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Varchild2008 (84.64)

Consumer Spending Versus Lending

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April 07, 2009 – Comments (2)

Do you know when I will agree with George Soros that this is a Bear Market Rally?
That will happen when Consumer Spending and Consumer Confidence / Mood  trend does a reversal to the downside in rapid succession from 1 week to the next over the course of 1 month.

But, I predict April through June to be UP spending months.

Check this out:

http://www.gallup.com/poll/117346/Weekly-Economic-Wrap-Mood-Year-Long-High.aspx

Right now Consumer Spending and Mood is roughly around February 2008 levels... It has spiked upward along with the Stock Market folks!

The Stock Market doesn't trade based solely on Consumer Spending.... But the Trend Lines do merge quite often.

Here's a QUICK QUIZ Question for you:

Let's say you operate a Manufacturing Facility that sells OVENs to Retail Stores.

Do you want:

A)  More consumers to buy your Ovens?

or

B)  More money from Banks to Lend from to pay your expenses?

Before you answer that consider this..... Let's say you earn $150 profit per Oven sold.

Let's say

A)  Consumers Buy 1,000 of your company's Ovens in a single month.

B)  Bank will lend you up to $100,000.

A   or  B?

2 Comments – Post Your Own

#1) On April 07, 2009 at 12:31 PM, Varchild2008 (84.64) wrote:

Also note... If you choose to borrow the money you put your company in debt...you have to pay it back plus interest.

There's no NET NET anything.... Lending is a poison that Saps your company's balance sheet.

That's why the FEAR Geroge Soros is spreading about Lending levels is completely trumped by the BULL Rally in Consumer Spending and Confidence.

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#2) On April 08, 2009 at 1:31 PM, TMEBenBenBen (< 20) wrote:

When is this ever a real world choice?

Why would these be mutually exclusive?

Why must one turn down sales to receive a line of credit?

 

If your competitor is accepting a government loan and using the money to advertise and otherwise move to take market share from you.... can't an arguement be made that 'A and B' or 'nothing' is a choice closer to reality than "A' or ''B'?

 

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