The investment newsletter forgot that the US is 40% of China’s exports. McDonald’s is going to get hammered when the global engine of consumption, the US, slows down, because the rest of the world will slow down as well, at least temporarily.
The consumer is still resilient. I had expected the spending to slow down by this time, but the loose lending is still going, and credit card debt is rising as well. I think it will take 1-2 quarters more to slow down the consumer. Catalysts could be more mortgage resets, dropping house prices making it harder to refinance since the equity is not there, the non-traditional mortgage lending guidelines, and massive layoffs beginning soon in construction and real estate and lending.
Durable goods sales are already falling: the consumer has money to buy sweaters and china, but not enough now for cars and houses and furniture. So we are seeing the slowdown start with the big ticket items. Home Depot is clearly worried; why else would they be selling groceries??? What do you all think about that move?
