allocate some this way :) On 1/5/06, Deanna Schneider <[EMAIL PROTECTED]> wrote: > Ha. I'm so not normal. I got this as I was just sitting here worrying about > my retirement account fund balance, and wondering how to re-allocate. > > -d > > > On 1/5/06, Gruss Gott <[EMAIL PROTECTED]> wrote: > > > > [Abridged From WSJ.com] > > Overextended Consumers Present > > A Serious Issue for the Economy, > > > > In the aftermath of Japan's burst bubble during the 1990s, the country > > was plagued by "zombie companies," firms that weren't viable but which > > banks refused to cut off entirely for fear of revealing how many bad > > loans they had on their books. > > > > In the U.S., we will have Zombie Consumers. George A. Romero's classic > > "Dawn of the Dead" anticipated this 30 years ago when he set his movie > > in a shopping mall. Zombies had returned to the mall after their > > deaths by instinct because, as one character explains, "it was an > > important place in their lives." > > > > The biggest and most underrated development in the U.S. economy over > > the past year is that the personal-savings rate went negative. In > > other words, Americans spent more money than they made last year -- > > for the first time since, oh, the Great Depression. The average worker > > hasn't participated in the economic recovery. Inflation-adjusted > > hourly and weekly wages are still below where they were at the start > > of the recovery in November 2001, points out the Economic Policy > > Institute. > > > > As we all know, people made up for this by borrowing more, primarily > > from their homes. As short-term rates rose, however, home-equity loans > > and low-cost mortgages became less attractive. Home prices seem to be > > stalling out. > > > > The consensus among economists is that consumer overextension isn't > > much to worry about. Their thinking: American consumers have never > > stopped spending before. Why should they now? > > > > In a fashion, the consensus may turn out to be right. There doesn't > > need to be a consumer implosion any time soon. Companies may be able > > to delay any implosion. Corporations will take extreme measures to > > keep their patients alive. Rather than write off bad loans, financial > > companies will extend more credit, improve terms, lower interest-rate > > payments and try to offload troubled loans to the financial markets. > > > > In retail, we have already seen the first glimmerings of zombie > > consumerist behavior. The walking dead keep coming back to the auto > > showroom for one more Hemi engine and thousands of dollars in cash > > back. As General Motors can attest, it's not enough. > > > > Wal-Mart Stores assaulted Christmas with a monster marketing campaign. > > The effort left the titan with its weakest same-store sales growth > > since 2000, but it was growth. Investors will have to wait to see how > > Wal-Mart margins come in. > > > > > >
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