Posts Tagged ‘consumers’

Consumers Starting To Spend Again

April 29, 2010

We’ve talked in this space recently about indications that consumers might be getting tired of their frugal ways and could be itching to spend some of that money they’ve been saving. There are more indications in the news that could be happening.

First quarter profits for several retail companies— from Polaris Industries to Target and Royal Caribbean Cruises— have been encouraging.

Even though unemployment still nearly 10% nationally and the housing market is mixed, at best, consumers seem ready to spend on discretionary items.

“They’ve saved some money, they’ve paid down debt, and at a certain point you just get bored eating frozen pizza and watching cable TV on Saturday night,” Barry Ritholtz, head of the financial research firm FusionIQ told the Associated Press.

Consumer spending has increased for the last five months and retail sales have climbed for the last four months, according to AP research.

But don’t get me wrong. I don’t think we’re out of the woods yet, not by a wide margin. Dealers are still going to have to work hard to build traffic and they’re going to have to work even harder to convert that traffic into sales. But there does seem to be more reason for optimism today than there was six months ago. JD

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at 952/893-6876 or joe@dealernews.com

Obama Can’t Have It Both Ways

December 17, 2009

Free Market Should Dictate Lending Practices

President Barack Obama seems to be uncertain about how he wants to deal with U.S. bankers—sending them directly conflicting messages about their lending practices—and his inconsistency is causing a continuing problem for consumers and small businesses who can’t get the credit they need, especially those in the powersports industry.

On the one hand, he beats up bankers for making so many bad mortgages and creating such a mess that we taxpayers had to bail them out. Shame on you, you greedy bankers, he says, for making so many lousy variable rate mortgages to people who couldn’t make their payments when the new rates kicked in.

That seems like a reasonable position. I think there were a lot of lenders and Wall Street pros who got caught up in spinning mortgage paper, quickly shifting loan packages off their desk and on to the next greedy investor before he could look at the underlying poorly structured loan. While Wall Street bankers bear the brunt of the blame for packaging these loans, the real blame has to come back to the originator— the local banker who approved the so-called NINJA loans for people with no income, no job and no assets. Main street bankers were far from innocent in the entire sub-prime housing mess.

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