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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Jim in MN's picture

Exactly what the Fed said they wanted last week. 

 

Slogan for the decline of the West: 

 

Deleveraging is Death.

fightthepower's picture

Stupid fuckers never learn. 

CuriousPasserby's picture

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

Chief KnocAHoma's picture

Thanks. Fixed it.

You're so nice.

francis_sawyer's picture

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

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?

JohnKozac's picture

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

Esso's picture

Psssssst, it's misteak.

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

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

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!

Kaiser Sousa's picture

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

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!!!!

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.

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?

trembo slice's picture

don't blame the speculators!

Kaiser Sousa's picture

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

walidsassia's picture

they are Buying AAPL product 

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!

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.

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

azzhatter's picture

"affluent" homeless neighborhoods

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. 

JohnKozac's picture

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

Sal34's picture

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

http://digitaljournal.com/article/321114

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.

Ralph Spoilsport's picture

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

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/

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? 

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.

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.

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"!

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.

Spastica Rex's picture

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

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.

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.     

Spastica Rex's picture

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

DaveyJones's picture

thank god I spell my name different

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?

 

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.

GMadScientist's picture

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

Get pedaling!

neidermeyer's picture

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

Agent P's picture

"There are to ways to spend money"

And there are three ways to spell two.

ekm's picture

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

Agent P's picture

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

ekm's picture

Keept doing it. Entertainment is important.

Henry Hub's picture

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

I know who you are. YOU'RE FIRED

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.

fuu's picture

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

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.