Poll; Only 13% Say Economic Conditions Are Positive
A November 11 through 14 Gallup poll further reveals that only 20% of Americans are satisfied with the direction of the country. This is the worst poll reading of this kind since they started tracking this sentiment.
An extraordinary 78% of Americans now say the economy is getting worse, while a scant 13% say it is getting better. Gallup has been asking this question since 1991, and these are the most negative responses Gallup has ever recorded.
The American people realize there is little to be positive about. Trillions of dollars in wealth is evaporating before their eyes as their real estate values plummet. Even if they still have equity, lenders have tightened up guidelines to the extent that those who need help the most cannot get it.
The home equity ATM is closed. This is very bad news for the economy as home equity provided the cash for consumers to keep shopping. Now there is no longer a safety release valve for burgeoning credit card balances. This is pointed out in Newsweek’s Consumer Crunch article.
The main fuel for the spending was easy access to credit. Banks and other financial institutions were willing to lend households ever increasing amounts of money. Any particular individual might default, but in the aggregate, loans to consumers were viewed as low-risk and profitable.
The subprime crisis, however, marks the beginning of the end for the long consumer borrow-and-buy boom.
With the pressures of plummeting real estate values, a lack of liquidity due to the debt markets being in a shambles, a weak dollar and a consumer who is all but tapped out, is there any reason to believe economic recovery is anywhere in sight?
I didn’t even mention the ever escalating oil prices. The price of oil and gas has a similar affect on the economy as does a tightening in interest rates. So any relief the Fed gives us is being offset by higher oil prices. Yet the Fed believes their rate cuts are sufficient.
Until mortgage securitization becomes close to normal again, real estate prices will continue to fall and the liquidity crises will deepen. The mortgage and real estate crises will continue to grow as will it’s negative affects on the economy.
Now the over-worked consumer doesn’t have the resources to keep buying. Even if they had the resources, why would they want to with impending doom on the horizon. Consumer sentiment is souring by the minute.
It’s only a matter of time before this new development causes more negative ripples in the economy. It’s not unreasonable to expect cut backs from manufacturers and service industries. The disease of economic woe continues to spread.
We are on a very slippery slope with no brakes to slow down the fall, let alone stop it. Meanwhile, the band plays on and on.
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