October 07, 2008
Consumer spending is falling off a cliff. Here are some reasons why:
- Americans' retirement plans have lost nearly $2 trillion dollars (so far) in the past 15 months. (How big is a trillion?)
- Nearly 1 in 6 US homeowners has a mortgage that's now under water (i.e., the principal is more than the house is worth).
- Home equity loans have fallen almost to zero in the most recent quarter.
People feel poorer, and with good reason.