Markets woes- blame the scarity American consumer

American consumer is a scarity cat.

Fearful, unsure, running at the slightest noise and a total wimp. American consumer does not have balls, its a soft baby with pink feet and a fragile ego. Slightest of adversity spooks the be juses out of him. Having grown up with a silver spoon and golden parachute of welfare system attached to its umblical cord he cannot face life when it get rough or when the rough gets going.

What does the American consumer do at the slightest dark cloud on the horizon? He freezes like a deer in the headlights. He is sacred to death about horrible consequences that hardly materialize. He stops SPENDING MONEY and sulks in a corner waiting for a green signal that all is well and he can cross the street. American consumer's habits beguile and frustrate everyone, from realtors,bankers, lawyers, landscapers to construction workers.

What happened in the real estate market is prime example of this behavior since late 2005. The American consumers saw dark clouds on the horizon for some reason and froze in its tracks. He immediately stopped buying real estate with bit of greed set in his eyes for bargain. Instead he sought security in renting 1 bed shacks and passing the night under someone else's roof. The magnitude of such a move killed the fledging real estate market and than the banking and mortgage lifeline attached to it.

Things started going worse and he became ever more fearful and scared. Pretty soon lenders had no business, they started going belly up and than the sub prime mess **** hit the fan in the summer of 2007. Since than it started effecting changes in the equities market and stock markets responded negatively and the overall general economy started get threatened by it. But since market has responded accordingly as expected, the neurotic consumer is now fully convinced that sky is about to fall and a talk about recession and obsession with doom gloom has taken hold of him. He is convinced and he is holding back spending on big ticket items like homes and cars etc.

If this scarity cats stops spending totally and tightens its belt further than I can bet the whole economy will be shattered and a recession will knock the winds out of the sails in America. And that is how American recessions usually start.

Lets hope our Government can coax this cat out of its hole into spending money and convince his fragile ego its Ok to come out and its not as dangerous as you have imagined. Lets hope he starts buying real estate and supported businesses starts spurting.

This is where the truth lies. How to deal with the American consumer ?

You can always take the horse to the water, but you can't make him drink. Hope we are wrong and the horse starts drinking.
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