To follow up on the previous post, I'm starting to look at the psychology of the consumer again.
While I wouldn't put in the dire terms that Buster put in the comments, there is a fine line between having a wounded consumer and a mortally wounded consumer. To my mind, it's better to be informed and skeptical, but not panicked.
Last night, I began wondering about all those people who have secure jobs, or relatively secure jobs. This is probably the majority, even the vast majority of consumers.
But they've cut back, nevertheless. It's a natural response. But most of them are still coming in and getting their favorite comics, or buying a book, or pulling the trigger for a toy that wows them.
What would be very dangerous is if they didn't just cut back, but stopped spending altogether.
I think that's what all the stimulus package talk is all about. Maybe Buster is right, and little of it will reach Bend in truth. But as long as the 'impression' is out there that SOMETHING is being done, I believe that the consumer will continue to be careful, but not stop altogether.
Obama is a plus, because he holds out the potential for improvement. The stimulus package is a plus, because it looks as though something is being done. The bail-out -- god help me -- is a plus, at least psychologically -- because it keeps the Big Bank Fails headlines out of the paper.
On street level, I saw the immediate impact of Bears, Sterns going down. Then the even bigger impact of Lehman brothers, and Bernie Madoff was the nail. I suppose, Murphy being a tricky bastard, that I should expect at least one more real eye-opener, and hope the psychology doesn't turn permanently bearish.
The underlying conditions are stark, but I can deal with them as long as there isn't another total shift in psychology.
1 week ago