Despite what Bush & Bernanke say to reassure us that the economy is doing well, I don’t believe it is. Here are some news stories that support this belief.
The first is from Newsweek.
Because home sales and moves stimulate purchases of appliances, electronics and furniture, the giant chains that catered to house flippers and renovators have reported recession-like results. In the second quarter, same-store sales were down 5.2 percent at Home Depot and 4.3 percent at Sears.
Americans who were living high by taking out home-equity loans during the boom have watched their equity drop, and are now faint of heart when it comes to big-ticket discretionary purchases.
The National Marine Manufacturers Association said it expects pleasure-boat sales, down 6 percent in 2006, to fall 10 percent more in 2007, largely due to the housing woes. Boatarama in Ft. Lauderdale, Fla., had to consolidate from four locations to one, and it now sells only used boats.
Brunswick Corp., which makes Sea Ray boats, said in July that it was slashing production due to the housing situation “in Florida and California, which are two of the nation’s largest boating markets.”
And this snippet from Bloomberg.com which basically says food is going to get more expensive.
Wheat rose the maximum allowed by the Chicago Board of Trade on rising
purchases of the grain by India, the second-biggest consumer, and forecasts for a drop in global supplies to their lowest in 26 years.
Global supplies are expected to decline to 114.8 million metric tons by the end of the marketing year May 31, 2008, the lowest since 1982, the U.S. Department of Agriculture said last month. Unusual weather has hurt crops in several regions, including Europe, the U.S., Canada and Australia.
I had previously voiced my concern over whether we were going to go through an inflationary period or a recession. Looks like we’re now scheduled to have both!