American Spending Goes Into Overdrive As Savings Plunge To 2008 Levels

Tyler Durden's picture




 

Why save when one can spend (and, more importantly, why save when one has ZIRP)? This appears to have been the motto of American consumers in the past three months when the US Savings rate has plunged from 4.7% in December to a tiny 3.7% in February: the lowest since December 2007's 2.6%, and just as the recession and the market crash was about to send everyone scrambling for the safety of bank savings. The reason: in February personal spending soared by 0.8% on expectations of a 0.6% rise, while incomes barely rose by 0.2% on a consensus rise of 0.4%. Which means the balance had to be savings funded. So even as we have seen retail weakness in the past three months, we now know that it was not only credit funded, but also forced US consumers to burn through their meager savings. And all this before the gasoline price shock hit. The question then is: with the remainder of US savings about to be tapped out on gasoline purchases, just where will the money come to fund all those priced in NEW iPad acquisitions? Or will Apple finally use up its cash hoard and start a captive lending unit, giving consumers credit to purchase its products?  At the rate the US consumer is going broke it may soon have no other option.

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Fri, 03/30/2012 - 08:46 | 2303104 Jim in MN
Jim in MN's picture

Exactly what the Fed said they wanted last week. 

 

Slogan for the decline of the West: 

 

Deleveraging is Death.

Fri, 03/30/2012 - 08:59 | 2303142 fightthepower
fightthepower's picture

Stupid fuckers never learn. 

Fri, 03/30/2012 - 09:05 | 2303162 Chief KnocAHoma
Chief KnocAHoma's picture

A report from our White House mole;

http://annoyanidiot.blogspot.com/

Fri, 03/30/2012 - 09:41 | 2303272 CuriousPasserby
CuriousPasserby's picture

A blog post loses all its credability when the author doesn't know the difference between "their" and "there." Sorry.

Fri, 03/30/2012 - 09:44 | 2303284 Chief KnocAHoma
Chief KnocAHoma's picture

Thanks. Fixed it.

You're so nice.

Fri, 03/30/2012 - 09:53 | 2303303 francis_sawyer
francis_sawyer's picture

So I guess personal savings is on the rise then? (Mr. "credAbility")

Fri, 03/30/2012 - 12:31 | 2303779 overbet
overbet's picture

I wonder about this mega millions jackpot. Someone told me it is going from 400 to 750 million. Does that mean consumers are going to dump $400m on tickets this week? That amount would have to affect retail sales data wouldnt it?

Fri, 03/30/2012 - 11:10 | 2303555 JohnKozac
JohnKozac's picture

wear is that mistake....I'll help him fix it....

Fri, 03/30/2012 - 15:57 | 2304633 Esso
Esso's picture

Psssssst, it's misteak.

Yu'l not bee alow'd to join the sheeple core untill you lerne to spel.

Fri, 03/30/2012 - 18:38 | 2305155 DorseyCecil68669
DorseyCecil68669's picture

my friend's aunt makes $72/hr on the internet. She has been without work for six months but last month her payment was $19183 just working on the internet for a few hours. Here's the site to read more .....  http://lazycash9.com

Fri, 03/30/2012 - 09:06 | 2303156 withnmeans
withnmeans's picture

I called this spot on, before the report came out. This is indeed a "no brainer". This is the American way, stay in debt, and pay, pay, pay interest. Here lies the problem, remember all of those times you have seen on TV, those bad math scores for students in the U.S. compared to the rest of the world. People here do not understand the math on interest rates, if they had no credit card debt and lived "WITHNMEANS", then more then likely they could buy twice the amount of crap then they have now.

The Big Bad Banks OWN YOU!

Fri, 03/30/2012 - 09:16 | 2303194 Kaiser Sousa
Kaiser Sousa's picture

Not if u default....
DEFAULT MOTHER FUCKERS....
then u own the fucking bankers......

Fri, 03/30/2012 - 10:06 | 2303341 Silveramada
Silveramada's picture

RIGHT ON! DEFAULT DON'T GIVE SHIT TO THOSE BASTARDS, THEY HAVE OWNED OUR LIVES SINCE THE MONEY CHANGERS, EVEN JESUS BEATED THE SHIT OUT OF THOSE CROOKS OUTSIDE OF THE TEMPLE... THEY ARE THE CAUSES OF ALL ECONOMIC MALAISES AND CRISES AND CONTRACTION OF ECONOMIES, PROFIT WARS...YOU NAME IT!

EVEN BETTER, WE SHOULD ALL, I MEAN ALL OF US, DECIDE ONE DAY CALLED"PEOPLE'S HOLIDAY" AND TAKE ALL THE FUCKING MONEY WE HAVE, OUT OF THE BANKING SYSTEM IN ONE SHOT, & STARVE THAT FUCKING BEAST!!!

BEFORE THEY SURPRISE US ON A MONDAY"BANK HOLIDAY" AND...OOPS , NOW THE IS DOLLAR DEVALUATED 30%. BITCHEZ, THEY WANNA FUCK US FOR SURE, LET'S US FUCK THEM FIRST!!!!

Fri, 03/30/2012 - 10:17 | 2303356 trembo slice
trembo slice's picture

You're right about Jesus overturning tables and calling out the twisted elites at the temple, but your ALL CAPS is so annoying.  Jesus would probably slam your keyboard on your face.

Fri, 03/30/2012 - 10:24 | 2303387 Silveramada
Silveramada's picture

CAPS? it was pressed on  the keyboard by accident and i wtrote it so fast without correcting it... no sin for that one, but maybe Jesus who knows better would slam the whole PC and monitor on your face instead due to the violent intention behind your reply, don't you think?

Fri, 03/30/2012 - 11:13 | 2303565 trembo slice
trembo slice's picture

don't blame the speculators!

Fri, 03/30/2012 - 10:43 | 2303455 Kaiser Sousa
Kaiser Sousa's picture

Hey trembo...don't b a childish smart ass...
focus on the message if u can or care...

Fri, 03/30/2012 - 08:46 | 2303105 walidsassia
walidsassia's picture

they are Buying AAPL product 

Fri, 03/30/2012 - 09:05 | 2303132 easypoints
easypoints's picture

and we are buying PM's. I'm fairly certain neither are counted as "savings" according to the data. Fine by me!

Fri, 03/30/2012 - 08:59 | 2303141 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

iPads aren't too good when you are homeless and can't find a socket to plug them in. Oh wait, we have Starbucks with all those other excessively educated banksters working as Baristas.

Fri, 03/30/2012 - 09:04 | 2303157 junkyardjack
junkyardjack's picture

BusinessWeek had an article a few weeks back, Living in your car isn't just for the homeless.  Everyone's doing it.  Buy an iPad and move out of your apartment.  There's probably an app to locate available outlets for the homeless elite

Fri, 03/30/2012 - 09:24 | 2303221 azzhatter
azzhatter's picture

"affluent" homeless neighborhoods

Fri, 03/30/2012 - 10:27 | 2303394 Oleander
Oleander's picture

A Y membership is cheaper than rent.  They supply hot water and toilet paper. Our Y even has eat cheap nights sponsored by local eateries. You can charge your iPad while relaxing in the lounge. 

Fri, 03/30/2012 - 11:20 | 2303584 JohnKozac
JohnKozac's picture

iPad reception stinks under some bridges they allegedly warn in the instruction sheets that come with iPads.....so they tell me....

Fri, 03/30/2012 - 12:21 | 2303747 Sal34
Sal34's picture

Or just park your car beside a homeless person/wireless router,

http://digitaljournal.com/article/321114

Fri, 03/30/2012 - 09:13 | 2303184 Decolat
Decolat's picture

Makes sense with the graph. Apple products typically have a four year shelf life before they break or become obsolete.

 

Extend the iPads value by using it as a frisbee or cutting board or food when it stops working.

Fri, 03/30/2012 - 10:06 | 2303342 Ralph Spoilsport
Ralph Spoilsport's picture

And your evidence for this broad and sweeping statement is what?

Fri, 03/30/2012 - 10:38 | 2303436 Goner
Goner's picture

Not sure if its evidence but a new iphone gets relased about evey 12-18 months so a full life cycle of 4 years seem long if you ask me. Thats one of the points with the die hard APL people, they cant have last years model. And to have one from 4 years ago (the original iphone 16GB relerased February 5, 2008 would be out of the question

  https://en.wikipedia.org/wiki/IPhone#Model_comparison

Again, not sure if this is evidence of the product life-cycle but ..

  http://www.maceinsteiger.de/ueber-apple/product-life-cycle-purchase-advice/

Fri, 03/30/2012 - 19:23 | 2305240 Decolat
Decolat's picture

I've had 2 ipods die on me. They're not designed to last. I did not drop them. They just stopped working. Maybe I'm biased from bad luck.

 

Either that, of most stupid fucks see the new model and throw the old model in the closet somewhere to never be seen again. Even if it works perfectly. I never see an ipod older than four years old out in public. Do you? 

Fri, 03/30/2012 - 08:48 | 2303106 ekm
ekm's picture

There are to ways to spend money:

- By free will (girl shopping)

- By force (gasoline price)

This is increased spending by force, since with 46% youth unemployment and most of working population about to retire, nobody in his right mind would go out and waste money.

Fri, 03/30/2012 - 08:53 | 2303124 GMadScientist
GMadScientist's picture

a) Free will would imply the possibility of not shopping.

b) Ride a bike.

Even though gasoline is expensive, and vital to the economy in many ways, it's still flexible demand. You want inflexible? Try healthcare.

Fri, 03/30/2012 - 08:58 | 2303139 disabledvet
disabledvet's picture

you mean "try paying for health care." of course "if you take out the word care" it's much easier. that's right: "try paying for health." and suddenly..."we have health on EVERY channel!" And PRESTO! "Healthcare"!

Fri, 03/30/2012 - 09:02 | 2303150 ekm
ekm's picture

I live in Canada. I am a member of an extinct species called "canadian right winger".

If you are just trying to visualize gov medical care, wait unti you taste it. And by the way, it is not health care, it's just medical care. They are brainwashing the US citizens the way canadians and europeans (where I come from) have been brainwashed.

Fri, 03/30/2012 - 09:26 | 2303232 Spastica Rex
Spastica Rex's picture

Sucks about your brainwashing. Maybe you can get some socialized healthcare to fix it?

Fri, 03/30/2012 - 09:40 | 2303270 ekm
ekm's picture

It's not healthcare. What they are talking about is medical care. Health care involves working out, eating well which are far more important than medical care which is when one is already sick.

The brainwashing has ocurred by using the word "healthcare" as if the gov can take care of our bodies. All the law is about is to take care of our sicknesses, not our bodies.

Leftwing brainwashing at its best.

Fri, 03/30/2012 - 10:16 | 2303364 DaveyJones
DaveyJones's picture

Yes, the government has no role to play in regulating our "healthcare." Take for instance food . As you say, "eating well" is an important part of health and I couldn't agree more. Now explain to us Monsanto's influence in both countries' governments along with GMOs , pesticides and other "healthy" things. While you're at it, throw in all the other corporate food heavies and their funny chickens and other oddities.

Funny thing about brainwashing , it knows no political label. In fact, simplifying any subject to a political (now meaningless) label is, in itself, political brainwashing.     

Fri, 03/30/2012 - 11:41 | 2303632 Spastica Rex
Spastica Rex's picture

I was sorry to hear about your recent passing. "Daydream Believer" was a great, happy tune.

Fri, 03/30/2012 - 12:20 | 2303745 DaveyJones
DaveyJones's picture

thank god I spell my name different

Fri, 03/30/2012 - 10:05 | 2303337 GMadScientist
GMadScientist's picture

I'd have them do the basic insurance part and leave the medical care to the doctors (with top-up private insurance for lipo, boob jobs, and boner piils), but that's me.

A shared risk pool for something most everyone needs, but almost always to a degree to which they can't completely guess ahead of time, seems....prudent!

I agree the way medicine is administered after the damage has been done leaves a bit to be desired, but we need to leave something to personal responsibility, don't you think?

 

Fri, 03/30/2012 - 09:11 | 2303175 withnmeans
withnmeans's picture

Hmm, this maybe the governments underlying ploy to fix healthcare, you know the OBESITY problem.

Raise the gas prices so you have to ride a bike.

Fri, 03/30/2012 - 10:07 | 2303345 GMadScientist
GMadScientist's picture

All while fighting terrorism and potentially generating electrical charge to store.

Get pedaling!

Fri, 03/30/2012 - 13:30 | 2304033 neidermeyer
neidermeyer's picture

Gas is not flexible to me ... without fuel my business stops "dead right there" ... I don't know anyone that joyrides...

Fri, 03/30/2012 - 09:49 | 2303297 Agent P
Agent P's picture

"There are to ways to spend money"

And there are three ways to spell two.

Fri, 03/30/2012 - 10:09 | 2303349 ekm
ekm's picture

I'm at work and blogging when nobody is around me. Pls allow a couple of spelling errors.

Fri, 03/30/2012 - 10:19 | 2303377 Agent P
Agent P's picture

I know how it is.  I wasn't questioning your intelligence...just having a little fun with you. 

Fri, 03/30/2012 - 12:28 | 2303771 ekm
ekm's picture

Keept doing it. Entertainment is important.

Fri, 03/30/2012 - 14:42 | 2304365 Henry Hub
Henry Hub's picture

***I'm at work and blogging***

I know who you are. YOU'RE FIRED

Fri, 03/30/2012 - 08:48 | 2303108 TruthInSunshine
TruthInSunshine's picture

Synopsis:

 

More Americans dip into savings (or more likely, credit cards) to buy food & gasoline (despite many not paying their mortgage or student loan payments).

Good luck retailers who think they can simply close 50 to 120 of their 'big box' stores to ride out the storm.

Fri, 03/30/2012 - 09:39 | 2303267 fuu
fuu's picture

Yet grocery chains and producers are struggling. Except for Ben's neighborhood bodega.

Fri, 03/30/2012 - 09:54 | 2303311 TruthInSunshine
TruthInSunshine's picture

Exactly.

I'm being quite serious. Not only is the consumer deleveraging in any category of consumption that is flexible (i.e. discretionary - see Best Buy or other major retailers), they're actually reducing consumption of inflexible (i.e. non-discretionary) 'things' such as gasoline and groceries (buy driving less, substituting less expensive brands, etc.) and they're still dipping into savings (if they are among the few to actually have significant savings) or borrowing more on their credit cards to pay for this reduced level of consumption of essentials.

The pain train is so obvious, but no will have been privy to "seeing this coming" in a few months or year or so from now.

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