Jake at EconPicData looks at last week’s consumer credit report (a data release from the Federal Reserve that, for some unknown reason, comes at 3PM EST on Fridays) and wonders if the American consumer is once again in a spending mood.
Total consumer credit expanded by $5.0 billion in January, the first increase in 11 months and only the third gain in almost a year-and-half in what has otherwise been a decades-long credit and spending binge.
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In case you haven’t already seen this video from Funny or Die that reunites all past Saturday Night Live cast members impersonating presidents, here it is.
If you didn’t recognize Dan Aykroyd at first as Jimmy Carter, don’t feel bad – I didn’t know it was him until it this fine piece (directed by Ron Howard) was almost over.
On March 3, 2010,
in Consumerism, Debt,
by Tim
If you’re a big bank, it makes perfectly good sense that the head of the U.S. banking cartel would continue in its role as the agency charged with watching out for the interests of the little guy. On the other hand, if you’re the little guy, maybe it doesn’t make sense for the Federal Reserve to be charged with protecting your interests, particularly since they hjaven’t done such a good job in recent years.
This Bloomberg report has all the details on the latest developments on the “reform” of the banking system and how consumers are to be “protected”:
For consumer advocates, housing a new agency to protect Americans from financial-product abuse within the Federal Reserve would be a defeat after lobbying for an independent body. For banks, it would represent a victory.
Barney Frank, Chairman of the House Financial Services Committee, called a Senate plan to house the proposed Consumer Financial Protection Agency at the Fed “a joke.” Shielding consumers from harmful financial products is “the most conspicuous failure by the Fed,” Frank said in an interview yesterday.
Banks say placing the agency with the Fed alleviates their concern that an independent entity would ignore the health of the financial system. Consumer advocates say it’s a mistake because the Fed didn’t succeed in curbing abuses during the subprime lending boom that contributed to the worst financial crisis since the Great Depression.
…
The Obama administration’s proposal for a consumer protection agency is part of the biggest overhaul of financial regulation since the 1930s. Putting it inside the Fed, instead of creating a standalone bureau, was a compromise proposed by Senator Bob Corker, a Tennessee Republican, and Banking Committee Chairman Christopher Dodd, a Connecticut Democrat.
Don’t be surprised if the banks win – they always seem to.
This could be the most interesting chart in the updated series of charts where the Case-Shiller Home Price Index is laid up against all kinds of other economic data. Two days ago it was home prices and gasoline prices in The Hummer “sweet spot” revisited and yesterday it was the mostly unexciting home values and consumer sentiment.
Today, the relationship between the nation’s housing bubble and the country’s outstanding revolving credit (i.e., mostly credit cards) is examined with some surprising results.
First, you can see how consumers turned to credit cards as both the 2001 and 2008 recessions began, however, due at least in part to real estate related financial resources such as home equity lines of credit, the surge was not nearly as great in 2008 than in 2001.
Notice that as home prices started to take off in 2004, revolving credit dropped sharply, presumably because money started gushing out of the housing ATM. After turning to credit cards a few years later following the bursting of the housing bubble, it looks as though consumers have sworn off plastic for good as revolving credit continues to decline even though home prices have been staging a bit of a rebound.
Here’s another chart from the long dormant series of charts that put the S&P Case-Shiller Home Price Index up against a variety of other economic indicators. In this version, home prices are shown on the same chart as consumer sentiment with an unsurprising result.
With the exception of the early-2007 period, the two track pretty well.
In fact, if you smooth the consumer sentiment curve as shown below, the two are nearly identical, save for a delayed reaction in the outlook of Americans in 2007 leading up to the fateful events of 2008.
Well, the good news about City Center in Las Vegas is that the elevators haven’t stopped working and the aquariums haven’t started leaking like they have in the Burj Khalifa in Dubai, the other White Elephant that Dubai World has a major interest in.
This Times Online story provides an update on the latest mega-project in Vegas:
JIM MURREN has heard it all. It started with “there’s no way you’re gonna survive this”, recalled the boss of the biggest casino group in Las Vegas, MGM Mirage. Then it was “well, it’s going to open but it’s going to be a pile of shit because you’re gonna cut corners”. And now they say: “It’s open but can you make money?”
…
At 18m sq ft, City Center is a city-within-a-city on the Las Vegas Strip, featuring, when fully complete, four hotels with 6,300 rooms, a giant casino, 2,400 homes, 42 restaurants and bars, four spas and a 500,000 sq ft shopping centre. Nothing, not even the Burj Khalifa in Dubai, the world’s tallest building, screams “boom-to-bust” louder. It was designed by world-class architects who command sky-high fees, including Britain’s Norman Foster. The boutiques — Gucci, Louis Vuitton, Cartier — are the stores nobody wants to shop in any more, even if they can afford to. Murren has also spent $40m on art, including sculptures by Henry Moore and Antony Gormley.
I’ll never forget what investor Jim Rogers wrote about the city of Las Vegas in his second book Adventure Capitalist – that it will be just a desert again in another century or two.
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