Consumers feeling fear of fiscal cliff
The macro concerns are finally reaching everyday Americans.
Was Wednesday the day when it dawned on people that without a deal, consumers could be in real trouble? Was it the day when it hit the market that the regular guy is concerned?
I have to tell you that the comments from Wal-Mart (WMT), on top of the comments from Dollar General (DG) Tuesday about gross margins, tell me that everyday Americans are now starting to figure out they have to be worried, even if they are not sure exactly what to be worried about. They know we have a big budget deficit. They know, as they did when the debt-ceiling crisis occurred, that something bad is going to happen, and they know it might be something bad happening to them.
So that's who pulls back.
We may now be past the point of who is to blame and more to the place of "I don't care who is to blame -- do something." That's why, contrary to many people, I was quite contented with what Ben Bernanke is doing (read on TheStreet). He knows that sudden austerity is coming, and the last thing the country needs is a guy who is going to raise interest rates now because we had some good housing data. I think he recognizes how fragile the construction and auto rebounds are, and he needs to send a signal that he is not a Jean-Claude Trichet figure who wants to start raising rates as soon as possible.
It drove me crazy to hear so many people talk about how the real problem now is how Bernanke will get out of this position when things get better.
To me, what's pertinent is who is going to hire if everybody gets a tax increase and if instant and stupid spending cuts cause 2 million jobs to be lost.
Bernanke knows that austerity is good incrementally but hideous all at once and without thought. That's why he coined it a fiscal cliff, for heaven's sake. So don't blame him. He knows that consumer and business confidence is falling. He knows the cliff is coming.
He just wants to make the landing as gentle as possible, although when you jump from a cliff without a rope, the results tend to be less than optimal.
Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network's sites. Follow his trades for Action Alerts PLUS, which Cramer co-manages as a charitable trust and has no positions in stocks mentioned.
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This puts things into a much better perspective.
Lesson # 1:
* U.S. Tax revenue: $ 2,170,000,000,000
* Fed budget: $ 3,820,000,000,000
* New debt: $ 1,650,000,000,000
* National debt: $14,271,000,000,000
* Recent budget cuts: $ 38,500,000,000
Let's now remove 8 zeros and pretend it's a household budget:
* Annual family income: $ 21,700
* Money the family spent: $ 38,200
* New debt on the credit card: $ 16,500
* Outstanding balance on the credit card: $142,710
* Total budget cuts so far: $ 38.50
Got It ?????
Lesson # 2:
Here's another way to look at the Debt Ceiling:
Let's say, You come home from work and find
there has been a sewer backup in your neighborhood....
and your home has sewage all the way up to your ceilings.
What do you think you should do ......
Raise the ceilings, or remove the shlt?
BoBo you do know that when we go over the cliff a whole bunch of people on extended unemployment will be shut out and not counted. This will result in a false reading of improved unemployment. That was one of Bennie's triggers to stopping all the QE flow.
Think man.... don't just spew crap.
i truly doubt the average guy is investing in volumes enough to be "seen" by anyone at the macro chart level of the stock market.
the 401K mutual funds might include a significant amount of average joe money, but it's in the hands of the masterful fund managers - so THEY already know all this, right?
19 DEMOCRATS ARE NOW TRYING TO STOP OBAMACARE! THEY WANT IT REPEALED! THEY
WANT THE DEATH PANEL STOPPED! THEY WANT IT CANCELLED! WHY NOW? THEY GOT
RE-ELECTED AND NOW SEE IT WILL DESTROY THEIR STATE AND ECONOMY AND HEALTH
CARE? THEY KNEW WHAT WAS IN IT AND VOTED FOR IT ANYWAY! NOW PEOPLE LIKE ME
ARE ALREADY SUFFERING WITH HIGHER RATES AND SERVICES CUT AND TAX HIKES!
THANKS YOU STUPID LIBERAL AHOLES! WHY ISN'T THE BIAS MEDIA REPORTING THIS?
It will take out the takers. not the makers.
quote from mirage "Nazi' are SOCIALIST's, hello National SOCIALIST Party... Socialists are part of the left. Nazi's went after their Rich class (Jews)... "
The top 1% of income earners are paying about 35% of all income taxes.
The top 5% of income earners are paying about 60% of all income taxes.
The top 10% of income earners are paying about 70% of all income taxes.
AND - alot of these "rich" are the capital allocators; you know -- the evil bankers, hedge fund managers, etc.
These same people are globally connected and mobile.
Try to think VERY carefully what happens, absent the usual wealth guilt ridden bunch, when you cross the line on higher tax rates. We don't know where that line is. However, they evaluate what they do (project analysis) based, in part, on marginal tax rates. The projects (factories, R&D, service centers, etc) don't have to be placed in the U.S. AND Neither do the future entrepreneurs or high net worth individuals supporting all this employment.
It is a complete disservice to everyone to call for government financial industry rescues, as Cramer and many posting here did in 2007 and 2008, and then cry for more taxes after the resulting income distribution issues. This is the kind of citizen/electoral schizophrenia and envy that is going to crunch everyone down.
dlh....We shouldn't send anymore weapons to the Middle East.....Friend or Foe...?
They always fall into the wrong hands...
No weapons of any kind...to anyone.
And apply sanctions to anyone that does.
Or arrest our suppliers and sellers.
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