Those ‘green shoots’ appear to mostly hype

From Zero Hedge, an overview on how the current downturn is hitting the rest of us. The upshot is that the confident consumer is NOT leading the way out of this disaster:

-the deleveraging of the US consumer is strongly, strongly under way. This is great news for the long term, terrible news for short term demand. Personal interest payments (non-mortgage) are down -9.54%, presumably on a combination of lower rates, personal bankruptcies and reduction of principal. Additionally, personal saving as a % of disposable income is up 38.10%. Again, this is great news in the long-term and is a strong signal for the USD and the US economy. Some of this no doubt is a fear-triggered response to the current economic and employment outlook but we believe that there is a permanent increase in savings hidden in the numbers. As a whole, this is a dagger for the macro demand picture and further calls into question the fundamentals of the recent equity rally.

In short, individual income continues to fall, the government is spending more, taking in less and growing debt for social programs and the drop in US consumer demand cannot be viewed as temporary. None of these are good or encouraging signs that we are near the bottom – the consumer has spoken, let’s hope the market listens.

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