Tuesday, March 31, 2009
Consumers still set on not buying as their confidence in the economy remains poor; they were betrayed and their trust was violated
I had dinner with a couple the other night who should now be together every day as they approach their older years.
But he works in another state during the week and she works full time here. And one of the reasons for their separation during the week is the large amount of savings lost in the stock market to retire in comfort. And of course with the job market, no one knows how long his or her job is going to be around.
Some readers may sense the deep anger I have toward people like Dave Ramsey, and financial advisers and brokerage representatives.
This fine couple and many others I have met are the reason why. They were betrayed and robbed. And a lot of those people who betrayed them are still around offering the same advice with their stupid grins and without any reprecussions.
For example, the Williamson Herald last week featured Ramsey with a giant photo on its front page offering more advice and his economic forecast. When the market was at 10,600 last September, he was telling people that everything would be all right and for people to get into growth mutual funds.
Since then, they've lost 30 percent of their money. Yet Ramsey still is out there giving advice without any sense of remorse and no scrutiny by the media that still lets him ramble on without calling him out for being wrong and costing people a lot of money they could not afford to lose.
Today's Conference Board report on consumer confidence shows the American people remain in grave doubt, and they do not know who to trust for advice. And the numbers also show a drop in people who are going to buy cars and new appliances. That means more layoffs as people buy less.
Ultimately, some institution will need to step forward to make amends for the betrayals of the couples like the one I had dinner with Saturday night. It won't be the media that continues to feature Dave Ramsey as an expert. It won't be the financial advisers who can only make money if people get back into the markets, which they should not. The clergy have plenty of words of comfort to offer but perhaps it's time to sell some land and quit building so many big structures and share with the people -- as in the beginning Christian communities.
Someone needs to apologize and make reparations. Or at least commence the healing. Until then, the American people are not going to trust enough to spend any money in large amounts. They will not be fooled again.
Here is the Marketwatch report on consumer attitudes:
WASHINGTON (MarketWatch) -- Consumer confidence ticked up in March from a record low in February as severe worries about the economy and jobs in coming months slightly eased, according to the monthly Conference Board index reported Tuesday.
The March consumer confidence index rose to 26 from an upwardly revised 25.3 in February. Economists surveyed by MarketWatch had expected a March reading of 28.
"Apprehension about the outlook for the economy, the labor market and earnings continues to weigh heavily on consumers' attitudes," said Lynn Franco, director of the Conference Board's Consumer Research Center. "Looking ahead, consumers remain extremely pessimistic about the short-term future and do not foresee a turnaround in economic conditions over the coming six months."
Given the persistent and widespread economic weakness, gloom among consumers is understandable. On Friday the government will report on nonfarm payrolls for March, and economists polled by MarketWatch are looking for a loss of almost 700,000 jobs, and an unemployment rate of 8.5%.
Last week, a survey from the University of Michigan and Reuters reported that consumer sentiment index rose slightly in March from February though it remained near record low levels as mounting job losses and depleted investments weighed down consumers.
Consumers' views of current conditions fell, with those saying jobs are "hard to get" rising to 48.7% from 46.9%. Those saying business conditions are "bad" rose to 51.1% from 50.5%.
Meanwhile, consumers' expectations rose, with those expecting fewer jobs in six months declining to 42.6% from 47%. Those expecting "worse" business conditions fell to 39.1% from 40.7%.
Those with plans to buy an automobile within six months fell to 3.9% from 4.7%. Those with plans to buy a home also dropped, to 2% from 2.3%. Those with plans to buy major appliances fell to 24% from 25%.