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"The Worst Is Yet to Come": If You're Not Petrified, You're Not Paying Attention

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May 17, 2009 – Comments (9) | RELATED TICKERS: BAC , WFC , RGR

Fooldom knows Howard Davidowitz is right. Davidowitz nails it here:

Watch the video here:

Click here to view video 

The green shoots story took a bit of hit this week between data on April retail sales, weekly jobless claims and foreclosures. But the whole concept of the economy finding its footing was "preposterous" to begin with, says Howard Davidowitz, chairman of Davidowitz & Associates.

"We're in a complete mess and the consumer is smart enough to know it," says Davidowitz, whose firm does consulting for the retail industry. "If the consumer isn't petrified, he or she is a damn fool."

Davidowitz, who is nothing if not opinionated (and colorful), paints a very grim picture: "The worst is yet to come with consumers and banks," he says. "This country is going into a 10-year decline. Living standards will never be the same."

This outlook is based on the following main points:

With the unemployment rate rising into double digits - and that's not counting the millions of "underemployed" Americans - consumers are hitting the breaks, which is having a huge impact, given consumer spending accounts for about 70% of economic activity. Rising unemployment and the $8 trillion negative wealth effect of housing mean more Americans will default on not just mortgages but student loans and auto loans and credit card debt. More consumer loan defaults will hit banks, which are also threatened by what Davidowitz calls a "depression" in commercial real estate, noting the recent bankruptcy of General Growth Properties and distressed sales by Developers Diversified and other REITs.

The rest is here:

http://finance.yahoo.com/tech-ticker/article/yftt_248398/%22The-Worst-Is-Yet-to-Come%22:-If-You%27re-Not-Petrified,-You%27re-Not-Paying-Attention?tickers=^DJI,^GSPC,DDR,XLF,GM,RWR

9 Comments – Post Your Own

#1) On May 17, 2009 at 8:27 PM, RonChapmanJr (56.66) wrote:

Way late to this party.  This has been on CAPS at least once before.

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#2) On May 17, 2009 at 8:30 PM, ChrisGraley (29.87) wrote:

This is a terrific post and I'd rec it 20 times if I could.

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#3) On May 17, 2009 at 8:47 PM, abitare (88.82) wrote:

RonChapmanJr,

Good call, I think I have been behind the last two weeks. I am 90% cash now, I am not watching the stock market/CAPS as much. Real estate is becoming compelling.

ChrisGraley,

Yep, concur this guys is spot on.

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#4) On May 17, 2009 at 10:42 PM, Tastylunch (29.37) wrote:

he's well respected in the biz.

If card check passes retail is really toast.

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#5) On May 17, 2009 at 10:49 PM, catoismymotor (< 20) wrote:

This looks stangely fimiliar.

http://caps.fool.com/Blogs/ViewPost.aspx?bpid=195520&t=01005675843573100730

 

 

 

 

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#6) On May 17, 2009 at 11:27 PM, checklist34 (99.72) wrote:

that guys pretty bearish... 

the bears are again dominating the media, the blogs, the sentiment, and everything.  I think they are going to get their way for a little while here...

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#7) On May 18, 2009 at 12:42 AM, motleyanimal (83.28) wrote:

My sheer will is enough to prevent a depression. I will live on fine wines, great steaks, sacred potatoes, divine carrots and dance like a Cossack with a crown of cabbge at weddings till my last breath.

I do not accept the Death Cult of Davidowitz. We will have some hard times, and we will endure and be stronger when they are past.

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#8) On May 18, 2009 at 9:12 AM, russiangambit (29.37) wrote:

Davidowitz is not a bear, he is a retail analyst.

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#9) On May 18, 2009 at 10:11 AM, jddubya (< 20) wrote:

"The Worst Is Yet to Come": If You're Not Petrified, You're Not Paying Attention 

Things are so bad already I can't pay.... attention.

 

yuk yuk!!

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