There is another reason why consumer confidence is returning. Its like dieting. When you begin, you are all gung-ho, but with the time, one ice cream here, a brie cheese there begins to creep in. After all, we can't be on a diet ALL THE TIME. Cutting back on spending is like that. After a while, let's face it, its just boring.
But the real frightening aspect of your PM tonight Richard is the prediction of the gap widening between the haves and the have nots. Would love to hear more from you about why you think this is so.
May 29th, 2009 11:04 pm ET
The underpinning of this rally has been the rob peter to pay paul principle. The principle is unsound and so too is the rally.
Look at the California economy (population 38 millions), it is in ruin. Washington will not guarantee Municipal debt, China doesn't want to buy more American debt, the Supply of Bonds overwhelms Demand causing interest rates to rise at the worst possible time. This car that is the American economy is a V8 that is running on 3 cylinders. How long before those 3 cylinders fail under the STRESS??.
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