent 24 months would put 1.2 million people into the red with their property values.

But if price falls of 25 per cent are sustained, that would put 2 million into negative equity, analysts at the investment bank said

Savills said today that its forecast that house prices will fall by 25 per cent over this year and next was looking like an increasingly safe bet.

Tags: economy, consumers, housing, i-prices, i-decrease, i-record

Retail sales slump surpasses 1990s recession

Thu, 28 Aug 2008 18:36:02 GMT

clipped by: JICWyllie

Clip Source: business.timesonline.co.uk

High street sales plunged to the lowest level in a quarter of century in August as wet weather and increased pressure on consumers' wallets deterred shoppers from splashing out.

Some 60 per cent of retailers said that trade fell in August compared with 13 per cent who said they had risen, according to figures from the CBI.

The resulting rounded balance of -46 per cent is down from -36 per cent in July and is the lowest figure since the CBI began its series in 1983, indicating that conditions for retailers are worse than during the last recession.

There are also signs that more jobs could be lost, with 31 per cent more retailers reporting a fall rather than a rise in employment, compared with 11 per cent in July.

Tags: economy, consumers, i-spending, i-decrease, i-record

Insight: The global spending spree has hit a brick wall

Thu, 28 Aug 2008 13:30:55 GMT

clipped by: JICWyllie

Clip Source: www.ft.com

The US consumer is not the only one feeling down and out. Since the start of the year, higher food and energy prices have undermined consumer confidence not only in Detroit but also in Dusseldorf, Delhi and Dalian. The upshot: a global slump in personal spending is unfolding, portending rockier times for the global economy and world financial markets.

At best, global private consumption expenditures – roughly $32,000bn in nominal dollars in 2007 – are expected to rise by 2-4 per cent this year. That compares with an 11 per cent jump in 2007, and contrasts sharply with the boom in personal spending this decade.

Global consumption surged 63 per cent between 2001 and 2007, a bonanza fuelled by easy global credit conditions and soaring equity and housing prices.

consumer spending in developing nations doubled between 2000 and 2007, from $4,500bn to $9,000bn last year

Lost on the “decouplers” is this – the mood among many consumers in the developing nations is just as foul as it is in the US.

Tags: economy, consumers, i-spending, i-decrease

Pinching pennies like your grandparents

Thu, 28 Aug 2008 12:13:40 GMT

clipped by: JICWyllie

Clip Source: www.msnbc.msn.com

the skyrocketing cost of everything from cereal to eggs is prompting some Americans to turn to traditional techniques for stretching a dollar or a meal.

The food inflation is clearly affecting American lifestyles. An April survey by market researchers NPD Group found that more than half of adults who described themselves as “financially challenged” were trying to use up leftovers more often and prepare more meals at home than they did a year ago.

Americans are still eating out but are choosing cheaper restaurants

more people are choosing grain-based foods, such as pizza and pasta, over meat-based meals.

Clip Source: www.msnbc.msn.com

For those people who are trying to shop and eat more like their grandparents did, the change in behavior isn’t just a matter of time management. Accustomed to years of drive-through restaurants and pasta in a box, many simply don’t know how to cook from scratch.

Tags: economy, consumers, i-spending, i-decrease, i-consequences

US house price declines slowing

Wed, 27 Aug 2008 12:00:33 GMT

clipped by: JICWyllie

Clip Source: www.ft.com

US home prices posted a record annual decline of 15.9 per cent in June, but the pace of monthly falls slowed significantly, offering hope that the ailing US housing market is edging towards a rebound.

Meanwhile, consumer confidence rose in August by more than expected, according to the Conference Board. Amid declining petrol prices, Americans have grown more confident about the future, though they remain gloomy about the present.

the pace of monthly declines in US home prices, which hovered around 2 per cent earlier in the year, slowed to 0.5 per cent.

Tags: economy, consumers, housing, i-prices

Property prices are slashed but sales head for new low

Mon, 18 Aug 2008 13:38:29 GMT

clipped by: JICWyllie

Clip Source: www.independent.co.uk

Having previously tried to resist market forces, property sellers have begun aggressively to cut the asking prices for their homes, according to the online estate agency Rightmove.

householders slashed the asking price of the average British home by 2.3 per cent last month – a drop of £5,403. In London, the discounting has become even more marked, with asking prices down by 5.3 per cent last month alone, representing a reduction of £21,000 in the four weeks to 9 August

The number of new mortgage approvals, says the Bank of England, is down 70 per cent on last year.

The number of transactions this year is in danger of being the lowest since 1959. This raises serious questions as to whether any short-term incentives by the Government or the Bank of England would be effective

more than £18bn of equity tied up in buy-to-let properties will be cashed in over the next few years, as Britain's private landlords sell out of the sector in their droves.

separate survey

found

Tags: economy consumers, housing, i-prices, i-decrease, i-record

Things will get worse: you can bet the house on it

Sun, 17 Aug 2008 14:14:14 GMT

clipped by: JICWyllie

Clip Source: www.guardian.co.uk

Already, Nationwide calculates that the average home is worth £15,000 less than it was a year ago, and has slipped back to its value in August 2006. Now, analysts are scrambling over each other to increase their predictions of how far prices could fall from their peak. Many say 20 per cent; some up to 35 per cent, or even more.

George Buckley, of Deutsche Bank, points out that house prices in the United States have been falling since 2006, with only tentative signs that the downturn is coming to an end - and the boom in the UK was much bigger.

As the market slides, she predicts that many more buyers will instead opt to buy a smaller property, or share with others. 'Expectations of falling house prices will convince many to defer their property purchase, or sell their property. As more people choose to share with friends, family or strangers, a key source of demand for property at the lower end of the market will be hit, intensifying the downward pressure on prices.'

Tags: economy, consumers, housing, i-prices, i-decrease, i-accelleration, i-record

Credit Card Debt: This Popping Bubble Is Really Going to Hurt

Sun, 17 Aug 2008 12:26:13 GMT

clipped by: JICWyllie

Clip Source: www.alternet.org

While many eyes are focusing on the housing meltdown and its hugely negative effect on an economy clearly moving into recession, few are paying attention to the next bubble expected to burst: credit cards.

Combined with the subprime losses, such a credit card nightmare has the potential, experts say, of bringing down the entire financial system and global economy.

Clip Source: www.alternet.org

Also, let us not forget that our credit card companies have been colonizing markets throughout the world. As the New York Times explained in a series on debt, "As the American blessing of credit cards became widespread, so did the American curse of debt."

Tags: economy, consumers, financial markets, i-debt, i-crisis, i-forecast

Inflation Takes Steam Out of Rise in Spending

Tue, 05 Aug 2008 16:41:46 GMT

clipped by: JICWyllie

Clip Source: www.nytimes.com

Consumers spent more in June, but only because the things they bought cost more.

Driven primarily by energy and food prices, inflation grew 0.8 percent over May, the biggest monthly increase since September 2005, the Bureau of Economic Analysis reported on Monday. Spending, by comparison, grew just 0.6 percent in June.

current measure of food and energy prices kept by the bureau, adding in items like clothing — recorded the biggest year-over-year increase since July 1981.

Oil fell $3.69, to $121.41 a barrel, partly on anticipation that struggling consumers would not be buying as much,

“This is a kind of ‘Honey, inflation ate my rebate check’ story,”

Tags: economy, currencies, i-inflation, i-increase, i-record

Housing Lenders Fear Bigger Wave of Loan Defaults

Tue, 05 Aug 2008 12:23:04 GMT

clipped by: JICWyllie

Clip Source: www.nytimes.com

The first wave of Americans to default on their home mortgages appears to be cresting, but a second, far larger one is quickly building.

Reports last week showed another drop in home prices, slower-than-expected economic growth and a huge loss at General Motors. On Friday, the Labor Department reported that the unemployment rate in July climbed to a four-year high.

Homeowners with good credit are falling behind on their payments in growing numbers,

The percentage of mortgages in arrears in the category of loans one rung above subprime, so-called alternative-A mortgages, quadrupled to 12 percent in April from a year earlier. Delinquencies among prime loans, which account for most of the $12 trillion market, doubled to 2.7 percent in that time.

Defaults are likely to accelerate because many homeowners’ monthly payments are rising rapidly.

“Subprime was the tip of the iceberg,” said Thomas H. Atteberry, president of First Pacific Advisors, a investment firm

that trades mortgage securities.

Tags: economy, consumers, housing, i-debt, i-mortgage, financial markets, i-risks, i-increase

Three Strikes Against Consumers

Sun, 03 Aug 2008 13:41:32 GMT

clipped by: JICWyllie

Clip Source: www.nytimes.com

the most unusual feature of our current problems: the primary impact of all of them has been on consumers, not on businesses. Even the credit crisis centers on the home mortgage problem

This combination of events explains why it is so hard to find solutions that can bring the economy back into the light. Past recessions and economic crises typically developed in the business sector, where companies have a habit during good times of running to excess in inventory accumulation or in expanding employment and capacity. This time, businesses generally have been well financed and conservative in their decision-making. Even the stock market, although at high levels in 2007, has not been in the kind of speculative fever that has led to past crashes.

As a result of these exceptional conditions, we have no guidelines to follow. We are in uncharted territory.

Tags: economy, consumers, i-debt, i-spending, i-decrease

Shipping Costs Start to Crimp Globalization

Sun, 03 Aug 2008 13:23:33 GMT

clipped by: JICWyllie

Clip Source: www.nytimes.com

Cheap oil, the lubricant of quick, inexpensive transportation links across the world, may not return anytime soon, upsetting the logic of diffuse global supply chains that treat geography as a footnote in the pursuit of lower wages.

Rising concern about global warming, the reaction against lost jobs in rich countries, worries about food safety and security, and the collapse of world trade talks in Geneva last week also signal that political and environmental concerns may make the calculus of globalization far more complex.

companies looking to keep prices low will have to move some production closer to consumers. Globe-spanning supply chains

make less sense today than they did a few years ago.

Decisions like those suggest that what some economists call a neighborhood effect — putting factories closer to components suppliers and to consumers, to reduce transportation costs — could grow in importance if oil remains expensive.

Tags: economy, trade, i-globalisation, i-decrease, transport, i-prices, i-increase

Halifax: British house prices slump by 10%

Sun, 03 Aug 2008 09:22:07 GMT

clipped by: JICWyllie

Clip Source: www.independent.co.uk

The housing market is falling at more than 10 per cent year on year, the most dramatic collapse in the sector's recorded history, the Halifax mortgage bank will reveal this week.

Even in the 1990s, Britain did not face double-digit annual falls in house values. The figures will show the cost of the average UK purchase fell below £180,000 in July, returning prices to mid-2006 levels. That compares with a peak of £199,600 last August.

In June, Halifax forecast house prices would fall by up to 9 per cent this year but its figures will show the annual rate already exceeds that. However, when the bank's parent, HBOS, last week revealed profits hit by provisions against falling property values it admitted the consensus is for prices to fall 15 to 20 per cent during 2008 and 2009.

Tags: economy, consumers, housing, i-decrease, i-record

Reviving the Household Economy, Part One: The World Outside the Market

Thu, 31 Jul 2008 14:51:57 GMT

clipped by: JICWyllie
clipper's remarks: The simple fact is that the more people do for themselves, the less money they need to spend, starting with feeding and entertaining themselves.

Clip Source: energybulletin.net

the United States, have spent most of the last century transferring as much as possible of the household economy into the market sphere. In making our own jam, among other things, Sara and I belong to a minority of American households. Glance back a hundred years, by contrast, and nearly every family in the country outside the very rich and the very poor had an active household economy that produced a large fraction of the total goods and services they consumed. Many factors contributed to this dramatic shift, but one of the most significant is the availability of cheap abundant energy.

Most of the economies of scale that make mass production of processed foods economically viable, after all, are economies only because the cost of transportation is low enough to permit them. As recently as the first half of the 20th century, most consumer products in the US were produced locally for regional markets, in large part because transportation costs were still high enough

Tags: economy, consumers, i-home production, i-increase

Home price falls hit record

Thu, 31 Jul 2008 14:33:40 GMT

clipped by: JICWyllie

Clip Source: www.independent.co.uk

House prices are falling at a record rate as the credit crunch continues to squeeze the property market,

The average UK home lost 8.1 per cent of its value during the past year, the biggest annual drop since Nationwide's monthly house price index was launched in 1991.

House prices fell for the ninth month in a row during July, losing a further 1.7 per cent of their value, nearly double the 0.8 per cent drop seen in June.

The group said the average home now costs £169,316, nearly £15,000 less than this time last year and the lowest since August 2006.

Today's gloomy data, which is worst than economists had forecast, comes two days after figures showed the number of mortgages approved for house purchase had dived by nearly 70 per cent during the past year to hit a new record low.

Tags: economy, consumers, housing, i-prices, i-decrease, i-record