Wednesday, May 20, 2009

The worst is yet to come

Via Mish Shedlock, who says "If you're not petrified of what Obama's doing, you're not paying attention." Read more at his excellent blog here.

From Yahoo's Tech Ticker, an interview with Howard Davidowitz:
The green shoots story took a bit of hit this week between data on April retail sales, weekly jobless claims and foreclosures. But the whole concept of the economy finding its footing was "preposterous" to begin with, says Howard Davidowitz, chairman of Davidowitz & Associates.

"We're in a complete mess and the consumer is smart enough to know it," says Davidowitz, whose firm does consulting for the retail industry. "If the consumer isn't petrified, he or she is a damn fool."

Davidowitz, who is nothing if not opinionated (and colorful), paints a very grim picture: "The worst is yet to come with consumers and banks," he says. "This country is going into a 10-year decline. Living standards will never be the same." [emphasis added] ...

Article here (video of the interview available at the link).

You may also want to view Mr. Davidowitz's take (video at link) on Obama's handling of the car companies:
... Barack Obama's plan is to "sustain the union" in an effort to secure future votes in five key Midwestern states, Davidowitz says, without hesitation. "We the taxpayers are bailing out the union [and] bailing out Chrysler, which is an inefficient company that shouldn't survive and can't survive in the long run, anyway."

More generally, the Chrysler saga is evidence of how "we keep putting more money into hopeless companies," he says. "That's not the American way. We let inefficient companies collapse and be replaced by more efficient companies. That's the only way this economy can work."

By propping up inefficient companies and keeping zombie banks alive, Davidowitz says "we are exactly on the same path as Japan," which is now two decades into its economic malaise. ...

A grim picture, to be sure.

No comments: